Net zero targets: The UK may raise taxes

Photo credit: DepositPhotos
Photo credit: DepositPhotos

The UK is making good progress toward its goal of having net zero carbon emissions by 2050, but it may have to raise taxes to reach that goal.

Lord Nicholas Stern, a well-known economist, says that the government and private sector must invest immediately in new technologies.

A former big oil company BP boss also says that the UK should promote green technology or net zero emissions as the US does.

But the government said that “when it comes to climate change, the UK is leading the way.”

Lord Stern told the BBC, “We need growth, and we need to cut emissions. We’ll get there by investing in new technologies.”

He also said, “I’m not saying health and education investments should be put off. But instead, we must work on both of them at the same time.

His words come at a time when the country is struggling with a high cost of living and taxes that are higher than they had ever been since the end of World War II.

Some people also want the government to do things like lower taxes.

On the other hand, Lord Stern says that more public investments could be good for jobs and the environment.

In 2006, Lord Stern wrote a groundbreaking report about climate change and acheiving net zero emission for the government of Prime Minister Tony Blair. Boris Johnson, who had been Prime Minister before, got the new version in 2021.

He hopes that key green technologies, like making energy, car batteries, and fertilizer, will reach a tipping point within a few years. A lot of this will have to do with artificial intelligence.

Lord Stern thinks that private investments will be able to pay for most of it, but the government will also have to help.

Lord Browne used to run BP and now runs a private equity fund that invests in companies that cut greenhouse gas emissions. He wants the government to help businesses more.

He wants the government to look at what is happening on the other side of the ocean and learn from it.

The Inflation Reduction Act signed into law by President Biden, gives tax credits and subsidies to companies that make electric cars, renewable electricity, sustainable aviation fuel, and hydrogen. It also gives people money back if they buy an electric car made in the US.

Lord Browne says, “I’ll give the US an A on the Inflation Reduction Act; that’s pretty dramatic.” “It’s not enough, but it is a good start and got people’s attention.”

Some UK Ministers, like Grant Shapps, who used to be the Business Secretary and now runs the new Department for Energy Security and Net Zero, have criticized President Biden’s move.

They’ve been worried that it gives unfair advantages to US businesses.

Most of the time, subsidies are paid for with tax money or money that was borrowed.

Lord Browne says, though, that there is already a source of tax money that could be used better.

He agrees with the way oil and gas production in the North Sea is taxed now. But he says it’s only fair that producers give back some of the unexpected profits they make on assets that belong to the country in the end.

He wants the money to be used to help experts in renewable energy find new ways to make energy.

But Lord Brown is worried that policymakers might have forgotten about environmental issues because they have many other things to consider, like ensuring the UK has enough energy.

He said that government ministers are worried about simple things like finding out more about inflation and security.

Last year, however, at the COP 27 climate meeting, Prime Minister Rishi Sunak said that the energy crisis was a reason to speed up the energy transition and attainment of net zero emissions.

In a statement, the government said that the UK “leads the world in fighting climate change with net zero policies that have led to the creation of 68,000 green jobs since 2020.”

A new strategy towards net zero?

Just last week, the Department for Energy Security and Net Zero was made.

This was one of 129 suggestions made in a review of the UK’s progress toward “net zero” that the former Prime Minister, Liz Truss, asked to be done. The review said that the government should be more brave.

Taking on a bigger part in fighting net zero and climate change might require some tough talks.

Pollsters from Ipsos found that people still worry about climate change, but now they worry more about inflation, the economy, and public services.

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And when it tried different policies to acheive net zero, like charging environmental fees for frequent flights or other products and phasing out fossil fuels for heating, the support went down.

Voters want to do the right thing, but they may need to be more excited about changes to funding.