Climate Agenda

Lord Browne of Madingley Excerpts

Thursday 24th October 2024 Lords Chamber

[Lord Browne of Madingley (CB)]

My Lords, I refer the House to my interests as set out in the register, specifically my chairmanship of BeyondNetZero, of Carbonplace and of the board of Equatic, and my membership of the board of the Institute for Carbon Management at the University of California, Los Angeles. I also refer noble Lords to my co-chairmanship of the Prime Minister’s Council for Science and Technology. I very much look forward to hearing the remarks of the noble Baroness, Lady May of Maidenhead, in this debate. Meanwhile, I will make four short points.

First, targeted investment in net zero will encourage rather than hinder economic growth, and for that reason it is worth pursuing. The market opportunities are sizeable and, importantly, the UK labour market possesses the relevant skills to grow climate-related activity at scale. We are fortunate to have world-class research scientists and academics at the cutting edge of climate and energy technologies. Structures such as the Faraday Institution, the UK’s flagship institute for electrochemical energy research and development, show what is possible when industry partners are involved, working together with the innovators on projects with real commercial potential. We probably have 50% of the technologies that we need to get to net zero, but we also have universities such as Cambridge that are awash with groups that have the potential to take discovery science, incubate it and prepare it for the commercial markets at the scale that we need not just in the UK but also in the world. There is a wealth of engineering and technical expertise among those who have spent decades working in my old industry, oil and gas, that can now be deployed in the wind, solar, nuclear and other energy sectors.

Secondly, the Government’s commitment to net zero must be reflected in consistent policy approaches. Whatever the rationale at the time, the previous Government’s announcement that they would delay banning the sale of new petrol and diesel cars by five years to 2035 was counterproductive. It sent mixed messages to investors, and electric vehicle supply chains were heavily damaged. Supply was disrupted and consumer confidence suffered. The new Government’s green energy mission, the establishment of Great British Energy and the convening of solar and wind task forces are all encouraging but they cannot simply be strong statements of intent; they must be accompanied by vehicles for focused delivery. For that, the private sector must be invited to the table and provided with incentives to invest and scale its operations even further.

This brings me to my third point: incentives and private sector investment. Incentives are the result of pricing externalities, something that we must tackle head on if we are to achieve the necessary climate correction. For example, the carbon released by one actor but affecting another must be priced and paid for. Incentives to release less carbon or to avoid emissions altogether then follow. Governments are well placed to introduce incentives of this kind or preferential tax regimes, but they must be accompanied by substantial levels of private investment if the national energy transition is to be delivered and the necessary climate technologies commercialised and, importantly, scaled. Governments can set the regulatory environment to encourage investment and in some cases they can lean in, providing incentives or concessionary finance, but they cannot be expected to deliver. The UK continues to lead the world as a wellspring of sustainable finance in the form of venture capital, private equity and large-scale institutional investors. The success of the Inflation Reduction Act in the United States is a case in point.

Fourthly, we must now pick up the pace. The direction and quality of investment flow are eminently predictable if the surrounding conditions are known and controlled. This is the story of economic growth in all sectors, perhaps most notably in the extraction and burning of hydrocarbons over centuries past in this country. There is no reason to believe that it will not continue to be true in the story of our new energy and climate revolution. I am very optimistic, and progress is picking up, but the missing element is time. In my opinion we are approximately 25 years behind, so we must accelerate the rollout of incentives, financing and R&D breakthroughs. This country is well placed to do just that.