Why Westminster’s £3bn green investment package proves it’s down to people, not politics, to save our planet
The summer budget offered an opportunity for the government to show itself as a leader on the world stage by acting boldly and with genuine purpose in the fight against climate change. Yet instead of innovation, we’ve been gifted insulation. Rishi Sunak, our very own Father Christmas, has delivered better than a lump of coal, yet what amounts to a political dressing-up exercise dims hopes for a meaningful and lasting green recovery from the COVID-19 crisis. Once again, politicians have failed people and planet.
Whilst we welcome the Chancellor’s announcement to commit £3bn towards making homes more energy efficient and its creation of jobs, it is important to understand how dismal and inadequate this token gesture will be. According to the Committee on Climate Change, it will cost the UK 1–2% of GDP – approximately £50bn a year – to achieve the government’s target of achieving net-zero carbon emissions by 2050 (a target which on our current trajectory, is set to be too late*). £3bn is a drop in the ocean to what is needed. It’s about a third of what the Conservative manifesto already promised for insulating energy efficiency of buildings. £3bn is also about a 1/10th of the £35bn Germany has committed.
Our leaders have touted a narrative of doing the ‘right’ thing, when reality couldn’t be more starkly different. The announcement followed repeated promises to ‘build back better’ from a prime minister casting himself as the next Roosevelt. £3bn is hardly a radical, definitive statement of ecological intent. Meanwhile, the very fossil fuel industries eroding our planet – and future – have been propped up by billions in bailouts across the world. This £3bn is but 1 per cent of the UK budget deficit which is forecast by the Office for Budget Responsibility to hit over £300bn, resulting from the measures to safeguard industries and jobs for the future – but there are no jobs on a dead planet.
The climate emergency is not going to be fixed by cladding in a nation’s roofs. This is simply too little, too late. There is so much more that could be done. Comprehensive and concerted long-term green strategy is vital to reverse our current trajectory. Improved grants towards electric vehicles and infrastructure would soften the cost to the consumer and build demand. Rebuilding a greener infrastructure must come hand in hand with regenerating nature. Notably, any bold research and development plans in alternative energies were woefully missing from Rishi Sunak’s commitment.
The prevailing view that protecting our planet comes at a cost must be disrupted. In fact, it is set to strengthen the economy and ensure economic and environmental resilience for generations to come. It’s the renewable industries such as solar, wind and electric vehicles that have the power to make a significant impact – and are the future-based, innovative technologies that will not only endure, but also thrive, through times of economic uncertainty. The data does the talking. Falls in fossil fuel stocks through the pandemic are a wake-up call that these damaging industries are collapsing. The World Economic Forum has said a green recovery could inject a $10trn boost into the world economy.
We are already seeing much better financial returns from “impact” investment as early adopters embrace investment in the technologies that will genuinely drive change. Just witness the financial gains from investing in Beyond Meat or Tesla in recent months. Green investment not only makes financial sense and offers plentiful job creation with minimal upskilling and training needed – it will save lives.
At Path Financial, we believe that short-termist and self-interested governments cannot be trusted to implement the necessary funding to instigate change. It has to come from people power – and our voice as consumers. We call on all investors and people with a pension to demand to find financial advisers able to show them how they can have a massive impact with their money by supporting companies actively helping the environment. Even £20,000 invested in an “impact” fund can take 3 cars off the road in carbon equivalent compared to conventional funds.
Whether Westminster continues to spiral down a path of green spin or forges one of genuine green recovery, only we as citizens, together, can be the solution.
*According to Parlay, experts believe in the next 6–16 years the majority of sea life will collapse. The World Meteorological Organisation forecasts a 20% chance we will reach 1.5°C global warming in the next five years. At 1.5°C warming, 70–90% of coral reefs will die, The Intergovernmental Panel on Climate Change notes.