Green and Global Britain

The Prime Minister wants Britain to ‘lead the world’ on climate change. But what does this mean for our trade strategy? Will the low carbon economy open up new export opportunities, or make it harder to trade with big polluters? And how might we use our trade clout to persuade others to go green?

These were the questions at the top of the agenda for the final session of The Spectator’s environmental summit – the Road to COP26 – and we were delighted, as ever, to be joined by an expert panel keen to answer them.

‘If we are successful in embedding net zero within the British economy, it will be an inherently strong part of our trade offer,’ said Bim Afolami MP, chair of the APPG on renewable energy, as he opened the discussion. Britain was already a world leader, he added, on decarbonising its energy system, and was well placed to sell this expertise around the world.

It was a point echoed by Clare Harbord, group director of corporate affairs at Drax (our sponsors for the discussion). The power-generation giant had recently ended its coal usage, she explained, and was now looking to use carbon capture technologies to become carbon negative by 2030 – something that was already driving interest from overseas partners keen to do the same thing. ‘We are now looking to the government providing the investment frameworks we need on this,’ she said. ‘Then those technologies can really take off like wind power has done.’

Panellists discussed particular priorities where they felt the government needed to take action sooner rather than later, including the long-awaited strategy on decarbonising homes (which, following a delay, has now been promised before COP26). ‘We would like to see that before the summer recess,’ said Matthew Fell from the CBI. But was the government really ready to say who will pay for this work?

‘There’s no way of sugar-coating that decarbonising homes will be an invasive thing to do, even without the costs,’ said Mr Afolami. ‘The majority of people will need to be quite heavily subsidised,’ he said, predicting that the ultimate cost would fall on the government via the taxpayer. Additional levies should also be placed on big polluters. ‘That way the cost is borne by those who are contributing to the problem,’ he added.

And what of international trade policy? ‘The Trade Secretary has made good progress on cutting tariffs, but there is further to go,’ said Eamonn Ives, a trade expert from the Centre for Policy Studies. ‘Why do we still have tariffs on electric vehicles and bicycles, for example – goods that help lower the cost of reaching net zero?’

He also called on the UK government to back a special measure designed to prevent ‘carbon leakage’ – when emissions are effectively outsourced to less green countries. ‘A Carbon Border Adjustment Mechanism (CBAM) would make companies responsible for emissions they send elsewhere,’ he said. It was an area, in his view, where the EU was ‘striding ahead’ (and the US was making the right noises) while the UK risked falling behind. ‘A CBAM would be an extremely powerful tool to persuade other countries to adopt the kind of measures we have,’ he said.

‘It’s something we should strongly consider,’ answered Mr Alofami, when asked if the Prime Minister should join the Conservative figures (including former cabinet members Liam Fox and Andrea Leadsom) calling for such a measure. The key, he said, would be getting the balance between using the measure to tackle heavy polluters, whilst ensuring poorer countries weren’t unfairly penalised. ‘We also need to use our aid to get them to net zero,’ he added.