The National Audit Office is warning that achieving net zero greenhouse gas emissions in the UK is a colossal challenge and government will need to spearhead a concerted national effort if it is to reach its goal by 2050.

The warning comes in  Achieving Net Zero - a new report from the NAO which has been published on the same day that the government has announced an new ambitious target to reduce the UK’s emissions by at least 68% by 2030, compared to 1990 levels.

The government passed legislation in June 2019 committing it to achieving ‘net zero’ greenhouse gas emissions by 2050 - significantly more challenging than government’s previous target to reduce emissions by 80% compared to 1990 levels by 2050.

However, while the UK’s emissions reduced by 28%, faster than any other G20 economy between 2008 and 2018, the NAO is warning that without further action, the UK’s emissions are projected to exceed government’s targets for the years 2023 to 2027 and 2028 to 2032.

Most of the reduction to date has come from changes to how electricity is generated, with a switch away from coal and increasing amounts coming from renewable sources such as wind and solar power.

The UK’s independent public spending watchdog says that reducing emissions further to achieve net zero will require "wide-ranging changes to the UK economy", including further investment in renewable electricity generation, as well as changing the way people travel, how land is used and how buildings are heated.

However, the NAO is warning that it is not yet known how quickly some technologies will develop or how much individuals will be willing to change their behaviours. The majority of reductions in greenhouse gas emissions achieved to date have been in the power sector, which required consumers to change their behaviour less than will be necessary for other sectors that need to decarbonise, such as heat and transport.

Although the government plans to announce policies aimed at closing the gaps, according to the independent economic watchdog even faster progress will be needed to get to net zero by 2050.

Government “often overestimates consumer buy-in to its policies aimed at reducing emissions”

BEIS estimates that costs will be reduced by achieving net zero and it will cost less if the public understands and accepts the changes that are required. The department has recently begun considering how to engage the public in achieving net zero in a coordinated way. BEIS established a central behaviour change and public engagement team in April 2020 to design a public engagement strategy and share good practice across government.

However, according to the NAO, “there is evidence of a disconnect between public support for tackling climate change and people’s understanding of the changes they need to make in their own lives.”

The NAO’s past work has also shown that government “often overestimates consumer buy-in to its policies aimed at reducing emissions”, the report says.

Government still not clearly set out roles of other public bodies in achieving net zero

The report says that the all-encompassing nature of achieving net zero means that all government bodies, including departments, arm’s-length bodies and executive agencies have a role to play.

The Department for Business, Energy & Industrial Strategy (BEIS) has overall responsibility in government for achieving net zero, while HM Treasury It is currently reviewing how the costs of net zero should be shared between government, businesses and individuals. Other departments with key roles include the Department for Environment, Food & Rural Affairs (Defra), the Department for Transport (DfT) and the Ministry of Housing, Communities & Local Government (MHCLG) .

Drawing on past experience, the NAO says that there are risks to cross-government arrangements that need to be considered carefully, such as ensuring individual departments give net zero sufficient priority and that there are the necessary skills across government.

However, the government has still not clearly set out the roles of public bodies outside central departments, despite many, including local authorities, playing critical roles in the achievement of net zero. The report says:

“Local authorities will be key in the achievement of emissions reductions in the transport and housing sectors locally where the decarbonisation challenge will vary by location. But local government representatives we have spoken to have said there is a lack of clarity from central government on the role local authorities should play in achieving net zero.

“BEIS told us that it plans to engage with local authorities about their role as part of the creation of the net zero strategy and that their roles will become clearer once government publishes sector strategies.”

Based on its expertise in major projects and programmes, the NAO is now calling on BEIS to identify and evaluate which parts of the net zero strategy are uncertain, develop a plan that reduces this uncertainty, and set out a timetable for key decisions to be made.

The report also says more work is needed to ensure that all public sector organisations take the actions necessary to reduce their own emissions. In 2018, public sector buildings emitted 8 million tonnes of greenhouse gases, representing 9% of all emissions in the buildings sector.

To date, central government departments have reduced emissions from their buildings and operations by an estimated 46% since 2009-10. However, the NAO is warning that targets have not covered significant areas of impact outside of central government, like schools and the NHS.

Gaps in existing monitoring arrangements to track progress towards net zero

The report is also flagging up gaps in existing monitoring arrangements to track progress towards net zero.

Although BEIS reports actual and forecast greenhouse gas emissions annually, there is currently no process in place for monitoring the progress of policies on a more regular basis, or for escalating problems identified by monitoring information.

Additionally, neither BEIS nor HM Treasury collates information on the overall costs and benefits of government policies in this area.

The NAO is also calling on the government to develop and monitor “clear, relevant and consistent data” on progress on net zero policies across government and gathers information on how much it has committed and spent.

Costs of achieving net zero “highly uncertain” - risks remain to securing private sector investment

According to the NAO, the costs of achieving net zero are highly uncertain. However, while BEIS’s plans for engaging the private sector are more advanced, risks remain to securing the investment required.

The NAO says its past reports demonstrate the difficulties government faces when it seeks to share risks with the private sector and create investor confidence in new initiatives, and the importance of tracking progress where private sector engagement is a critical success factor .

The Climate Change Committee estimated in 2019 that the annual costs of achieving net zero could increase over time, to around 1-2% of GDP in 2050. The CCC will also shortly publish revised analysis of the potential costs of net zero, while HM Treasury will investigate how these costs could be shared between government, businesses and individuals.

As part of this review, which will conclude in 2021, HM Treasury will consider the range of policy instruments that might be used to support decarbonisation, including the role of regulation.

BEIS is also developing its own estimates of what net zero will cost between now and 2050, with this likely to be hundreds of billions of pounds.

THE NAO is calling for BEIS, working with HM Treasury, Cabinet Office and the other departments with responsibility for aspects of net zero to set out how it will manage the risks it has identified in this report with regard to creating collective responsibility for net zero.

The watchdog also wants HM Treasury to publish analysis shortly after the next Comprehensive Spending Review, which will allocate high-level budgets to departments in the medium term, demonstrating its impact on expected emissions.

Need to set out how trade-offs between achieving net zero and other government priorities will be managed

The report also says that government has not yet done enough to ensure that all public sector organisations take the actions necessary to reduce their own emissions and that while there are some minimum requirements for government procurement which relate to greenhouse gas emissions, the NAO’s past work has noted that “these are out of date and compliance has not been monitored.”

In addition, the government still needs to identify how it will manage the links between different aspects of achieving net zero and how it relates to other government priorities. The report is recommending that all departments with lead responsibility for decarbonising sectors (BEIS, Defra, DfT and MHCLG) should work to widening government’s understanding of links between achieving net zero and other government aims in order to establish how trade-offs will be managed, including the prioritisation of resources.

The report says:

“It is important that government leads by example as part of its overall efforts to reach the net zero target and takes opportunities to pilot initiatives and develop supply chains for low-carbon technologies that could be beneficial to the wider economy.”

Referencing its work on the government’s preparations for EU Exit, the NAO said it had found that government did not have spending information at a cross-government level and relied on existing control frameworks and systems of departmental accountability. This created risks to financial management, such as where reprioritisation of either EU Exit work or business-as-usual activity might be necessary, and public accountability.

The NAO is warning that similarly, the government has not yet collated data on current and future spending on net zero-related policies, nor the benefits derived from this expenditure.

BEIS and HM Treasury should collate information on how much government is spending to achieve net zero overall, including how much it has committed and how much it has actually spent – including the costs of policies that go through consumers’ bills, the report says.

“Government hasn’t put its own house in order yet - next year’s strategy can’t be hot air”

According to the NAO, achieving net zero will require wide-ranging changes across society and the economy “at a pace which leaves little room for delay.”

However, commenting on the government’s new net zero target, Meg Hillier MP, Chair of the House of Commons Committee of Public Accounts said:

“The net-zero target is daunting and will need everyone in the country to play a part.

“The government hasn’t put its own house in order yet or done enough to put the UK on course to meet older, easier targets.  It’s time to lead by example and shift its efforts up a gear.

“Next year’s strategy can’t be hot air; it needs to set out what every part of government is going to do, what the government expects others to do and how it is going to make sure everyone pulls their weight.”

Click here to down the NAO report Achieving Net Zero