By Matthew Lockwood
What does today’s restructuring of government departments mean for climate policy? Badged as being about making government deliver, the Prime Minster announced a relatively major reorganisation, with the Department for Business, Energy and Industrial Strategy (BEIS) being broken up, a new Department for Energy Security and Net Zero being created and business going to international trade to form a new Business and Trade Department. Meanwhile the innovation parts of BEIS will be merged with digital in a new science, innovation and technology department.
Sunak’s rewiring of government departments reflects his pledge to create a new stand-alone energy ministry during last year’s Conservative leadership election, reflecting the PM’s apparent desire to bring climate back up the agenda. On the face of it, this move takes us back to the Department for Energy and Climate Change (DECC), created in 2008 and lasting until 2015.
So is this good news for better energy policy and for accelerated action to get us to net zero?
The positive take is that bringing energy and net zero out of a larger department creates focus. It should help government on delivery, which the recent Skidmore review of net zero identified as the key problem.
A more negative perspective is that this move risks ghettoising the climate agenda in one department, which was a drawback with the DECC arrangement. DECC became the prime point of contact for the Climate Change Committee, and getting other departments to engage on emissions reduction was an uphill struggle as it lacked clout and authority. When DECC was disbanded and energy and climate policy were merged into BEIS, there were fears that they would get lost, but in fact these agendas had wider influence, for example, over an resurgent industrial policy agenda. However, delivery has not been so easy, and in areas like industrial decarbonisation, tied closely to energy prices and competitiveness, there is now a danger that policy may become more incoherent.
In fact, it could be argued that this issue, i.e., ensuring all departments engage with the climate imperative, is much more important than it was back in 2015. The electricity system is decarbonising quickly and while huge energy challenges remain, such as decarbonising heating, reaching net zero now needs action across other policy areas, including transport, farming, industry, and diet. This suggests that what is needed is not just a different carve up of line departments, but stronger coordination and political direction from the centre, i.e., both the Treasury and No. 10.
Major initiatives in UK energy and climate policy are deeply dependent on engagement from the Treasury (HMT). From kick starting the Energy Market Reform at the end of the 2000s to limiting the growth of onshore renewables over the 2010s to cancelling money for carbon capture and storage and then reinstating it, the hand of HMT is clearly visible. At the same time, active leadership is needed from the Prime Minster. Boris Johnson created a cabinet committee on climate change, which is one model, but without strong political backing it didn’t actually achieve very much.
So without some serious political energy from the top, there is a risk that, in the words of Greenpeace, today’s changes are ‘rearranging deckchairs on the Titanic’. But there are deep-seated reasons why political will on climate policy in the UK is typically patchy. This is partly about imposing investment costs (for example, estimates of investment needs for decarbonising the heating of homes are in the hundreds of billions) in what has become an increasingly low wage economy. It is also particularly difficult for the Conservative leadership, with risks lying not so much with attacks from the opposition, but rather from risks within the party, which is ideologically split over the extensive intervention needed.
Overall, then, today’s redrawing of departments may mean some acceleration of decarbonisation in energy, but will not in itself give us the coordinated approach with strong leadership from the top that we now need.Follow Sussex Energy Group