Scotland's Economy

Further UK Government action required to support our green recovery

September 7, 2020 by No Comments | Category Uncategorized

The coronavirus pandemic is an unprecedented global health and economic crisis, It has fundamentally changed every aspect of our lives and the Scottish Government’s focus is on supressing the virus to protect both lives and livelihoods. This year’s Programme for Government is centred on that challenge while also focussing on that other global crisis which has not gone away – climate change. Our starting point has changed but our ambition has not and our world leading net zero targets will be central to our recovery.

We are wholly committed to ensuring that our economic recovery from Covid-19 will be a green recovery, one that creates green jobs and ensures a fair and just transition to net zero, leaving no-one behind.
At the heart of our enhanced Green New Deal, announced this week, is a £1.6 billion package to transform heat and energy efficiency. This investment can directly support up to 5,000 green jobs, tackle fuel poverty and rapidly accelerate the decarbonisation of an area which makes up a quarter of Scotland’s greenhouse gas emissions.

We have also set out our plan to establish and deliver a Scottish Industrial Energy Transformation Fund, to support our industrial manufacturing sector through a green recovery, as well as a £62 million Energy Transition Fund to help the energy sector recover from the dual impacts of coronavirus and the oil and gas price crash whilst supporting our transformation to net zero.

Our focus on green recovery will be entirely in keeping with our energy policy and wider climate change commitments, consistent not only with the need to decarbonise our energy systems and wider economies, but also underpinned with the principles of a fair and just transition.

Our commitment to ending Scotland’s contribution to climate change is unwavering. But we cannot do this alone. We all – governments, businesses, communities and consumers – need to work together to decarbonise and to seize the opportunities that creates.

I believe that we are now at a critical juncture in energy policy. We need an energy system capable of playing its part in supporting a green recovery, delivering rapid decarbonisation across each of electricity, heat and transport and creating good quality jobs in the process.

The Committee on Climate Change has been clear that Scotland’s world leading net-zero target depends on bold action in policy areas which remain reserved to Westminster. It is therefore imperative that the UK Government follow our lead and increase their pace of action.

We have called a number of times on the UK Government to act and this week I outlined a number of key areas where action is needed urgently, if we are to deliver a green recovery and our shared net-zero ambitions.

In a letter to the Secretary of State for Business, Energy and Industry this week, I made clear the grave concerns I have that Ofgem’s decisions on energy network funding risk getting the balance wrong between short term consumer savings, and the investment essential to deliver energy networks equipped to deliver net zero.

I have called for the UK Government to give Ofgem an explicit statutory obligation to enable the delivery of net zero.

There should also be an urgent step up in pace of work to define the future role of the gas network, including work and funding to trial hydrogen and appropriate technologies for decarbonising heat in on-gas grid areas.

It’s also vital that the UK Government’s mechanism for supporting new renewable technologies, its support for Carbon Capture, Use and Storage (CCUS) and industrial decarbonisation – all of which are reserved – properly reflect the new economic context. That requires a framework delivering certainty and a long term pipeline for investors, as well as opportunities for our indigenous supply chain.

We need a robust regulatory framework to maximise the opportunities for offshore decarbonisation, as well as further clarity on CCUS projects and hydrogen production business models to give this sector confidence.

The UK Government should also increase the Clean Heat Grant budget, alongside an early commitment to a long term policy and funding framework to support low carbon heat following the end of the Clean Heat Grant, Green Gas Levy and the Renewable Heat Incentive.

The critical importance of achieving net zero, coupled with the need to recover well from Coronavirus, means that we can’t afford any delays or missteps in our journey. Indeed, the eyes of the world are on us now as COP 26 prepares to arrive in Glasgow next year.

Action in the areas I’ve set out will allow our pace to match Scotland’s ambition, and I call on the UK Government to act now for this generation, and for those to come.

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