Skidmore’s Net Zero Review called net zero the ‘economic opportunity of the 21st Century’. Investing in net zero will create jobs, rebalance the UK’s economy and spur economic growth. But unlocking these benefits will require action by the government to mobilise investment at pace. To do this, we need a Net Zero Investment Plan, underpinned by independent tracking of net zero financial flows.
A Net Zero Investment Plan is the missing piece of the net zero investment puzzle. The Net Zero Strategy sets out sectoral transition pathways, whereas the Green Finance Strategy Review will establish a framework for transitioning the financial sector. However, clarity on sectoral investment progress and policy incentives is lacking – in other words, a plan.
The need for a Net Zero Investment Plan has also been recognised by investors managing over £3 trillion of assets and was explicitly referenced by Chris Skidmore’s 2023 Net Zero Review. Clarity on what this would look like in practice is therefore essential.
This briefing, co-authored by E3G and WWF, sets out the detail of a Net Zero Investment Plan and the benefits it would have for the UK economy, including providing the policy certainty and stability that the private sector has been crying out for, and encouraging the best use of scarce public resources to crowd in private finance.
This will require the following commitments in the 2023 Green Finance Strategy:
To empower an independent body to analyse net zero financial flows on an ongoing basis:
This independent body (e.g., Office for Budget Responsibility or the Climate Change Committee) would recommend actions that the Government could take to tackle market barriers and leverage the private investment needed to meet the UK’s climate targets.
To produce a Net Zero Investment Plan by end of 2023, which will:
- Set out what actions will be taken to leverage private investment, thereby ensuring planned net zero investment is secured and any investment gap is filled in the most effective and economically efficient way.
- Be regularly updated to provide as much certainty as possible to the market about how the Government intends to secure private investment.
E3G’s related work on the UK’s Green Finance Strategy