Report outlines broader UK green recovery

The UK Government has been urged to adopt a broader “green recovery” approach focusing on policies for biodiversity and the circular economy as well as energy and transport transformation.

The calls to action have been made by MPs through the Environmental Audit Committee’s (EAC) report, ‘Growing Back Better: Putting Nature and Net-Zero at the Heart of the Economic Recovery’.

While the Prime Minister’s Ten-Point Plan for a green industrial revolution points in the right direction, the report argues, the UK’s broader approach to the economic recovery from Covid-19 could be even more environmentally sustainable.

The committee has accused the Government of failing to deliver the level of policy support needed for nature or for the circular economy.

The report calls for the pilot of a National Nature Service in partnership with conservation charities which would help unemployed people into nature-related jobs.

The report highlights the need for better ways of using resources alongside its net-zero aspirations. It recommends Government provision of targeted support for businesses that offer repair services or use high quantities of recycled materials.

The EAC report urges the Government to prevent further delays to the Hydrogen Strategy and the Heat and Buildings Strategy while accelerating work to investigate potential changes to carbon tax and carbon border adjustment requirements.

And it calls for a broader and longer-term approach to creating low-carbon, low-air-pollution transport systems.

The EAC’s specific recommendations for policies made in this report mainly centre around fiscal and financial “carrots and sticks” to drive the green recovery.

It has proposed VAT reductions for businesses that offer circular economy services like repairs, noting they should also broadly apply to products made using recycled content, building on the Government’s plans to tax the use of non-recycled plastic.

Such policy drivers could “reset” the way that UK businesses, and those importing to the UK, design products, the committee claims.

The EAC also sees VAT reductions as part of the solutions in sectors including home energy efficiency and ultra-low emissions vehicles.

On the “sticks” approach, the report suggests the idea of new requirements for businesses to invest “blunt” environmental taxes in low-carbon technologies. The Air Passenger Duty, for example, could be used to help airlines invest in electric, hydrogen, biofuel-powered or simply more efficient planes.

It also calls for the Government to “begin scoping work” on a carbon tax for the whole economy and on carbon border adjustments.

Questions regarding the forthcoming Sovereign Green Bond – the first in the UK’s history – and the creation of the new National Investment Bank (NIB) are also raised. The EAC wants Chancellor Rishi Sunak to guarantee that the bond is only used to support projects which deliver “demonstrable, significant and measurable environmental benefits” and that the Bank will have a net-zero and nature recovery mandate.

“The Covid-19 crisis must be treated as a wake-up call; it is a symptom of a growing ecological emergency,” EAC chair Philip Dunne MP said. “The economic recovery will shape our national economy for decades to come, and it is crucial that tackling climate change and restoring nature is at its core.

“A tax system fit for net-zero Britain is key. It will encourage innovation, give confidence to the sector and support companies to make the low-carbon transition. There are endless initiatives that can lead to a greener future and the Chancellor should use his upcoming Budget statement to start this process.”

Reacting to the EAC’s report, Wildlife and Countryside Link’s chief executive Dr Richard Benwell said: “This welcome report rightly shows that a truly green recovery must reach every corner of the economy.

“Investing in a green recovery to restore our failing natural world and decarbonise our economy could create hundreds of thousands of new jobs, as well as making our streets, rivers and the air we breathe healthier. In particular, we welcome the recommendation to pilot a National Nature Service, which would follow the example set by President Biden in deploying a large-scale environmental employment scheme.”

Green Alliance’s head of climate policy Caterina Brandmayr added: “Frontloading investment in climate solutions, nature and the circular economy, and ensuring recovery plans are consistent with our climate and environmental goals, must be a priority in the upcoming budget and government strategies.

“This will help create jobs, benefit businesses and communities across the country, and ensure the UK is seen as an environmental world leader as it prepares to host first the G7 and then COP26.”