Tony Blair turns up the heat on net zero

Tony Blair’s intervention this week on the climate debate has seen another powerful voice calling for a net zero reset.

The Tony Blair Institute report ‘The Climate Paradox - Why We Need to Reset Action on Climate Change’ has been interpreted by some as an attack on Ed Miliband’s dogged determination to continue to focus on delivering the UK’s net zero by 2050 target, despite the huge change blowing through the world and growing cynicism about net zero policy choices.

Media analysis of the Blair report has leaned into those political tensions and culture wars around net zero, perhaps unsurprisingly given the report was published the day before local elections.

Interventions today from trade union Unite, supporting Blair’s conclusions and calling for investment in green jobs and skills to allow the UK to prosper in a world of both renewables and fossil fuels, does little to shut down speculation of a growing Labour Party rift on net zero policy. 

Yet Blair’s report is far more pragmatic and measured than many media stories would suggest.

 This is not a denial of climate change science (and indeed it calls for ongoing action to combat global warming), nor is it a call for ending investment in renewable energy. Rather it recognises that energy demand globally is rising as are the use of fossil fuels and calls for policy solutions that recognise that reality.

One of the core points he makes is that the developing world is powering economic development and growth through increasing fossil fuel use at the same time that developed countries are cutting back fossil fuels and calling for a rapid phasing out of them globally, is (as the report says) an inconvenient fact and leads to the conclusion that we need a reset of ‘irrational’ net zero policies.

The argument put forward in the Report is that we have to accept the reality that fossil fuel use cannot realistically be phased out by 2050 and we need to re-orientate our approach from trying to persuade and pressure the world to drop fossil fuels onto a more pragmatic solutions-based approach that looks at how we use energy more efficiently (using AI) and how we remove carbon from the atmosphere (through Carbon Capture and Storage and nature-based solutions). The thinking being that we can’t stop fossil fuel use entirely but we can do more to abate the damaging emissions that come from it and boost alternative sources of lower carbon energy.

The report also makes a strong plea for investment in a wide range of technology, which includes renewable power (which the report describes as ‘both necessary and cost effective’), as well as in nuclear power (including modular reactors). In addition, it calls for an acceleration in investment in carbon removal to deliver climate goals through technology.

To do that, Blair says we need to mobilise finance (notably philanthropic capital) to invest in scaling new carbon removal and reduction technologies.

In reality it’s going to take more than philanthropic capital to do that but that call for a new approach is landing on political and social ground that is already being re-set in light of the great vibe shift that has been accelerated by Donald Trump and his efforts to broker a new deal in global geopolitical and trade relations.

Many environmentalists have reacted strongly to the report, believing it inflicts yet more damage on net zero as a global approach and pointing out that carbon capture technology is still at an early stage, has yet to scale and that if we accept the climate science, which is supported by the bulk of the global scientific community, then we don’t have the time to switch direction and therefore cutting emission through phasing-out fossil fuels for energy use has to remain an imperative.

For business, the report and resulting debate is yet another challenge to ESG and environmental impact which leaves them facing yet more uncertainty. If the end result is that the Labour Party does soften its approach to Net Zero (even if it doesn’t join the Conservatives and Reform as net zero policy cynics) then what is the result? Almost certainly its more policy row-backs, more uncertainty, delay and inaction in a world that was already seeing significant push back and a lack of progress on climate goals.

In this toxic-brew of uncertainty business is often left to try and forecast for itself where the direction of travel is leading. That’s a significant problem when the result of the forecasting is often going to see large-scale investment in new goods, services and approaches that could result in companies being left with products and infrastructure that isn’t demanded as much as they thought and risks becoming a stranded asset. The world’s automotive industry is currently wrestling with exactly this challenge.

In that world simple truths still matter, and for me there are four core things that stick:

• Renewable energy is now the cheapest form of power, as part of a re-set energy mix (that will also inevitably include oil and gas and nuclear) it has a vital role to play. Regardless of how you view net zero policy choices, the planet is getting hotter and we need de-carbonised energy as much as we need cheap and reliable power. Business needs to play its part in investing into renewable energy systems that meet its needs and provide energy security and price certainty as part of a wider energy mix.
• Donald Trump may believe that global warming is a natural part of the climate cycle, others believe its driven by human activity. Regardless, it’s going to result in planetary warming, sea level rises, huge investment needed in mitigation and management. Business still has to recognise that reality and invest and develop products and supply lines accordingly.
• As humans we consumer far too much and have far too little regard for the natural world around us. We have to change that dynamic and we have to put a price on nature that allows us to value it and invest into its restoration and protection. And yet the global population is growing and developing and we will consume more. We have to build a circular approach to the economy and we need to consume far more consciously and respect our natural environment. Business has a role to play in creating products and circular product lifecycles that enable consumers to deliver these goals through their own lifestyles and choices.
• Regardless of net zero cynicism, research continually shows us that the public expect business to be responsible and to show leadership on climate action. Good businesses are still those that the public, and other businesses, want to buy from, work for and partner with.

While our advice has always been that business needs to focus on a pragmatic approach to delivering a whole-economy transition to a sustainable future, interrogating whether net zero policies are the right framework to get us there is no bad thing, as long as we don’t lose sight of what the end goal actually is.

For business, the need for certainty and policy clarity is now greater than ever. That clarity is unlikely to arrive anytime soon which leaves C-suite decision makers having to follow the science, focus on the facts, and plan ahead with responsibility as their north star.