This article was written for Politics Home by John Penrose MP, Jo Gideon MP, Stephen Kinnock MP and Arjan Geveke
Today, we are launching a cross-party and cross-industry commission to explore how the United Kingdom can reach net zero without undermining the competitiveness of British industry.
We are a cross-party group, which means we follow the proud tradition of pursuing climate action by consensus. From introducing the 2008 Climate Change Act, to being the first developed nation to put the net zero transition into law in 2019, as well as hosting COP26, successive governments of all political stripes have sought to lead international action to tackle climate change.
But reaching our net zero goals requires more than summits and legislation – it requires rapid changes across the whole economy, which poses potential challenges as well as opportunities. We must make the transition at a minimum cost to society, the economy, and the public purse.
Nowhere is this conundrum more acute than in the United Kingdom’s energy-intensive industries – the factories, foundries, and furnaces that form the backbone of our steel, ceramics, cement, and other manufacturing sectors. These industries have a key role to play in the transition to net zero by investing in new technologies and manufacturing the materials vital to decarbonisation.
However, they are not operating on a level playing field. They face international rivals who can dominate supply chains and produce products without having to worry about net zero taxes, regulations, or environmental targets.
If we cannot fix this problem and maintain the competitiveness of UK industry against these international players, our exports will suffer, and new investments and production will take place elsewhere. What is more, the same emissions will still occur, just in another country, while UK jobs and investment are lost here. This is known as carbon leakage and it not only damages UK industry but also fails to reduce emissions and risks leading to mass deindustrialisation.
That is why it is critical that the government helps deliver a just transition for workers, businesses, and communities. Decarbonisation must not lead to deindustrialisation and the mass offshoring of well-paid jobs.
The answer is not to back out of our climate commitments but to find ways to support industrial decarbonisation while retaining their ability to compete internationally. That is why we have formed the Commission for Carbon Competitiveness. We aim to find solutions to carbon leakage, such as Carbon Border Adjustment Mechanisms (CBAM), so we can transform our energy-intensive industries and industrial communities into being the nexus for green growth and not victims of inevitable decline.
Over the next few months, the commission will gather evidence from a cross-section of industry and subject matter experts and engage with MPs across the House of Commons who share the same interest in achieving net zero while maintaining our strategic industries. We will publish a full report of recommendations in the Spring.
As we carry out our work, we will keep our focus on the overriding objective: ensuring Britain’s world-leading efforts to reduce emissions work for, and not against, the interests of our industries and the communities they enrich.
John Penrose, Conservative MP for Weston-super-Mare and chair of the Commission for Carbon Competitiveness. Jo Gideon, Conservative MP for Stoke-on-Trent Central. Stephen Kinnock, Labour MP for Aberavon. Arjan Geveke, director of the Energy Intensive Users Group.