As the UK shutters its last coal power plant, a new study hails the decarbonisation of the country’s power sector as an exemplar of global climate policy. But experts warn the most challenging tasks are yet to come.

The UK closed its last coal-fired power plant, Ratcliffe-on-Soar in Nottinghamshire, at the end of September. This marked the end of 142 years of coal power in the country. It is the first G7 country to achieve this feat.

Decarbonisation of the power sector has been one of the few successes of the last 14 years of Conservative government, despite missing climate targets in other sectors. A new study on global climate policy highlights it as one of the few examples worldwide where direct policy interventions resulted in major emissions reductions.

How did UK policymakers achieve the milestone? And, with progress stalling under net-zero sceptics Liz Truss and Rishi Sunak, how can the new Labour government advance British climate policy towards net zero?

A mixed bag

Last month, an unprecedented study published in Science analysed the effectiveness of 1,500 climate policies from 41 countries, spanning six continents, over the past two decades. The research, led by climate econometricians at the Potsdam Institute for Climate Impact Research (PIK), the Mercator Research Institute on Global Commons and Climate Change (MCC) and the University of Oxford, revealed a sobering reality. Only 63 policies resulted in significant emissions reductions – averaging 19%.

Researchers used a new OECD global climate policies database and applied an AI-based methodology developed by the Institute for New Economic Thinking at the Oxford Martin School and Smith School of Enterprise and Environment (INET Oxford). The aim was to measure “emissions breaks” following policy interventions.

“The policies we detected in the study only reduced global emissions by between 0.6 and 1.8 gigatonnes of CO2. Whereas the current emissions gap for 2030, to achieve 1.5°C, is 23 gigatonnes,” co-author Ebba Mark, a researcher at INET Oxford’s Calleva Project, tells E-FWD. “That’s a very small proportion.”

The research identified a key trend in the 63 successful cases. This was the inclusion of tax and price incentives in well-designed policy mixes.

“Our findings demonstrate that more policies do not necessarily equate to better outcomes. Instead, the right mix of measures is crucial,” said lead author Nicolas Koch from PIK and MCC.

“For example, subsidies or regulations alone are insufficient. Only in combination with price-based instruments, such as carbon and energy taxes, can they deliver substantial emissions reductions.”

UK power play

The study highlighted the success of the UK’s coal power phase out for reducing emissions. It also noted policy interventions in the transport sectors in the US and Norway. The report noted a diverse package of restrictions and incentives – or “carrots and sticks”, as Mark put it.

In 2015 and 2016, the country cut emissions significantly. Earlier studies highlighted the mid-2013 introduction of a carbon price floor. This imposed a minimum price for UK power producers in the EU Emissions Trading System (ETS).

However, the new study attributed the reduction to broader policies stemming from the Climate Change Act in 2008.

This package included command-and-control measures such as renewable portfolio standards, renewable expansion planning, stricter air pollution standards and the announcement of a phase-out of coal power plants. There were also other market-based incentives such as renewable feed-in tariffs (FiTs) and auctions.

These measures were introduced in the early 2010s. Without them, the country’s emissions would have been 43.6% higher, researchers found.

More than a number

In a webinar discussing the study’s results, Chris Stark, former CEO of the UK’s Climate Change Committee (CCC), said there had been a sense that carbon pricing would be important.

“But we’ve demonstrated that you need a bit more than just a carbon price. You need a mixture of regulation and incentives. And you need to bring that together in a way that allows the private sector to finance it at scale.”

After his July election, Prime Minister Keir Starmer chose Stark to head the government’s Mission Control for Clean Power. This is a new body tasked with moving the UK to clean energy by 2030, five years earlier than the previous government’s 2035 target.

“[The 2030 target] isn’t really about emissions saved, it’s about the story we tell about how to achieve net zero in this country… [It’s] about electrifying the economy by and large,” said Stark.

He added that the success of the Climate Change Act “shows you can usually achieve more than you think over time, as long as you keep implementing a [broad] package of measures – and don’t mess around with them so much that you disturb investor confidence. Whatever route you take to lower emissions, it typically involves investing a lot in capital across all the relevant sectors.”

Despite their work in the power sector, particularly with the coal phase-out, UK climate policymakers have room for improvement elsewhere.

Uniper's iconic Ratcliffe power plant closed in September — *Uniper’s iconic Ratcliffe power plant closed in September*

Yet to come

The research did not detect significant emissions reductions – defined as more than a 5% reduction – from policy interventions in any other sector, other than those expected from economic and demographic trends.

To reach net zero by 2050, the country must decouple emissions from economic and population growth. It must deliver this in heating, transport and industry.

“The Climate Change Act requires the government to come up with the plan. In other words, to produce specific policies that they’re going to implement to meet the carbon budget,” Alina Averchenkova, lead for Governance and Legislation at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics, tells E-FWD.

“However, the legislation doesn’t specify how quickly this should be done, nor what happens if the policies don’t add up to the carbon budget.”

Last September, the Sunak administration reversed its stance on several net-zero policies without balancing the resulting carbon deficit. In its July progress report to Parliament, the CCC revealed that a third of the emissions reductions required to achieve the UK’s 2030 climate target are covered by credible plans.

Finding the benefits

To meet net-zero goals, UK policymaking must shift from focusing solely on the upfront costs of the climate transition. Instead, it must start accounting for the considerable benefits that will accrue over years to come, according to Dr Anupama Sen, head of policy at the Oxford Smith School of Enterprise and the Environment.

“In more than 80% of investments the total lifetime cost of a clean technology is considerably lower than that of a fossil technology. While the new UK government’s policies are moving in the right direction, they need to go further and faster to unlock these lower costs.”

To implement fast and effective climate policy, the UK should copy what worked in other countries. In Norway, the government slashed transport emissions by 15% between 2013 and 2019 by providing generous subsidies for electric vehicles (EVs). It also provided benefits such as allowing EVs in bus lanes.

Similarly, Germany reduced emissions by 19% by gradually scaling a social tax since 1999. It also introduced a toll for trucks in 2005.

In the buildings sector, Sweden cut emissions by 16% by boosting its carbon tax and adopting subsidies. As a result, the country now has one of largest shares of air-source heat pumps in the world.

In industry, China achieved a 10% reduction in emissions during the pilot phase of its ETS. It also brought in a number of fossil fuel subsidy reforms, which increased prices.

“These types of policies, which we can [now] specify and quantify, that can really be a guide for the UK,” said one of the study’s co-authors, Moritz Schwarz, an associate with the Climate Econometrics project at Nuffield College and the Smith School for Enterprise and the Environment, in the webinar.

Path finding

“[But] the hard bit is yet to come,” admitted Stark. Decarbonising the built environment has yet to start in earnest in Britain. Stark agreed the country must learn from other countries, particularly for heat pumps.

Similarly, there has been a lack of progress in agriculture and land-use sector. “You can’t wait for that, there are literally biogenic cycles that mean you have to move now if you want to do it in time,” said Stark.

There is still a challenge in how to provide dispatchable power. Intermittent generation from solar and wind alone cannot fill the void left by moving away from coal – and ultimately gas.

“Doing that in a way that’s good for both the climate and the consumer isn’t easy,” said Stark.

The Climate Change Act may have got the UK off to a good start. But to progress the UK will need to craft a new additional climate policy, acknowledged Stark.

“We need a really dynamic picture of the right policies, trying to get ahead of some of those technology curves, building the basic confidence for those long-term capital assets we need to invest in.”

“[After the closure of Ratcliffe-on-Soar], it’s kind of ‘job done’ on coal,” said Stark. “But what we have ahead of us is much, much more difficult.”

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