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Hope is not enough for net zero – we need independent strategy

Nothing changes if nothing changes.

If you keep doing what you’re doing, you’re going to keep getting what you’re getting.

I have a strong dislike for fast-food philosophy – by which I mean the rubbish which increasingly proliferates my LinkedIn feed thanks to a growing band of like-hungry influencers.

However, these words, from author Courtney Steven, resonated with me, because they succinctly summarise how the energy transition is currently playing out in the UK, and the real danger which lies ahead if we don’t set a different path.

In recent times, we have seen our political system become addicted to short-termism. One where an insatiable thirst for votes today always trumps the long-term thinking required to properly shape tomorrow. The consequence has been a chaotic and reactionary response to energy policy which has left us in a real mess.

And that is why we need a new body – wholly independent of government – to draw up a multi-decade strategy to deliver the energy transition. Because something has to change.

Clarity is needed to unlock the trillions of pounds worth of investment we need to develop the infrastructure and technology required to make our hydrocarbon-hungry nation a green energy powerhouse. This is something our political system is, frankly, incapable of delivering.

Like the Bank of England, this new body should be charged with developing recommendations which could command cross-party consensus and insulate the sector from political policy shocks in the future.

Bank Of England, London. By cristapper/Shutterstock

Contradiction over clarity

Instead of clarity, the industry has been lumbered with a cornucopia of contradiction from all the UK’s major political parties.

At Westminster, we have a UK Government led by a Conservative Party which wants to mandate future North Sea licensing rounds, while strangling investment with a windfall tax.

Any policy seeking to boost UK energy security and North Sea production is pointless when it is accompanied by a fiscal regime in which nobody wants to invest.

A huge opportunity to turbocharge the energy transition was also missed by not extending the investment allowance attached to the Energy Profits Levy to include all renewables projects.

Labour – the party that wants to replace the Tories in government this year – has made a lot of noise with its energy strategy, but with a big question mark over its flagship commitment to spend £28 billion a year on green projects, people are rightly questioning the substance behind it.

If you believe the polls, an incoming Labour government will come to power with just 2% of the offshore sector believing they have the right policies to deliver energy security and just 7% backing their vision for the energy transition.

Keir Starmer, Ed Miliband and Scottish Labour leader Anas Sarwar.

And you’ll find more contradiction north of the border, where the SNP-Green administration has been tied in knots over its draft energy strategy, which – like Labour – put forward a presumption against oil and gas.

During a recent visit to New York for the city’s Climate Week event, Humza Yousaf said the Scottish Government was ready to “put its money where its mouth is” and provide “moral leadership” on the climate crisis.

It was surprising therefore to find in its budget for the 2024-25 financial year that money for the Just Transition Fund will drop by 76% from April, from £50 million this financial year to £12.2m in the next.

Three years into this decade-long fund, just £87.2m of the £500m promised will have been spent, based on current projections.

At best, this can be described as a piecemeal approach to tackling what the first minister rightly calls the biggest challenge of our generation.

At worst, and if spending is not accelerated, it could become a dereliction of the 90,000 people employed in Scotland’s energy sector, 45,000 of whom reside in Aberdeen and Aberdeenshire.

He wants us to be the net zero capital of Europe. But hope is not a strategy.

Energy, independent

As we kick-off an election year, do we really expect things to get any better? I’m not holding out much hope.  Which is why we need a seismic shift in how we draw up long-term energy policy in this country.

Right now, we are at risk of the North Sea oil and gas industry being wound down through rhetoric, rather than strategic policy. If this continues unchecked, it will be as chaotic as it will be economically damaging.

So, what is the solution? My view is that we need a new body, entirely independent of government, to set a policy direction for the next 40 years.

Like the Bank of England – which has maintaining monetary and fiscal stability as its central mission – the new body should be charged with developing recommendations which could command cross-party consensus and insulate the sector from political policy shocks in the future.

If nothing changes, and we get five more years of the same muddled policy, then nothing will change. Discretionary capital will continue to move overseas, the transition will stall, and a world class supply chain built up over decades will go.

We can – and must – do better.

Ryan Crighton is Director of Policy at Aberdeen & Grampian Chamber of Commerce.

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