November 2marked the end of a consensus fundamental to British politics for the last 20 years.

Public policy to reduce CO2 emissions and achieve net zero has had consistent support from successive governments and six prime ministers, from Gordon Brown to Rishi Sunak.

All the parties endorsed that consensus. Not just at Westminster but also at Holyrood. There have been differences in emphasis and target variations between and within the different parties.

The overall objective of net zero by 2050, set in 2019 by Theresa May’s amendment to the Climate Change Act, has not been contested.

Competing offers

On November 2, that consensus was broken. The Conservative Party elected Kemi Badenoch as leader. While she recognises climate change as a challenge, she does not believe in net zero. The same shift would have occurred if Robert Jenrick had won.

Of course, the Conservative Party is in opposition and its leaders’ views won’t change any policies in the short term.

British politics are volatile, as can be seen in the dramatic changes in Westminster following the July election. Less than 5 years ago, voters elected the Tories a majority of over 80 seats. Now, Labour has a majority of over 150.

Traditional party loyalties and ideologies have been replaced by a consumer-oriented approach. Parties now offer policy packages designed to appeal to voters.

The end of the consensus matters to the energy industry and consumers. It adds doubt and risk to their decisions. Our energy mix depends on a mass of decisions. These are from the producers of oil, gas, wind, nuclear or solar power, but also on the decisions of individuals and businesses.

Policy support

The energy transition depends on public policy – on regulations and subsidies. The policies will determine whether companies invest in production capacity – the next wind farm or new nuclear facility.

They will also determine whether households scrap their existing boilers or petrol cars for heat pumps or electric vehicles.

The chance of a new government arriving in 2029 and changing net zero plans is a risk. This may deter people and companies from rethinking their current energy systems.

The consensus breakdown is not driven by climate denial. In the US, recent polls show some 40% of the electorate regarding climate change as a hoax. In the UK, a clear majority accept it as a reality and long-term threat.

What has changed is the perception of the cost of the transition. There is a realisation that reaching net zero will require large-scale, upfront investment.

There is growing awareness – across the public and policymakers – that the energy transition carries costs. We must pay these capital costs before consumers enjoy any of the benefits.

Those costs include building new nuclear plants at Hinkley and Sizewell, renewing the power grid for increased electricity use, developing carbon capture and storage (CCS), electrifying the remaining 50% of the railway network and replacing traditional steel production methods and other heavy industrial needs.

At the domestic level, we need to transform home heating systems and replace millions of ordinary cars with EVs.

This led Badenoch to say the drive to net zero would “bankrupt” the country.

Who pays?

This fundamentally transforms the existing energy economy – 80% reliant on fossil fuels – that we depend on.

The transformation is possible. There is debate on how to pay for it. This uncertainty leads to fears of rising utility bills and the imposition, through regulation, of costs that households and businesses question their ability to afford.

The end of the consensus is not accidental and is not limited to the UK. In Germany, there are doubts about the pace and costs of climate policy. For Germans, the primary concern is business competitiveness in a country dependent on manufactured goods exports.

Support for the AFD, a right-wing populist party that came second in the recent European elections, has sharply risen. With the departure of the liberal FDP from the governing coalition, a new Bundestag election looks likely. A new CDU administration could be in power within months.

Brexit redux

In Britain, the consequences of the breakdown of the consensus are unclear. The shift echoes the debate about the country’s relationship with the European Union a decade ago.

In both cases, there was a sense that a metropolitan elite designed and pushed through policies. A decade ago, that debate ended in Brexit.

The end of a common cross-party approach on climate change could lead to accusations that elitist energy policies reflect indifference to consumer costs and threaten jobs in the established energy industry.

Climate policy was a technocratic issue, focused on finding scientific and technical solutions. It is shifting to a Brexit-like issue, which could easily descend into rough, raw politics.

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