The Rest Is Politics: Leading - 142. The Truth About Net Zero's Credibility (Emma Pinchbeck)

Episode Date: July 6, 2025

Why are the British paying more for energy than anywhere else in Europe? How does society navigate the anxiety of having children during the climate crisis? What does the UK government need to do in order to speed up our transition to green energy? Rory and Alastair are joined by the Chief Executive of the Climate Change Committee and former CEO of Energy UK, Emma Pinchbeck, to answer all these questions and more. The Rest Is Politics Plus: Become a member for exclusive bonus content, early access to Question Time episodes to live show tickets, ad-free listening for both TRIP and Leading, our exclusive newsletter, discount book prices on titles mentioned on the pod, and our members’ chatroom on Discord. Join today or enjoy a free trial at ⁠therestispolitics.com⁠⁠. Visit HP.com/politics to find out more. For more Goalhanger Podcasts, head to www.goalhanger.com Instagram: @restispolitics Twitter: @restispolitics Email: [e-mail] Social Producer: Harry Balden Assistant Producers: Alice Horrell Producers: Nicole Maslen Senior Producer: Dom Johnson Head of Content: Tom Whiter Exec Producers: Tony Pastor, Jack Davenport Learn more about your ad choices. Visit podcastchoices.com/adchoices

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Welcome to the rest is politics leading with me, Alistair Campbell. And with me, Rory Stewart. And we have with us today, Emma Pinchbeck. And Emma is somebody who knows inside out an area of policy that we talk about a fair bit, but often, I guess, skimming over because it's one of those issues that it's just part of everything that weaves its way into politics and geopolitics. And that is energy. because Emma has run several organisations or had senior jobs in several organisations that are all been about energy.

And she now heads the Climate Change Committee, which is often described as the body that marks the UK government's homework in terms of its commitment to net zero. So we are going to be talking a lot about the climate, about net zero, about the politics of net zero. And I'd like to start, Emma, by asking you if it's true. And I think that since the Queen died, if we're looking for an elderly national hero, it's David Attenborough, that David Attenborough played a big role in setting you on this journey in the first place. Is that right? It is absolutely true, yeah. I don't know how you found out.

I was doing my training contract in the Financial Services as a graduate. And Frozen Planet, the television series came out. And as with all of those nature documentaries, they quite often step back and think about that environment in a particular context at the end of a series. And at the end of the Frozen Planet series, it was focused on the Arctic and Antarctic. They did an episode on climate change.

And I was watching it sitting on the floor of a friend's house. And I can remember feeling viscerally moved by it and deciding pretty much there and then that that's what I wanted to spend my time working on. And so I think I quit my job within weeks of that and went to work in business and environmental consultancies and into energy. And I'm sure we'll come onto it, but energy sits underneath a lot of the debate on climate change and changing the energy system. So yeah, it is true. And I suppose the other thing to know about that is there is often this positioning at the moment of building energy infrastructure as opposed to the kind of desire to protect the natural environment.

And for me, I do this work because I get out of bed in the morning thinking about those natural landscapes and nature and a very traditional conservative conservation model, I think, somewhere deep in my soul, buried beneath layers and layers of energy policy, geekery and nerdery. And it was that flame that has driven the rest of my career. Emma, tell us something about your central role at the moment. And how you balance, I guess, a pretty difficult balancing act, which is being honest, being critical, being supportive, connecting with government, not being part of government, cheerleading,

analysing. Tell us about how that all works. What is the job, actually? Just tell us what the job is and what some of the problems would are. I quite like Alice's characterization of it as marking the UK government's homework. But actually, we're the formal advisor to government and then by extension to Parliament on the level of the UK's carbon budgets and carbon budgets are a fixed amount of emissions to be released in a UK economy over a period of years and we set them about 12 years ahead of time. And if this sounds a bit technocratic, that's because it is we're a scientific expert body meant to advise government on the level of a carbon budget and for them to then take that advice or potentially not take that advice but to use it in the setting of that legislation

in Parliament and it is a public sector job as well which is different from me. So it's a very defined, clear mandate under the Climate Change Act, so we do do other things. I can see you want to ask me more. Yeah, I think for internationalists and others, try to bring that alive. I mean, if you were trying to explain to one of your children, or maybe they're a bit young. He's three, but yeah, I'm five. What it is you're doing without using language like a carbon budget, which I'm afraid most people wouldn't understand at all. I mean, what's the point of your job? What do you really trying to do for the world? I'm a big fan of the UK's climate governance, and that's because what we're trying to do in the UK with the carbon budgets is take

this global challenge of staying within a particular average global temperature, 1.5 degrees under the Paris Agreement or well below two, and then translate that into a domestic target or program in order to drive emissions out of national economies. And there are different approaches in different nations. Most countries have gone for a system of hard targets for particular technology, say renewables of a certain percentage or they've gone for a decade-specific, like a 2030 target for emissions reduction. What the UK has done is take that long-term problem and then break it down into five-yearly chunks and set them ahead of time. time. And there are two things that are really important about that. One, there's quite a range of

things that can happen in five years. So there's some flexibility within the policy and it's not technology specific which allows innovation to happen. And a good example of that is when we were setting the first three carbon budgets in the 2000s, the climate change committee, the energy sector, no one thought that they would be delivered by offshore wind because it was a nascent new technology that no one really considered as a dominant technology in the energy system. And it's offshore wind that delivered a significant chunk of our emissions reduction in the carbon budget. So it allows for the private sector to surprise us. And the other thing that's smart about them is they're designed to sit outside political debate and politics and be long-term and forward-looking, which allows parliamentarians

and governments to see where the world might be going and to take a view and then to set their own policy of the day accordingly. So each government is setting a carbon budget 12 years ahead for another government to deliver and they're working within a framework where they can take various different policy options. And I think that combination of state and private sector and flexible, but clear enough that people can invest, is really clever governance. How does that work, though, in practice when, so you mentioned there that this is about long-term planning for the future of the country. And we've been through a conservative government. You've now got Ed Miliband leading up the policy for the UK government. It's got a reputation of being very much kind of,

you know, try to take a leadership position towards net zero. And then you've got Kemi Badernock, the Tory leader, who is basically saying that she wouldn't commit to the same sort of targets that he's got. So how does this work between you setting out the budget, as it were, and if we think about it in terms of a normal budget, as people understand it, this is like the environmentally equivalent thereof, but longer term. But do the politicians actually have to listen to you? Simply no, they don't. The authority of the climate change committee and the advice comes down to the expertise that underpins the number that we're suggesting to a government. But they could come up with their own number and then they would, I assume, defend it in Parliament and legislate accordingly.

equally we've already changed the target in line with scientific changes internationally. So our first carbon budgets were set before the Paris Agreement in line with an emissions reduction target of 80% in the economy by 2050. And it was revised because the international science and the international target changed. And so theoretically a government can come in, change the targets and we would advise them accordingly. Now the committee would likely tell them if what they came up with was weak, in terms of either their international commitment or the actual science and climate change, we would probably reflect that in our advice. But we have delivered advice to devolve governments where they've gone further than us on their targets, for example, or done things slightly

differently. And that, again, is part of what's good about the UK's climate governance is ultimately we are a expert body. The committee members are all experts in their fields. They're senior economists or technologists or academics or former politicians. And they all bring something and they're meant to support policymakers, but it is ultimately for elected parliamentarians to take a decision on what the targets look like. So, Emma, as far as I get it, what you're trying to do is you're trying to reduce carbon emissions in the UK because you're trying to make a UK contribution to slowing climate change. You're trying to meet these Paris targets in the UK is trying to play its road in that. And your job is to mark the government's homework on whether or not

it's managing to achieve those emissions reductions. Is that right? That's why I'm sort of pushing for the explanation in a more simple, simple language. What's the big picture of what you're trying to do? There's an international agreement done through the UN climate change negotiations that we should stay at about 1.5 degrees of warming. There was a deal reached in Paris in 2015.

And what every country then has to do is go away and work out. It's called a nationally determined. contribution, but its own individual contribution to that global effort. And it has to be done territorially, as in within country borders, because you can't tell another country with sovereignty that they should do something in their manufacturing sector. So every country is supposed to go away and prepare its plans. And what the UK did in the 2008 Climate Change Act and then in response to Paris is work out what our plans would have to be to be considered a fair contribution to that global effort. And then what we did, unlike other countries, is not set hard, specific,

decade or targets for a certain percentage by, you know, at 2030 or 2035. We set an envelope of emissions. So we set an outcome in the economy that we're looking for over a five-year period. So the other thing we do is we set those carbon budgets about over a decade ahead. And that gives investors and governments long-term certainty about where we might be heading, because we've legislated a target for 12 years time, but there's enough flexibility in the model that we can be surprised about how it's delivered. And Emma, how does it affect your work and your view of what you're trying to do when something like Donald Trump comes along as president of one of the two biggest emitters in the world and decides no longer to be part or to feel bound by Paris

and by the international consensus that's been reached? How hard does that make, how hard does that make it for you to kind of have the long-term approach? Or do you just have to try and work around it? I think there are two answers. One is practical, which is the noise around net zero and climate change in politics at the moment was a much bigger problem for me in my last job, whereas Chief Executive of the Energy Trade Body, because investors are relatively short term. So they're making decisions now about what they think the politics will be.

They read headlines. They're not necessarily reading sort of sophisticated. economic analysis. And the last time there was noise around net zero targets in the UK and I was in my last job, we were losing millions of pounds worth of investment from the UK because the energy sector reads net zero as a infrastructure project as a sort of long-term strategic industrial strategy. They want to invest against it. And so that political uncertainty is a problem.

The point of the climate change committee is with the medium long-term people. So I guess thinking about what the world looks at. like in 2030, that's where the committee's heads are. They're thinking ahead of time. That's the work that we're doing analytically is focused on the late part of the 2030s. But how can you, on something like climate change, how can you do that without really making deep assessment of the position in the United States, the position in Canada, the position in China, position in India? Surely there has far greater impact than what we do? There's definitely a practical thing about is this is the political noise meaningful in terms of the feasibility of

delivering against our targets because under the climate change that we are required to advise government on feasible delivery pathways and a feasible target and I think so things like the change in the global economy the idea of more protectionism may be concerns around supply chains, these things manifest themselves in our advice. And so in the seventh carbon budget, this is the one that we've just published in our advice for the UK government in the late 2030s and 2040s. We are talking about particular industries, needing to have industrial strategy, needing to think about energy prices, needing to be aware that energy security is really important. We say that a UK household with a gas boiler and a gas-based energy system in the 2030,

30s and 40s is something like 12 times more exposed to another gas price crisis of the time we've just seen and reflect the sort of uncertain geopolitics and some of that. So I think there's some below the noise is this significant of a change in policy direction that we have to think about. But we are supposed to be taking a medium long-term view. And so I get asked this question a lot about net zero. And I say to people all the time, it was genuinely more immediate in the last job when I was dealing with the private sector.

I just wanted to say to Rory as well, the other thing is we are the body that advises government on climate risk. So if we, of course, think that there's more chance of climate impacts materialising because governments aren't acting, then our Adaptation Committee, which is the other big body at the Climate Change Committee, confusingly singular title, two committees, that group of experts will be thinking about what does this mean for UK flooding, for extreme heat for rising sea levels under a outcome where we might not stay beneath 1.5 degrees. So we are doing the risk management,

I guess, for a lack of political will eventually too. And Emma, one of the things I think that was reported is that one of the reports at least suggested that not all the government policies were credible. I think there was a, I don't know, one third of the proposals when were credible. What does that mean?

Try to bring the life and what more does the government need to be doing? I mean, where's the gap? What are we likely to miss unless stuff gets sorted out? And what have we got to do to address that gap? Because reading reports, it looks as though we're not credibly on track. You're not confident that everything that's happening It's going to make us achieve the target that's been set.

Is that right? That is right in terms of current government progress. As well as advising the head of time, the homework marking bits that every year we publish an annual report and every two years on the climate risk piece about government progress. And we give that to Parliament so they can hold government to account critically in the UK. The biggest gaps in terms of policy delivery in the UK are around the next bits of the economy that we need to decarbonise.

So the UK's decarbonisation to date has largely come from the power sector. It's come from replacing large power plants, gas power plants mainly and coal, with renewables and flexible technologies. And that has caused the UK to reduce its emissions by over half against 1990 levels. That's a really good news story in the UK, particularly for the home of the Industrial Revolution. But now the story is how can you use that clean electricity and other bits of the economy? and in particular in heat and in transport. Now, with transport, actually, that's less of a policy job than getting the market framework right for cheap electric vehicles to come through

and people to buy them when they come to replace their cars. But for heat in the UK, it's much more challenging and is likely to need some leadership from government. And that's because 80% plus of UK households have individual gas boilers. We're not like Europeans or some other countries where we have shared heating systems or electric. We use individual gas boilers. And for at least as long as I've been working in the energy sector,

successive governments haven't really come up with a decent framework for dealing with that. And the big underlying driver always for us is can you make the alternative cheaper for people and more attractive so that the market can just do it? And the biggest barrier to the uptake of electric vehicles and heat pumps in the UK is that our electricity price is high and some of that is down to government policy choices. And so there's this kind of series of policy decisions that government aren't making. I have to say, having come off the back of an energy crisis, I cannot understand why they're not doing what everyone has been recommending in terms of removing some of the policy costs of electricity bills in the UK to make electricity cheaper. But that I'm sure we can get into.

Electric heat pumps is something people keep talking about. Yeah. What is an electric heat pump? How much does it cost? Why am we not getting more in? and how much of a problem is this electric heat pump in the grander scheme of things? Getting people removed from gas to electric heat pumps would solve 5% of your problem, 20% of your problem, 2% of your problem? I mean, how big an issue is this and why is it not happening?

So in terms of do they matter, yes, they are a keystone technology for decarbonisation in the UK for the 2030s and 40s, and that's because we've squeezed emissions out of the power sector pretty credibly. we think transport will be driven, pun intended, by electric vehicles through the market. But in the UK, we do have this problem of replacing gas boilers with heat pumps. And they're just a different technology. They're very common in Europe. They're very common in parts of Asia. And I'm going to get into trouble with a load of engineers for describing them this way.

But that's been the story of my life. They are like, think about an air conditioning unit that does heat. So they take heat from either the ground or from the air, and they pass it over a heat exchanger in a box that sits outside your house, and they kind of bump up that heat to make it warm enough to then warm your radiators up. And unlike a boiler, they don't produce really, really hot radiators and hot heat a couple of hours a day. They keep your house at a particular temperature over time. Now, this is very common.

Any Europeans listen to this will be like, yes, obviously that's how heating systems work. But in the UK, they're just very novel, and they're seen as this brand new technology. and we don't have a heating market or an installer base or a heating industry that is designed to fit them. They used to be also concerns with our housing stock because the UK, having not had the same experience of the European World War, still has a lot of old housing stock. And because heat pumps are a very efficient technology, they work best in buildings that are well insulated. But as the technology has improved, we can now put them in more buildings. So we're relatively confident most households in the UK can.

have them. In terms of cost, because they're a novel technology in the UK and the installer base and so on, they're more expensive than a boiler. So the big policy challenge is can you get the cost of them down? Can you scale them in the market to do that? Can you get people to adopt them? And also, they should be cheaper to run. So we reckon that a household in the UK that had a heat pump rather than a gas boiler saves about £700 per year by net zero than one where they stay dependent on fossil fuels, but to realise that benefit, we have to change how we're putting policy costs on electricity. We have to make electricity as cheap as possible. And there's been a reluctance to do that. You said in answer to Rory's last question that you don't understand

why the government isn't doing things that could bring the cost of energy down. Can you just elaborate in that? What should they be doing and why aren't they doing it if it's so simple? Or is it not just the fact that this is a really complicated area where the simple may look simple but isn't always as simple as it sounds. Get excited while I talk you through electricity prices in the UK wholesale market. I'm sure that's what everyone tuned in for. So when you think of the thing that we want the government to do and in my last job I was asking for this because we went through the energy crisis in the UK. People couldn't afford to pay their bills and we were looking for ways to get bills down. And

In most countries around the world, the investment in energy infrastructure in networks and in new infrastructure and then policy costs, things like social tariffs or fuel poverty support or other things, that either sits on the bill or it sits in taxation, sometimes pass through the private sector, but ultimately that's what happens. And in the UK, our policy costs sit on the electricity part of our bill, bearing in mind that most people in the UK have a dual-fill bill. gas for their heating and they're using electricity otherwise. And the decision to put those costs on electricity is in one way logical because some of it is financing new electricity infrastructure. But what we have accidentally done is make the fuel of the future where we're going to be asking

people to use more of it in their households, where it's going to be driving our industries, where it is the absolute heart of the current energy transition. We've made that more expensive with a policy choice. And so then you end up having to effectively additionally subsidise the technologies because the market can't finance the operational savings that you make, the fact that these technologies should be cheaper, the efficiencies of them, and can't use low-cost electricity. What it also does politically is make people think that electricity must be more expensive than it is. So when they hear people like me telling them that renewables are cheap or these technologies are cheap and they see their bill, they think it must be, that we must be making it up.

And so I think there are very good political reasons to try and give people the benefit of cheap electricity as soon as possible. Now, the government has resisted moving those policy costs into taxation, fairly obviously because there's a cost to it. But the long-term consequences, they are harming the ability of the market to take more of this transition on. And it means people aren't experiencing the benefits of cheap electricity. So that has been confusing to me for some time, I mean years now that this isn't happening. but it's the single most important thing they could do. If you've got, still got brain space, there are more complex things that we can do in energy markets

to realise the fact that we've just put brand new cheap renewables onto systems designed for fossil fuels. And in the UK, our electricity price, and in most markets, we use a market design where the overall price in the market is dictated by the last possible plant on the system. And all you need to know in the UK is that's gas.

Gas is more expensive than renewables, and it means that the electricity price that would be cheaper is driven up by the cost of gas. And so our electricity price tracks the gas price. And we're very dependent on gas in the UK, and we use a lot of it, and we've got a lot of gas and electricity mix. So that's why our electricity prices are higher. It sounds to me like you're marking the government's homework quite low.

I think that based on... 10 years of working in the energy sector, I'm pretty confident that we're in the middle of the kind of energy transition that we last experienced at the turn of the Industrial Revolution. Like, I cannot tell you how exciting, terrifying, fast the change in technologies were happening away from fossil fuels towards electrification. And this isn't a climate change committee view that we've got cheap electricity in our modelling. It's an energy sector view. I cannot understand why any economy looking to grow, where energy is such a key input to everything else that you're trying to do, particularly after an energy crisis caused by volatile gas, would not be trying

to make electricity as cheap as possible and taking advantage of the fact that we can have renewables and then we can give them to people to use in their homes and electrified technologies as quickly as possible. And so it's, I don't know, frustrated industrialists for you as much as it is a climate change for you, that one. But it is, I would love to see progress on electricity. So you're hearing 10 years of frustration. The UK government has been a trailblazer in working out how to get emissions down in a major economy and grow the economy and keep, you know, manufacturing GVA. I think there are great things that we've done, this particular piece about cheap electricity and helping people get the benefits of it. I just think we really need to get right.

I mean, try to help us understand what this means for industry and manufacturing. We had British Steel saying that one of their problems was that their energy costs were higher than they would be in Europe and higher than they would be in the United States and that this is a real problem for industry in the United Kingdom. Yeah, this is one of those ones where we're not really sure why industrial energy prices in the UK are higher than in Europe. Though I can talk you through a few key factors. One is what we've been. talking about, which is we do have a higher electricity price here. And that is partly due to the fact that gas sets our electricity price even more often than it does in other European markets where gas might be the price setter. We had a dash for gas in the UK in 2012. We used a lot of gas

in our energy system. We're very exposed to the gas price. And on top of that, gas sets the electricity price about 98% of the time in the UK. So it's pushing electricity prices up. So that's one of the reasons. Generally, when you look across Europe, economies that have a more diverse mix of like nuclear and renewables are not using gas as a price setter and they have lower prices. So I think there's something about, again, getting gas out of our economy and using cheap renewables effectively and getting that electricity price down, that would be really helpful. So the wholesale price is a big part of it. There are also policy costs on the price that industrial users pay. There's a portfolio of exemptions that the UK government gives different kinds

of manufacturers like steel or a chemicals plant or a pharmaceuticals company. But they're not the same for different kinds of plant. And crucially, they are less generous than our European equivalent. So often that difference is that is to do with the exemptions in policy. And that comes back to what you could call a more activist industrial strategy in other countries than we've had here. So Emma, it's sorry, just to simplify, in some cases then, this is that the government is charging or putting something on top of the bill, which was bringing revenue into the government in a way that the Americans and Europeans aren't. Either of the Americans, Europeans are actually actually subsidising. So maybe the government's even taking a loss, getting the energy

these people. But in other cases, I guess it's just the Americans, Europeans are not charging as much. The government's not making as much of it. So there are two different kinds of charge. One is we've got things like a carbon price in the UK, though carbon prices also exist in other markets. So the EU, which is a big competitor for manufacturing, the EU has the emissions trading scheme and a carbon price there, for example. And then there's the other kind of policy costs, which most countries have. And this is the thing where we finance our infrastructure through often levies on bills or the users of energy. And that includes network connections and upgrades, but also the infrastructure to provide the power to people. Now, different countries do that

differently. They spread the costs of that differently. And a lot of Europe, for example, domestic householders pay more of those costs to give industry more of a break or different countries offer bigger exemptions. So it's not that these charges don't exist. They look at different levels in different countries. It's that other countries have had a more activist industrial policy that has said we're going to exempt our heavy industries from these charges at a greater level than the UK. and that's often behind the difference. So a lot of complexity, but the result of it is that Bush's steel is probably right, that they are paying more for their energy than European and American competitors.

And this will be true through other bits of our industry. So if the government was trying to generate growth through manufacturing and heavy industry and really compete with European and American firms, it would have to find a way of bringing those energy costs down. So yes and now. I'll come on to what they could do in a moment, but it's important to say that industrial GVA grew in the UK whilst we were delivering emissions reductions along with GDP. And again, it's quite hard to tell how much it's about energy price or policy and just a structural change in the UK economy towards services or to higher value more efficient manufacturing. So some industries like steel or refineries are using older, more less efficient kit, their older plant, they're from an older industry and we have grown high value manufacturing in the UK at the same time as those industries have had a harder time. And again, the energy prices, those companies pay are also different because the exemptions apply differently to different kinds of manufacturing.

So it's not as simple as manufacturing as a whole. In terms of what governments could do, it is absolutely true that energy prices are fundamental to people wanting to locate manufacturing or energy-intensive businesses here. There's no question about that. And our prices are higher than in Europe and the US. The only solution to that in the UK, so far as I could tell, from working with industries in my entire career

and particularly through the energy crisis, is investment in energy efficiency, is investment in renewables in making the cheap renewables that we can build manifest to the users of energy. And this is about making sure that electricity is actually cheap. and possibly, though this is outside the climate change committee's remit, a more activist industrial strategy.

If the government thinks having steelmaking in the UK is important, it's going to have to do what other countries have done and offer bigger exemptions or have a better industrial policy or plan in advance for these industries and accept that there's a cost to that, but it's strategic. So that's not to do really with energy policy per se. That's a different portfolio of things. Lastly, I'd also say that from the experience of trying to get factories

to come to the UK in my last year, grid connections are also really important. So are you doing your infrastructure upgrades? Have you got roads to get components to people? Have you got skilled labour and a workforce that you can employ in those factories? And that's why it's not just about the energy price. These companies are also making decisions on whether they think you've got incredible industrial policy. And very lastly, something those companies absolutely liked when I worked with them was that the UK had carbon budgets because they saw those as like long-term industrial policy. Their problem was the short-term energy price and the grid connection and the fact that government wasn't moving

to make electricity as cheap as it could be given the renewables that we have on the system. OK, Emma, Rory, quick break, and then back for more. Hello, everyone, it's Gary Lineke here from The Rest is Football. Just a quick message to tell you all about the Club World Cup tournament that's taking place in the US at the moment. It's 32 of the best teams from all around the world battling it out to be crowned the best side on the planet. We've reached the knockout stages of the competition, which means all the big guns will be going head to head.

Manchester City, Real Madrid, PSG, Chelsea and Bayern Munich are just some of the sides vying to lift the trophy. Join myself, Alan Shearer, Micah Richards and our experts out in America, Alex Aljo, as we guide you through the explosive final stages of the tournament. To make things even better if you're watching the video version of the show on Spotify or YouTube, you can also watch all the goals. the best bits of the action as we discuss the games are first for podcasting. Just search the rest is football wherever you get your podcasts. Hi everybody, it's Dominic Samaruk here from The Rest is History. Now, some of you may have heard me on your show, The Rest is Politics, when Rory was away and I was filling in and enjoying Alistair Campbell's tremendous banter.

And I'm back to tell you about our new series on The Restis History, which is all about Britain in the 1970s, a period with a lot of uncanny. panny resemblances to our own. So right now we're living through a moment when oil shocks generated by war in the Middle East are rippling through the world economy, when Britain feels like it's sunk in a bit of a malaise. People are arguing about Europe. The government has got a few issues with the trade unions. And we have a kind of, I suppose you'd say governing elite, a kind of political class that is really struggling to come to terms with all of these issues. and people are asking if Britain is governable at all.

So there are a lot of parallels between that Britain that I'm describing, which is our Britain, and the Britain of the mid-1970s. So in this series that's coming out on the rest is history, we'll be looking at these and other issues. We'll be talking about the rise of Margaret Thatcher, obviously a colossal figure in our political life even now, whether you love her or loathe her. We'll be talking about the very first Brexit referendum of 1975,

a subject that I'm sure Rory and Alistair will have strong opinions about. We'll be talking about the fall of the Labour Prime Minister Harold Wilson and we'll be talking about one of the grimmest moments in Britain's economic history, the moment in 1976 when we had to go cap in hand, as people said at the time, to the International Monetary Fund, the IMF, for a then record bailout. Now, if that sounds good to you, how could it not sound good to you? Of course it sounds good to you. We have a clip for you to listen to at the end of this episode.

And if you want to hear more, just search for The Rest is History wherever you get your podcasts. In February 5th, Ed Miliband made a speech and he relaunched the Net Zero Council, talked about the importance of business, the importance of local authorities. But he very much made it part of the plan for growth, which is the government, the Labour government's kind of number one mission. but he said we have to double onshore, triple solar, quadruple offshore and have nuclear in the mix. Is that all doable? Yeah, in terms of the scale of renewables growth. Now, the government's clean energy mission is not the same thing as the UK's carbon budgets, right? There is a slight difference in what they're trying to do.

Are they realistic objectives? But the scale of growth for renewables is realistic. Now, when we're setting out our advice, we're required to make sure it's feasible. And most of those technology rollout rates are consistent with either what we've seen in other countries or what we've done in the UK previously. And they're based on modelling pretty sophisticated technology S curves. This is the idea that technologies often go slowly into the market while they're developing and they're expensive and they speed up when they're cheaper and then you get sort of the hard bit at the very end. And we've done that with every technology that we need in order to decarbonize the energy system. And that's absolutely possible.

it has been just extraordinary in the energy sector over the past 10 years. We've smashed through every sort of target I've ever seen for particularly solar. There is a more challenging geopolitics. Supply chains are harder. Inflation has been the way it is. But even so, we were at record levels of clean energy investment last year globally. I would expect to see renewables continuing to grow internationally. And that sort of scale doesn't feel outlandish.

So long as you get the investment investment. environment right. And that's part of you've got to have cheap electricity. People have to benefit for these technologies. We have to want to use the energy from them. You also have to have a planning regime that allows you to build infrastructure at speed and you have to have the grid able to take off the power from the new power plant. There is still a challenge in delivery, but it is completely plausible to scale up that kind of technology. And just very lastly, there's a kind of skepticism sometimes I hear about the speed of technology change and what's possible. Just to give you two examples, we're all walking around with phones in our pocket that

did not exist back when I started university and they've kind of fundamentally changed how we live our lives and that happened very slowly and then all at once. And then the other is that we changed the entire gas network at least once in the lifetimes of people who'll be listening to this, you know, in the 60s and 70s moving over from coal gas to now methane and did the whole gas network. we built like 40 power stations in 10 years when we were dashing for gas in 2012. These things are not without precedent. And we've become a bit cynical about our potential to build stuff, but we can do it. And of course, other countries have been doing it at scale.

You only have to look at China and India for that and what they've been doing on renewables and solar. So, Emma, you've got this very difficult task of trying to be as honest and objective as you can be about what the government is likely to achieve. and you've got this very difficult thing of, and we just saw it in your last answer, you can say, yeah, well, it's absolutely feasible, and it could be done. And then you say,

but you'd have to change the electricity prices, you'd have to change the planning system, etc. So stepping back from the, of course, it can theoretically be done. What are the things that your committee is most worried about practically? What are the things that are most likely to go wrong,

given what you know about the real world, taking off your optimists had, what are the things that in the real world are likely to cause real problems? If we miss these targets in 2030, 2035, it will be because of what? And what's keeping you awake at night? Look, I know this is going to sound like I'm dodging your answer and it's not. It's because I'm a new, I'm new, I'm new. Why would you dodge this, given this as the core of your job? It's actually, what I was going to say, it's not the core of my job, actually. So I was about to say, I'm a new public servants. I'm being very well behaved at making sure that I stay within the mandate of the CCC. And the mandate of the CCC is to demonstrate a particular number in 12 years time is feasible.

And we do that by modelling pathways and scenarios that can get you to a number. And so, and we look at global examples of what's possible and we try and benchmark our advice in science and evidence. But we're not the project delivery people. And just to give you an example of that, Just drawing outside the energy sector for a moment, we make advice on agriculture and tree planting and that bit of the economy in the seventh carbon budget. We did a lot of work with the National Farmers Union in thinking about that advice. And what we've done is model agriculture in the UK economy and things like meat production and crop production and land use. And then we've looked at things like tree planting and hedges and peatum restoration, which are all uses of land and considered how farms might change over time. And what the National Farmers Union we're trying to get at was, well, what does this mean for each individual farm?

Can you make recommendations that are like, well, it's five cows from this farm as opposed to, you know, it's stopping or like turning over part of the country to do arable crop? And the thing is about that local farm by farm detailed approach is that is for government in policy and for industries to do in delivery. and what I've learned in 10 years in the energy sector is we will be completely surprised about what the delivery pathway actually is, mostly. It will be the offshore wind story for a lot of the economy where a technology will come through

and do something we didn't expect it to. Can I just suggest to me, I think what we're always getting at is that in a way, so like, for example, you have said, you wish the government would do this because if they did this on this area of policy, that you think would lead to cheaper electricity,

and you can't understand why they're not doing it. But then you don't necessarily want to say things that you say are outside your mandate. But in a way, you've got a leadership voice. Yeah. So what I was going to say to help Rory out is to take off my CCC hat on and put on my decade or so of working the energy sector.

And what I would have said, and I probably said on the record in that last job, in terms of where are the barriers to this infrastructure role? Because a big part of delivering emissions reduction is still energy system change. is still building clean energy infrastructure and utilising it. It is political will, I think, you know, the kind of focus to do some quite complex things. I did try and talk to you about energy market design in this podcast, and it is complex stuff.

It's always more nuanced than it appears on the surface. And, you know, I appreciate the similar conversation on like offshoring. I realize most of the answers I give are like impossibly technical and nuance, but that's because it is. It's a really complex area of work this, and you need people who are going to be able to sit with it and wrestle with it and focus on it and get some stuff done. So there is that, can we, in a age that feels fractured and where it's hard to keep focus, can we just kind of crack on with that sort of detail, quite boring delivery stuff? So there's a sort of political bit there. The other thing is materiality. Towards the end of my last job, I got completely obsessed with global supply chains.

And we have this rising protectionism and a change in geopolitics and a changing trade policy. And if you're thinking about building infrastructure and you're a business, how do you make sure that you've got all the stuff that you need? And we're in a much more competitive environment for a lot of this as well. You know, the skilled workers, the components, the commodities. And that would be my main concern if I was sitting trying to think about delivery, either in government or in industry. And I suppose that comes back to the need for industrial policy.

alongside energy policy, alongside your decarbonisation strategy? It seems as though we're in a, and maybe I've got this wrong, but the way I see it is that we've in a sense got some of the low-hanging fruit, some of the halving of emissions since 1990, were done without it really pushing against the individual household very directly. The next bit is going to be a very heavy lift. And the challenge is that, yes, you've got all the very different,

detailed technocratic idea that experts sit in a room and work out what needs to be done. But in practice, under the surface of what you're talking about, you know, when you say cheaper electricity, what you're really saying sounds like is we're not going to charge people on electricity bills. We're going to increase taxes, right? So the government's going to have to increase tax, right? Or if we're thinking about all the stuff that you're talking about with steel firms, you're getting to the question of people's jobs, when you're getting to these questions about land use,

I think to defend the NFU, they're not really expecting you to get down to the level of five cows, but they're trying to say, what the hell is this really going to mean in practice for farmers in the farming industry, right? And so the challenge, I guess, for the government is that you can't really think about it just in terms of detailed conversations amongst experts, particularly in a time of inequality when a lot of the costs fall on the poorest households, what's really going to derail this is not thinking it's going to be politics. It's going to be people saying, you've got to be kidding me. The taxes are going up. I don't want this happening here. I don't want this happening there. I actually completely agree with that.

And then just to take a few things. The first thing I should say, I'm definitely not telling the NFU off. We've had a great working relationship with them. And I think the point is, and again, in my last job, you know, I had to brief the energy sector and the transport sector and the farming sector about the carbon budget and it's a change I've had to make in my own head since coming over to doing this work that the how it's delivered will feel differently in different to this kind of big exercise in looking across the economy which is the CCC's job and that's okay like they can go faster they can do slightly different things to us they can disagree with our analysis and in that debate you get the quality and delivery and again the value of the carbon

budgets is allows space for the private sector or so the sectors of the economy to disagree and to do things differently. And the NFE have published a couple of papers that will sit alongside our advice for us looking at, well, how would this actually work in practice? And I'd love to do that with other areas of the economy too. In terms of feelings, yes, I talk about cheap electricity all the time, not from a climate change point of view or as a kind of industrialist,

but because I sat with people who had to run call centres at the peak of an energy crisis, there is a record level of debt held by the energy suppliers in this country because people cannot pay their energy bills. It is a critical input into our economy that people should be able to have access to cheap electricity. And the decision or non-decision to leave policy costs and electricity bills at a time when we could be giving people immediate bill relief is, for me, a huge issue when we're trying to persuade people that the energy transition

will be good for them in the long run and also just because we could do with taking some money off people's bills right now and I accept worry that you have to pay for this somewhere in the economy but the household bill in the UK, the energy bill in the UK is such a big thing for a lot of households particularly low-income households

that it would make a significant difference to people to feel that change and of course for all households they did benefit, and you would get this market signal that would help people adopt cheap technologies. And that is a much better approach than pushing people into having technologies if you can make them cheaper, more convenient and a better product. So that speaks the feeling bit. The other thing I wanted to say is we ran a citizens panel for this advice. And I think, Rory, you've taken part in Citizens' Assemblies before. And we've got experts on the climate

change committee who are experts in behaviour change and the big takeaways from that exercise were that people were actually very up for ambition on climate change. They really wanted government to do more rather than less. But to speak to the technocratic thing, they also wanted more information. They wanted conversations like this one. They wanted more detail and they enjoyed understanding what they were being asked to do. And lastly, they were often not clear on what they were being asked to do, sometimes because the political rhetoric had changed. On technologies like heat pumps, they were hearing various different stories about whether they were effective or not or whether they were supposed to get one or not. And they wanted clear messaging

from government. They wanted clarity about what they were being asked to do. And they wanted it to be a fair transition. So they wanted to make sure that people weren't going to be left behind in the transition that there would be support, particularly for low-income households. And this was a, you know, a broad demographic that we talked to. And that fed into how we thought about our advice. And so I completely agree with you that it's about how people feel. Underneath a lot of the technocratic arguments we're making is this kind of consciousness about what we think would work, bearing in mind we are asking people to adopt new technologies

in their homes and in transport systems now. So, yeah. And I really love that Citizens panel research. You should definitely look at that if you haven't managed to see it already in the advice. Emma, thanks for your time and thanks for coming into our studio when both Boreen and I are overseas. But my final question, I want to ask you, you know, you said a couple times you've got a young family. And I know people who have been putting off having children in part because they're absolutely terrified about climate change. You know, the question, can you really bring children into a world that feels like it's sort of burning to hell?

on a sort of one to ten scale where one is honestly sleep easy at night nothing to worry about it's all going to be fine and ten is we're doomed where are you most days of the week i think that there is a lot to be concerned about with climate change and i think the public know that i think it's really important we don't patronise people into the idea that the British public don't understand that climate change is happening or that the global population don't. We're all seeing and feeling and experiencing it. And we've just put out our climate adaptation report in the UK, which says something like a quarter of UK households might be affected by flooding in a world where we don't tackle climate change where we'll have potentially tens of thousands of people dying in extreme heat waves by 2050. That there are real impacts to this that we will all experience more human populations moving, less stability in. food, less stability and energy systems, just a less stable world. And of course, I thought about that

before having the children. But for the last five years of my life, I've been working in the private sector with companies who are investing in the alternative. And those companies care about the environment for all the reasons I just mentioned, but they also can see where the economics of energy are going. And I am very confident that we're moving into an age of electricity. And because the economic signals are there, that gives me hope that even when the politics around climate change vary, we will continue to decarbonise. Now, the speed is the thing. And that is what government needs to do is set the framework for this change to continue to happen. But as much as there are sometimes reasons to be worried, there are also very clear reasons to

hope. And I suppose on the day that I decided to have my children, it was the day where I was feeling particularly hopeful. And my final question, which I guess is probably one you get too much, but the anxiety is we decarbonise in the UK. In other words, we don't pump as much carbon into the atmosphere from the UK. But we continue to consume huge amounts, you know, our clothes, our toys, everything, which are produced in other people's countries who are pumping carbon into the air. We buy this stuff from China. So in terms of our carbon footprint, it remains really, really high. And so I guess the anxiety would be from a UK only point of view, all we're doing is getting rid of our own industry, but continuing to support carbon polluting industries and other

countries through our buying patterns. And then the second point, which I guess is Alistair's bigger point, which is we're a drop in the bucket. And unless there's a big international carbon pricing scheme that really has big rat ship mechanisms on carbon consumption that takes in China, the US, India, you know, you could meet all your targets and it wouldn't have any effect on climate change. A few things in that. Firstly, I checked before I came to do this, but our consumption emissions in 2024 are down. And, of course, a lot of our consumption emissions from trade come from Europe, which has

a carbon price and a net zero target. So in terms of our own imports, they will be decarbonising over time. China, of course, looks like its emissions will peak and then start declining in the 2030s because of the investments they're making far more than the rest of the world into renewables and into things like electric vehicles and clean technologies. So China, no question, is a key economy in decarbonising the globe and has moved ahead. And watching it is important. But I would expect to see our consumption emissions come down as those economies,

change too. There's a thing in this about why don't we talk more about lifestyle change and resource management more generally. And it comes back to the mandate of the climate change committee, which is our job is to show that it is possible inside the existing economic framework to do this, that you can do it and grow GDP, you can do it and have your manufacturing GVA increase. You can do it and keep the way that we live pretty similar. So you'll still have a warm home, you'll still drive a car, but those technologies will change. There is some necessary behaviour change in our analysis, but again, it's driven by choice rather than just forcing people to do things. And generally speaking, especially in an age when people are tired, when the economy has been challenging, when you've

got some more children that wake you up at night, I think the idea that you can put the emphasis on individual change rather than system change and the energy transition is probably not what I would stake decarbonising and looking after the planet on. And then lastly, why should we when emissions are small? Well, something like a quarter of global emissions come from countries where their national impact is about 1% of those global emissions. We are all in it together and we all need to do our bit and that is behind the international framework on climate action, the idea that we all do our part and industrialised economies that have more resources go first and invest in these technologies early. And I suppose I often think about this again in relation

to what it's like to parent a three-year-old. There's a kind of moral thing here in that if you can see the right thing to do, you don't go for the lowest common denominator. I don't say he can like poke his sister in the eyes so long as his friends are doing it. I say poking your sister in the eyes is just the wrong thing to do, so we're not going to do it. And we know that climate change is a problem. The public knows that in poll after poll after poll after poll, they tell us they want politicians to do more. But they do want it to be fair. They do want it to be straightforward.

They want to be able to do it whilst living their lives straightforwardly. And they want clarity from government about what they're being asked to do. So I think there is actually very simple, if long answer to the thing that I get asked all the time is why should we try? And very lastly, I think I said this

when I did question time with Alistair, this is a challenging decade for the energy transition because there's more competition and there's global supply chains and there's the kind of condition in global markets we've all talked about, but ultimately the energy transition is going in one direction.

If you care about growth in the future of the economy, you're going to have to adopt electric technologies and get on board with cheap electricity and the countries that do that early, which China and others certainly have moved to do, will get the most industrial benefits. That's what happens in economic revolutions. We are in one of those moments now.

So whether you care about climate change or not, whether you call it industrial policy or social policy or your energy policy, fine, but you are going to end up doing a lot of the things that we're proposing that you do in order to meet the UK's card and budgets. Good. Well, thank you. Thanks for your time. And I think you did say that. You did. I remember it. The world fell a bit more optimistic then, though. This issue, you felt a bit more interesting. Yeah, possibly. But equally, Alistair, the technologies have continued to improve, right?

So we've halved the costs of achieving net zero between the last time we invited government, which was around that time and now, because the technologies have continued to improve, regardless of what's happening in the politics. Yeah. Good. Well, good to end the rest of this policy leading with the word politics. Thank you.

Thank you, Emma, very much for joining us. And sorry, we're not with you. Thank you. Now, Rory, as she said a couple times, Emma and I met on question time a while back a few years ago. And then so I sort of kept in touch with it because she is such an expert on energy, which is a subject I do kind of have difficulty with

because it's so sort of technical, I guess, and the politics of it sometimes are very, very difficult. But I remember she wrote to me after you had been talking about energy and net zero, and she sort of felt there were parts of this that you needed a bit of an educational, particularly this sort of offshoring stuff. So what did you think? I noticed you coming back several times saying,

you know, can you make this a bit simpler? And what was your take? I'm really pleased we interviewed her. I mean, partly because we don't talk enough about a, climate. I mean, it's a really strange thing that, and this is partly geopolitics and Trump, that climate, which would have been completely central to any kind of policy discussion five years ago, is now getting smaller and smaller coverage. So I'm really pleased we head on. I'm really pleased that she brought us into some of the technical details this. But I also think that

without being unfair to Emma, she's an example of the problem that we're facing, which is that there is an issue in making this stuff really alive and concrete. I mean, I do get, as you saw in my questions, I get a bit anxious with the sort of, well, it's all very difficult and it's very nuanced. I get that, but if we're going to get this done, we've got to be a bit more straightforward. So, for example, on heat pumps, at the moment, you can spend seven to 15,000 pounds for a heat pump compared to two to three thousand pounds for a gas boiler. And doing up your house to install it can cost thousands of pounds. And at the moment, this is the problem. There's a slight sort of tendency because she wants to be optimistic. You know, I would want a question. She said,

yep, you know, if we achieve all we do on net zero, then it will be 700 pounds a year cheaper. I sort of take from that, well, that means it ain't cheaper now. And I think actually even if you're quite wealthy, let alone on a low income. It doesn't make much sense. And yet, as she said, and again, she doesn't want to give you percentages, but a huge amount of trying to meet our targets is about trying to get the majority of people in Britain to put in heat pumps. We're not beginning to get there. I mean, I think we're 55,000 grants out there, only 30,000 would take an up. And the final one, and then I'll stop my rant. I would have liked more figures. Listen, I don't know this stuff as well as she does, but to really understand what the problem is,

She said, you know, what we've got to do is make electricity more affordable. But I think what she's saying is to do that, we're going to have to take off most of the costs that the government's putting on top of the electricity bill, which I believe is about 23% of the electricity bill. And I think across the country, that's about something like 12 billion pounds. So off the back of an envelope, I think what she's saying is if that comes off, that's something like, you know, 2% on the income tax or 1.5% of it. on VAT. These are huge, huge figures. And she's slightly sort of skirting round it if what she's saying is, well, you know, the government needs to make electricity more cheap and there's going to be some difficult decisions about where revenue comes from. Is it conceivable? I would have wanted to ask you this, that Rachel Reeves is going to put up income tax by 2% in order to do this.

When we were off air, you had to go off to a meeting and she and I just did a little chat at the end. I was making the point that I think what you saw there was, and I think it's why she was glad to come on the podcast and have like, you know, almost an hour to sort of set some of this stuff out in detail. And I think that is good. I think it's good that people do get that sort of long form explanation of some of these issues. But of course, if you're Ed Miliband as the Secretary of State and a politician in a very, very hostile political environment where the Farages and the Trumps

are trying to sort of, you know, drill baby drill rather than move toward, renewables, whatever it might be, he has to have kind of really clear, punchy lines, whereas what she sees her job as is as part of her job is the sort of education about the complexities that sometimes the politicians, it's not that they avoid the complexities, but they want to make them as simple as possible because they're trying to communicate a really big political message. We talk a lot about Germany and, you know, there's no doubt that one of the issues that has led to the rise of the AFT has been the whole thing about heat pumps. There has been an attempt to try to push people towards something.

In the end, they said, no, no, sorry, we can't afford it. So I guess what you're seeing is the difference between a politician and Ed Miliband and somebody who's got this really important job as the chair of an incredibly important committee on climate change, full of experts who really know this stuff inside out, but aren't necessarily the people who have the responsibility or even the skills then to translate that into something that moves public opinion. That's why I think actually I think she should, because I think she is a very good communicator.

I think she should step up a bit on the leadership role, the argument leadership role. I think actually she does more than she lets on. But it's interesting how she kept related to her previous jobs. When I was in my previous job, I said this, because I think she feels a bit more civil servanty now, I guess. Yeah. Interesting also. I thought she'd be holding the government's feet to the firemore. I sort of see it as

also having a little bit more like an inspector. So the prisons inspectors or school inspectors, and prison inspects particularly come out and say the government's doing a terrible job. And of course, that began with this guy called Ramsbottom. So you can approach these jobs in very different ways. You can be very sort of

quiet and don't want to ripples. And maybe over time, she will develop the confidence to be more... The final thing I thought, it's just a communications question for you, but I sometimes wonder whether actually facts and figures,

instead of making things more complicated, can actually make things more direct. I mean, actually, if she had said, well, actually, you know, 30% of the problem here is heat pumps, and if we don't sort it out, we're going to miss this by a third, or a heat pump costs, whatever it costs, you know, eight, nine thousand pounds,

and think about that if you're on a low income and how much more it costs. that sometimes the facts and figures, instead of confusing people, actually can make things a bit more clear. Yeah, well, I think it works both ways. I mean, some people just sort of, they glaze over when they start to hear numbers. And I think when you're talking about an issue as big as this, and you're right, it's gone down the agenda. The reason she was on question time when she was, partly was because at that time, the issue of climate was absolutely massive. I can't remember what the specific thing was, but that was, I can remember them saying, you know, the first question will be on it.

It was a sort of environment-related question. And, of course, Trump is going to drive it further down the agenda. Anyway, I think she's a really interesting person with a lot of responsibility. And I'm glad that she liked the marking the homework thing because I think that's her job. I felt she was not A-plus, was she? No, I don't think she was giving the government an A-plus. I think she was very politely saying, and I think her committee is very politely saying, that they're going to miss this by a country mile unless they do some very, very difficult things.

It's absolutely possible for them to do it, but brackets, you're going to have to completely change the way that you charge electricity, you're going to have to change planning, etc. Thank you very much, yes. Okay. See you soon. Bye.