Last week Labour’s hunt for growth saw the chancellor, Rachel Reeves, announce the controversial decision to signal the government’s support for a third runway at Heathrow airport, alongside plans to transform the corridor between Oxford and Cambridge, turning it into “Europe’s Silicon Valley”. The announcements come after turbulence in the bond markets in January have shown the precarity of the UK economy, with Reeves using the tagline “kickstart economic growth” as she announced the plans. The battle between economic growth and climate credentials appears to be becoming a central dilemma to its plans.
With Reeves having already cut Labour’s £28bn green pledge well before the election, last week’s announcements are seen as another blow to Labour’s efforts to tackle climate change. Both the London mayor, Sadiq Khan, and energy secretary, Ed Miliband, have openly challenged the moves. Miliband is reported to have told the cabinet expanding Heathrow would more than likely violate UK carbon emission targets. Other critics also say the first planes would not take off until 2040 and would cause huge disruptions around the M25 further damaging climate commitments. Moreover, from an economic viewpoint, the plans have no guarantee of achieving the growth Reeves claims according to some, with many highlighting that the figures quoted are taken from a report produced by Heathrow itself. The government’s mantra for growth has been said to be signs of desperation to turn the UK economy around especially given that previously Keir Starmer has spoken out against another Heathrow runway in 2020 and Reeves also spoke out against the expansion of Leeds Bradford airport in the same year, citing environmental grounds as the reason.
Although the Climate Change Committee (CCC), have said that airports can be expanded previously, this can only come with the government seeking equivalent carbon savings elsewhere. Reeves has signalled that this could come through developments in sustainable aviation fuel (SAF) but experts say that making large amounts of SAF requires huge amounts of land, endangers food security and biodiversity. Decarbonising the aviation industry would also come at a significant cost the public, yet reports have found that more than half the public do not take flights in any given year. Who pays for transitioning to a greener aviation sector is another key question that needs answering, with any additional costs passed onto the public potentially being seen as unfair and hindering support for climate ambitions. The CCC is in the final phases of putting together the UK’s next carbon budget which will set out what will be needed in a 5-year period to achieve net zero by 2050. This will be the UK’s seventh carbon budget and will cover the years between 2038 and 2042.
Labour’s dilemma of growth vs. the climate could again soon be in the spotlight with rumours that the government is going to give the go ahead for the Rosebank oilfield to be built off Shetland later this year. This support comes amidst the conclusion of a court battle in Scotland in which it was ruled that the previous government giving the project a green light was unlawful due to unknown figures on the amount of carbon dioxide the site would produce over its lifetime. Insiders fear that this ruling could be ignored by the government in its push to achieve economic growth and would argue that it is not breaking its own manifesto promises of no further oil and gas licenses as the license for Rosebank would given approval in 2023. The Norwegian company, Equinor, is spearheading the project and plans to carry out more assessments and hopes to return with an application later this year.
With much talk over recent years of a ‘just transition’ for the UK’s climate plans, is the reality of this much harder than anticipated? Is it possible for everyone to win in this approach? Can both the workers and communities heavily reliant on fossil fuel industries and the climate targets set out by the government be satisfied? Many questions therefore remained unanswered in how to balance this dilemma, however, for some the approach of growth vs. the climate could appear as a false dichotomy. With recent research suggesting that the global economy could face a loss of 50% in GDP between 2070 and 2090 due to climate change, climate action now could mitigate the potential future impacts to the economy and of course the planet’s health. Achieving growth may not be possible without enacting climate policies and Labour’s dilemma may only be resolved if it faces up to the reality that this process will create winners and losers. Ultimately Labour has two options. Its first is to support the workers and communities who have been crucial to the UK’s energy sectors over the past 50 years by offering retraining to develop skills and generating jobs in publicly owned green sectors that will help the UK achieve its climate ambitions and generate growth through these new industries. Its second would be to support the large multinational fossil fuel companies through allowing projects such as Rosebank to commence and allowing them to continue make billions in the name of ‘growth’ whilst continuing the pollute the planet and hinder the UK’s chances of achieving its climate targets. Which option to take will be Labour’s dilemma to resolve.