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NETWORK / 16 / FEBRUARY 2020 REACHING NET ZERO The UK's 2050 net zero emissions commitment has added urgency to calls for a review of the allocation of decarbonisation costs. At an exclusive Network debate event, energy system stakeholders discussed the big questions and challenges involved in finding a fairer way forward I n the wake of the UK's landmark commitment in 2019 to achieving net zero emissions by 2050, heated debate has been stimulated over the best and fairest ways to fund the shi•. The issues encompassed in this challenge are complex and impact a broad range of stakeholders, from individual consumers and communities, to business and industrial energy users and of course utilities, including the UK's regulated energy networks. It was therefore in an - ticipation of a dynamic and wide-ranging discussion that Network, in association with National Grid, brought together a roundtable debate in late 2019, focused on advancing the debate around how to pay for the UK's net zero ambition. The roundtable event in - cluded participation from senior network leaders, industrial energy users, academics, envi- ronmental NGOs, energy effi- ciency advocates and regulatory experts. And it did not disap- point in terms of the breadth of discussion. Participants raised consid- erations including the urgent need for clarity on low carbon heat pathways before decarboni- sation policy costs can be effec- tively allocated. They touched on the need to reinvent business models for energy retail so that energy efficiency services can proactively drive down demand and reduce the overall net zero price tag. And they explored the interaction between suc - cessful decarbonisation cost allocations and the challenge of building better public trust in both government and industry as positive agents for action against climate change – the current inadequacies inherent in loading low carbon policy costs onto bills in a way which disproportionately impacts low income households was a key issue here. A gamut of other concerns, from the increasing appetite for energy self-reliance among in - regulator has "dodged this ques- tion for a long time". They said the regulator had failed to act quickly to adapt its regulatory measures to take into account the legally binding nature of the net zero commitment and the way this should have shi•ed its focus on driving down short to medium-term energy system costs for consumers. "That hesitation in assuming a policy baseline which is set against achieving the [net zero] target is hugely damaging in lots of small ways," they insisted. Other industry representa - tives seconded these comments, reiterating previous calls for an update to Ofgem's remit so that it includes a specific duty to support decarbonisation. Regulatory experts at the debate pushed back on some of these points however, stat - ing that it is "superficial" and "glib" to expect a new duty on the regulator to significantly change its position on the need to balance current and future consumer interests. They em - phasised that sustainability and the environment already sit at the heart of Ofgem's approach to executing its duties. One expert added: "Also, net zero is legally binding and there is absolutely no question that the regulator has to take its decisions within the legal framework in which it is set. "I don't think another duty is the issue here. The issue is how do you trade off the interests of Paying for net zero Points of consensus from the debates: This debate on the challenges and issues involved in devising a fair way to pay for net zero teased out a variety of perspectives and interests from the diverse stakeholders involved. However, a number of key consensus points did emerge from the discussion: ∙ Finding new ways to fund decarbonisation must link directly to an agenda for building and sustaining higher levels of trust in government and industry generally, and utilities in particular, since trust has been shown to influence consumer willingness to pay ∙ Decisions on funding decarbonisation cannot move forward before big decisions are made around how heat will be decarbonised since this will impact both the total cost of decarbonisation and the options for allocation of cost ∙ Networks should take the opportunity to engage with the movement to create citizens' assemblies on climate change since these represent an opportunity to increase understanding of the costs of decarbonisation and options for allocating those costs ∙ Government should rethink the way in which environmental and social policy costs are funded via customer bills. This has been shown to be regressive and places an undue burden on those least able to pay. dustrial and commercial energy users and the need to promote investment in biodiversity as part of the net zero agenda also featured in our conversation. Key controversy – Ofgem's balancing act Arguably the most controversial issue raised during the debate was Ofgem's current approach to balancing the interests of current and future customers, and the way in which this is in - fluencing its design of network price control frameworks. One senior network industry leader at the event said they found it "unacceptable" that the