Utility Week

UTILITY WEEK | MARCH 2021 | 13 Countdown to COP Climate action must be fair If decarbonisation initiatives are perceived to benefit wealthy countries or demographics while penalising the poor and powerless, they won't get the public buy-in essential to make them effective. Opinion Sharon Darcy, Director, Sustainability First F or many Utility Week readers, taking action on climate cahnge might mean clearer plans for elec- tric vehicle charging and new technologies. These are vital for UK delivery of net zero, but if our national action on climate doesn't also deliver a socially "just" transition, its success risks being undermined at home – and abroad. The Energy White Paper recognised this, highlighting the importance of fairness and affordability in energy policy. But why is this important and what can be done to turn rhetoric into reality? Sustainability First has carried out extensive work on fairness in utilities. Most people would recognise what isn't fair; getting agreement on what is fair is harder. The social issues that underpin fairness tend to be qualita- tive and entail judgements. And questions of fairness go way beyond traditional customer protection require- ments to include global, national, regional and inter- generational impacts (ecosystems, adaptation, supply chains, structural employment, etc). They transcend the boundaries of consumer concerns and raise significant community and citizen issues. Given this complexity, why not keep things simple and ensure UK climate action focuses purely on carbon? The moral case is crucial here. If the government wants to be a true climate leader, and also be at the forefront of the green industrial revolution, the risks and opportuni- ties around climate adaptation and mitigation need to be shared fairly. There are deep and long-standing global fairness questions here that COP26 will need to address. And in our interconnected world, these issues speak directly to the lived experience of many UK citizens. More parochially, if UK utilities (particularly monopoly networks) want to be trusted to use private capital to deliver public value, they need to think about how the benefits of the energy transition are shared in a fair way. A situation where only the well-off can afford electric vehicles or heat pumps, for example, would be deeply unethical. If this happened, the affordability of climate policies could detract from decarbonisation. By widening inequalities, it could drive political instability, making the implementation of net zero even more of a challenge. And it's important to recognise that climate impacts are already with us and influencing our lives. These issues are current and growing. There's another reason, however, why a just transi- tion is important. To reach net zero by 2050, all of us need to play a part. For the UK, the Sixth Carbon Budget makes it clear that over 40 per cent of the carbon reduc- tion in the scenarios to 2035 is from consumers adopting new low-carbon technologies. And a further 15 per cent requires consumer choices, both to reduce demand and improve efficiency. To change how people use energy in their daily lives you have to start from where they are and take them with you, not "do" change to them. In basic terms, understanding the lived experience of those you need to influence is crucial to get heat pumps installed in homes. The need for innovation, not just in technology but also in processes and business models, is another compelling reason for taking social issues into account when considering domestic climate action. By not reaching out into the wider and diverse communities of which they are part, utilities will miss out on talent and ideas. Getting the right skills, insights and perspectives around the table to become more creative, resilient and people-centred businesses requires a re-evaluation: of the role of utilities in their local communities; how they deliver co-benefits; and their potential to promote social mobility. Getting a fair transition to net zero in the UK may indeed be more complicated than laying new pipes and wires. There are three things that sectors like energy, water and communications can do at home to "mind the gap" between environmental and social agendas. First, deliberative citizen engagement can help navi- gate the difficult waters of what fairness looks like for the UK in the transition. Second, what gets measured counts. Utilities need to get much better at measuring their social impacts. For policymakers and regulators too, there are gaps in basic data on the potential spatial and intergenera- tional social impacts of climate change. Existing econo- metric models need to look more broadly and longer term if they are to provide frameworks which encourage companies to deliver a wider range of social outcomes and not just focus on a series of one-shot "games". . Last, there needs to be a recognition that while there are many win wins that better engagement, metrics and models can create, delivering on both the social and environmental agendas can entail real costs and trade-offs. Sustainability First considers that in the UK the time has come for a fundamental discussion about who pays for decarbonisation: billpayers or taxpayers – and how these costs are recovered via different charging mechanisms. Without such a debate, in our view, nature and the next generation will keep picking up the tab. These are fundamental questions but ones that can't be avoided if all sides are going to come "Together for a Fair Climate Future" and make the UK's climate action, spurred on by COP26, a real and enduring success. "If UK utilities want to be trusted to use private capital to deliver public value, they need to think about how the benefits of the energy transition are shared in a fair way." This is an abridged version of Sharon Darcy's opinion piece. Read the article in full at: https://utilityweek.co.uk

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