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Saturday, Oct 31, 2026

Rishi Sunak’s budget is gambling with the climate crisis

Rishi Sunak’s budget is gambling with the climate crisis

Analysis: No serious investment in UK’s green future means chancellor is hoping market will deliver
In failing to make any serious new government investment in the UK’s green future, Rishi Sunak has chosen to gamble that the market will deliver instead. That is a very high-stakes bet in the face of a climate emergency.

Four days before the UK hosts the crucial Cop26 climate summit, the virtual absence of the climate crisis from Sunak’s budget speech was startling. The most eye-catching announcement was the halving of taxes on domestic flights, which are already far cheaper and more polluting than trains.

Sunak appeared to splash the cash for public transport in the UK’s city regions. But only £1.5bn turned out to be new money. The Green Alliance estimates £7.6bn a year is needed. Meanwhile, he announced £21bn for roads and a freezing of the duty on fossil fuels used by cars for the 12th year in a row.

It could have been different. “This government chooses to invest” in a high-wage, hi-tech “economy fit for a new age of optimism”, said Sunak in his budget speech. He just wasn’t talking about the low-carbon economy.

The UK government set out its net zero strategy last week. “Clearly, it’s a very market-led strategy,” said Chris Stark, head of the Climate Change Committee (CCC), the government’s official advisers. “We shall see how that fares.”

Cutting emissions from homes is vital, but Sunak will part-subsidise just 30,000 heat pumps a year for three years. Will that get us to the government’s 600,000 a year in just six years’ time? Not many would take that wager, with the Green Alliance estimating funding needs to be three times higher.

The government’s previous flutters on energy efficiency have been also-rans. The recent green homes grant was botched, according to the Public Accounts Committee. The earlier green deal also failed, despite clear prior warnings. “We think there is a significant risk in leaving it to the market, as that has never worked anywhere in the world and is unlikely to happen in the UK,” said Stark’s predecessor way back in 2011.

One big punt Sunak is taking with taxpayers’ money is on a new nuclear power station, to be seeded with “up to £1.7bn of new direct government funding”. Energy bill payers will also pay upfront for the power plant, described as “writing a blank cheque that the consumer is on the hook for” by the BBC’s business editor.

But nuclear power stations have an appalling record of delays and ballooning costs. In 2017, two nuclear power plants in South Carolina, funded by energy bill payers in a similar way, were abandoned, half-built, with billions of dollars down the drain.

The cut in domestic air passenger duty follows the net zero strategy having nothing to say on curbing the growth of flying or reducing the amount of meat and dairy people eat. Ignoring these areas is another gamble, making hitting climate targets “more difficult and riskier”, the CCC said.

“The recent net zero strategy was seen as a big step forward, but if the chancellor really wants to get the UK on track to net zero, an extra £21bn a year in public investment is needed,” said Sam Alvis, of the Green Alliance. The government has provided about half that but says it will leverage new private investments of up to £90bn by 2030.

The Labour party has pledged £280bn of green capital investment by 2030, equivalent to half the defence budget, and by far the party’s biggest spending pledge.

There is always an argument to be had about the relative roles of the state and private sector in investment. Sunak railed against “reckless unfunded pledges” on Wednesday and said “governments should have limits”. But Alvis said: “The fiscally responsible approach is to invest now rather than facing huge risks to the economy and environment later.”

Four days from the most important global climate summit in history, Sunak mentioned Cop26 just once in passing. On Tuesday, economist Prof Nicholas Stern said: “The move to net zero [emissions] can be the growth story of the 21st century.”

Missing this economic opportunity by playing roulette with climate action is shooting ourselves in the foot. But risking the catastrophic impacts of global heating means Sunak is playing Russian roulette – we may be shooting ourselves in the head.
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