Achieving a Net Zero Economy

On 25 March, Burges Salmon and Scottish Financial Enterprise (SFE) hosted a webinar on “Achieving a Net Zero Economy,” which is part of SFE’s Climate Series on climate and sustainability – in the lead up to COP26 taking place in November this year.

The three speakers for this event included Simon Tilling, Head of Environment/Partner at Burges Salmon, Craig Whelton, Head of Planning (Scotland)/Partner at Burges Salmon and Anne Johnstone Founder and Director of Fair Futures Partnership.

Joanna Monaghan, Director in Burges Salmon’s Corporate and Financial Institutions team also set the scene by speaking on Burges Salmon’s financial services and Net Zero credentials.

In terms of key take-home points from the three speakers:

What does Net Zero really mean?

Simon Tilling spoke from the UK’s perspective, particularly on the Climate Change Act 2008. The most important clause in the Act is that the Secretary of State is under a duty to ensure reduction of net carbon emissions by 2050.  In 2008 the legally binding reduction was 80% lower than the baseline set in 1990, but this was then amended to 100% in 2019 (or “net zero emissions”), which is important because: “The final 20% is the really difficult part of the economy to decarbonise,” said Simon.

Speaking on the value of the Act, Simon highlighted how the architects thought about the risk of procrastination and built in a system of governance in delivering the changes that are needed so that parliament, the business community and civic society can track progress and hold the government of the day to account. “That independent oversight role is what the Climate Change Committee do, as well as advising the secretary of state on the budgets that should be set and providing good analytics of how we are going to deliver,” said Simon.

He clarified that the Act provides a legal obligation, a framework for governance and accountability, and a budgeting system so we can check progress, but it doesn’t answer the question of how we are going to get there. Simon emphasised that: “It’s critical that the financial services sector plays a role because we need the private money for that transition.”

Scotland’s legal commitment to Net Zero

Craig Whelton highlighted that Scotland has its own 2045 target for Net Zero, and that the two targets are linked, as for the UK to reach Net Zero by 2050, Scotland will have to get there by 2045.

Scotland’s legislative framework was also updated in 2019 to include interim reduction targets of 75% by 2030 and 90% by 2040; again it is the final 10 to 20% that is the most challenging.

 “The Scottish National Investment Bank (SNIP) has been created with the principle mission of supporting Scotland’s transition to Net Zero. We still await detail on how SNIP is going to put that mission statement into practice,” said Craig. 

Craig also spoke on how transport and housing are the two biggest contributors to emissions in Scotland. The big question is how ready we are to accept the proposition of certain change, such as switching away from personal vehicles towards public transport.

COP26 and the International Perspective

Anne Johnstone spoke on COP26, which she described as a global stock take, and warned that every country will find its plans and targets for achieving Net Zero emissions and its nationally determined contributions under scrutiny. 

She informed us that if the conference had taken place last year and wasn’t delayed to this year because of the pandemic then the USA wouldn’t have been present: “Donald Trump withdrew from the agreement during his presidency, taking the US back into the agreement was just the first of a number of strong actions taken by the Biden administration,”. We now anticipate the US joining the list of countries with a legal commitment to reach Net Zero.

It is good that climate change is now talk of the agenda for governments, businesses and ordinary people. Anne highlighted that: “This is because it’s no longer just a threat, it is happening right now people can see the impact climate change is having on our lives.”

She added that: “There is a global movement involving millions of young people that didn’t exist back in 2015 who are demanding rapid and meaningful action in the climate crisis.”

A recording of the webinar can be viewed here.