Lord Nicholas Herbert Stern, British economist, banker and academician has opined that to achieve net-zero carbon emissions by 2050, higher taxes may be required.
According to Mr. Stern, both public and private investment are needed in new technologies to meet the set target.
Advising the UK government, Lord Stern advised that it follows the US in stimulating green technology as directed by a former boss of oil giant BP – a British multinational oil and gas company headquartered in London, England.
“We must have growth and we must drive down emissions, and it’s investment in the new technologies that’s going to get us there. I’m not arguing for delaying investment in health and education. We have to pursue those at the same time.
“If we have to tax a little bit more, so be it. If we have to borrow a bit more for the really tremendous investments, then we should do that.”
Lord Stern
Lord Stern’s message is coming across at a time when the country is already grappling with a cost of living crisis and confronted with the highest taxes relative to income since the Second World War.
The UK government as well is under pressure to reduce taxes from some of its headquarters. How then is the net-zero emission of carbon possible, faced with all these challenges.
If an already developed country like the UK is faced with this challenge, what is more for those in the emerging and developing countries category?
Meanwhile, Lord Stern further stated that more public investment could help jobs and the environment while also optimistic that a tipping point in key green technologies – including energy generation, car batteries and fertilizer manufacture – is achievable within a few years, with artificial intelligence playing a key role.
This, the economist believes private investment can fund but indicated it is equally important the government shows involvement.
Lord Browne, a former chief executive of BP who now heads up a private equity fund that invests in firms that reduce greenhouse gases, wants more state help for businesses and urges government to take inspiration from across the Atlantic.
“I will give the US an A-grade for the Inflation Reduction Act, that’s pretty dramatic, it’s nothing like enough, but it’s a great start and it’s made people notice.”
Lord Browne
Browne’s statement was based on President Biden’s Inflation Reduction Act, which involves subsidies and tax credits for producing electric vehicles, renewable electricity, sustainable aviation fuel and hydrogen as well as money off for consumers who buy US-made electric cars.
The move by the President however has received criticisms by some UK ministers, including Former Business Secretary, Grant Shapps, who now heads up the new Department for Energy Security and Net Zero.
The concern from these critics is that these tax cuts and subsidies gives US businesses an unfair advantage over them and said such subsidies are typically financed by revenues gotten from taxes or from borrowing.
Lord Browne in response to this said there’s already one source of tax cash that could be channeled better and with this, he meant the current windfall tax on North Sea oil and gas production, saying it is only right that producers should pay over a slice of the unforeseen profits earned on assets that are ultimately owned by the nation.
Seeing those revenues (from sea oil and gas production) earmarked to help renewable specialists who are developing new energies, he said will be a delight.
Browne’s concern however is that, with so many issues on the desk to consider, such as securing UK’s supply of energy, environmental concerns may have slipped from the forefront of policymakers’ minds.
“Government ministers are preoccupied with very simple things, which is a rediscovery of inflation and rediscovery of security.
“It is first keeping the lights on, energy security. Secondly, affordability. And third is climate. Now, you should be able to do all three things at once but it’s very theoretical to say that people do focus on three objectives simultaneously. They just don’t in life.”
Lord Browne
There’s the need to accelerate energy transition
Rishi Sunak, Prime Minister of the United Kingdom while speaking at the COP 27 climate meeting in 2022, noted that the energy crisis was a reason to accelerate the energy transition.
Meanwhile, in a statement, the government claimed the UK is “leading the world on tackling climate change with policies having supported 68,000 green jobs since 2020.”
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