In his report, Skidmore said that net zero is “the growth opportunity of the 21st century” but warned that while “the benefits of net zero will outweigh the costs”, work is needed to secure the benefits and minimise costs associated with the transition to a net zero economy – and that speedy action is required.
“We must quickly take the decisions we know we have to. This is how we will achieve net zero in a more affordable and efficient way, at the same time as providing certainty for inward investment in the UK,” according to the report.
Experts at Pinsent Masons described the review as impressive, comprehensive and ambitious, and welcomed the pro-business and pro-investment tone that runs through the report.
Hayden Morgan of Pinsent Masons, a specialist sustainability adviser, said: “The previous work of the Financial Stability Board and Network for Greening the Financial System has highlighted the significant systemic risks presented from a disorderly transition. If bold action is taken, and the recommendations are implemented, this review goes some way to mitigating against a disorderly transition, at least in the UK.”
“To thrive in this changing landscape, businesses of all sizes, will need to evolve and adapt business models and strategies to respond to the transition, at a pace and scale previously not experienced. It is critical that business adopt a strategy and plan to respond to this transition considering both the risks and opportunities presented,” he said.
Michael Watson, climate and sustainability expert at Pinsent Masons, said: “The Skidmore review reflects a long-standing agenda that has been pushed for years by John Kerry, the US special presidential envoy for climate, and which is also reflected in the approach taken by the US government’s landmark Inflation Reduction Act. The US legislation recognises and incentivises, and the Skidmore review highlights, the practical steps towards delivering on the climate-related action that was agreed is required at COP26 in Glasgow.”
“Measures such as carbon pricing, the carbon border adjustment mechanism and regulation to-date could perhaps be considered often as a ‘stick’ approach to driving decarbonisation, but they have been slow and difficult to deliver, requiring multilateral agreement. On the other hand, the US Inflation Reduction Act and UK Skidmore recommendations perhaps signal that policymakers are now aligning more behind the ‘carrot’ approach as governments focus on industrial policy and bilateral intervention and financial support to accelerate change” he said.