The official spring budget announcement is tomorrow. The budget will set out the government’s tax and spending policies. At present, the outlook is bleak.
The UK has some big challenges ahead and it will be interesting to see what Jeremy Hunt sets out on Wednesday 15th March.
Mr Hunt will announce a £20bn investment into carbon capture technology over the next two decades to tackle energy and reduce the UK’s carbon emissions. That’s £1bn per year. It may seem like a huge amount of money but that is less than 0.1% of the government’s annual managed expenditure.
The government is attempting to lock up 20-30m tonnes of CO2 a year by 2030. This is the equivalent to 15-23% of UK household greenhouse gas emissions. A significant volume of carbon which may drive us closer to our legally binding targets of net zero by 2050.
The Chancellor also believes we need a clean energy reset, where we will refocus our efforts on upscaling nuclear power. Nuclear may be argued as clean in respect to direct emissions when producing energy but many argue nuclear is not clean at all.
Anyway, back to carbon capture. The £20 bn investment into low-carbon technology is exactly that. An investment, not a guarantee of success.
Carbon capture and storage (CCS) is a range of technologies designed to capture and store carbon. Efficiency of the current technology is about 90%. However, to tackle climate change our technology needs to be closer to 99% efficient.
This is where it gets challenging. It is an economic and engineering challenge. The costs of improving efficiency above 90% becomes incredibly expensive. There needs be incentives to tackle the engineering challenge. We need incentives to increase efficiency as close to 100% as possible.
I wish the environment could be enough of an incentive to make those improvements and develop CCS technologies that could help. Unfortunately, I don’t think the environment alone is enough. We need changes to policy, including a carbon pricing structure that drives innovation in this space.
There are arguments stating we shouldn’t need large scale CCS, as we should be focusing on reducing our emissions rather than relying on future technology that doesn’t exist yet.