The Guardian view on net zero: a bank-led green transition

A state industrial strategy is needed to reduce carbon output, produce cleaner growth and redistribute jobs around the UK

Theresa May and Boris Johnson both argued for levelling up and for a state-supported green transition undergirded by an industrial strategy. Neither delivered and their successor, Rishi Sunak, has repudiated their legacy as prime minister. He looks to the City to deliver growth, with banks determining the rate of investment to meet the challenge of the climate emergency. This is a recipe for failure. The Climate Change Committee (CCC), the government’s independent advisers on cutting carbon emissions, warned last year of “worryingly slow” progress to meet net zero targets. The government is not engaging on what it will take to decarbonise.

Weaning the country off fossil fuels and on to green energy is a complex transition that should be a job for the state, not the free market. Yet Britain is bottom of the league for state spending on renewables in the Organisation for Economic Co-operation and Development. In the offshore industry alone 30,000 workers could end up with nowhere to go by 2030 without new roles in green industries. Relying on big finance to meet that gap will entrench today’s failing model, which emphasises the need to attract significant capital flows through deregulation and privatisation, strengthening the hand of boom-and-bust financial services and weakening labour rights. The flipside is a bigger trade deficit and a destructive politics of redistribution to asset holders and to London.