UK MPs call for extra £30bn to aid green recovery from Covid-19

Jonathan Watts Global environment editor
Photograph: Robert Perry/EPA

The UK needs to invest an additional £30bn a year in shovel-ready green projects to create jobs, energise the post-lockdown economy and put the country back on track to achieve its climate targets, a new cross-party commission recommends.

In the most detailed blueprint to date for a green recovery from Covid-19, it also advises the government to make an initial down payment of £5bn into a national “just transition fund” that would support the regions likely to be worst affected by the shift away from fossil fuels.

The 96-page dossier was unveiled on Wednesday by the environmental justice commission, which is composed of MPs, business executives, union leaders, climate activists and members of the Institute for Public Policy Research.

Under the heading “Faster, further, fairer”, the paper calls for accelerated action to combat the climate and nature crisis, while rebuilding the economy and reducing the risks to livelihoods.

It urges the government to set an ambitious 2030 emissions reduction target, including – for the first time – embedded carbon from imported goods. This would help make British manufacturers more competitive, the authors say.

To ensure the government does not blow the remaining carbon budget, the paper recommends ending the UK’s policy of maximising the economic extraction of oil and gas in the North Sea and elsewhere and shifting more resources to job creation in construction, manufacturing, renewables, broadband rollout and electrification of the heating and transport sectors.

They list nine policies that could accelerate the recovery from Covid-19 and put the UK on a healthier environmental track. Any bailouts for struggling firms should be conditional on reduced emissions, particularly in the airline industry.

The stimulus would be funded by borrowing, which is cheap at present thanks to ultra-low interest rates. As well as rebuilding the economy, the spending should aim to address inequality and restore the nation’s natural wealth.

Luke Murphy, the head of the environmental justice commission, said the most remarkable aspect of the report was that it united such a broad coalition of ideologies and interests. He hoped cabinet ministers would adopt the recommendations.

“We know this fits with the government agenda. And officials are looking at green recovery,” he said. “This goes beyond climate and nature. It must be a wholesale change of the economy that is also good for jobs and business. It is a positive vision of the kind of society we could create.”

The MPs on the commission said decarbonising the economy and restoring nature were an opportunity to fix a broken economic model that was failing the majority of people in the UK.

“We can build back better – but only if we embed an agenda of rapid decarbonisation within a broader social and economic justice agenda, and ensure that those communities most affected by change have the power to lead and shape it,” said the co-chair Caroline Lucas, a former leader of the Green party.

The former Conservative MP Laura Sandys, another co-chair, said the country had a “tantalising and enticing prospect” of a better quality of life, cleaner air, warmer homes, healthier diets and greater access to open spaces.

“A new and green economy that is fit for the future is a real possibility if only we can grasp it quickly,” she said.

Ed Miliband, who was involved in the commission before his recent appointment as shadow secretary of state for business, energy and industrial strategy, called on the government to act on the recommendations.

“This important report shows why a green recovery is essential for jobs, tackling the climate crisis and improving quality of life,” he said. “There is real urgency for the government to respond and rise to this moment.”