In this guest post, Peter Newell and Freddie Daley discuss the research from their recently published article in Environmental Politics: The political economy of supply-side climate policy in the UK.
The UK is the birthplace of the industrial revolution, a leading financial centre in the world economy and a significant fossil fuel producer. It is also a purported leader on global climate policy, so what happens in the UK will have practical, strategic and political ramifications for global efforts to phase-out fossil fuels.
From a disruptive and unjust transition away from coal and controls on export finance for fossil fuels to current discussions about ending new licenses for oil and gas in the North Sea, the UK has been a key battleground over measures to limit fossil fuel production – otherwise known as supply-side climate policies. It is vital to learn from historical and contemporary lessons when developing and implementing such policies, as ambitious climate targets will remain out of reach unless a greater number of countries take action of fossil fuel supply. In a new paper in Environmental Politics, titled The political economy of supply-side climate policy in the UK, we draw out these lessons.
So, what has the UK done?
Fossil fuels remain a significant part of the UK energy mix, despite progress in scaling up clean electricity generation. In 2023, 33% of the electricity supplied to the UK grid was from fossil fuels, of which 31% was from gas, with coal and oil generating 1% each. While the level of fossil fuel power generation is at a historic low, further action is required to achieve the government’s target of a fully decarbonised electricity grid by 2030 and to reduce fossil fuel dependence in other sectors of the economy, such as agriculture and residential heating.
In terms of regulating fossil fuel emissions, the UK’s climate regime is robust. The country is often celebrated internationally for its ‘climate leadership’, especially the 2008 Climate Change Act, introduced under the last Labour government, which codified emissions reductions into law and established an institutional regime for the governance of climate policy in the UK. In 2019, the UK went further and became the first G7 economy to enshrine a ‘net zero’ by 2050 target into law and has cut domestic emissions by 51% since 1990.
Central to this was the first case of UK supply-side climate policy we analyse: the phase out of coal. Albeit not driven by climate concerns, the phase out of coal reinforces the UK’s ongoing claims of global climate leadership due to the deep emission reductions to electricity generation that this transition set in motion; an achievement few other major economies can claim. Yet the transition away from coal was neither smooth nor just; and its legacy continues to shape contemporary debates around supply-side climate policies about who benefits from production in the North Sea and how these benefits are distributed. It resulted from an alignment between competitive pressures and shifting material conditions (cheap imported coal, the ‘dash for gas’, newly developed domestic oil and nuclear), combined with ideologically driven strategic choices of the Thatcher administration to discipline labour and prioritise finance over productive capital.
The second case is the previous Conservative government’s 2020 ban on public finance for overseas fossil fuel projects via the UK’s export credit agency, UK Export Finance. This was achieved by a focussed and carefully orchestrated civil society campaign that deployed insider track tactics within government which magnified external pressures emanating from the UK hosting the Glasgow COP and critical media coverage of UK public funds being spent on controversial fossil fuel projects overseas while pursuing decarbonisation domestically.
The third case is the Labour government’s current commitment to end licensing for new oil and gas production in the North Sea. The government has moved to end licensing for oil and gas fields in the North Sea but will ‘honour any licences’ issued before the 2024 general election – which already exceed the remaining domestic and international carbon budgets. Though the basin is in terminal decline and remaining oil and gas would be for export, thus doing nothing to bolster UK energy security, Russia’s invasion of Ukraine opened the door for right-wing media, business groups and some trade unions to push for expansion of domestic reserves and contest Labour’s policy. Despite this, the government looks set to end new oil and gas licenses in the North Sea, although there is a risk that loopholes will emerge.
What can be learned from the UK’s experience?
Firstly, proponents of supply-side policies must navigate the increasing securitisation of supply-side policies. In particular, how geopolitical tensions can be weaponised by incumbent actors to justify further fossil fuel extraction and resist phase-out policies. A prefigurative politics is needed to present fossil fuel phase outs as compatible with, and even enhancing of, energy security. In terms of the UK’s global leadership, calls to boost investment for renewable energy through its Global Clean Power Alliance must be balanced with leadership on a transition away from fossil fuels, which will require alignment with the sorts of domestic supply-side policies analysed here.
Secondly, our analysis underscores the need to engage with the political economy of fossil fuel production: both the patterns of power and political influence which characterise the incumbent regime and the need to destabilise them, but also to address the structures of ownership and control across public and private domains. In the case of the former, it points to the need to grapple with the particular nature of incumbent power in the UK and how it is sustained and reproduced within the state and outside it through business groups, trade unions and influential media.
Thirdly, there is a clear need for coordinated and diverse coalitions supporting the adoption of these policies and working to sustain them among a broad constituency of actors within and beyond the state. In the case of the ban on export finance for fossil fuels, bringing together CSOs from different sectors and combining insider and outsider strategies produced a pincer movement that proved to be highly effective. Greater and more thorough engagement with trade unions will be vital to avoid repeating the injustices associated with the legacy of the coal transition in the UK and to pre-empt resistance to phase-out policies.
Bios:
Peter Newell is Professor of International Relations at the University of Sussex and research director and co-founder of the Rapid Transition Alliance. His recent books include Power Shift: The Global Political Economy of the Energy Transition, Changing Our Ways: Behaviour Change and the Climate Crisis and Global Green Politics.
Freddie Daley is a Research Associate at the Centre for Global Political Economy University of Sussex and research and communications lead on the SUS-POL project. He is co-author of the book Changing Our Ways: Behaviour Change and the Climate Crisis and articles in the journals Earth Systems Governance, Global Sustainability and Energy Research and Social Science.
