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A Call for the UK Government to Supercharge Infrastructure Funding in the Race to Net Zero

The National Infrastructure Commission (NIC) has sounded the alarm, urging the government to kick its investment game up. The aim? To meet the dual objectives of net-zero emissions and economic levelling-up. But this isn't a mere suggestion; it's a clarion call for a seismic shift in policy and investment.

The NIC isn't just talking about a few billion pounds here and there. They're advocating for a monumental surge in public and private investment—somewhere in the tens of billions annually. This isn't just about slapping a green label on existing systems; it's about a transformative overhaul of the UK's somewhat antiquated infrastructure.

Now, let's talk numbers because they're staggering. The private sector must pay between £20bn and £35bn each year from 2025 to 2050 to decarbonise the power sector alone. That's not pocket change; that's a commitment to renewable energy, grid flexibility, and cutting-edge technologies like hydrogen and carbon capture.

But wait, there's more. Public investment needs its own revamp. About £28bn annually should be funnelled into public transport and congestion solutions, especially in bustling urban centres. This isn't just about reducing carbon footprints; it's about turbocharging regional growth.

And let's remember the existing infrastructure, much of which will still be around in 2055. Upgrading these assets for climate resilience will require an annual investment of up to £1.5bn from the public coffers and £12bn from private entities through 2050.

The NIC's report is exhaustive. It's a five-yearly magnum opus that outlines the UK's infrastructural needs for the next three decades. It's not just about throwing money at problems; it's about strategic, well-planned investment to meet legal obligations, improve resilience, and even enhance natural environments. And time is of the essence; the global race to attract infrastructure investment is heating up.

The report doesn't mince words. It calls for decisive actions, like ruling out hydrogen for heating and ramping up a national heat pump program. It even puts forth a detailed financial blueprint, earmarking billions for subsidies and grants to make green heating and insulation accessible for all.

But the NIC doesn't stop there. It also advocates for increased grid flexibility, more authority for local leaders to manage urban traffic, and a concerted effort to fix water supply issues and leaks. The recommendations are far-reaching, from recycling reforms to phasing out certain waste plants.

So, what's the bottom line? According to the NIC, these investments are non-negotiable. They're vital for the UK's future and promise long-term savings for households—up to £1,000 annually by the mid-2030s. It's a win-win if the government acts swiftly and decisively.

Sir John Armit, chair of the NIC, described today's report as "probably the most comprehensive assessment yet of the infrastructure costs associated with supporting regional growth and reaching net zero", adding that its conclusion was clear that delivering climate and nature-friendly infrastructure could boost the UK economy.

"The good news is that modern, reliable infrastructure can support economic growth, help tackle climate change and enhance the natural environment," he said.

"We stand at a pivotal moment in time, with the opportunity to make a major difference to this country's future. But we need to get on with it.

"People often talk about infrastructure as the backbone of our economy: what our infrastructure needs now is the collective mettle to turn commitments into action that will reap rewards for decades to come."

The government is expected to respond formally to the NIC's assessment within 12 months. In a statement, it welcomed the NIC's review, which would inform its long-term ambitions to boost growth and deliver net zero.

"Delivering high-quality infrastructure is the foundation of our future growth," it said.

"Our Network North plan will deliver the transport that matters most to people, and we're adopting a fairer and more pragmatic approach to meeting net zero that supports households and families to make greener choices whilst easing the burdens on working people. Over the next five years, we are delivering over £600bn of planned public sector investment in infrastructure, R&D and defence, including an unprecedented package to improve connections in our city regions and billions to decarbonize buildings."

Joe Dillon, a climate think tank E3G researcher, hailed the NIC's assessment, which he said should provide "an invaluable roadmap" for the UK government to develop a new net zero investment plan to attract much-needed private backing for clean energy infrastructure.

"Infrastructure upgrades should be a top priority for the government to protect UK households from current and future bill shocks and inflation," he said.

"Ramping up private investment will require a step change in the government's approach. Whilst leading investors are desperate for more green investment options, financial institutions need clarity, consistency and policy stability from the UK government. Committing to the NIC's proposals will go a long way to increase investor confidence and make the UK more competitive."

Dr Janet Young, director general at the Institution of Civil Engineers (ICE), said today's NIC report "reinforces the central role that infrastructure plays in meeting the big challenge that the UK faces - namely, regional inequalities, decarbonizing society, and improving climate resiliency".

"If the UK continues its stop/start approach to infrastructure planning and fails to commit to long-term goals, it will not only miss the much-needed opportunity to attract private investment to deliver needed projects, the problems faced by the public will get bigger," she warned.

The report comes on the same day as a separate analysis from the Social Market Foundation think tank, which argues that the government's recent decision to dilute plans to phase out gas boilers would undermine investment in the domestic heat pump supply chain and ultimately drive up consumer costs.

"The government's recent delaying of key net zero initiatives will mean that British households' energy bills will be determined by Putin's war or supply chain shocks," said Niamh O Regan, a researcher at the Social Market Foundation. "It will also mean that the British heat pump industry forgoes a chance to grab the growing global demand for low-carbon heating. Unless the government starts investing today in the technology and the workforce needed to realize savings from transitioning to low carbon heating, British consumers, workers and manufacturers will be worse off."


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