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Among key factors such as economic challenges, high taxes, and scandals plaguing the previous Conservative government, the Labour Party’s landslide victory in the 2024 British elections was also partially driven by a manifesto pledging to make the United Kingdom (UK) a clean energy superpower. Five months after assuming office, the government, led by Prime Minister Keir Starmer, announced ambitious targets at the COP29 conference held in Baku, Azerbaijan.
While the UK seeks to reassert its climate leadership on the world stage, it is grappling with economic challenges and extreme weather events. For the first time in decades, the government debt hit 100 percent of the country's GDP and the economy has now contracted for two consecutive months. The Labour Party’s 2024 election manifesto warned that delaying action on prosperity and security could nearly triple the national debt to percent of GDP. Meanwhile, Storm Darragh is wreaking havoc across the UK, shortly after severe flooding caused by Storms Bert and Conall.
The Labour Party’s 2024 election manifesto warned that delaying action on prosperity and security could nearly triple the national debt to percent of GDP.
The Labour government’s environmental agenda, which is deeply intertwined with broader economic policy, stands in stark contrast to that of the Conservative Party, which was concerned with immediate cost considerations. Under Rishi Sunak, the Conservative government curtailed climate commitments and drew criticism for its “divisive and cynical climate politics”. Furthermore, the Conservative Party’s 2024 electoral manifesto attacked what it referred to as “unaffordable eco-zealotry” and made little mention of green policies, except its pledge to remain committed to meeting net zero by 2050. Rankings by Greenpeace on the climate and nature aspects of political party manifestoes accorded 20.5/40 points to Labour and only 5/40 to the Conservatives.
On the other hand, Labour’s climate agenda seeks to address economic inequality, and energy poverty and insulate the UK from volatile fuel prices. According to the International Monetary Fund, the UK was worst hit by the energy crisis in Western Europe, with gas prices soaring nine times higher than renewable energy in 2022, while in 2023, gas prices were 100 percent higher than pre-crisis levels.
Global and domestic ambitions
Stepping up as a climate frontrunner, the Labour government has adopted a strong narrative of climate ambition at home and abroad.
At the COP29 in Baku, the UK set a high benchmark by setting an ambitious target to reduce emissions by 81 percent on 1990 levels by 2035. Secretary of State for Energy Security and Net Zero Ed Miliband outlined the UK’s top priorities, which include scaling up climate finance, staying within reach of the Paris Agreement’s 1.5C goal, and enhancing resilience to climate impact. The UK demonstrated support for the Green Energy Zones and Corridors Pledge, which aims to accelerate renewable energy investments through regional cooperation. As part of its commitment to deliver 11.6 billion euros in carbon finance by 2026, the UK pledged 239 million euros to support forest-rich nations. Additionally, at the G20 summit held in Rio de Janeiro in November 2024, the UK government proposed the Global Clean Power Alliance to accelerate energy transition and bolster clean energy supply chains.
The UK demonstrated support for the Green Energy Zones and Corridors Pledge, which aims to accelerate renewable energy investments through regional cooperation.
Domestically, the Labour government seeks to stimulate economic prosperity, while ensuring environmental sustainability and financial viability. The government’s ‘levelling up’ agenda champions a decentralised approach to climate action through customised local growth plans.
The Starmer government plans to double onshore and quadruple offshore wind generation while tripling solar power by 2030. Britain is striving to be the first developed country with a fully decarbonised and low-cost power system by 2035 through a new ‘Great British Energy’ (GBE) company. Inspired by successful state-owned energy companies in Europe such as Orsted in Denmark and Equinor in Norway, GBE will create a publicly owned company, to affirm support for British-owned clean energy and reduce dependence on foreign supplies.
At the heart of the Labour government’s climate agenda is the Green Prosperity Plan, which leverages 15 billion euros annually, to support a just transition to renewable energy. Through initiatives such as ‘Net Zero Building Strategy’ and ‘Warm Homes Plan,’ it seeks to double the current spending on home insulation and tackle carbon emissions. The Labour government also announced a ‘National Wealth Fund’ to promote green growth through private investment. It also unveiled its industrial plan, the ‘Invest 2035 strategy,’ to drive investment into green technologies and sustainable infrastructure. Besides, it has also committed to refraining from issuing new oil, gas, or coal licenses.
The Labour government aims to transform the UK into a clean energy superpower and the world’s green finance hub. In its Autumn Budget, it announced £100 billion in public investment over five years, focusing on low-carbon technologies and green initiatives such as carbon capture, nuclear energy, hydrogen hubs, and the advancement of a Carbon Border Adjustment Mechanism by 2027.
Ambition versus action
The UK has a strong record of emissions reductions and is also one of the first major economies to set a legally binding net-zero target. Britain has successfully met its first three carbon budgets, mandated by the Climate Change Act of 2008. It has also significantly reduced carbon emissions from electricity generation by phasing out coal and expanding renewables like wind and solar. By 2023, renewables accounted for 47 percent of electricity, up from 7 percent in 2010, and the country’s last coal power plant was closed in September 2024.
The Department for Environment, Food and Rural Affairs (Defra) has warned of rising food insecurity in the UK due to climate change and inflation.
Yet while the UK has taken many concrete steps towards a planned transition, there have also been inconsistencies. The UK Climate Change Committee, an independent advisory body, asserts that the UK is off track for its 2030 emissions reduction target, and current plans cover only a third of the emissions reductions needed by 2030. The UK also continues to fall short of meeting its commitments under the fourth and fifth carbon budgets. In May 2024, the high court ruled the British government’s climate adaptation plan unlawful evidence based on insufficient policies in place to reduce greenhouse gas emissions. The Department for Environment, Food and Rural Affairs (Defra) has warned of rising food insecurity in the UK due to climate change and inflation.
Moreover, the Labour government’s decision in February 2024 to halve the £28bn green investment pledge faced widespread criticism for mirroring Conservative government policies of scaling back ambitious climate commitments. The Autumn budget allocated £125 million for 2025-26 to the GBE, far below campaign promises. In addition, it decreased funding for flood protection and nature conservation, while continuing to subsidise fossil fuels, prompting critics to question whether Labour’s commitment is merely rhetorical.
Besides fiscal challenges, climate ambitions also need to be supported by substantial investments and extensive infrastructure development. The Parliament’s Environmental Audit Committee highlighted significant connection delays for solar installations due to inadequate infrastructure. In addition, sector-specific challenges persist. The transport sector, responsible for nearly a quarter of the country’s emissions, remains a decarbonisation challenge. Although electric vehicle (EV) adoption has increased, delays in banning petrol and diesel cars until 2035 and the lack of a diesel bus phase-out plan are worrisome. While overall greenhouse gas emissions have significantly declined, the land-use and forestry sector remains a substantial source of emissions. Offshore wind installations are falling short of targets, and onshore wind and solar deployment needs a boost. Moreover, the UK’s investment in green industries amounts to merely one-fifth of Germany’s and about half that of France and the United States.
The Parliament’s Environmental Audit Committee highlighted significant connection delays for solar installations due to inadequate infrastructure.
Another key challenge is the dominance of foreign ownership in the UK’s renewable energy sector. This is most apparent in the offshore wind capacity sector, 82.2 percent of which is owned by foreign governments. UK public entities own merely 0.03 percent of total energy generating capacity, which is significantly lower than Denmark, Norway, and even the city of Munich. Denmark’s Orsted, the largest offshore developer in the world, owns 30 percent of the UK’s offshore wind capacity. As a result, many of the UK government’s profits are offshored to foreign governments. And despite being rich in renewable resources, the UK lacks domestic supply chains for developing wind, solar, nuclear or other energy sources. In this context, securing supply chains is critical for the country’s green agenda. Collaborations with international partners such as the European Union (EU) can be boosted to secure supply chains and transition to climate neutrality. The UK can also look at the ‘Green Alliance', the EU’s partnership with Japan, as a model. Ultimately, the trade-offs between expensive domestically produced green tech and a slower and costlier energy transition will also need to be considered.
Shairee Malhotra is the Deputy Director of the Strategic Studies Programme at the Observer Research Foundation
Jayaa Auplish is a Research Intern with the Strategic Studies Programme at the Observer Research Foundation
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