The inquiry seeks further evidence on how and whether the government’s response to COVID-19 should take green ambitions into account.
On 24 July 2020, the UK Treasury Committee (the Committee) relaunched its inquiry into decarbonisation of the UK economy and green finance.
Background – The June 2019 Inquiry
The inquiry was originally launched on 5 June 2019 to scrutinise the role of HM Treasury (HMT), regulators, and financial services firms in supporting the UK government’s (the government) climate change commitments and examine the potential for decarbonising the UK economy (please see this post for further details). The government has since passed legislation requiring the UK to achieve net-zero greenhouse gas (GHG) emissions by 2050.
The Committee was established by the House of Commons (the House) to examine the expenditure, administration, and policy of HMT, HM Revenue & Customs (HMRC), and associated public bodies such as the Bank of England and the Financial Conduct Authority. The Committee is free to choose its own subjects of inquiry, which may lead to a report to the House, or a single day’s oral evidence.
The Relaunched Inquiry and the Impact of COVID-19
The Committee’s Chair, Mel Stride, acknowledged that although the Committee had received a substantial amount of evidence since the original launch of the inquiry, “much has changed” due to the impact of COVID-19 on the economy. Stride added that “now is the time to ask whether the Government can seize the opportunity presented by the crisis to further green the economy to achieve net-zero by 2050”.
The relaunch of the inquiry accompanies other government measures addressing a potential green recovery for the UK. For example, the government has separately formed working groups to consider economic recovery measures, including the theme “Green recovery: how to capture economic growth opportunities from the shift to net-zero carbon emissions” (see this post for further details).
Terms of Reference
The original inquiry’s terms of reference detailed three stands of inquiry: (i) the economic opportunity for the UK, (ii) HMT’s strategy, and (iii) green finance (please see this post for further discussion of the original inquiry’s scope).
The relaunched inquiry now calls for additional written evidence addressing the following questions (published here by the government):
- Should HMT’s support package to businesses distinguish between companies based on how much they pollute?
- Should HMT be directly funding green infrastructure as part of its COVID-19 spending package?
- Are there any green-related policies that HMT should change or commence due to COVID-19 to facilitate the transition to net-zero GHG emissions?
- In which ways will the new economy post-COVID-19 allow the government to change the way it finances meeting the net-zero target?
- Are there outcomes from the COVID-19 that will enable HMT and HMRC to meet the net-zero target more easily?
The inquiry, which highlights the continued focus of policy makers on the concept of “building back better”, will be open for comments until 28 August 2020.
Latham & Watkins will continue to monitor developments in this area.
This post was prepared with the assistance of Emilie Cornelis in the London office of Latham & Watkins.