When British Prime Minister Rishi Sunak appeared before the hastily assembled press on September 20, the letter-filled slogan on his lectern made the country squint: “Long-term decisions for a better future,” it read.
We now know, of course, that there was little in the speech that followed that brought hope. Certainly not when it comes to the technological fight for our future climate.
Not long ago, the UK seemed a rather brighter beacon in the industrial transition towards reversing global climate breakdown. Objectives were established at the national level. COP26 at least offered a forum and a focus. London has come a long way to establish itself as a hub for green technology startups. On the narrow but doable path to net zero, leaders were at least taking the right steps.
Then came the lowest point in recent weeks.
Last week, with the government’s now infamous U-turn on its green promises, the nation joined a dismayed chorus with world leaders to lament the prime minister’s short-sighted choice. Sunak has delayed the timeline for Britain’s transition to net zero emissions for at least five years.
The first and most vexing concern is, obviously, the consequences for the future of our species on this planet. The next big problem, which is currently being voiced by leaders in all industries and especially within the climate technology and climate finance sectors, is the message it sends to those of us in the trenches actually trying to build technology to change the world and enable a sustainable future.
That message is loud and clear: the UK government is unwilling to be consistent when it comes to policy response to the climate crisis, which, apart from capital and support for nascent technology markets, is one of the most critical things for anyone in our sector. it can wait.
For entrepreneurs, innovators and businesses to thrive and unlock the economic potential that arises from creating new industries, we need a consistent approach from government.
This matters to me because, as Americans who chose to build a biocatalyst engineering company here in the UK, we are acutely aware of the impact such a policy change has on every stage of our sector’s existence. Ultimately, every major technological innovation comes from government support from the beginning. We wouldn’t have affordable solar panels, microchips, cell phones, or Internet without government funding, government subsidies, government stimulus, and government infrastructure. You can’t scale a technology that is going to have a significant impact without initial capital to match it.
In January of this year, Chancellor Jeremy Hunt revealed long-term vision to grow the economy, saying: “I want the world’s tech entrepreneurs, life sciences innovators and clean energy companies to come to the UK because it offers the best possible place to realize their vision.” Unless your long-term vision was only meant to last until the end of the summer, for entrepreneurs, innovators and businesses to thrive and unlock the economic potential that arises from the creation of new industries, we need a consistent approach from the government .
We have enormous fiscal potential. Within the UK climate technology community, we are working to create well-paid jobs and value for investors across almost every asset class. And collectively – heck, individually – our solutions could really change the world.
Of course, this is the common cause around which we should be united. Our company is trying to move the industry away from dependence on fossil fuels to make chemicals, among other things. But it is not difficult to see the impact that these political spasms and contradictions in our climate commitments have on, say, an electric vehicle battery business (which has just seen market demand for its output decline over five years). If giants like Ford feel the frustration, Imagine the environment at a small green tech startup.
So what is the work? How can the government support those who struggle in an increasingly insecure (and disingenuous) context?
The response of any technology company affected by last week’s news surely has to be this.
First, we need consistent macroeconomic policy. This has a major impact on startups raising and deploying capital in climate R&D. The global economic contraction has made it difficult for these companies to raise money. General approaches to economics have indirect effects on how we, as businesses, make money and manage our operations. Even salaries, which alone are difficult to keep up with inflation-based wage increases.
The second is a coherent fiscal policy. One of the most critical things for startups is Tax credits for research and development (R&D). This was a lifeline that gave research-intensive small businesses months of budget headroom each year, effectively allowing them to recoup a third of the money spent on R&D. The government announced it would eliminate it last year, and only thanks to a lobbying effort led by the Startup Coalition that, at the last moment, a part of that tax credit could be preserved.
Which leads to the third and most important point: a coherent climate policy. The impact of not having one It’s developing in real time, right now.. Sunak’s public U-turn not only undermines science and plays into the hands of climate skeptics. He also dives deep into the future of any climate tech companies whose launch plans need to align with decarbonization timelines. This will damage economic confidence. People will lose jobs. And, unfortunately, the measures will be delayed even further.
In the end, it’s simple: inconsistency breeds uncertainty. So give us consistency. It is possible for our sector to succeed despite bad policies. But to thrive, we need consistent resolutions and behaviors from a government that truly cares about leading this critical fight. Considering the colossal stakes, which at least recently have been taken seriously, is that really asking too much?
