LONDON: The British government’s reliance on market mechanisms to achieve its net-zero targets won’t be enough to rid the country of fossil fuels by 2050, a parliamentary committee says.

Global fossil fuel financing of US$742bil in 2021 still outpaced investment in renewables, underlining the risks of leaving decarbonisation to the private sector, the Environmental Audit Committee said in a report.

Backsliding by the UK government is causing confusion, just as global policy makers redouble their green transition efforts.

“The government should implement swiftly its initiatives on mandatory transition plans, a UK green taxonomy, and carbon leakage mitigation measures,” Philip Dunne, chair of the committee, said in a statement.

“Any delay is likely to send mixed messages to the financial sector that the United Kingdom is wavering on its ambitions, as set out at the 2021 United Nations Climate Change Conference, to become the first net zero-aligned financial centre.”

The lawmakers urged the government to make transition plans mandatory for companies, while monitoring their effectiveness through the publication of quarterly reports.

They also recommend creating an independent body responsible for tracking net-zero and nature-related financial flows, as well as investment geared toward high-carbon projects as a way to mitigate risks such as a delays in policy implementation.

To be sure, the UK Treasury and private companies including Aviva Plc, London Stock Exchange Group Plc and Unilever Plc are working on an initiative to have consistent and comparable company disclosures.

This is as the government moves toward making publication of transition plans mandatory.

 - Bloomberg