The UK could meet its 2030 emissions targets by mobilising between £6bn and £8bn of public investment annually, a new analysis from University of Oxford researchers has calculated.
A study published this morning by the Smith School of Enterprise and the Environment posits the UK could deliver climate goals at a “minimal cost” to people and the economy.
A “balanced” mix of policies focused on the transport, buildings, and power sectors would “benefit the majority of households”, as well as the broader UK economy, even if current challenging fiscal conditions persist, the study notes.
The research, entitled Getting a good deal on net zero, calculates that roughly 80 to 87 per cent of low-carbon investments, including the roll out of heat pumps and electric vehicles (EVs), will reduce overall costs to consumers over the technologies’ lifetimes, relative to continued reliance on fossil fuel technologies like gas boilers and internal combustion engine vehicles.
Households with one EV and a heat pump could deliver net savings of up to £380 a year through a “well-coordinated” transition focused on the two technologies, the researchers said.
“A focus on only the initial costs of adoption denies households and businesses significant savings that low-carbon technologies offer, for example when a household has to replace an ageing boiler or vehicle in the coming years as millions of businesses and homes will be doing,” said Dr Anupama Sen, co-author and head of policy engagement at the Smith School.
The study also calculates that investments in net zero technologies and solutions could create approximately 250,000 full-time equivalent jobs by 2030, of which 150,000 would be direct jobs and a further 100,000 jobs in the construction, installation and operation of new technologies, as well as across supply chains.
Sen said the cost of inaction on climate change would be significantly greater than investments that could deliver emissions reduction.
“The total amount of annual investment needed from the public and private sectors is around 0.7 to one per cent of GDP,” she said. “This equates to £5 to £7 a week – the cost of two cups of coffee – per person per year, while vulnerable households could be protected from any additional costs at all.
“The cost of inaction, which an LSE study estimated at 1.1 per cent of GDP in 2022 and 3.3 per cent of GDP by 2050, will continue to rise.”
The report is the latest in a string of studies to warn the economic costs of escalating climate impacts could be bigger than previously expected while arguing the costs of the net transition are likely to prove remarkably affordable.
It comes as net zero policies are expected to emerge as a potential dividing line at the upcoming election, with the Conservatives accusing Labour of pursuing decarbonisation plans that could push up costs for consumers – a charge Labour has denied, while arguing mixed messages from the Prime Minister have undermined green investment.
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