The Climate Change Committee (CCC) has set out a new pathway to a decarbonised UK by 2050 under the Seventh Carbon Budget.
The CCC has outlined in the pathway what decisions need to be made in coming years to ensure success, modelling on a reduction of emissions by 87% compared to 1990 levels by 2040.
Its findings include electrification making up 60% of emissions reductions by 2040, including moving to electric vehicles, as well as heat pumps and a decarbonised grid.
Almost half of the reduction comes from the transport and energy sectors (44%). Some 27% of the emissions reduction by 2040 will come from surface transport, 5% of the emissions reduction by 2040 comes from aviation and 12% of emissions reductions by 2040 comes from electricity supply. When including energy use and efficiency in buildings, the number is significantly over 50%.
Globally, the world now invests almost twice as much in clean energy as it does in fossil fuels, with clean energy investment expected to reach $2 trillion in 2024.
According to the CCC, investment in decarbonisation will create savings over time within the Seventh Carbon Budget Period (2038-1042) seeing this realised in a cross-economy basis.
It predicts net costs of delivering to be 0.2% of GDP per year on average.
Household bills are predicted to be around £700 cheaper than today, and driving to also be a similar amount by 2050, through applying the pathway.
Critically, energy security from the shift will also see household energy bills by 2040 being 15 times less sensitive to spikes in energy prices, like the one seen Russian’s invasion of Ukraine in 2022.
The private sector will fund on average 65-90% of the financing required for the transition from 2025-2050. Public spend per year “never exceeds” 2% of total managed public expenditure, it said.
Professor Piers Forster, Interim Chair of the Climate Change Committee, said:
“The Committee is delighted to be able to present a good news story about how the country can decarbonise while also creating savings across the economy. For a long time, decarbonisation in this country has really meant work in the power sector, but now we need to see action on transport, buildings, industry and farming. This will create opportunities in the economy, tackle climate change, and bring down household bills.”
‘Our analysis shows that there is no need to pitch action on climate change against the economy. We will need Government and business to deliver the investment, but we are confident that this Seventh Carbon Budget offers a secure, prosperous future for the UK.”
Industry reaction:
Matthew Adams, Head of Transport at RECHARGE UK, the EV arm of the Renewable Energy Association (REA) said:
“It is now clear that the success of HGV decarbonisation in many cases after 2040 lies with electric batteries. It is therefore critical that the Government include HGV charging infrastructure in its rapid charging fund and address rising concerns around grid connections to support the backbone of the UK’s economy, the logistics sector. Without significant investment in public and depot-based charging, the 7th Carbon Budget’s targets will fail to be hit.
“It is also important to recognise the single largest purchase a household can do to reduce their emissions is buy an electric car (42% reduction) and achieve £2.7 billion a year in health savings by 2040 as a result of improved air quality from EVs and low carbon heat. So, the single best purchase we can make for ourselves, and the economy is to drive an EV.
“It is clear though that what underpins the transition to electric vehicles is the need for investment, which can only be achieved through clear and consistent long term policy signals. We must move away from the chop and change of the last Government and move towards consistent messaging around the positive role EVs play in the transition to a net zero economy, improving our health, our wallets and our economy. Government must therefore kick start a mass information campaign to raise awareness of the number of ways consumers can access an EV at low cost such as salary sacrifice and the growing second hand market.”
Tania Kumar, Net Zero Director, CBI, said:
“The Climate Change Committee’s Carbon Budget report outlines a clear path to 2050 and highlights the UK’s leadership opportunity to show that the energy transition can drive economic transformation.
“Businesses want to decarbonise. Energy is a core cost for any business and, long-term, net zero will be key to reducing the cost of doing business. But if we are to reap the benefits of this transition targets alone are no longer enough to provide confidence to markets or households for the pace of change required.
“Today’s analysis demonstrates the scale and urgency of the investment needed now to achieve this, with the majority coming from the private sector. To enable this, proactive decision-making from the government is critical. This includes stepping into markets where costs are still prohibitive, providing policy clarity on future energy system design, and establishing clear processes for tackling barriers like planning and permitting.
“The upcoming spending review will be key for setting out these next steps and building the policy frameworks that businesses require to support the delivery of the carbon budgets.”
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