The net zero transition could yield over £90bn of annual benefits to the UK, with the co-benefits, growth opportunities and costs of inaction outweighing the additional immediate spending needed.
Keeping Us Competitive: A UK Investment Strategy for Net Zero, prepared by Vivid Economics for WWF UK, found the net zero transition would avoid yearly costs of global inaction (£3bn) and unlock business opportunities (£50bn), while the co-benefits of decarbonisation – including health benefits from more active travel and improved air quality – would capture a further £80bn. Yearly resource costs were forecast at £40bn.
The additional annual investment needs, both public and private, in the short-term were calculated at around £30bn during the 2020s, and £300bn over the decade – only 15% of the Department for Work and Pensions’ annual spend or 1% of UK GDP. However, these investment levels will unlikely be met without significant government support, with a combination of carbon taxes, sector-specific carbon prices and levies, government subsidies, standards and regulation all cited as necessary.
Furthermore, in light of the economic impact of COVID-19, green investments that can support an economic recovery were highlighted. Investing in the green building sector will support the most jobs in the short-term, with potentially 85,000 in green retrofitting by 2030, while investment in nature and biodiversity was said to be “vital” to the UK’s recovery. This would include investment in rural employment and adapting to adverse climate effects and impacts.
Elsewhere, investing in clean energy infrastructure can also support green jobs, with the government’s aim of increasing UK offshore capacity to 40GW by 2030 supporting 28,000. Carbon capture and storage (30,000 jobs) and the UK’s automotive sector were also cited as opportunities. The latter already supports 100,000, however low-carbon investment in electric vehicles (EVs) and EV infrastructure could lead to further growth.