The UK will maximise the benefits to be had from the transition to net zero if embracing a full throttle approach, according to Energy UK and Oxford Economics.
Moving quickly will see clean investment boost the UK’s global competitiveness, driven by increased investor confidence, lower costs of capital and cheaper technologies. However, as it stands, the UK is falling “far behind” the likes of the United States and the EU and forecast to have the slowest growth in low carbon electricity production of the world’s eight largest economies.
For the latest report in their Clean Growth Gap series, Energy UK and Oxford Economics explored four different scenarios for reaching net zero. This ranged from a “baseline” approach, meaning the current state of play, through to others where government policy stimulates investment, innovation and technological advances.
The most ambitious of the pathways is Net Zero Transformation, which sees early policy action and technology advances, cutting the costs of carbon abatement, bringing greater confidence from private investors that they can generate profits from green investment, and in turn incentives for innovation are then stimulated.
Through Net Zero Transformation, reaching net zero by 2050 would see the economy 6.4% larger, equivalent to £240bn, than the baseline approach. It would also deliver 226,000 more jobs and increased confidence would bring about a £165bn boost in private investment. There would be growth across a range of sectors, with electricity generation, transmission and distribution (26.7%), automotive vehicle manufacturing and plants (12%), manufacturing (10.3%) and construction (9%) all benefiting. In contrast, and perhaps unsurprisingly, the manufacture and distribution of gas will contract sharply.
Therefore, not only will inaction on the road to net zero cost the planet, it is clearly going to cost economically too. The quicker policies and frameworks to decarbonise the economy are put in place, the more significant a role the private sector will be able to play when it comes to future investment.
It will also make it easier for people to manage their energy use, leading to more affordable bills, drive job creation across a host of different technologies and supporting services, and deliver lasting benefits in terms of employment, the supply chain and education opportunities for communities near clean energy infrastructure, even if they do have to deal with disruption over the short-term.
