The Climate Change Committee (CCC) has
released a
new report to complement its 2025 advice
on the UK's Seventh Carbon
Budget.
The independent, statutory
body tested its cost and energy security
conclusions against different scenarios. It
found that the total additional cost of a
single fossil fuel price spike of 2022 magnitude is
likely to be as large as the total
net additional cost of meeting the pathway to Net
Zero across every year to
2050.
In
all scenarios, achieving Net Zero was found to
be a more cost-effective path for the
UK economy than continued reliance on fossil
fuels, bringing a net benefit to
society.
Nigel Topping
CMG, Chair of the Climate Change
Committee, said:
“There has been a lot of
public interest in the cost of transitioning to a low carbon
economy. Going through an economic transition is exciting, but a
sense of uncertainty about the future is completely reasonable.
As such, it's important that decision makers and
commentators are using accurate information to inform
debates.
“In light of current world
events, it's more important than ever for the UK to move away
from being reliant on volatile foreign fossil fuels, to clean,
domestic, less wasteful energy.”
The
report also includes additional cost-benefit
analysis of the CCC's proposed Balanced Pathway to
Net Zero. This pathway was modelled for the
Seventh Carbon Budget advice the CCC gave the UK
Government in February 2025. This is carried out in
line with the government's Green Book
guidance.
The Committee's key findings
are:
-
For every pound spent on Net
Zero, the benefits outweigh this by 2.2 to 4.1
times.
-
Avoiding climate damages is
the most significant benefit of the
transition. This saving is estimated between £40 billion
and £130 billion in 2050.
-
Energy losses are
halved compared to
today. Losses
in a Net Zero system are valued at £30 billion per year,
compared to £60 billion a year in today's energy
system.
-
The transition is set to
deliver far greater health and wellbeing co-benefits than
costs. Cleaner
air, warmer homes, more active travel and healthier
diets strongly outweigh downsides like extra
public transport time or potential congestion from
increased EV use. These ‘co-benefits' are estimated
to provide £2 billion to £8 billion per year in net
benefit by 2050.
Notes to editors
The
UK Parliament is required to vote on and legislate
the Seventh Carbon Budget (covering the period from
2038-2042) by 30 June 2026.
Costs and savings from the
Committee's Seventh Carbon Budget
advice:
-
Overall cost of meeting the Balanced
Pathway is estimated to be around £4 billion per year, on
average between 2025 and 2050. This is around 0.2% of
the annual GDP expected over the same period. The
net additional cost of the Balanced Pathway is
between 0% and 0.5% of GDP per year between 2025 and 2050,
under each sensitivity.
-
- An average investment of £26
billion per year will be needed. This investment will be
offset by savings of around £22 billion per year on average in
operating costs (improved efficiency and higher levels of
low-cost renewable energy, reducing gas imports).
