Hitting the UK’s net zero targets would save money and the climate

The UK could have lower bills, cleaner air and better energy security in a net zero future.

While it’s been known for some time that cutting carbon emissions works out much cheaper than continuing to burn fossil fuels, recent shifts in the global political landscape have slowed progress towards this goal.

The latest report from the Climate Change Committee (CCC), the independent body that advises the UK Government on its climate change targets, confirms that a low-carbon future is not only best for the planet, but for our economy as well.

As part of its seventh carbon budget, which establishes emission targets for 2038-2042, the CCC predicts that electrifying the UK’s power and transport systems could save UK households as much as £1,400 a year by 2050 by protecting them from the volatile price of fossil fuels.

While significant investment will be needed to achieve this, the overall cost of a net zero transition has fallen by almost £300 billion since the CCC’s previous estimate. The net cost is now estimated at just over £4 billion a year, which represents less than 0.2% of the UK’s annual GDP.

The interim chair of the CCC, Professor Piers Forster, says that the report is 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.”

While the CCC’s carbon budget lays out a path towards net zero, it’s only advice. It’s up to the UK Government to decide if, and how, it will bring the nation’s fossil fuel era to an end.

Quick wins

The majority of emissions savings in the carbon budget come from electrification, as part of broader trends around the world.

It’s estimated that global investment in green energy reached $2 trillion in 2024, bringing the cost of renewable energy down as the industry scales up. The price of energy from solar panels is almost twice as cheap as it was in 2010, while wind is around 60% cheaper.

The CCC anticipates that this rollout will continue to gather pace, with offshore and onshore wind turbines set to provide the majority of the UK’s power by the 2040s. In total, this will account for more than half of the UK’s emission cuts in the coming decades.

As our power networks get greener, they will also be able to help other sectors to slash their emissions. This will be particularly useful for decarbonising road and rail transport, which is currently responsible for a quarter of the whole country’s emissions.

It’s expected that electric vehicles will soon become cheaper than their diesel and petrol equivalents, with people set to increasingly buy new electric cars throughout the 2030s. By the 2040s, this is predicted to slash emissions from land transport by 90%.

While this will require a dramatic uptake of electric cars in the next decade, the CCC believes it’s a realistic change that’s similar in scale to the rapid adoption of mobile phones in the 1990s and 2000s. What’s more, these changes don’t need people to get rid of their existing vehicles early – they can change them over once they’re worn out.

Longer term goals

While much of the net zero transition is already in motion, some steps will need more support than others.

One example is how the UK heats its homes. Currently, most properties are heated using gas boilers, which account for around 10% of the UK’s carbon dioxide. While there have been suggestions that natural gas could be replaced with hydrogen, the CCC recommends that heat pumps are used instead.

While these are cleaner and cheaper than gas boilers, the UK currently lags behind the rest of Europe in installing them. This could represent a potential opportunity, as it means the country can learn from previous rollouts to avoid potential pitfalls.

It will also mean incentivising heat pump installation so that they are a more tempting alternative to gas boilers. The CCC suggests that new policies to encourage the take up of heat pumps, like scrappage schemes and the training of more installers, will be needed to ensure that around half of homes have one by 2040.

Certain industries, however, are expected to have difficulties reducing their carbon emissions. Aviation, for instance, is set to become the UK’s highest source of greenhouse gases by the 2040s.

While sustainable aviation fuels and more efficient planes will play a part in cutting these emissions, they won’t be enough on their own. The report suggests that carbon dioxide removal will need to increase substantially to balance out the emissions from flying.

The main cuts, however, will come from ‘demand management’. The CCC says that the number of flights will need to stay relatively constant over the next decade to meet emissions goals, with growth coming later once cleaner aviation technologies are developed.

This could mean increasing the cost of flying, or subsidising the price of alternatives so that it’s more tempting to swap short-haul flights for journeys by trains, ferries and other modes of transport.