Gov't publishes interim Net Zero review
The Treasury ahs published an interim Net Zero Review, informing the next steps in the UK’s transition to net zero by 2050.
This interim report sets out the analysis so far from the Treasury’s Net Zero Review and seeks feedback on the approach ahead of the final report, due to be published in spring 2021.
The interim report explores how people’s lives, businesses and the economy will adapt to the shift to net zero, and lays out some of the choices the Government will consider as it seizes new opportunities in the green industrial revolution. The report contains initial analysis, rather than policy recommendations, which will guide further work ahead of the publication of the Review’s final report next year.
The report sets out initial analysis covering:
- The economy and net zero: The scale, distribution and balance of new growth opportunities and challenges will depend on how the economy and policy respond to the changes required.
- The costs and investment required: new investment will be required to seize the opportunities of net zero, and there are opportunities to bring down the costs by encouraging innovation. This includes both public and private sector investment.
- Markets and climate change: markets are operating in a way that is contributing to climate change, and the Government will need to use a mix of policies to address these and to manage the effect on households and business.
- Innovation and private finance: well-designed policy can reduce the costs and risks for investors, supporting innovation and the deployment of new technologies which will be crucial for the transition to net zero.
- International competitiveness: the UK is well-positioned to use its early mover advantage to generate low-carbon export opportunities, but the risk of carbon leakage, where policies lower emissions in the UK but inadvertently increase emissions elsewhere, increase if other countries do not adopt similarly ambitious climate initiatives.
- Households’ exposure to the transition: households are exposed to the costs and benefits of the transition through their consumption, jobs and assets, and the Government will need to design net zero policy to spread the costs fairly across different groups and over time.
The final report will build on this analysis, looking at how the Government can encourage innovation, technological development and investment in green technologies in the UK; address risks to competitiveness; and manage implications of the transition for households. This will also complement the Government’s Net Zero Strategy to be published next year, as well as sectoral decarbonisation strategies.