While I appreciate the concerns raised, the assessment of the independent Committee on Climate Change (CCC) has concluded that this target is feasible, deliverable and can be met within the same cost as was estimated for our previous target of 80 per cent which was set back in 2008, such has been the power of innovation in reducing costs.
That is not to mention that the actual impact could be partially or completely off-set by wider benefits such as better health through reduced air pollution, improved efficiencies across the economy and the creation of green collar jobs and clean growth. We can also reduce the risks of catastrophic and costly climate change driven impacts, such as flooding.
Most recently, to ensure net zero is delivered as effectively as possible, the Government has announced an independent review of its approach to meeting its net zero 2050 target to ensure our legal commitment is delivered in a way that is pro-business and pro-growth.
However, it is right that we should look carefully at how these costs are distributed in the longer-term. In 2021, the Treasury published its Net Zero Review which found that the majority of global GDP is now covered by net zero targets. As the world decarbonises, UK action can generate benefits to businesses and households across the country. The report highlighted that the transition to net zero implies a significant transformation of the UK economy over the next three decades. It noted that the overall impact is uncertain and challenging to estimate. However, existing estimates suggest that the impact on GDP by the end of the transition is likely to be relatively small, and dwarfed by the costs of global inaction.
The most recent cost estimates in the Net Zero Strategy present a net cost, excluding air quality and emission reduction benefits, equivalent to 1-2 per cent of GDP in 2050. This is easily justified when another report estimated the overall costs and risks of global warming to be equivalent to losing between 5 per cent and 20 per cent of global GDP each year. While the UK might be less exposed to physical risks of continued global warming than many other nations owing to its temperate climate and status as an advanced economy, there are potentially still significant indirect impacts. For example, damage to global supply chains affecting trade, reduced production in trading partner nations pushing up the cost of imported goods, or changes to migration from regions heavily affected by climate change.
Ultimately, in fulfilling the scale of the commitment, technological and logistical changes are needed in the way we use our land and to seize the opportunity to support investment in a range of new or advanced technologies, including in areas such as carbon capture, usage and storage, hydrogen and nuclear. The Treasury's interim report noted that well-designed policy can reduce costs and risk for investors, support innovation and the deployment of new technologies.
Further, the £12 billion Ten Point Plan lays the blueprint for a green industrial revolution. The new Energy Security Strategy builds on the Ten Point Plan, and, together with the Net Zero Strategy, is driving an unprecedented £100 billion of private sector investment into new British industries including Offshore Wind and supporting 480,000 new clean jobs by the end of the decade.
The Government has decided to adopt the CCC’s recommended Sixth Carbon Budget in full, which will see the UK reduce its greenhouse gas emissions by almost 78 per cent by 2035, compared to 1990 levels. This comes in addition to the further interim target of reducing greenhouse emissions by 68 per cent by 2030, compared to 1990 levels.
The Government's Net Zero Strategy sets out a clear path for the changes needed to secure our energy, create jobs and new industries, and end the UK's contribution to climate change. The UK can rapidly cut carbon emissions, while creating new jobs, new technologies and future-proof industries that will generate economic growth for decades to come.
I have spoken with colleagues at the Treasury to make the concerns raised known regarding the impact of our green recovery on tax receipts. These colleagues assure me that any changes to taxation that have been or will be implemented as part of our green agenda are subject to extensive evidence-based consideration to determine their impact on Treasury revenues and how this relates to the benefits of their implementation. All taxes and any related reliefs are kept under constant review, and are subject to further scrutiny as part of the normal process leading up to a Budget. Post-implementation evaluation is also carried out after any given change to ensure that its effects are as expected.
Aiming for zero emissions by 2030 is almost certainly impossible, disruptive, not required by the science, economically unfeasible and risks undermining consensus.
In addition to championing renewable energy, reducing overall power demand forms part of the ambitious Net Zero Strategy. Energy efficiency measures, such as better insulating the buildings in which we live and work, in addition to shifting from gas to electricity to heat our homes, will reduce emissions and promote more ambitious and sustained demand reduction. Many government schemes support free or subsidised energy-saving measures that can reduce demand for energy.
Most recently, the Government has announced a new long-term commitment to drive improvements in energy efficiency to bring down bills for households, businesses and the public sector with an ambition to reduce the UK’s final energy consumption from buildings and industry by 15 per cent by 2030 against 2021 levels. New funding worth £6 billion will be made available from 2025 to 2028, in addition to the £6.6 billion provided in this Parliament. To achieve this target, a new Energy Efficiency Taskforce will be charged with delivering energy efficiency across the economy.
You may also be interested to know that the Government has committed up to £6.25 million for the Smart Energy Savings (SENS) competition, which is supporting the development, trialling and evaluation of innovative products and services that use smart meters to help consumers to reduce their energy consumption. I am also encouraged that since April 2022, a time-limited zero-rate of VAT for the installation of certain types of energy saving materials has been available.