U.K. Says Climate Goals Can Be Met Without Hurting the Economy

The U.K.’s efforts to introduce new climate policies and neutralize emissions by 2050 will likely have a “relatively small” impact on the economy, according to the government.

A move to a net-zero economy will create new jobs and opportunities for green industry to flourish, the U.K. Treasury said in a report published Thursday. Policy that’s designed well will support innovation and encourage the deployment of new technologies such as carbon capture and storage and hydrogen.

The review commissioned last year by the Treasury came to a similar conclusion that the government’s independent adviser, the Committee on Climate Change, which last week said the net-zero goals may pay for themselves in the opportunities they create.

“Employment opportunities in green industries will emerge, while high-carbon sectors will have to adapt or decline,” the report said. Government should use a variety of policies, including a carbon market to support emissions reduction.

Both the Treasury and the CCC are looking at the U.K.’s goal to slash net output of greenhouse gases to zero by 2050. It was also tasked with analyzing ways to maximize economic growth as the country makes the transition to less polluting industries.

Prime Minster Boris Johnson has put fighting climate change front and center of government policy as he seeks to emphasize the U.K.’s global outlook in the wake of Brexit. Earlier this month he pledged the steepest greenhouse-gas cuts of any major economy, and this week his government published an energy blueprint that pushed nuclear power and renewables and sought to overhaul the way people heat their homes.

Those plans come at a cost, and the government’s own climate advisers, the Committee on Climate Change, estimates low-carbon investment must reach 50 billion pounds ($68 billion) a year by 2030, up from about 10 billion pounds today.

But the climate panel also has reduced its estimate of the costs of the transition, and said last week that the savings to Britain from ending the use of fossil fuels in transport and using more efficient energy technologies would cancel out the increased investment needed.

The government says it will fund at least one power project equipped with CCS technology that captures emissions and stores them permanently under the seabed, starting with 1 billion pounds by the middle of the decade.

CCS is crucial in securing the future of large gas plants in the electricity mix. Overall, the U.K. wants to capture 10 million tons of carbon dioxide a year by 2030.

©2020 Bloomberg L.P.

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