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This month we look at how the subject of Net Zero is being received and how the message about reducing fossil fuel generated energy is translating into financial benefit, rather than just about saving the planet.
In March the Climate Change Committee (CCC) published a supplementary analysis of the 7th carbon budget, going into more detail on cost and energy security conclusions against different scenarios. This was timely in light of the US invasion of Iran and subsequent closure of the Strait of Hormuz, leading to a significant global energy price spike, which was not foreseen at the time the report was published, but was part of its theoretical forecasting.
The report concluded that the benefits of Net Zero consistently outweigh the costs, and while including the admission that achieving Net Zero does require investment, concluded that for every £1 spent there will be £2 to £4 in benefits. Interestingly this was based on a theoretical gas price spike event happening every decade, replicating the 2022 spike seen after the Russia/Ukraine conflict, and not more frequently than that. The report then goes on to say that the transition to a more electrified, efficient, renewables-based system will reduce overall exposure to fossil fuel price volatility, while continued reliance on gas would result in the UK being over 40% more exposed to a spike in the late 2020s than if we followed the recommended Net Zero Pathway. For a spike in the late 2030s the UK would be twice as exposed, and in the late 2040s, the UK would be five times more exposed.
The report spells out in pragmatic, economic terms the risk to the UK (and other countries currently relying on an element of fossil fuel power generation) without labouring the point about the environmental benefits. This isn’t the first time we have heard this advice, and if we refer to “an oldie but a goodie” the Stern Review: The Economics of Climate Change, that was published in 2006, this tells us what the future (or by now, the past) would look like if we failed to invest in a low carbon future.
Later in March we saw the long-awaited publication of the UK Net Zero Carbon Buildings Standard, which has been collaboratively developed by a wide range of stakeholders in the United Kingdom’s built environment industry. Finally it’s time to put to bed the debate over what constitutes a Net Zero building – now we know this. All we need to do now is ensure that management of our new and existing UK building stock works towards achieving that standard…
Back onto costs, it is unlikely that following publication of the UK Net Zero Carbon Buildings Standard, all parties involved in the design, construction and use of buildings in the UK are going to move full steam ahead to achieving the recommendations of the standard, but linking it back to the CCC report, there is clearly a business case to be made for saving money by doing so. This is where the investment vs return argument comes in; Net Zero does require investment, however doing so this will not only reduce costs in future but help to act as a catalyst for economic growth (often called the ‘Green Economy’) in the UK in the present, something that we desperately need in light of the gloomy economic forecasts coming out as a result of the US/Iran conflict.
The Standard does outline the climate science argument of working towards Net Zero, which shows that to prevent the worst impacts of climate change on people and natural ecosystems, the planet’s average temperature rise needs to be limited to 1.5°C above pre-industrial levels, and to do this humanity must reduce worldwide carbon emissions in line with the global ‘carbon budget’ pathway and reach a net zero carbon world by 2050. Whether you are an ardent believer in climate science or you just like saving money, there’s something in there for everyone. Fellow Venn diagram fans would agree that there is plenty of crossover with these 2 camps, and I suspect that their combination would cover most, if not all, of the current global population.
Cutting through the detailed economics and climate science of the reports the advice being provided is relatively simple – move away from fossil fuels, to save money and reduce environmental impact. And the sooner we do it as a country, the better.
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