Last June, the UK committed itself to the legally binding target of net-zero emissions by 2050. The UK has a good track record, having already reduced emissions by 42% while growing the economy by 72%. And under its Industrial Strategy, ‘green collar jobs’ could reach two million while exports from the low-carbon economy could grow to a hefty £170bn a year by 2030.[i]
The net zero-carbon target will impose major changes in almost every aspect of British life, affecting our homes, food, the way we get around, as well as jobs and businesses. Reaching the target could cost about 1–2% of gross domestic product annually, according to a report from the Committee on Climate Change. The implications for future taxes on all aspects of demand and supply remain uncertain.
How fast do we need to phase out fossil fuels?
The prospects of a total phase out of fossil fuels remains unlikely, as the world economy will still oil and gas as a feedstock for making a range of industrial chemical, plastics, medicines and fertilizers. Instead the main effort will be a gradual greening of fossil fuels with alternative energy sources in power, transport, heating and industry.
Several options are open to both policy and decision makers in achieving the net zero challenge, on the supply side changing the business environment to encourage traditional fossil producers to become full spectrum energy companies. Since, they have many of the key technological, innovative, fiscal and project management knowhow to deliver the mega green projects of the future. As for the demand side, policy makers need to create the business climate regulatory incentives for a greener energy future.