But long-term savings of between £400 and £6,000 could be more than doubled if the UK made changes to electricity pricing that would allow it to better reflect cheap renewable energy, the review said.
The report says the benefits of net zero will “eventually” outweigh the costs.
Dieter Helm, professor of economic policy at Oxford University and a government adviser, said the cost estimates in the review were “highly speculative”, with the costs and savings of heat pumps being “incredibly optimistic”.
“My view is that the costs are likely to be much higher,” he said.
“Net zero is extremely important, and I think it’s critical to tell the public that it probably means they have to pay for the pollution they’re causing and save to fund the investment.”
We are now in a net zero race – standing still is not an option
By Chris Skidmore MP
Forty-two months ago, the UK became the first G7 country to sign our commitment to net zero carbon dioxide emissions by 2050 into law.
The UK’s leadership in tackling climate change has not only led to real change at home, reducing our carbon dioxide emissions over the past 20 years by nearly 50 per cent compared to 1990 levels. It has also led to global transformation abroad in the way countries and companies now view the importance of taking action on net zero.
Thanks to the UK’s chairmanship of Cop26, the Glasgow Climate Pact in November 2021 meant that more than 90 percent of global GDP committed to a net zero target.
Indeed, the rest of the world, along with the international investment community, has recognized the fact that the energy transition is a new economic reality. 2022 marked a watershed moment for global net-zero investment—not least from the US Deflation Act, with its commitment to put clean technology at the center of future economic strategy.
The global reality of an energy security crisis and rising gas and fossil fuel prices in 2022 demonstrates the importance of ensuring future energy security through greater use of locally generated renewable and clean energy sources, while striving for more good reduction of energy demand.
Planning for our net zero future
Forty-two months later, much has changed. For this reason, the independent review of Net Zero that I led was commissioned in September 2022 to ask how the UK could better meet its net zero commitments, taking into account these global changes.
Above all, this review sought to ask how the UK can meet its net zero commitments by demonstrating how to deliver and implement the most effective and efficient plan for our future energy transition.
Climate commitments and net zero goals remain just words on a page without a clear, coherent and robust transition plan. Although it may have been 42 months since the UK signed up to net zero legislation, there are only 324 months to go until 2050. Effective planning for this net zero future must be our priority.
This review seeks to establish how best to create a delivery ecosystem to achieve the best possible solutions for the future. This requires not only government to play its part, but also importantly to empower regional agencies, local communities and individuals to play a greater role in their own journey to net zero. A key focus was how we create a ‘big bang’ moment for net zero, enabling and unlocking the potential of the whole of the UK to take advantage of the opportunities that net zero offers.
This 350-page report, Mission Zero, lays out clearly the international opportunity for future investment and economic growth that net zero presents. This opportunity must be seized if the UK is not only to maintain its international leadership in climate action, but also if the UK is to realistically compete with other nations making important strategic decisions about their own energy transitions.
The review outlined what is needed to effectively deliver net zero investment – what needs to be achieved to provide the certainty, clarity and consistency required by government policy and investment to de-risk private investment and capital expenditure.
There is a vital requirement for robust, long-term programs rather than piecemeal, short-term projects if the UK is to meet its zero ambitions in an affordable way.
Long-term investment security, enabling supply chains to be established and secured, will reduce net costs to zero, while making the UK a more attractive place to invest.
That’s why we need a new approach to our net zero strategy – one that identifies robust 10-year missions that can be established across sectors, providing the vision and certainty for stakeholders and investors.
Turning point
There is no denying the fact that 42 months after the UK net zero law was signed into law, we are now in the race to net zero. Standing still, procrastinating or maintaining the status quo is not an option.
International markets and investors are looking to make decisions now on where to invest for the future. The UK can either seek to provide incentives for investment – as outlined in this review – alongside wider opportunities for job creation and local and regional regeneration, or else these markets will go elsewhere.
An active, strategic choice must be made. Does the UK want to compete in the net zero race, with the chance to lead, or do we just want to watch from the sidelines?
On the one hand, leading and seeking first-mover advantage brings with it the opportunity to attract inward investment, to create new supply chains, and to reduce costs for the wider deployment of clean technologies and industries. On the other hand, to trace the risks by witnessing the job opportunities, infrastructure and investment that could be directed to the UK, go elsewhere in the world.
We have reached a tipping point. The risks of “not zero” now outweigh the associated risks of taking decisive action on net zero now.
Chris Skidmore is chairman of the Net Zero Review, which comes out on Friday
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