CCC says net zero transition cheaper than single fossil fuel shock

The UK’s independent climate advisory body, the Climate Change Committee (CCC), has published a new analysis suggesting that meeting the country’s legally binding net zero by 2050 target would cost less overall than the economic impact of a single major fossil fuel price shock.

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The committee found that the total net additional cost of reaching net zero from now to 2050 is likely smaller than the cost to the economy of a fossil fuel price spike similar to the one seen in 2022, when energy markets were disrupted by Russia’s invasion of Ukraine.

The CCC’s supplementary analysis report, a companion to the CCC’s Seventh Carbon Budget advice, tested different scenarios and concluded that pursuing the committee’s Balanced Pathway to net zero is more cost‑effective than continued reliance on fossil fuels. It estimates that for every £1 invested, benefits outweigh costs by 2.2 to 4.1 times, largely through avoided climate damages estimated to be £40bn to £130bn by 2050.

The report concludes “estimating the cost of achieving Net Zero is technically complex, requiring the application of economic principles and modelling methodologies, supported by a wide range of underlying assumptions… However, this costings analysis shows that regardless of the chosen methodologies and assumptions, achieving Net Zero brings a net benefit to society.”

Commenting on the report Nigel Topping CMG, Chair of the CCC, said the analysis shows that transitioning to cleaner energy while reducing dependence on volatile overseas fossil fuels makes economic as well as environmental sense: “it’s more important than ever for the UK to move away from being reliant on volatile foreign fossil fuels, to clean, domestic, less wasteful energy.”