Achieving net zero by 2050 in the UK requires a substantial increase in investment, over two-thirds more than current levels.
That’s according to a report by Oxford Economics and Energy UK, which suggests encouraging this investment with the right incentives can trigger innovation, cost reduction and enhanced productivity.
However, the authors of the report have warned that delaying action until the 2030s would result in significantly lower private-sector investment, a decline in economic output and reduced employment compared to the baseline scenario.
The report, titled “Path to Prosperity,” explores four scenarios for achieving net zero, from the current state (baseline) to those where government policies can either stimulate investment and innovation or, conversely, lead to delayed action and reduced ambition.
The most ambitious scenario, “Net Zero Transformation,” offers the greatest economic benefits, according to the report.
It could boost the UK’s GDP by 6.4%, equivalent to £240 billion by 2050, compared to the baseline.
Under this scenario, private investment could increase by £165 billion and approximately 226,000 additional jobs could be created.
Key sectors like manufacturing, construction, automotive, and the supply chain, as well as electricity generation, transmission and distribution, would contribute significantly to GDP, with manufacturing alone adding as much as £30 billion.