Review of Net Zero Policy

Chris Skidmore launched the net zero review on 26 September 2022. Its purpose was to identify how the UK could meet its net zero commitments in an affordable and efficient manner, specifically one that is “pro-business, pro-enterprise and pro-growth”. It examined:

• what the most pro-business, pro-growth and economically efficient path to reaching net zero would be
• how to maximise the economic opportunities that the net zero target presents, as well as increase innovation, investment, exports and jobs in the UK
• what economic costs and benefits are associated with new and emerging policies and technologies
  
  

The review engaged with businesses, organisations, local government, academia and the public across the UK. A call for evidence also informed the review and received over 1,800 responses.
The review’s findings were published in its final report, ‘Mission zero: Independent review of net zero’, on 13 January 2023.
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The review described net zero as the “economic opportunity of the 21st century”. Citing an analysis by global consultancy firm McKinsey, the report said the supply of goods and services to enable the global net zero transition could be worth £1tn to UK businesses by 2030. As part of the British energy security strategy published in April 2022, the government estimated that the energy transition could support 480,000 UK jobs by 2030.

The economy and climate change are intertwined. While this Review has a clear focus on ways to achieve growth and reduce the costs of net zero, it is impossible to consider this in isolation from the physical risks that climate change presents. In a high emission future, the level of global disruption will be so severe that ‘normal’ economic activity will become very challenging. 

The Review has heard loud and clear that net zero is the economic opportunity of the 21st century. The evidence presented to the Review has shown that the pace of recent change has created a rush of economic opportunity at a massive, global scale. With more than 90% of global GDP covered by a net zero target1 there is now huge global momentum to reach net zero and capture the economic opportunities. This is driven by businesses of all sizes who have recognised that net zero can help them grow. 

We must move quickly. We have heard from businesses that economic opportunities are being missed today because of weaknesses in the UK’s investment environment – whether that be skills shortages or inconsistent policy commitment. Moving quickly must include spending money. We know that investing in net zero today will be cheaper than delaying, as well as increasing the economic and climate benefits.

Ultimately, the benefits of net zero will outweigh the costs. In some estimates, the UK would see approximately 2% additional growth in GDP, through the benefits from new jobs, increased economic activity, reduced fossil fuel imports and cost savings (for example cheaper household bills).