The headline above should make you stop and think as it goes against current thinking from some quarters that the road to Net Zero will leave us colder and poorer – but that simply does not have to be the case.
Martin Fahey, Head of Sustainability at Mitsubishi Electric
This is pretty much a direct quote from MP Chris Skidmore OBE, Chair of the Independent Government Review on Net Zero from a recent podcast I took part in with him and BESA (Building Engineering Services Association). The entire podcast is a discussion around net zero and his seminal ‘Mission Zero’ Report.
The podcast saw the MP, my colleague Chris Newman and myself, in a discussion on the economic potential of Net Zero, ably chaired by David Frise, Chief Executive at BESA. We explored how to achieve the full benefits and opportunities that net zero offers, and covered the need to invest in the green technologies that will decarbonise the built environment, upskill the current installer base and ensure that businesses and consumers alike are supported on the journey towards Net Zero.
As it stands, more than 70 countries around the world have established targets for reaching Net Zero carbon emissions, with the UK now legally obliged to reach Net Zero by 2050. The country is now set on decarbonising all areas of the economy as part of this goal, including the built environment.
While Net Zero will greatly reduce our environmental impact, it also presents a significant opportunity to drive investment in the UK economy – with one trillion pounds worth of inward investment up for grabs this decade.
Against a backdrop of increasing economic uncertainty, Net Zero offers a valuable opportunity to create jobs, minimise supply chain disruption and boost the country’s economy. However, we must act now if we are to unleash the economic benefits of this transition in the future.
Significant progress is already being made towards Net Zero
The UK government has already established a Net Zero Strategy, which sets out a pathway to reaching Net Zero greenhouse gas emissions by 2050. This has recently been reviewed within the government’s Independent Review of Net Zero, which outlines 129 recommendations for delivering a prosperous green economy, including speeding up decisions around low carbon heating.
With the built environment contributing to 40% of all carbon emissions across the UK, to the focus is now on how we can reduce the environmental impact of our buildings. Regulatory requirements are changing as a result, with the Future Buildings Standard ensuring all new homes built by 2025 produce up to 80% less carbon emissions than the existing building stock.
Heating is also a key contributor of carbon emissions across the UK, so changing the way we heat these spaces is crucial. This has been shown through the establishment of targets for the transition towards the adoption of more renewable alternatives such as heat pumps, with the government aiming to reach 600,000 installations per year by 2028.
The economic benefits are becoming clearer
While significant progress towards Net Zero has already been made, it’s vital we recognise the economic opportunities reaching this goal will provide – while also ensuring this investment is evenly distributed across society as a whole.
By creating demand for jobs in low carbon sectors, such as renewable energy and building retrofitting, Net Zero offers a crucial opportunity to drive employment across the UK. In fact, 250,000 additional jobs have already been created in the economy so far, with the possibility of almost 280,000 more if we act now. Alongside boosting productivity, Net Zero will also localise production by reducing the environmental impact of global supply chains, allowing the UK to become a leading manufacturer and supplier on the global stage.
To ensure the economic benefits of this transition are felt by all, we need to reconsider how those at the very top of society, such as large corporations, can redirect investment towards our smaller towns and communities. One way this can be achieved is by reconsidering where businesses offset the carbon from their scope 3 emissions, and investing a proportion of these in insulation for local authority housing associations. By directing profits towards supporting people in making energy efficient upgrades to their homes, we can ensure no one is left behind in the transition towards Net Zero.
The impetus to act now
In order to reap the economic benefits of Net Zero, there are a number of things we can do now to help reach future targets while also ensuring a just and fair transition is achieved in the long-term.
Firstly, we need to drive investment in low carbon alternatives such as heat pumps – starting with lowering the price gap between electricity and gas. While the government is continuing to offer a number of financial incentives to support homeowners in making the switch, including the Boiler Upgrade Scheme, we must ensure the transition towards low carbon heating is affordable and accessible to the average UK homeowner.
With the government targeting 600,000 heat pump installations by 2028, upskilling and reskilling the workforce will also play a critical role in supporting the transition to Net Zero. As it stands, we don’t currently have the skills base to ensure current targets for renewable energy will be met. There are a number of ways this can be achieved, including creating modular qualifications for engineers training on the job, and encouraging businesses to trial heat pump training in specific regions to figure out what works well.
Net Zero presents a significant opportunity to enrich the economy and establish the country as a world leader on the global stage. However, only by acting now can we maximise the economic benefits of this transition for all – starting with directing investment towards heat pumps and upskilling the next generation to meet installation targets. This will ensure the UK has the right skills, technology and investment in place to win the race to Net Zero.
