Policies to tackle climate change could have a positive effect on the UK economy, according to a new report that challenges those that say sustainability will harm economic growth.
A range of studies and lobby groups have previously criticised climate change policies for harming the economy because of the risk of carbon intensive companies leaving the UK in favour of countries with more relaxed regulation.
However, a report by the Centre for Climate Change Economics and Policy and the Grantham Research Institute has found there is limited evidence to suggest climate change policies will damage the economy and government targets should not be weakened.
With the Committee on Climate Change finding the UK’s carbon footprint is now one of the largest in the world, in regards to consumption, it is more important than ever for the UK to step up its action against climate change.
The UK has targets for reducing greenhouse gas emissions by 80% by 2050, as part of the legally binding Climate Change Act, and carbon budgets have been created to help the UK to meet this target.
The government predicts the UK will meet the first three carbon budgets but has admitted there may be a shortfall in reaching the fourth.
The fourth budget was set in 2011 and aims for UK emissions to be 50% lower in 2025, when compared to 1990. It was announced in 2012 that the fourth carbon budget would be reviewed early this year and the outcome will be announced this summer.
With the announcement coming up this has opened up the debate about the effect of policy on the economy.
However, the new report notes the UK’s climate change policies have limited negative effects. It says, “Arguments in favour of revising the fourth carbon budget, based on concerns about competitiveness, do not appear to be supported by the evidence. Existing data suggest that the impact of current policies is small or negligible, dwarfed by a range of other economic factors.”
It also found these policies could instead have positive outcomes as they create competition in this sector. The report adds, “Well-designed climate change policies could offer business opportunities in fast-growing global markets, as countries, such as the United States, China and Member States of the European Union, implement ever more stringent carbon reduction and energy efficiency policies.
“The UK is well-positioned to benefit from a global transition to a more resource-efficient and renewable economy, provided flexible structural policies allow it to use its comparative advantages.”
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