If the UK government sticks to its carbon budgets, which set targets for national emission reductions through the coming decades, every household could be £565 better off per year by 2030.
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A new report, from research firm Cambridge Econometrics and commissioned by WWF, calculated the impacts that the carbon budgets could have, finding a wealth of positive effects.
The budgets, which collectively span the period 2008 to 2027, build towards the ultimate aim of an 80% cut from 1990 emission levels by 2050.
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Though they were set by the legally binding Climate Change Act, the government does hold the power to review and alter these targets.
Energy secretary Ed Davey recently announced that the government would remain committed to the fourth budget, which covers the period from 2023 to 2027 and requires an emissions cut of 50% from 1990 levels.
Most estimates say carbon-cutting policies will act as a slight drag on economic growth, but according to the new econometric report, this decision will pay off.
It claims that more efficient and cheaper to run cars, improved energy security, lower food prices and widespread health benefits from a cut to pollution will result in a 1.1% boost to GDP by 2030, when compared to a business as usual scenario.
Though energy prices would rise slightly, these benefits combined with increased employment in the renewable energy industry would more that mitigate this.
The government would also save £8.5 billion a year on oil and gas imports, while benefiting from higher prices on carbon markets and increased tax revenues.
“Changes to the energy system do result in slightly higher costs but they also change the structure of the economy, with net benefits for the UK,” the report explains.
The UK is expected to meet its second carbon budget, which covers 2013 to 2017, largely thanks to the decline in economic activity caused by the recession.
However, experts warn significant investment and effective policies will be needed to reach future targets.
Commenting after it was confirmed the fourth budget would be upheld, David Nussbaum, chief executive of WWF UK, said, “Looking ahead, we need the next government – of whatever political complexion – to ensure policies are in place to attract the significant investment in low-carbon infrastructure needed in the coming decade to meet the emission cuts set out in the budget.
“All parties must make this a priority in their general election manifestos.”
Photo: Matt Buck via Flickr