One of the most frustrating aspects of having to listen to climate change sceptics banging on is their profound economic illiteracy. Anything to do with sustainable energy solutions (renewables, efficiency, smart grids etc) is automatically trashed as being massively expensive, detrimental to the interests of citizens, and, essentially, a complete waste of time. Too costly, too small, too marginal.

From painful experience, I know that the sceptics themselves are unwilling to hear anything that cuts across this facile schtick, but these days I’m much more concerned by those who might be taken in by these misperceptions / untruths.

So full marks to WWF for commissioning Cambridge Econometrics to deploy its hugely respected macro-economic model of the UK economy to tease out what some of the economic consequences would be if we go flat-out for a low-carbon economy here in the UK.

And the UK’s in a good position here – as a consequence of the 2008 Climate Change Act. That Act established the Committee on Climate Change, a completely independent body that has set up the timetable for reducing emissions of greenhouse gases, on the basis of five-year carbon budgets. So what this Report is talking about are the first four carbon budgets, with the target to reduce our emissions by 50% (on 1990 levels) by 2025.

The headline conclusion from the study couldn’t be simpler: working for this kind of low-carbon economy makes good economic sense. In four main areas:

  1. Households
    Despite the up-front costs needed to finance the low-carbon and energy efficiency technologies needed to meet the first four carbon budgets, the average household is expected to be £565 better off annually by 2030 as a result of policies to reduce emissions.
  2.  GDP
     combination of increased household income and investment in low-carbon infrastructure would, by 2030, lead to a 1.1% net increase in GDP, and the creation of an additional 190,000 net jobs.
  3. Energy security
    There would be a 30% reduction in demand for primary oils and petroleum products, and a 55% reduction in demand for gas in 2030.
  4. UK business
    UK business would benefit by developing, manufacturing and installing low-carbon technologies in the power sector, and from the additional spending power of households and the knock-on effects this would have on the wider economy.

Add to that potential increases in government revenues and reduced health costs (as a consequence of improved air quality and a cleaner environment), and the outlook really couldn’t be rosier!

I don’t suppose the climate change sceptics will be minded to listen to any of that, but one rather hopes that others will.

WWF Cambridge Econometrics Report: The Economics of Climate Change Policy in the UK

Headlines, intro video and links + Full report here