Report highlights economic benefits of switching to low-carbon heating

A new report, produced by Cambridge Econometrics on behalf of Greenpeace UK, shows how a properly funded programme to insulate homes and install low-carbon heating sources could deliver large economic and social benefits.

Up to 138,600 new jobs could be created and the economy boosted by £9.8bn by 2030 if the government was to significantly increase the deployment of heat pumps and energy efficiency measures, with grants to cover the costs, according to the report.

These findings come ahead of the publication of the government’s Heat and Buildings Strategy and Spending Review next month, which is expected to set out plans for decarbonising homes and buildings and the finances made available to do it.

Greenpeace UK’s policy director, Doug Parr, said: ‘The simple fact is, the government’s current plan to decarbonise homes won’t cut emissions enough to meet its own legally binding climate commitments or tackle the climate crisis. A more ambitious plan, which will sufficiently slash emissions from homes, could create many thousands of new jobs right across the country and pump billions into the economy. This should be music to the Prime Minister and Chancellor’s ears.

‘Rishi Sunak will be shooting himself in the foot if he fails to deliver the required extra £12bn to green our homes next month. His reluctance to dig deep in order to tackle the climate crisis will cost the UK economy much more in the long run but he’d also be missing a trick when it comes to short-term economic growth. It’s time to stop tinkering around the edges and get on with tackling this crisis.’

The government has set an ambition to deliver 600,000 heat pump installations per year by 2028, however the Climate Change Committee (CCC) state that the target is insufficient in their 2021 Progress Report to Parliament and argue it should be upscaled by 900,000 installations per year if we are to be successful on our path to net zero.

The analysis modelled three decarbonisation scenarios, including reflecting the Climate Change Committee’s Balanced Net Zero Pathway ambition, the lower ambition of the government’s 10-Point Plan deployment, and a low technology cost scenario reflecting predictions that the cost of heat pump installation will decrease over time, albeit slower than in the first scenario.

The report found positive impacts on GDP across all three modelled scenarios, with increased ambition in heat pump deployment or substantial lowering of installation costs leading to greater economic benefits for the UK economy by 2030.

They also found substantial job creation associated with all three scenarios, with around 44,000 net jobs created in 2025 in all scenarios, taking into account job losses associated with the shift away from fossil fuels, with the most ambitious scenario leading to the greatest job benefits by 2030.

Jon Stenning, associate director at Cambridge Econometrics, said: ‘This analysis highlights the substantial economic benefits that would result from a programme to encourage the deployment of heat pumps and energy efficiency measures into people’s homes. The government should take the opportunity presented by the Comprehensive Spending Review to set out a clear long-term framework for delivering these measures, which are an essential component in decarbonising the UK economy.’

In related news, the National Federation of Builders (NFB) reports that the material crisis is harming the government’s housebuilding and construction ambitions and the sector needs help in addressing it.

Photo by Erik Mclean