The Treasury will carry out a review to inform the UK’s approach to hitting its net-zero emissions target by 2050, chancellor Sajid Javid has announced.
The review will look at the potential costs to various groups of transitioning to a net-zero economy. It will look at how these costs could be divided between households, businesses and the exchequer, and identify ways to balance these contributions.
It will form the basis of a Treasury report to be published in autumn 2020 to “guide decision making” in government about how to enable the UK to meet its target to cut greenhouse gas emissions to net zero by 2050.
The review will also look at how a “green economy” could boost economic growth, and evaluate the trade-offs of different approaches between cost, competitiveness, and the impact on consumers and taxpayers.
It will not duplicate the work of other reviews, which means it will not look into detailed policy options to decarbonise specific areas of the economy, or the social and floral benefits of decarbonisation.
The Treasury will work closely with other Whitehall departments and the devolved administrations on the review, as well as taking input from experts and those affected by the transition, according to the terms of reference.
The announcement comes after the business secretary Andrea Leadsom told a committee of MPs last month that the government would come up with a “pathway that combines energy security, affordability for taxpayers and achieving net zero” next year.
Leadsom told the Business, Energy and Industrial Strategy Committee the UK had “various different ways” of meeting the target, which could include making use of carbon capture and storage technology, nuclear power and renewables.
The review followed a call by the government’s independent advisers, the Committee on Climate Change, for the government to thoroughly assess how the move to net-zero emissions will be funded and who should bear the costs.
Welcoming the review, CCC chief executive Chris Stark said the committee was pleased that its recommendation to look at the distribution of costs between businesses, householders and the exchequer was the “central thrust of what the Treasury will consider”.
“The terms of reference look comprehensive. We look forward to engaging with the review as it develops,” he added.
Javid said the review would ensure the UK could end its "contribution to global warming, while supporting growth and balancing costs, to avoid placing unfair burdens on families or businesses".
The Treasury said it would publish further details of the review “in due course”.