UK: How to achieve Net-Zero by 2030 and improve the economy
Just Stop Oil is demanding that the UK endorses the Fossil Fuel Non-Proliferation Treaty and completely phases pout fossil fuels until 2030. Unfortuntaely, they do not show how to get there.
Climate science would definitely agree with that target –we have been more than 1.5 degrees above pre-industrial levels since May 2023, a target that was not supposed to be surpassed if we reach Net-Zero emissions by 2050. Climate change is accelerating and what that means we are experiencing right now: heatwaves, wild-fires, rain bombs, floodings, landslides. The combination of weather extremes will soon have severe impacts on global food production.
According to a recent global survey, 80% of the population want their governments “to do more” about climate change. Most people would happily agree with phasing out fossil fuels sooner than later, provided they still have a heated home and access to transportation. Where we want to go is clear – but how do we get there? Could the UK possibly phase out oil, gas and coal by 2030? Is that technically possible, and economically fesasible? What would be the investment needed for a full transition to a fossil free society by 2030?
In order to demonstrate the economic feasibility of the 2030 Net-Zero transition, the investment needs calculations are based on a 1-1 transition, i.e. generating all current energy needs with renewable electricity, and replacing all fossil fuelled technology (road transport, heating) with electric alternatives (EVs, heat pumps):
- Sufficient renewable energy generation (wind, solar) to cover all energy demands by 2030
- Extending electric grid capacity
- Provision of electricity storage (batteries, pumped storage, chemical storage) to guarantee grid stability
- The replacement of all fossil power appliances (heating) with electric heating systems (heat pumps) by 2030
- The replacement of fossil-power vehicles with electric vehicles (EVs) by 2030, including the relevant charging infrastructure
At first sight – before taking into account energy cost savings, jobs created, and improved health down the line – the numbers appear quite staggering
- Total investment requirements for the energy transition amount to £1’240 billion from 2025-2030.
- More than 50% (app- £670 billion) of these investments is required for the replacement of the road transport fleet (cars, trucks, coaches). However, through efficiency gains, smart vehicle sharing, improved public transport systems, and traffic flow management the cost of transport replacement could be reduced by up to 40%
- The development of the renewable energy infrastructure, including distribution (grid updates) and storage (batteries) amounts to £410 billion (on top of “naturally” occurring investments)
For details, download the Report here:
Investements required 2025 to 2030 to achieve Net-Zero by 2030 under a 1-1 scenario (replacement of all fossil infrastructure with electric alternatives). Efficiency gains, smart public transport, upgraded inner cities and shared community transport concepts could significantly reduce the investments required for road transport.
UK energy mix (primary energy) before, during and after the transition to Net-Zero. Note the dip in overall energy conszmption: primary energy refers to the total theoretical energy content of consumed energy. When transforming fossil energy to another form of energy – e.g. the movment of a car – large proportion of the energy is lost in the form of heat. Because electric appliances have a theoretical efficiency grade of 100% electricity to movment, overall energy consumption will be considerably lower than today.
Financing the energy transition
The markets alone will not come up with this kind of capital financing without government intervention. The government therefore needs to raise capital (which in turn will lead to additional private investment. Where should the capital come from?
- Carbon pricing at a rate of U$200 equivalent per tCO2e, rising by U$150 every year. Increasing the cost of oil/gas/coal accelerates the diversion of private and institutional capital from fossils to renewables. However, it also initially increases the cost of energy (until the cheaper renewable energy is available). 50% of the carbon pricing revenues are therefore re-distributed per capita on a monthly basis to ensure that the lower income segments have equal or more disposable income at their hands
- a border carbon adjustment tariff of 5% to protect the energy intensive sectors of the domestic industries,
- a temporary 10% tax on the highest incomes,
- a temporary wealth tax on the super-rich,
- and a modest Tobin tax on stock trading at 0.1% could raise approximately £1050 billion
These revenues are sufficient to cover 100% of the installation of the renewable energy infrastructure, as well as subsidising 50% of replacement of fossil heating devices with heat pumps, subsidising 30% of vehicle replacement, and a per-capita cash-payment to the people to counterbalance for initially rising energy costs
For details, download the Report here:
CO2 emissions from energy usage will drop to zero by 2030. Due to technological feasible and economicall viable alternative to the current fuel-powered commercial aviation, avaiation emissions are set to continue for some time after 2030.
Energy costs as percentage of GDP before, during and after the energy transition. Energy costs will rise for the first 2 years before dropping to levels at around 2% from nearly 4% of GDP before the transition. Investments and monthly cash payment per capita are off-setting the temprarely increasing energy cost.
The Benefits
- Thanks to the per-capita pay-back scheme, the average citizen would have more disposable income to spend during the transition (despite initially rising energy cost)
- The national cost for energy would fall between 1.2% to 1.4% of GDP after the transition, freeing significant resources for other purposes
- The availability of cheap energy is making the UK economy more competitive
- Most of the costs of the energy transition are investments. A rapid energy transition would have a positive effect on GDP and employment.
- It is estimated that the energy transition would create between 1.5 and 2 million new jobs.
- Additional benefits, such as better environment, better population health have bot been quantified for the purpose of this study
For details, download the Report here:
While the carbon-pricing initially affects energy costs, the short-term impacts are more than covered through investments and the cash-back element. The Net-Zero initiative is net positive on the economy and GDP from day one.
Thanks to the money-back component, the average family will have more disposable income at their hands despite initially higher energy costs, benefiting local businesses.
For details, download the Report here:
(Research conducted by SolAbility Sustainable Intelligence)
Could the UK possibly end oil/gas/coal by 2030? Modelling technology options, cost, and potential finance mechanisms: UK Fossil Free 2030 – Challenges & Opportunities
