According to the latest report from the Climate Change Committee (CCC), the total cost to Britain of transitioning to Net Zero by 2050 would be less than a single fossil fuel price shock such as the 2022 energy crisis.
7e Carbon budget from 2025found that pursuing Net Zero in Britain would deliver “net benefit to society” and that every £1 spent would deliver between £2 and £4 in benefits. These include public health benefits, energy savings and other related improvements.
It said the net additional cost of achieving the UK’s Net Zero ambitions to 2050 would be less than the price of a single fossil fuel crisis on the scale of the 2022 price peak.
The CCC said the additional annual investment costs to meet Net Zero would average around £4 billion between 2025 and 2050, and would likely peak in 2029, after which investment costs would fall as low-carbon technologies and supply chains become more mature and cheaper. By comparison, the Office of Budget Responsibility (OBR) estimates that taxpayers will have spent $41.6 billion on energy bill support in 2022-23 due to the fossil fuel price spike.
The CCC – an independent statutory body set up to advise on the progress of Net Zero – said avoiding climate damage through the transition to Net Zero would be the key national benefit, with an estimated saving of between £40 billion and £130 billion by 2050 by reducing the impacts of rising temperatures, climate change and extreme weather.
Energy losses would also halve in a Net Zero system, the report said, falling to around £30 billion per year, compared to £60 billion per year in the current system. By 2025, “more than half” of the primary energy put into the oil and gas-dominated energy system will be wasted rather than converted into useful output, the CCC report said; Renewable energy sources “tend to be more efficient” and require “significantly less primary energy” to produce the same output.
Furthermore, the cost benefits of improvements in health and wellbeing, resulting from cleaner air, warmer homes, more active travel and healthier eating habits, “strongly outweigh the disadvantages such as additional time on public transport or potential traffic congestion due to increased EV use,” the report said. These peripheral benefits of a carbon-free energy system would generate between £2 billion and £8 billion net annually by 2050.
Nigel Topping, chairman of the CCC, said: “There is a lot of public interest in the costs of transitioning to a low-carbon economy. Going through an economic transition is exciting, but a sense of uncertainty about the future is completely reasonable.
He continued: “In light of current world events, it is more important than ever for Britain to move away from dependence on volatile foreign fossil fuels, towards clean, domestic, less wasteful energy.”
The war in Iran exposes the volatility of fossil fuels
The analysis accompanying the seventh Carbon Budget published last year takes on new resonance as global oil prices soared this week following the outbreak of the conflict in Iran. As prices shot above $100 a barrel for the first time since the 2022 energy crisis, Solar energy portal and our colleagues from PV technology examined the impact the conflict could have on UK energy prices and the global deployment of renewables.
“The last fossil fuel energy crisis, when Russia invaded Ukraine, cost the UK £183 billion over four years,” said Gareth Redmond-King, head of the international program at the non-profit research institute Energy and Climate Intelligence Unit (ECIU). Those costs, based on ECIU researchis more than NHS England spent on healthcare in 2024-2025.
“It’s worth remembering that renewable alternatives to gas are cheaper and quicker to build, and UK wind farms cut wholesale prices by almost a third last year. Electric vehicles are also cheaper than petrol and diesel vehicles to own and operate, even if oil prices don’t rise dramatically, saving their owners hundreds of pounds a year,” Redmond-King continued.
“As the world faces another fossil fuel crisis, it is clearer than ever that clean technologies offer a less costly and energy-secure future.”
Opposition parties to the right of the government have been vocal in opposing Net Zero commitments. The current poll leader, Reform UK, has called the target “net stupid zero” and warned in its manifesto that decarbonisation was “crippling our economy”. Meanwhile, the International Energy Agency (IEA) have discovered in the aftermath of the invasion of Ukraine that volatile fossil fuel prices can account for up to 50% of variable food costs, which are ultimately passed on to consumers and make up a large part of the cost of living.
