£33bn a year needed to reach net zero by 2050

New IPPR analysis has revealed the scale of extra investment needed in public transport, low carbon housing and restoration of nature to hit the UK's vital 2050 net zero target.

Ed Miliband and Caroline Lucas, two chairs of the cross-party IPPR Environmental Justice Commission, say that if the UK is to show true leadership on climate and nature as host of COP26, then the upcoming Budget must be the ‘first budget for climate and nature’.

The two politicians argue that the government must match its declaration of a climate emergency and legal commitment to a net zero target with the public investment needed – much of which would also deliver on government promises to ‘level up’ the nation.

The new analysis argues that the UK must invest an additional £33 billion per year in total to ensure the economy is on path to reach the government’s new target of net zero by 2050 and restore nature. A significant amount of the additional annual investment would need to be in low-carbon transport - perhaps as much as £12 billion per year - and low-carbon buildings - reaching approximately £10 billion extra per year.

IPPR also said the government needs to invest a further £33 billion in addition to its current £17 billion to meet their new net zero target, bringing the total investment spending on climate and nature to £50 billion per year (just above two per cent of GDP). The government is currently spending £17 billion per year on climate and environment.

Miliband, Labour MP for Doncaster North, said: “This is the government’s opportunity, in the year of the COP, to show true global leadership on the climate crisis. We need a significantly tougher UK target for 2030 put in place this year to encourage other countries to follow and a budget that puts tackling the climate emergency at its heart. This will take investment but making these decisions will create hundreds of thousands of jobs, improve our natural environment, cut air pollution and make Britain a better place to live. It makes economic and environmental sense. The time to act is now.”

Lucas MP, Green MP for Brighton Pavilion, said: “This budget will be a litmus test of whether the government understand the climate crisis, and on the basis of the evidence, they are falling terrifyingly short of what is needed. With likely shocks to the economy because of the coronavirus outbreak, and the accelerating climate emergency, investing in a Green New Deal is now more important than ever.

“It wouldn’t only help us address the climate and nature emergencies, it would transform almost every aspect of our economy and society and deliver on government promises to ‘level up’ the nation by making our economy fairer and fit for the future. When the Chancellor rises to his feet on Wednesday, he should announce investment on a scale that meets the multiple challenges we face.”