Policies to reach net zero emissions in the United Kingdom
The United Kingdom is among world leaders in reducing domestic greenhouse gas emissions,
and a broad political consensus supports the target to reduce net emissions to zero
by 2050. The UK’s strong institutional framework is an inspiration to countries around
the world, and the country is pioneering work to embed climate considerations in the
financial sector. Achieving carbon neutrality will require policy to match ambition.
Emission reductions so far were largely driven by electricity generation, a sector
targeted by explicit pricing instruments and a cost efficient renewables auction-design
subsidy scheme. Expanding pricing instruments across the economy is an essential building
block to reach targets. Such measures will be more effective if complemented by well-designed
sectoral regulation and subsidies, and more acceptable if implemented once energy
prices have started to come down from historically high levels. Britons are conscious
of the need to act. However, winning their acceptance of the needed policies may require
targeting carbon revenue to compensate low-income households and investments in green
infrastructure and new technologies. A mechanism defusing fears that effective policies
undermine competitiveness, preferably internationally agreed, would facilitate effective
policies towards emission intensive trade exposed industries.
Published on December 19, 2022
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