Lack of renewable investment could lead to a slump in the UK economy

The Association for Renewable Energy and Clean Technology (REA) has called for increased investment in renewables if the UK is to avoid the consequences recently highlighted in the UK’s Third Climate Change Risk Assessment. 

According to the Government’s assessment, the UK could face a 1% reduction in its GDP by 2045 if it fails to keep warming below 2°C. That would be a serious blow to the country’s economy, which could be worsened if no further action is taken on climate change. In fact, the assessment warns that temperatures could rise on average by anything up to 4°C by 2080. 

The REA notes that none of these scenarios is guaranteed, and through an acceleration in the transition to renewables, the UK may maintain temperatures below the 2°C threshold. 

Dr Nina Skorupska CBE, Chief Executive of the Association for Renewable Energy and Clean Technology (REA), commented, “The Government’s own risk assessment confirms that, even if global warming is limited to 2°C, it would still wipe out 1% of GDP a year by 2045, underling the huge impact to the UK economy if the Government fails to meet its Net Zero targets.

“That is why we need to urgently see a new raft of measures to help accelerate the energy transition, such as the adoption of six monthly CfD auctions for all pots, bringing forward the 5GW hydrogen production target, and stepping up plans for industrial and non-domestic heat decarbonisation.

“The report is clear – the size of investment needed to safeguard our future is modest in comparison to the damage caused by the worst climate change scenarios should we fail to reduce emissions.

“Rapidly accelerating the energy transition isn’t just an environmental imperative, but an economic one too.”

Many have questioned the UK Government on the high price for transitioning to renewables and meeting its net zero goal, but the latest report suggests that without that investment the UK’s economy will suffer. 

For eight of the risks assessed in the report, economic damages will exceed £1bn each year by 2050, even if warming is limited to 2°C. The report states the total hit is likely to be at least 1% of GDP in a 2°C scenario when all the risks are assessed.