Further public funding on the green transition would spur economic growth, reduce the damage caused by climate change and prove overwhelmingly popular with the public, according to a new report from IPPR.
Despite a darkening economic picture, increased government investment is fiscally responsible as a means to stimulate growth, reduce the costs of importing gas and tackle the growing expense of inaction.
The report finds that investing now to tackle climate change is the most responsible and cost-saving policy for government. The transition to net zero provides an opportunity to boost economic growth from new businesses and jobs which will increase public revenue. A 0.5 percentage point increase in GDP would loosen the fiscal constraints on government budgets and allow about £12 billion more in public spending. It is estimated that net zero will boost GDP by 2 per cent by 2030 and 3 per cent by 2050 through the creation of high value high skilled new industries and cheaper energy.
Conversely, not acting on climate change is increasingly expensive; flooding alone in the winter of 2019/20 cost the UK economy £333 million, while cleaner air, less pollution and more green spaces would also reduce the burden on the NHS by £2 billion a year.
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Posted On: 16/12/2022