Costs of net zero by 2050

On 3 April 2025 the House of Lords is scheduled to debate the following motion:

Lord Offord of Garvel (Conservative) to move that this House takes note of the affordability of achieving the net-zero emissions target by 2050.

1. What is the net-zero emissions by 2050 target?

1.1 UK developments and commitments

The target for the UK to reach net-zero emissions by 2050 was set under then prime minister Theresa May in 2019. This extended a target that had been set under the previous Labour government to reduce emissions by 80% by 2050. The target is set out in section 1 of the Climate Change Act 2008. The UN has described the meaning of net zero as follows:

[…] net zero means cutting carbon emissions to a small amount of residual emissions that can be absorbed and durably stored by nature and other carbon dioxide removal measures, leaving zero in the atmosphere.^[1]

The consensus across successive governments has been that the UK should contribute towards international efforts to address climate change by reducing greenhouse gas emissions. For example, in 1992 at the United Nations Conference in Rio de Janeiro, the then Conservative government signed the United Nations Framework Convention on Climate Change (UNFCCC).^[2] This established a framework for intergovernmental efforts to reduce global greenhouse gas emissions, which includes regular ‘conference of the parties’ (COP) meetings. In the preamble to this agreement, the parties to the convention acknowledged that “change in the Earth’s climate and its adverse effects are a common concern of humankind”.^[3]

In 1998, following negotiations which began under the Conservative government, the then Labour government signed the Kyoto Protocol to the UNFCCC.^[4] The protocol, which came into force in 2004, set binding targets for industrialised countries, including the UK and the European Union, to reduce greenhouse gas emissions.^[5]

In December 2015, the parties to the UNFCCC adopted the Paris Climate Agreement, a replacement for the Kyoto Protocol.^[6] The overarching goal of the Paris Agreement was to limit the increase in global average temperatures to “well below” 2^oC above pre-industrial levels and to “pursue efforts” to limit this increase in temperatures to 1.5^oC above pre-industrial levels.^[7] This agreement was ratified by the then Conservative government in 2016.^[8]

Over the last two decades, UK governments have focused on either maintaining the UK’s statutory emission reduction targets, bringing them forward or increasing targets for emissions reduction. In 2008, the then Labour government passed the Climate Change Act which established a legal requirement for the UK to reduce greenhouse gas emissions by 80% by 2050 compared with 1990 levels.^[9] The 2008 act also requires the government to publish regular carbon budgets setting limits on the total amount of greenhouse gases the UK can emit during a series of five-year periods in order to meet this 2050 target.^[10]

In 2019, Theresa May’s Conservative government used delegated powers in the 2008 act to establish a new target for the UK to achieve net zero greenhouse gas emissions by 2050 compared with 1990 levels.^[11] Separate legislation in Scotland passed by the SNP government set a target for Scottish ministers to achieve net zero emissions in Scotland by 2045.^[12] In December 2020, the Conservative government, under then prime minister Boris Johnson, committed the UK to an interim target of reducing its greenhouse gas emissions to 68% by 2030 compared to 1990 levels.^[13] This commitment was made as part of the UK’s submission of its nationally determined contribution (NDC) to the UNFCCC, as required under the Paris Agreement.^[14]

While the Conservative government remained committed to the 2050 net zero target, in September 2023 then prime minister Rishi Sunak argued the government’s approach to achieving this goal had failed to take account of additional costs to households and disruption to people’s lives.^[15] In his speech to the 2023 Conservative Party conference, Mr Sunak said net zero measures risked “losing the consent of the British people” and that therefore the government would adopt a “more pragmatic, proportionate, and realistic approach […] that eases the burdens on working people”.^[16] This change of approach included pushing back the planned date for phasing out the sale of new petrol and diesel cars and vans from 2030 to 2035.^[17] The Labour manifesto for the 2024 general election included a commitment to reintroduce the ban on the sale of new cars with internal combustion engines by 2030.^[18]

During the 2024 general election campaign, both Labour and the Conservatives committed to the target of achieving net zero emissions by 2050.^[19] The Liberal Democrats and the Green Party committed to achieving net zero carbon emissions before 2050.^[20] By contrast, Reform UK committed to “scrap net zero” and increase the UK’s fossil fuel production, arguing this would reduce household energy bills and improve economic growth.^[21]

In a speech on 18 March 2025, the leader of the Conservative party, Kemi Badenoch, announced a change in policy and argued that “net zero by 2050 is impossible”.^[22] She described herself as a “net zero sceptic”. BBC News reported that speaking afterwards, Mrs Badenoch said that she still backed net zero but was not going to “rush out” a target.^[23] The BBC said she told reporters that following consultation if “we do find a target is necessary, then yes we will have one”. Kemi Badenoch’s announcement is discussed in more detail in section 5 of this briefing.

1.2 International targets emphasising importance of net zero

The UN has stated that in order to limit global warming to no more than 1.5^oC (as aimed for under the Paris Agreement) emissions would need to be reduced by 45% by 2030 and reach net zero by 2050.^[24] As of June 2024, 107 countries, with responsibility for about 82% of global greenhouse gas emissions, had “adopted net-zero pledges either in law, in a policy document such as a national climate action plan or a long-term strategy, or in an announcement by a high-level government official”.^[25] There are 195 parties to the Paris Agreement.^[26]

Although a large number of countries have committed to reducing emissions, progress is well behind the targets set by the Paris Agreement. The press release published alongside United Nations Climate Change’s latest assessment of NDCs said that:

The report’s findings are stark but not surprising—current national climate plans fall miles short of what’s needed to stop global heating from crippling every economy, and wrecking billions of lives and livelihoods across every country.^[27]

The press release said that current progress would lead to an “economic trainwreck” for all countries:

Current plans combined—if fully implemented—would see emissions of 51.5 gigatonnes of CO2 equivalent in 2030—a level only 2.6 per cent lower than in 2019. Greenhouse gas pollution at these levels will guarantee a human and economic trainwreck for every country, without exception.^[28]

United Nations Climate Change said that “much bolder” new national climate plans could not only “avert climate chaos”, if they were done well they could also be “transformational for people and prosperity in every nation”.

The UN Environment Programme’s October 2024 emissions gap report stated that it remained “technically possible” to get the world onto a 1.5^oC pathway. However, it said sufficiently strong NDCs would be needed and G20 nations, particularly the largest emitters, would need to “do the heavy lifting”.^[29] The six largest greenhouse gas emitters are China, the US, India, the EU, Russia and Brazil. These accounted for 63% of global emissions in 2023.^[30] The 45 least developed countries accounted for 3%. The G20 (which includes the six largest emitters) overall accounted for 77%.

On 20 January 2025, US President Donald Trump signed an executive order to withdraw the US from the Paris Agreement. The executive order said it was the policy of the Trump administration to “put the interests of the United States and the American people first in the development and negotiation of any international agreements with the potential to damage or stifle the American economy”.^[31] President Trump had withdrawn the US from the agreement in 2017 in his first term, but this was reversed by President Joe Biden.^[32] In his inaugural address President Trump said he would declare a national energy emergency in order to address rising energy prices:

The inflation crisis was caused by massive overspending and escalating energy prices, and that is why today I will also declare a national energy emergency. We will drill, baby, drill.

America will be a manufacturing nation once again, and we have something that no other manufacturing nation will ever have—the largest amount of oil and gas of any country on earth—and we are going to use it. We’ll use it.^[33]

The BBC reported that the US’s withdrawal from the Paris Agreement meant that it would join Iran, Yemen and Libya as the only countries outside of the agreement.^[34]

2. Climate Change Act 2008 and UK progress towards net zero by 2050

As mentioned above, the UK’s target of achieving net zero by 2050 is set out in section 1 of the Climate Change Act 2008. The act also established the Climate Change Committee (which is independent of the government) and introduced carbon budgets to guide progress towards the target.

Under the act, the committee is required to produce statutory reports to government and Parliament. The committee states its key reports are:

• advice on carbon budgets and long-term emissions targets
• progress reports on meeting carbon budgets and targets
• an assessment of UK climate change risks
• progress reports on adapting and preparing for climate change^[35]

The committee states that it was established “to ensure that the assessment of progress and advice provided can be evidence-based, independently assessed and long term in its advice”.

The carbon budgets set out restrictions on the total amount of greenhouse gases the UK can emit over a five-year period.^[36] Each carbon budget must be set at least 12 years ahead of time to allow policy-makers, businesses and individuals to prepare.^[37] The Climate Change Committee advises on the level of each carbon budget. The committee states that each carbon budget is designed to “reflect cost-effective” ways of meeting the UK’s long-term climate change objectives. Under the Climate Change Act 2008, the government must prepare policies to ensure the budget is met. Section 13 of the act sets out a duty to prepare proposals and policies for meeting the carbon budgets and section 14 sets out a duty to report on those proposals.

In May 2024, the government lost a high court case brought by Friends of the Earth, ClientEarth and the Good Law Project.^[38] BBC News reported that the groups had argued that the then energy minister had signed off the government’s climate plans without evidence they could be achieved. These plans had been set out in the carbon budget delivery plan, which was laid before Parliament pursuant to section 14 of the Climate Change Act 2008.^[39] The carbon budget delivery plan had itself been published to comply with a previous court decision about the net zero strategy published in October 2021.^[40] In answer to an oral question in the House of Lords on the May 2024 ruling, the government said it was “immensely proud” of its record on climate change and stated that “the judgment focused on the decision-making process and did not criticise the policies themselves”.^[41] The government said it would publish a new compliant report within 12 months. This did not happen before the 2024 general election. The new Labour government has said it will publish a report on its carbon budget strategy by the court order’s deadline.^[42]

The first carbon budget ran from 2008 to 2012. The UK is currently in its fourth carbon budget which runs to 2027. The fifth and sixth carbon budgets have been set for the period 2028–32 and 2033–37.^[43] The committee published its advice to the government on the level of the seventh carbon budget on 26 February 2025.^[44]

Table 1 provides a summary of the UK’s carbon budgets.

(Climate Change Committee, ‘Climate action’, accessed 24 March 2025; and ‘Letter to the Secretary of State for Energy Security and Net Zero on the UK’s 2035 nationally determined contribution’, 26 October 2024)

Figure 1 below is taken from the Climate Change Committee’s report on the seventh carbon budget. It shows the UK’s performance against the first three carbon budgets, sets out the upcoming carbon budgets which have been legislated for, and the seventh carbon budget proposed by the Climate Change Committee. The committee notes that the drop in level between the fifth and sixth carbon budget reflects the change in the 2050 target from an 80% reduction in carbon emissions to net zero:

The steep reduction between the fifth and sixth carbon budgets is due to the fact that the sixth carbon budget is the first set in line with net zero. The fourth and fifth carbon budgets were set on a trajectory to the previous 80% target. These carbon budgets will therefore need to be overperformed in order to be on a sensible path to net zero.^[45]

Figure 1. The recommended seventh carbon budget

The balanced pathway referred to in figure 1 is described by the committee as “an ambitious, deliverable pathway for the UK to reach net zero by 2050, based on detailed modelling of cost-effective, feasible decarbonisation options”.^[46]

However, in its July 2024 progress report to Parliament, the Climate Change Committee stated that “only a third of the emissions reductions required to achieve the 2030 target are currently covered by credible plans”.^[47] It said action was needed across all sectors of the economy. Published shortly after the 2024 general election, the report set out a number of priority actions for the new government, including:^[48]

• Make electricity cheaper. Removing policy costs from electricity prices will support industrial electrification and ensure the lower running costs of heat pumps compared to fossil-fuel boilers are reflected in household bills.
• Reverse recent policy rollbacks. Remove the exemption of 20% of households from the 2035 fossil-fuel boiler installation phase-out, address the gap left by removing obligations on landlords to improve the energy efficiency of rented homes and reinstate the 2030 phaseout of new fossil-fuel car and van sales. The damage of these rollbacks can be limited by quickly reinstating these policies.
• Publish a strategy to support skills. Support workers in sectors which need to grow or transition and in communities that may be adversely impacted.

3. Assessments and commentary on the cost of reducing emissions

Various attempts have been made to assess the costs and benefits of reducing the UK’s emissions based on projections of the economic impact of unchecked climate change.

For example, in 2006 the then Labour government published the independent review of the economics of climate change, chaired by the economist Nicholas Stern (now Lord Stern of Brentford (Crossbench)).^[49] This report estimated that the overall costs and risks of climate change would be equivalent to losing 5% of global gross domestic product (GDP) each year.^[50] The same review estimated the costs of reducing greenhouse gas emissions could be limited to around 1% of global GDP each year.

More recently, in 2022, the Grantham Institute attempted to estimate the total potential economic impact of climate change for the UK. The institute is a research body based at the London School of Economics and Political Science (LSE) and is also chaired by Lord Stern. It concluded there were “strong economic reasons” for retaining the net zero target, arguing the benefits would exceed the costs by the second half of this century.^[51] It found that, “under current policies, the total cost of climate change damages to the UK are projected to increase from 1.1% of GDP at present to 3.3% by 2050 and 7.4% by 2100”.^[52]

In 2021, the Office for Budget Responsibility (OBR) estimated unmitigated global warming would result in increased costs, as the UK would need to adapt to a hotter climate. It also warned global warming was likely to result in greater and more frequent economic shocks for the UK, such as increased conflict around the world and mass migration.^[53] The OBR estimated that if countries did nothing to reduce global warming, this could result in UK debt growing up to three times larger than its economic output (around 290% of UK GDP by the end of the century).^[54] The same report concluded that achieving the UK’s net zero carbon emissions target would require an investment cost of around £1.4tn spread over 30 years.^[55] After taking into account savings, such as improvements to the energy efficiency of buildings and vehicles, the OBR estimated the total net cost of decarbonising the UK economy would be £344bn. This estimate assumes that only around a quarter of this funding would need to come from the government, with the rest coming from private sector investment.

The OBR concluded the “costs of failing to get climate change under control would be much larger than those of bringing emissions down to net zero”.^[56] However, the OBR noted that while the UK had a high degree of control over its own emissions, these only accounted for 1% of global emissions.^[57] The OBR said the risks faced by the UK economy would depend to a significant extent on how successful other countries were in achieving net zero emissions.^[58]

The OBR also noted that estimates of the economic impact of climate change are subject to several uncertainties. These uncertainties include the unpredictable speed at which global temperatures may rise and what the full consequences of climate change might be. It said the speed at which low emission technologies may develop and how much they would ultimately cost was also uncertain.^[59] More broadly, the OBR said assessments of the impact of climate change which focused primarily on GDP were subject to limitations.^[60] These limitations include the fact that GDP does not take sufficient account of the value of natural assets.^[61]

In a 2022 summary for policy makers on its contribution to the United Nations Intergovernmental Panel on Climate Change (IPCC), Working Group II of the IPCC concluded that the aggregate impact of climate change on the world economy was difficult to estimate and that existing estimates varied widely.^[62] It also noted the estimated economic impact was likely to vary widely between regions. However, the IPCC working group did conclude with a high degree of confidence that the economic damage caused by climate change was likely to be higher if global temperatures were allowed to rise by 3^oC or more compared to pre-industrial temperatures, than if they rose by 1.5^oC. The IPCC did not publish an aggregate figure for the global economic impact of climate change as part of its sixth assessment reporting cycle, covering October 2015 to July 2023.^[63]

The impact of recent macroeconomic events on the transition to net zero has recently been examined by the Oxford Smith School of Enterprise and the Environment at the University of Oxford. An analysis published in May 2024 highlighted that since the sixth carbon budget was published in December 2020 there had been a series of economic shocks to the UK, such as supply chain disruption during Covid-19 and rising energy prices following Russia’s invasion of Ukraine.^[64] The authors stated that the Bank of England raising interest rates in response to these events had increased the cost of capital. They said that because clean technologies tended to require more capital investment than conventional alternatives, they “may be disproportionately affected by these increasing financing costs”. However, the authors argued that the impact of these macroeconomic changes could be mitigated by policy choices. They stated:

Our analysis shows that the right mix of policies could minimise the upfront costs required for low-carbon technologies, even if the current high-cost environment, with higher real interest rates, were to continue. In fact, a balanced policy mix such as the one detailed in this brief could halve the public sector support needed to 2030, to between £6bn and £8bn per year, from £13bn–19bn per year and crowd in private investment.^[65]

In its February 2025 report on the seventh carbon budget, the Climate Change Committee said that delivering its balanced pathway to net zero by 2050 would require significant upfront capital investment in low-carbon technologies, citing renewables, heat pumps and electric vehicles as examples.^[66] For example, on heat pumps, the committee said that the balanced pathway saw about 50% of UK homes heated by a heat pump by 2040. This would require a large increase in the rate of installations per year in existing residential properties from 60,000 in 2023 to 450,000 by 2030 and 1.5mn by 2035. The committee said this would be “a rate of increase in line with that seen in other European countries such as Ireland and the Netherlands”.^[67]

The committee argued that this investment would generate a return in operating savings in later years:

When combining the required investment and operating savings across the economy, we expect the average cost of the balanced pathway to be £4bn per year between 2025 and 2050. This translates to around 0.2% of GDP (using Office for Budget Responsibility (OBR) estimates).^[68]

The committee estimated that over the 25-year period it expected total net cost (defined as investment less operating savings) to be approximately £110bn. The committee said that due to falling technology costs and increasing operating savings there would be an estimated net saving of around £35bn in 2050. Depending on incentives, the committee argued the private sector could provide most of the required investment.^[69]

Some have argued that the costs of achieving net zero by 2050 have been understated. Sir Dieter Helm, professor of economic policy at the University of Oxford, has argued that, while the UK’s transition to renewable energy is desirable, the arguments for doing this should be based on living within our sustainable means rather than any economic benefits.^[70] He argued politicians have downplayed the economic costs of achieving net zero. Specifically, he argued the investment needed to develop and adapt the UK’s energy infrastructure and improve supply chains in order to achieve net zero had been insufficiently accounted for. He asserted that the narrative that the costs of transition are low could risk a public backlash:

It is not the transition that is the problem; it is the fact that people have been told it is not going to cost them very much, when in fact it is. As they find out that what they have been told is not true, magnified through the main media and through the social networks by the activists and politicians, it would be surprising if there was not a backlash and a diminishing of trust about the costs.^[71]

Professor Helm has also argued that measuring net zero in terms of territorial carbon production rather than consumption was a “deceit” and the UK’s success in reducing its emissions was related to “switching from home production of energy-intensive goods to imports”.^[72] In addition, he expressed scepticism that the international COP process would be able to deliver on emissions reduction targets internationally. He said whilst it could be argued that the COP meetings provided an international forum for discussion, this “crowds out the search for other ways of tackling climate change”. Instead, he recommended three steps that could provide a framework for stopping climate change and creating an energy system appropriate for a modern industrial economy:

• Moving away from the COP process towards a “bottom-up coalition of the willing”. Countries would set targets based on carbon consumption and would treat carbon embedded in imports on the same basis as domestic production. This could be achieved through a carbon border adjustment mechanism “for the bigger items in energy-intensive trade”. Professor Helm sets out his argument for how this would operate in more detail in his article ‘Climate realism: Time for a re-set’ (3 December 2024).^[73]
• Investing in nuclear power to provide “firm-power” backup for renewable energy. Professor Helm has argued that the costs of renewable energy have been understated in part because of needing to address their intermittency with energy storage. However, he stated that wind and solar added considerably to climate policies and his arguments did not mean their expansion was not “generally a good thing”.
• Drop short-term net zero targets. Professor Helm argued that short term targets which he believed could not be met, such as decarbonising Britain’s electricity generation by 2030, were counter-productive. He argued missing these targets would “further fracture the precious political cross-party consensus”.

In a 2021 article on paying for net zero, the Institute for Government (IFG) set out three “overlapping” groups that policy makers could look at when distributing costs. Although it said most of the investment was unlikely to come from the government, public money would need to be used “in a targeted way to unlock private investment and meet costs that the private sector is unlikely to”. It set out the groups as follows:

• taxpayers, by funding changes through general taxation
• consumers, for instance by regulating to restrict the use of high-carbon options or imposing costs onto energy suppliers, who have traditionally passed these onto bills
• businesses, which ultimately means the burden is borne by shareholders, employees and/or consumers of their products^[74]

The IFG said there was a fourth option of the government borrowing more, with the cost of servicing the increased debt being met by future taxpayers. The IFG said that many economists believed that the most efficient route to net zero would involve the application of applying slowly increasing carbon prices across the economy. It said that this would “spur innovation” and incentivise consumers and businesses to switch from high to low carbon activities. It stated where consumers did not do this they would pay more. However, the IFG said that if politicians were to choose this approach, it would need to protect consumers who were least able to pay from any price rises. As discussed by Dieter Helm above, the IFG also said that a carbon border mechanism could be needed if other countries did not also take action.

Concern has been expressed by some about the cost of the transition to net zero and the possible impact on consumers. In her speech on 18 March 2025, Kemi Badenoch argued that environmental levies were adding to the cost of energy bills:

The cost of electricity—far too high—much higher than nearby and comparative countries with the real possibility of it going even higher with environmental levies. A big chunk of our existing bills are not direct energy costs.^[75]

The amount of money that net zero policy costs add to energy bills was recently considered by the fact-checking organisation Full Fact.^[76] It found that:

• For a typical household on an electricity-only tariff, environmental and social policy costs amount to 16% of the total price cap. Not all of these costs go towards environmental, or ‘net zero’, schemes.
• Of the £111 increase to the energy price cap from April 2025, approximately 10% is accounted for by an increase in environmental and social scheme costs (or 22% of electricity-only bills).^[77]

BBC Verify has also recently published an article which asked the question, “if the UK has more renewable energy, why aren’t bills coming down?”.^[78] The BBC explained there are several factors, including the time and money taken to invest in the national grid, the “question of who pays” and the way the electricity market is set up. Part of this is how the wholesale price of electricity is set. The BBC stated that the main reason for the spikes in electricity prices in recent years has been changes to wholesale costs linked to an increase in international gas prices:

The price for wholesale electricity is set by a bidding process, with each generating company saying what it would be willing to accept to produce a unit of electricity. Once built, the cost of generating power from renewables is very low, so these typically come in with the cheapest bid. Nuclear might come next. Gas generators often have the highest costs, because they have to buy gas to burn, as well as paying a “carbon price”—a charge for emissions. The wholesale cost is set by the last unit of electricity needed to meet demand from consumers. This means that even if gas only generates 1% of power at a given time, gas will still set the wholesale price. In Great Britain, this generally happens more often than its European counterparts, where demand can be met more often without relying on gas.^[79]

In the context of Labour’s plans to deliver a clean power system by 2030, BBC Verify also examined concerns that investing in upgrades to the national grid to support the roll out of renewable energy could increase energy bills.^[80] The article stated that most energy experts agreed that in the longer-term, decarbonisation would be good for household energy bills because it would reduce reliance on natural gas. However, investing in decarbonising the grid would come at a cost “and that could well be reflected in households’ bills”. The article argued that the faster decarbonisation happened, the faster any costs may be passed on. However, BBC Verify said this would depend on what happened to gas prices, “If there were to be another 2022-style global fossil-fuel price shock at some point over the next decade it might be the case that UK households will prove better off financially by moving to renewable energy more quickly”.

The costs associated with climate change and the transition to net zero have also been discussed in two recent House of Lords Library briefings:

• House of Lords Library, ‘Renewable energy: Costs’, 8 November 2024
• House of Lords Library, ‘Government climate policy: Economic impact’, 17 October 2024

4. Recent Labour government statements on net zero

The Labour Party’s 2024 general election manifesto stated the “climate and nature crisis” was the “greatest long-term global challenge”.^[81] One of Labour’s ‘five missions to rebuild Britain’ in the manifesto was to make Britain “a clean energy super power to cut bills, create jobs and deliver security with cheaper, zero-carbon electricity by 2030, accelerating to net zero”.^[82] The manifesto said that the country had been held back by high electricity costs. It argued that the party’s clean energy mission would lower energy bills and make British business internationally competitive.^[83] Labour also said that it would ensure that the institutional framework for policy making reflected its commitments to reaching net zero and the UK’s carbon budgets. For example, Labour said it would reverse a decision to prevent the Bank of England “giving due consideration” to climate change in its mandates.

The Labour government’s 2024 autumn budget restated its commitment to achieving net zero.^[84] It set out recent steps the government had taken to increase investment in the UK’s clean energy industries, including making it easier for onshore wind to be built in England and securing “£34.8bn of private investment into the UK’s clean energy industries around the International Investment Summit”.^[85] The budget set out further actions the government would take, including investing in carbon capture, usage and storage projects and providing support for the first round of electrolytic hydrogen production contracts. It also said the government was delivering on the first steps of its “clean energy superpower mission” through investing £125mn in 2025–26 for Great British Energy, which is to be headquartered in Aberdeen.^[86] In addition, Prime Minister Sir Keir Starmer launched the UK-led Global Clean Power Alliance in November 2024.^[87] Twelve countries have signed up to the alliance’s first mission, including Brazil, France, Germany and the African Union. The government has said that the US and the EU “will also partner with the UK on the initiative”. The alliance will be based on missions, with the first mission being on finance. The government has said this “will harness the political leadership needed to unlock private finance on a huge scale, so that no developing country is left behind”. In December 2024, the government published its ‘Clean power 2030 action plan’ which set out its plans to deliver a clean power system by 2030.^[88]

More recently, the government reiterated its commitment to achieving net zero by 2050 in a statement on North Sea energy repeated in the House of Lords on 12 March 2025.^[89] Baroness Blake of Leeds, a government whip in the House of Lords, said the government remained committed to achieving the UK’s NDCs, carbon budget six and net zero by 2050.

The government has said that it will set out details on its plans for meeting legislated carbon budgets later in 2025.^[90]

5. Kemi Badenoch’s March 2025 announcement on net zero

In a speech on 18 March 2025, the leader of the Conservative Party, Kemi Badenoch, announced a change in party policy, arguing that “net zero by 2050 is impossible” and describing herself has a “net zero sceptic”.^[91] Kemi Badenoch said she did not take pleasure in saying that net zero by 2050 was impossible, but “we have to get real”. BBC News reported that speaking afterwards, Mrs Badenoch said that she still backed net zero but was not going to “rush out” a target.^[92] The BBC said she told reporters that following consultation if “we do find a target is necessary, then yes we will have one”. The Conservative Party’s 2024 manifesto, published under Rishi Sunak’s leadership in June 2024, had said the party was “proud” of its record and remained committed to delivering net zero by 2050.^[93]

Mrs Badenoch argued there were “three truths” about net zero:^[94]

• The UK’s current plans to achieve net zero “are completely muddled”. She argued that other countries were not following the UK to net zero. She also asserted that energy costs would increase as a result of transitioning to net zero and “it will mean our economy losing out on exploiting our own natural resources in the North Sea, while being saddled with ever greater debt”.
• The UK is behind on meeting its targets. Mrs Badenoch cited the Climate Change Committee as saying that more than half of homes would need heat pumps by 2040. She asserted that this was not possible. She said the need for the UK to spend more money on defence would constrain available money for subsidies for the installation of heat pumps.
• The UK was becoming dependent on China for the supply of components for low-carbon technologies, such as wind farms and electric vehicle batteries. Mrs Badenoch also said that 60% of China’s energy came from coal fired power stations.

Kemi Badenoch said that the shadow secretary of state, Claire Coutinho, would be examining “all aspects of the UK’s future energy and net zero policies”. Mrs Badenoch said she had tasked her with finding and working with people “who know the truth and who can come up with achievable solutions”. Mrs Badenoch said they would be looking at how the UK could deliver cheap and clean energy “without eye-watering bills for households [and] without dependencies on hostile or unstable countries”. She said that the Conservatives were interested in these questions because the party wanted “to protect our environment [and wanted] to secure our energy and deliver a better world for our children”. Mrs Badenoch argued that the market was the best way to deliver clean energy and environmental improvements, “not state diktat” or “pretend statistics from vested interests”.

Kemi Badenoch’s change in policy was welcomed by the Institute of Economic Affairs. Andy Mayer, chief operating officer and energy analyst, argued that the “narrative shift” was important, “particularly the nod to the importance of markets in delivering change”.^[95] Mr Mayer argued that energy choices should be “driven by consumer and industrial demand, while better environmental choice are encouraged through markets and prices not plans and bans”.

Former prime minister Theresa May (Baroness May of Maidenhead) was critical of Kemi Badenoch’s change in policy. BBC News reported that Baroness May said the target of net zero was “challenging but achievable” and that “delaying action will only harm the next generation and increase both the economic and social costs of climate change”.^[96]

Rain Newton-Smith, chief executive officer of the Confederation of British Industry (CBI), argued that “now is not the time to step back from the opportunities of the green economy”.^[97] She argued that cross-party consensus on net zero had “underpinned international investors’ confidence to choose the UK for investment in the energy transition”. She said that last year the net zero economy grew by 10% and added £83bn to national income. Ms Newton-Smith argued that net zero presented opportunities for green growth, but this was only deliverable where conditions existed for high levels of sustained private investment. She said “this includes governments committing to the long-term policy certainty established by UK carbon budgets”.

Responding to Kemi Badenoch’s speech, Energy UK’s chief executive, Dhara Vyas, said that “honest conversations” were needed about how the costs of achieving net zero were funded.^[98] However, she argued that this needed to include the potential cost of inaction. Ms Vyas stated that because much of the investment required would come from the private sector there was a risk that “any perceived reduction in commitment or ambition sees that investment and those economic opportunities go elsewhere and damages our own interests”.

6. Read more

6.1 Parliamentary briefings

• House of Commons Library, ‘Gas and electricity prices during the ‘energy crisis’ and beyond’, 25 February 2025
• House of Lords Library, ‘Long-duration energy storage: House of Lords Committee report and plans for a new scheme’, 16 December 2024
• House of Lords Library, ‘Renewable energy: Costs’, 8 November 2024
• House of Commons Library, ‘The UK’s plans and progress to reach net zero by 2050’, 26 September 2024
• House of Lords Library, ‘Government climate policy: Economic impact’, 17 October 2024
• House of Lords Library, ‘Mission zero: Independent review of net zero’, 20 January 2023

6.2 External commentary

• Dieter Helm, ‘Defence and the retreat from net zero’, 17 March 2025
• Office for Budget Responsibility, ‘Estimating current and future adaptation costs to the UK’, September 2024
• International Energy Agency, ‘Strategies for affordable and fair clean energy transitions: World energy outlook special report’, May 2024
• National Audit Office, ‘Approaches to achieving net zero across the UK’, 15 September 2023
• Office for Budget Responsibility, ‘The fiscal cost of net zero in the UK in an international context’, July 2023
• World Bank Group, ‘The macroeconomic implications of a transition to zero net Emissions: A modelling framework’, March 2023
• McKinsey Global Institute, ‘The net-zero transition: What it would cost, what it could bring’, January 2022

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Cover image by Nicholas Doherty on Unsplash

Table 1 was amended on 7 April 2025 to include the revised figure for the percent reduction in emissions from 1990 levels by 2037 set out in the sixth carbon budget (from 78% to 77%).