In 2019 the UK parliament passed legislation to commit the country to reducing net emissions of greenhouse gases by 100% by 2050. Achieving this goal will make the UK a “net zero” emitter. Emissions have already been reduced by 40% since 1990, and the UK has made significant progress in decarbonising electricity generation and manufacturing, in particular. However, as we move forward decarbonisation will become increasingly challenging and expensive, and will often come to rely on new technologies which are still under development.

Reaching net zero will require significant changes right across the economy, requiring not only substantial investment in new technologies and activities, but also new policies from government and a need for individuals to adjust aspects of their lifestyles.

The Climate Change Committee estimates that the UK will need to invest £1.4 trillion between 2020 and 2050 to reach net zero. This includes an average of £50 billion per year between 2025 and 2050—an amount broadly comparable to the government’s annual spending on schools. Some 40% of the investment needed between 2020 and 2050 will be directed to the power sector, and a further 24% will be needed in land transport to electrify the UK’s vehicle fleet.

Another substantial area of investment will be homes, where there is a need to invest some £253 billion to improve home insulation and fit low-carbon sources of heat and hot water. The estimated investment need is smaller for agriculture, although the sector is nonetheless anticipated to undergo significant changes in response to reduced consumption of meat and dairy products, and an increased need to use land for tree planting and the growth of biofuel crops.

Governments around the world are seeking solutions to similar challenges and considering how their own transitions can be financed. But this need to invest means that there is also a unique opportunity for British businesses to innovate, produce, and supply the goods and services needed to enable the transition, not only in the UK but across the globe.

Official estimates suggest that the UK’s green economy already supports 200,000 to 400,000 jobs. And while there is considerable uncertainty surrounding future growth, two recent studies have suggested that by 2050 the number of jobs in the green economy could grow to between 1.4 million and 2.5 million.

There is substantial growth potential within the fields of low-carbon energy and electric vehicles to serve UK and international demand. The need to retrofit buildings, particularly homes, with insulation and low-carbon heating will support significant activity for local businesses across the UK.