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The UK could announce next month billions of U.S. dollars of additional spending on supporting its net-zero targets as part of a broad budget of $83 billion (£60 billion), Goldman Sachs says.
The UK, the first developed nation to enshrine a net-zero by 2050 target into law, wants to lead the world in tackling the effects of climate change and preparing the business and industries for low-carbon energy.
Due to a lower budget deficit earlier this year, the UK could announce more spending in the fall budget announcement next month, Steffan Ball, Goldman Sachs’s chief UK economist, wrote in a note carried by Bloomberg.
“We expect Prime Minister [Boris] Johnson and Chancellor Sunak to take advantage of this headroom, given they have both the political incentive and the parliamentary support to make substantial progress on the ‘leveling-up’ agenda,” Ball wrote.
As much as $41.5 billion (£30 billion) of the potential additional spending could be earmarked for actions to reach net-zero emissions by 2050, as well as skills and training, and digital connectivity, Goldman’s Ball says.
Despite the “The ten point plan for a green industrial revolution” which the UK launched in November 2020 to “to build back better, support green jobs, and accelerate our path to net zero,” the government has not invested as much in this green revolution in the March 2021 budget, environmental group WWF said in an analysis last month.
WWF’s study found that the March 2021 Budget had a clear ambition gap. “It would cost less than 1% of GDP per year to build a clean, safe, prosperous future for the UK, but climate change mitigation measures in the Budget added up to just 0.01% of GDP,” the group said.
“The latest Budget simply doesn’t add up to the cleaner, greener future we all want to see. To turn things around, ministers must close the gap between their climate commitments and their spending plans, by adopting a Net Zero Test for all government spending ahead of the UK-hosted COP26 climate summit in November,” said Isabella O’Dowd, head of climate change at WWF.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com