Is net zero now the UK’s cheapest choice for energy?

The cost of reaching net zero could be cheaper than a single fossil fuel crisis.

This is the message from the UK’s Climate Change Committee (CCC), which today released a report to supplement its formal advice to the government on the country’s Seventh Carbon Budget (CB7).

With oil and natural gas supply reduced due to the conflict in the Middle East, energy prices are surging. Households face rising bills and some analysts fear wider economic impacts.

If not solved by the end of the month, the conflict could push prices above the peaks seen in 2022, when Russia invaded Ukraine.

Reaching net zero carbon emissions by 2050 would be cheaper, shield the UK from future shocks, and deliver clear benefits to society.

About the Seventh Carbon Budget

Carbon budgets are an integral part of the UK’s response to climate change. Covering five-yearly periods, and usually set 12 years in advance, they ensure steady progress towards the 2050 net zero target.

CB7 covers the period from 2038 to 2042. The government must set this budget into law by 30 June 2026.

The CCC is responsible for providing evidence-based advice to the government on setting carbon budgets. The CCC published its advice on CB7 in February 2025.

Cost, benefits, and energy security

Today’s report tests the cost and energy security conclusions in the CCC’s 2025 advice against a range of scenarios.

It finds that achieving net zero is far more cost-effective than continued reliance on fossil fuels. Notably, the economic cost of a single fossil fuel shock like 2022’s would be similar to the total additional cost of meeting net zero by 2050.

In all scenarios, net zero benefits society, reducing exposure to volatile global energy markets and cutting energy waste across the system.

A positive outlook

Broadly, the CCC’s advice paints a positive picture.

Investments being made now will start to pay off by 2038, including through lower household energy bills and reduced costs for motorists.

This tracks with the UK’s latest national infrastructure assessment. In 2023, the National Infrastructure Commission (now the National Infrastructure and Service Transformation Authority, or NISTA) found that the average household will save at least £1,000 by the mid-2030s.

This comes alongside new jobs and growing markets linked to new technologies, as well as cleaner air and enhanced biodiversity.

So, how far do emissions need to fall?

By 2042, emissions must fall by 87% compared to 1990 levels.

This is a limit of 535 million tonnes of CO2 emitted over the five-year period – a quarter of the level they are today.

This is achievable, but only if the government acts quickly.

What does this mean for infrastructure?

Meeting these targets will mean rapid emissions reductions across the infrastructure system, particularly surface transport and buildings.

Progress in decarbonising electricity must also continue.

By 2040, surface transport emissions must fall by 86%, and residential buildings emissions by 66%, from 2023 levels. At this point, aviation and agriculture will likely be the leading sources of UK emissions.

Electrification will deliver the bulk of this change, mainly through the shift to electric vehicles (EVs) and electric heat pumps.

This means that most of the solutions are available today. With the right market and public incentives, they could be rapidly deployed.

Private investment is crucial

Between 2025 and 2050, the UK will need to invest an average of £26 billion per year to meet net zero, peaking in the first half of the transition.

The majority of this will come from the private sector.

Public investment in decarbonisation should never exceed 2% of total annual public spending. Its main purpose should be to attract private investment and help people meet upfront costs.

The CCC compares the scale of the rollout of EVs and heat pumps to that seen in the recent past with mobile phones and household internet connections. Both were delivered in similar timeframes, and both were pioneered by the private sector, with multiple innovations along the way.

The CCC’s supplementary advice strengthens the investment case. Operational savings, reduced energy waste, avoided climate damages, and improved public health together create benefits many times larger than the upfront cost.

For investors, this provides a clear signal that decarbonisation delivers long-term value.

Net zero is an economic opportunity

By demonstrating that it can plan and deliver infrastructure on time and on budget, the government can rebuild trust with the public and attract investors.

Adopting the recommendations in this carbon budget would send a clear signal that the UK is committed to ambitious action.

In 2025, the Confederation of British Industry (CBI) revealed that the net zero economy is creating tens of thousands of new jobs, boosting productivity, and attracting billions in investment.

The message is clear: net zero and growth go hand in hand.

What are the concerns?

The CCC’s advice is built on evidence. But any analysis looking so far ahead will have contingencies and uncertainties.

These include population and GDP growth, an assumption that the electricity system will decarbonise at pace, and that incentives will support the rollout of EVs and heat pumps.

The advice also warns that low-income households will need support to address cost barriers.

The government must act decisively, swiftly, and fairly

Failure to act now will only make it harder to achieve later targets. What’s more, MPs have recently warned that delivering CB7 will be more complex than ever before.

The Environmental Audit Committee (EAC) says that CB7 requires not just technical credibility but also long‑term certainty, coordinated action across government, and clear public communication of the benefits of net zero.

The EAC repeats the message to the government to act decisively and swiftly. The late 2030s are a turning point: the “low‑hanging fruit” of decarbonisation will have been largely exhausted, and future progress will rely on system-wide change across homes, transport, industry, and everyday behaviour.

The EAC also emphasises the importance of fairness. Where the public feel costs early and unevenly, such as during the rollout of heat pumps, the government cannot take its support for granted.