New research reveals Net zero policies can help tackle poverty and drive economic growth in the UK

New research reveals accelerating the roll out of heat pumps, electric vehicles and home insulation measures could help alleviate fuel and transport poverty in the UK, while supporting the government’s growth agenda.

The Green Alliance report, produced in partnership with academics from the Centre for Research into Energy Demand Solutions (CREDS), and with analysis from global economic consultancy Cambridge Econometrics, finds that despite the lower running costs of many low carbon technologies, the upfront price is still a barrier for many low-income households.

But, if policies were targeted at reducing the price tag and providing financial support to the most vulnerable, this would widen the benefits of a green economy and drive GDP growth.

With around 6.7 million people in the UK estimated to be in fuel poverty, widening access to low carbon solutions is urgently needed to ensure the poorest households can afford to heat their homes.

The report calls for a mandate on fossil fuel heating appliance manufacturers to incentivise the sale of heat pumps to help to drive down the upfront costs, more financial support for low-income households to install heat pumps and insulation in their home, and improvements to minimum energy efficiency standards to ensure all private rental and social housing has an EPC C energy performance rating by 2028.

The cost-of-living crisis has likely resulted in a rise in transport poverty in the UK, as fuel and public transport has become more expensive. The report highlights the need for a standardised definition of transport poverty to allow better monitoring of its prevalence and causes.

The report also underlines the need for an ambitious zero emission vehicle (ZEV) mandate for car makers to help to grow the second-hand electric vehicle market, something Green Alliance has repeatedly called for.

Improvements to public transport services and walking and cycling infrastructure were also cited as policies to support lower income households with rising costs while reducing carbon emissions.

Stuart Dossett, Senior Policy Adviser at Green Alliance, said:

The prime minister is fond of saying that she wants to ‘grow the pie’ of the economy. There is no doubt that green technologies have huge potential to drive economic growth in the UK long into the future. But what this report shows is that by improving access to green solutions like heat pumps and electric vehicles, coupled with reducing the price of electricity, we can also tackle rising fuel and transport poverty as well. With inflation and energy bills set to stay high, the government urgently needs to widen the benefits of these technologies.

Mari Martiskainen, Senior Research Fellow, University of Sussex and Equity and Justice theme lead of CREDS, said:

Almost everyone is being impacted by rising energy and transport costs. Unable to afford the bus or heat their home, we have heard from people having to walk long distances for their weekly shop, only for them to return to a cold home to eat a cold meal. People are extremely anxious about their energy bills and the cost of fuelling their car or getting the bus. This is having a detrimental impact on their quality of life.

Find out more about the report here.