It’s a busy autumn ahead in the world of economics and policy. The Treasury will be preparing for the next spending review while in less than two months’ time the UK will be hosting the United Nations climate summit – COP26 – in Glasgow. Due to be held last year, the conference was postponed in light of the COVID-19 pandemic.
COP26 could be a defining moment on the road to achieving net zero carbon emissions, as world leaders come together to discuss the climate emergency. Although many countries are still grappling with the economic fallout from the pandemic, the crisis has also highlighted the imperative to establish a green, sustainable recovery. And the cost of inaction could be huge. The Office for Budget Responsibility (OBR) estimate unmitigated climate change, in the absence of any fiscal action, could push UK government debt well above 200 per cent of GDP by the end of the 21st century. This includes the cost of adapting to higher temperatures and responding to more frequent shocks such as extreme weather events. Thus, fiscal policy will be critical to achieving the country’s domestic net zero ambitions.
While the consequences of inaction could be huge, the benefits of addressing issues such as decarbonisation, air pollution, and biodiversity are also substantial. CBI Economics analysis for the Clean Air Fund found the UK economy could benefit to the tune of £1.6 billion each year if it were to achieve the air quality guidelines set by the World Health Organisation. Cleaner air could improve the health outcomes of workers by reducing sickness absence and deaths, adding over three million working days to the national economy. Tackling the challenges facing our climate too late could increase pressures on the public purse, while acting quickly can deliver benefits to businesses and the broader population.
Do you need help developing your economic evidence base?
Developing credible economic analysis and a compelling narrative will be important for businesses and policymakers presenting the case for immediate climate action. CBI Economics offers several services that can help, ranging from economic contribution studies to surveys and forecasts. With years of policy experience, working with both national and local governments, we understand the importance of robust analysis and effective stakeholder engagement.
CBI Economics has been involved in helping clients build a strong evidence base for change and helping to facilitate discussions with officials and government departments, ensuring both robust analysis and meaningful impact.
If you have a project or idea that you’d like to discuss, get in touch with the team today at CBIeconomics@cbi.org.uk