Changes to fiscal borrowing rules are reported to unlock over £50 billion
The Government’s planned changes to fiscal borrowing rules could have a significant impact on the speed and scale of the UK’s green transition.
Change in rules will enables more public capital investment which is crucial to funding for green infrastructure.
A Smith School analysis published a few weeks before the 2024 general election showed that the additional annual investment needed by 2030 from UK businesses, households and government to get back on to the CCC’s ‘Balanced Net Zero’ scenario pathway was around 25% more than ‘current policies’ at the time were set to deliver.
The analysis looked at the savings from clean technologies with lower running costs compared to their fossil fuel counterparts.
For instance, comparing a heat pump to a gas boiler, this meant factoring in the initial extra capital costs as well as around 15 years of lower running costs.
A similar calculation was made for other technologies such as Electric Vehicles (EVs) versus petrol cars, and power generated from renewables versus fossil fuels.
As Cop 29 continues this week Dr Anupama Sen, Head of Policy Engagement at the Smith School of Enterprise and the Environment, University of Oxford said:
“The change is good news for net zero investment – the shift in rules explicitly enables more public capital investment which will be crucial to funding or catalysing funding for green infrastructure. It is clear from Oxford Smith School research that low carbon technologies generate savings in the medium-to-long term and typically require upfront capital spend… The new fiscal rules could allow Labour the rare ability to do two things – make an informed investment in technologies of the future, and make concrete progress towards net zero buildings and transport today.”
They hope new rules could allow Labour to make informed investment in technologies of the future, while making concrete progress towards net zero buildings and transport today.
You can read more on the Smith School research here.