The Resolution Foundation published a paper on 22 July 2024 setting out net zero investment priorities for the new Government, written by principal economist Jonathan Marshall1. The paper examines how decarbonisation trends must change, how the transition could affect the living standards of low- to middle-income households, and what should be done over the next five years so that the burden does not fall unduly on poorer families1.
It finds that overall investment levels will need to increase four-fold on those seen since 20101. The next phase of the transition requires progress in more areas than before, with major work needed in homes, transport and electricity. Those sectors account for close to 70 per cent of the carbon footprints of lower- and middle-income households1.
Upfront cost is identified as a central problem for households. Initial expenditure on a heat pump comprises 40 per cent of total lifetime costs, compared with 17 per cent for a gas boiler1. The paper states that poorer households will need help navigating this outlay, but that the UK has a poor record on effectively targeting support at those in need1.
"This paper details some of the major challenges facing the new Government as it sets out policies to decarbonise the UK economy at the pace required by our legally binding carbon targets."
The paper also addresses where low carbon infrastructure is built. It says the majority of planned low carbon infrastructure is in areas where the population is wealthier and older than the national average, and that financial incentives designed to assuage communities' concerns could, if applied too generously for renewable energy projects, see older and richer households overcompensated by poorer and younger counterparts1.
| Measure | Upfront share of lifetime cost |
|---|---|
| Heat pump | 40 per cent |
| Gas boiler | 17 per cent |
Why it matters for households
The paper's figures point to a shift in where the cost of decarbonisation lands. For homes, the practical question is the shape of the spending: a heat pump concentrates 40 per cent of its lifetime cost at the point of installation, against 17 per cent for a gas boiler1. That front-loading matters for any household without ready capital, and the paper says higher upfront costs could limit the affordability of low carbon technologies to those with lower means1.
Because homes, transport and electricity make up close to 70 per cent of the carbon footprints of lower- and middle-income households, these are the areas where the transition touches household budgets most directly1. The paper's finding that support has been poorly targeted in recent years suggests the design of any scheme, rather than its existence, determines who can actually take part. The regulation and policy framework around heat, transport and electricity is where those design choices sit.
The distributional point about infrastructure siting is also a household matter: if incentives for hosting new developments flow mainly to wealthier and older areas, the benefits of the transition and its local disruption are not shared evenly1.
What happens next
The paper sets out steps to be taken over the next five years to ensure the burden of decarbonisation does not unduly fall on poorer families, and frames effective targeting of support as a priority1. No specific scheme, funding amount or implementation date is given in the published findings.
Sources1 cited
- Net zeroing in on investment • Resolution Foundation, resolutionfoundation.org