The CCC’s seventh five-yearly 'carbon budget' covers the period 2038-2042. Each carbon budget is published around 12 years ahead of time; the UK is currently on track to meet the CCC’s fourth carbon budget, covering 2023-2027. The latest report spells out how the trend would continue the progress made so far.

The CCC’s report says that the decarbonisation needed by 2040 would be mainly (60%) driven by electrification across the economy.

It says this should save households around £1,400 a year from motoring and heating. The CCC expects electric vehicles to reach price parity with petrol and diesel cars within three years and continue getting cheaper after that. With EVs’ lower running costs, the average household would save £699 a year on motoring by 2040.

The CCC expects heat pumps to remain more expensive than gas boilers and calls on government to help households and businesses with the upfront costs and only when gas boilers need replacing anyway.

But it reckons that the UK’s continuing shift to renewable energy will reduce energy prices and save households on average £716 a year on energy bills by 2040.

This aligns with other studies that find energy prices will be lower in a renewables-dominated system compared with now, even after the cost of energy storage and grid upgrades are included.

Reducing the UK’s dependence on imported gas should also reduce the risk of inflation shocks and recessions, as happened after Russia’s 2022 invasion of Ukraine. These are well worth avoiding, the OBR reckons that if the UK suffered a repeat of the 2022 shock once every ten years, it would cost the Treasury 2-3% of GDP a year.

The CCC’s carbon budget foresees a few modest lifestyle proposals which it tested with people in citizens’ panels. One proposal is to hold flying at around today’s levels by imposing a tax on frequent flyers. People in the panel supported this as long as they could still have one annual family holiday by plane. Another is to reduce meat consumption by around two portions a week (from 1kg to 678g a week). People accepted this, as long as there are affordable alternatives and policies to support farmers.

Economically, the CCC says the upfront investments needed for net zero would be mostly funded by the private sector (60% to 90%) with a maximum of £26bn public money in any year (up to 2% of government spending). This would mostly be spent in the UK and benefit the economy. The costs would turn into a net saving by around 2040, thanks to cheaper energy.

Net zero should create more jobs than are lost, potentially a lot more. A recent report written for the CBI estimated that nearly a million UK jobs would be created in the net zero economy. However, some locations such as Aberdeen could be hit hard and would need government support for workers leaving the oil and gas industry there. Otherwise job creation would be well distributed across the UK.

The CCC found that the overall impact of achieving net zero on GDP is likely to be insignificant and could be positive. Either way, it is much preferable to the cost of unmitigated climate change, which could be huge (the IPCC estimates up to 23% losses to global GDP by 2100, some forecasts put it much higher).

Finally, the CCC recommends that the government should develop an implementation plan so that MPs know what they are voting for, ahead of the 30th June 2026 deadline for Parliament to adopt the Seventh Carbon Budget.

For more analysis, see Carbon Brief.