Could Switching to Low-Carbon Transport Save the UK Billions?
Jun 04 2016
Environmental groups have been campaigning for the UK government and the British populace to switch to low-carbon forms of transport for decades, citing the need to improve air quality and reduce transport-related pollution as the main reason for the change.
However, a new report from Cambridge Econometrics has suggested that moving away from fossil fuels could prove to make prudent financial sense, as well. Philip Summerton, lead author of the report, claims that such a move could save the UK billions of pounds, through a boost to its economy and the expense saved in importing oil from other countries.
Tumbling Oil Prices
Weening ourselves off oil would help to keep prices down on a global scale, which for importing countries like the UK would represent a huge boon to the economy. At present, the UK imports roughly 38% of its oil, which could potentially translate into annual savings of £13 billion by 2030 were the country to pursue cleaner methods of transport.
Such figures are based on the projection that a preference for low-carbon transport would result in oil price reductions of 15% by 2020 and 29% by 2040. This would keep a ceiling on oil prices at around $85 a barrel, proving excellent value for a country like Britain.
“Through policy support and technological innovation, we can expect the global economy to be using 11m fewer barrels of oil per day by 2030 than we would without significant changes to transport technologies,” explained Summerton, who is also director at Cambridge Econometrics.
“Lower oil prices would benefit oil-importing regions such as Europe by reducing inflationary pressures on consumers, increasing real incomes, and shifting spending towards other goods and services that deliver more value for Europe.”
A Low-Carbon Boost to the Economy
Simultaneously, investing in hybrid and electric technologies could provide a much-needed shot in the arm to the British economy. Not only would such a venture create literally thousands of jobs, it could also generate between £2.4 billion and £5 billion in revenue for the nation.
However, Summerton warned that without investment in such technologies, oil would surely make a resurgence in terms of barrel prices, which could rise to $130 by 2050. For reference, European investment in low-carbon energy sources is currently at its lowest level for a decade.
“Without any further policy changes, oil prices are likely to recover in the long-term, driven by global economic growth and increasing demand for mobility,” he went on. “In a world where climate policies are being implemented to drive investment in low-carbon technologies - as governments agreed in Paris - demand for oil will be curbed, and ultimately reduced, leading to lower oil prices than would otherwise be the case.”
Summerton’s findings make the government’s decision to cut subsidies for all manner of low-carbon energies, from electric vehicles (EVs) to solar power to wind farms, all the more baffling. With any luck, his report will resonate with the nation and Britain will make the move towards low-carbon which its economy and its ecology so desperately need.
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