Cutting emissions from buildings and transport across the UK could yield billions of pounds in economic “co-benefits”, leaving people healthier and better off, a new study finds.
The research calculates that meeting sectoral climate targets out to 2037 could result in at least £164bn worth of benefits in six UK urban centres, from Belfast to Manchester.
The UK-wide figure is likely to be far higher, say the authors, because this analysis only covers a handful of regions and does not account for all the co-benefits, including the impact cutting emissions would have on climate change.
Some right-leaning politicians and media outlets like to claim that the UK’s net-zero policies should be abandoned due to “excessive” costs. This has led to many inaccurate claims about the “cost of net-zero”.
Yet official analysis for the UK government has repeatedly concluded that the lower costs of running clean technologies and cutting reliance on fossil fuels will likely save money, offsetting much of the upfront investment costs.
The new study, published in the Journal of Environmental Studies and Sciences, argues that while such running cost savings are significant, they are dwarfed by the “social benefits” of net-zero. These include the economic benefits of improved air quality, less congested roads and warmer homes.
The researchers calculate that around four-fifths of the economic gains from cutting building and transport emissions over the next decade will be social benefits. This is mostly due to fewer people driving cars, with far-reaching consequences for everyone’s health.
‘Cost’ of net-zero
Climate sceptics and some right-leaning politicians have seized on the “cost of net-zero” as an argument to weaken climate policies or abandon the target altogether.
This rhetoric cut through when the previous Conservative government rolled back core climate targets, citing the burden on “hard-pressed British families”.
The recent election saw both the Conservatives and Reform UK spreading misleading messages about the cost of net-zero. Typically, they chose to ignore the cost of business-as-usual, plus cited costs but not benefits or omitted the costs of failing to tackle climate change.
Achieving the UK target of net-zero emissions by 2050 will require significant investment in low-carbon infrastructure. Government advisors at the Climate Change Committee (CCC) place the figure at £50bn a year by 2030 – mostly delivered by the private sector.
Yet the CCC and others have also stressed that these numbers do not account for the financial benefits of net-zero. Ultimately, the lower costs of driving electric cars, heating well-insulated homes and cutting reliance on gas are expected to save people money, offsetting most of the cost of net-zero investments.
But even this is only part of the story. Moving to a low-carbon economy is also set to bring all sorts of other benefits, including cleaner air, less traffic and improved health.
These “co-benefits” of climate action have been “side-lined in many economic analyses”, according to the new study. This is partly because it is hard to place a value on things that lack data, are difficult to quantify or vary depending on location and context.
Amid pushback against net-zero, the paper argues that it is essential to quantify these co-benefits. Study co-author Ruaidhrí Higgins-Lavery, a senior carbon analyst at the Edinburgh Climate Change Institute, tells Carbon Brief:
“At the end of the day, we need to decarbonise – we have a legal commitment – and the way we do that will have massive implications across economic and social barriers…If you incorporate co-benefits into the decision-making process, we can have a more balanced deployment of measures.”
Among Higgins-Lavery’s six co-authors, two have affiliations at the consultancy PwC and two at the consultancy Your Climate Strategy. The latter describes its focus as “designing and delivering ambitious climate strategies” for local authorities, businesses and other organisations.
Case for action
The study focuses on six major urban regions – three in England, one in Scotland, one in Wales and one in Northern Ireland – which are home to 13% of the UK population. They are Belfast, Cambridgeshire and Peterborough, Glasgow, Greater Manchester and Liverpool.
It assesses policies that would allow the UK to meet “sixth carbon budget” targets for transport and buildings in these areas, out to 2037. (The CCC says nearly half of the emissions reductions required over this period will need to come from these two sectors.)
The analysis covers around 750 measures that would collectively help curb emissions by the sixth carbon budget target of 78% by 2035, compared to 1990 levels.
In total, the researchers find that this programme of action for achieving the sixth carbon budget would generate £179bn in total benefits in these regions. Accounting for investment costs, this amounts to £164bn in net benefits.
These benefits are made up of three components. First, the researchers use “best-practice UK government methods” – including the Treasury’s own “green book” – to assess the financial costs and benefits of investing in low-carbon homes and transport.
Their assessment finds that the investment required to electrify transport, build charging stations and replace gas boilers with heat pumps is significantly offset by the energy savings and lower costs of running these technologies.
Overall, the analysis concludes that these regions would need to invest £14.5bn, but would save £23.2bn – meaning a saving of £8.7bn over this period.
Second, the researchers assess the “carbon case for action” by converting the emissions savings from policy interventions into monetary values.
They use the UK’s own “carbon value” calculations, which are the costs the government says are associated with cutting a tonne of carbon dioxide (CO2), and are used to gauge the impact of climate policies. This results in savings of £13.6bn.
However, while the financial and carbon benefits are substantial, the study concludes that £142bn – or 79% of the total benefits – are “social”.
In order to arrive at this figure, the team uses a range of well-established methods to convert everything from warmer homes to reduced traffic accidents into monetary values.
The chart below shows how the social benefits of the transport and building policies set out in the new study far exceed the investment needs over the sixth carbon budget period. It also shows that social benefits are significantly larger than financial and carbon benefits.
Higgins-Lavery notes that while they attempted to be as comprehensive as possible, the team’s calculation of total benefits is likely an underestimate. This is because many major benefits that could arise from cutting emissions, including avoided harm to food supplies and lower heat stress, were “beyond the scope” of their analysis.
Cutting cars
The study concludes that by far the biggest co-benefits come from reducing the number of cars on the roads. Instead, people would depend more on public transport, walking and cycling.
The resulting dip in congestion and increase in physical activity accounts for 86% of the social benefits identified. Among other things, cities would see lower healthcare costs due to fewer car accidents, less air pollution and fitter populations.
The researchers note that their estimate of per-capita health improvements resulting from transport sector policies is between four and 13 times higher than previous studies.
This is largely due to their optimistic estimates of how much people will choose to walk or cycle. The authors defend this assumption on the basis that it is still lower than the active transport rates seen in the Netherlands and Denmark, and similar to those seen in Paris.
Higgins-Lavery tells Carbon Brief that all of this highlights the importance of different policy decisions made on the path to net-zero:
“If we don’t prioritise things like active travel – if we instead prioritise switching to electric vehicles – we could miss out on a lot of social benefits.”
As it stands, the UK’s highest-profile net-zero transport policies have focused on electric cars. The government has a target to deliver a “world-class cycling and walking network in England by 2040”, but this has been hampered by years of underinvestment.
Citing this as a key example, Higgins-Lavery and his colleagues write that co-benefits are “significantly affected by value-based decisions” made during the policymaking process.
With this in mind, they call for organisations such as the CCC to be clearer about the assumptions that inform their advice to the government.
(The research group’s work will inform the CCC”s upcoming seventh carbon budget, which will include an assessment of “non-monetary benefits and costs”.)
‘Lopsided picture’
Overall, the authors argue that accounting for co-benefits can help to make the economic case for net-zero and “overcome ideological barriers” to climate action.
Prof Sam Fankhauser, a climate change economist at the University of Oxford who was not involved in the new study, welcomes the new paper. He tells Carbon Brief:
“Most net-zero cost studies acknowledge [co-benefits], but don’t actually quantify them. This produces a lopsided picture since the qualitatively assessed benefits get forgotten and the focus is on the hard cost numbers.”
He notes that focusing on transport and buildings alone means the authors “chose sectors where the indirect benefits of action are particularly pronounced”, compared to other sectors such as power and industry.
However, Fankhauser says this is “swings and roundabouts”, considering that, for example, the direct costs of decarbonising buildings are higher than for the power sector.
Dom Boyle, study co-author and director of net-zero policy and economics at the consultancy PwC, notes that the public is “not particularly aware” of the co-benefits of net-zero. He tells Carbon Brief:
“There has been a reticence from previous governments to communicate these benefits to the public, which has not been matched by the relish the right-wing press show in communicating the dis-benefits.”
This is despite the CCC estimate that nearly two-thirds of the emissions cuts required to meet the UK’s net-zero target will depend on individual choices and behaviours.
Bob Ward, policy and communications director at the Grantham Research Institute on Climate Change and the Environment, who was not involved in the study, says co-benefits should not be viewed as merely “coincidental” by-products of climate policy. He tells Carbon Brief:
“It is far more accurate to talk about the multiple benefits of smart policies that address the great environmental crises, and these should be central to any cost-benefit analysis.”
The post Net-zero transition will deliver at least ‘£164bn in benefits’ to UK appeared first on Carbon Brief.
Net-zero transition will deliver at least ‘£164bn in benefits’ to UK
The launch of the Africa Energy Bank (AEB) has been put back yet again, raising doubts about the institution’s future ability to finance fossil fuel projects – its main objective – as global lenders retreat from such investments over climate concerns, experts told Climate Home News.
The bank, which had been billed to launch in September after a series of delays, is now scheduled to begin operations in November, according to the head of the African Energy Chamber, an advocacy body for the continent’s oil and gas sector.
Even as the world aims to transition away from fossil fuels, many African leaders have made clear they want to continue exploring and extracting the continent’s large oil and gas deposits – estimated at around 125 billion barrels of crude and over 600 trillion cubic feet of gas – to boost economic development.
As a group, Africa sided with a number of powerful oil-and-gas producing nations in blocking progress on negotiations to craft a global roadmap to transition away from fossil fuels at last year’s UN COP30 climate talks, although some countries did individually support the proposal.
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Meanwhile, major projects under development across the continent – including the 1,443-km East African Crude Oil Pipeline (EACOP) and Dangote’s 700,000-barrel-per-day Kenyan refinery – show that African governments see oil and gas as playing a significant role in meeting their energy and economic needs for many years to come.
In 2022, at a gathering of the African Petroleum Producers’ Organization (APPO) in oil-rich Angola, ministers from its member states adopted a resolution to create the Africa Energy Bank to finance projects for the production, use and trade of oil, gas and broader energy sources.
African control over energy resources
An article on the APPO website explains that the bank was conceived as a way to overcome “disenchantment” with fossil fuels among “the international community” which it said had crystallised around the “energy transition” concept.
“If Western countries, after having long taken advantage of the energy sources they now revile to develop, can afford the luxury of abandoning them, this is not the case in Africa,” it adds, noting that many of the continent’s economies are still largely dependent on oil and gas revenues.
A separate web page about the bank, also hosted on APPO’s website, says its objectives include financing the exploration, production and refining of oil and gas, as well as supporting member states in transitioning from fossil fuels to cleaner energy sources “while ensuring energy security”.
Said Addi, a former executive with Shell and energy commodities trading house Gunvor, said the new bank was judged necessary because financing for hydrocarbons from many traditional international lenders has become constrained.
In trying to fill this financing gap, Africa is not simply setting up another fund to support oil and gas, he added. “It is also an attempt to give African countries greater control over how their energy resources and infrastructure are financed,” he explained.
Nigeria to host the AEB
The energy bank – a joint initiative of APPO and the African Export–Import Bank (Afreximbank) – has so far suffered several delays and is almost two years behind schedule. The initial plan was to start operations in January 2025, with Nigeria as the host country, but the bank’s opening was delayed to June of that year to allow Nigeria time to finalise the construction of the bank’s headquarters in Abuja.
After the government announced the completion of the offices in late November 2025, a new launch date was set for January 2026, which was moved back to April, June and then September. Now it has shifted again to November, raising concerns that the institution may be losing momentum.
Former Shell executive Addi said that if the capital is eventually paid in, the bank becomes operational and its first projects are commercially credible, then the delays will be regarded as normal teething troubles in setting up a multilateral institution. But, he added, scepticism will be justified if it continues to stall.
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Baron Lamarré, an oil and gas expert and former Petronas oil trader, said that missing “three deadlines in a row is not normal”, and warned that if the timeline slips again, “the story flips from ‘ambitious institution finding its footing’ to ‘good idea that lost momentum before it found any’.”
The Nigerian government, APPO and Afreximbank did not respond to requests for comment by the time of publication.
The funding challenge
The Africa Energy Bank is targeting base capital of $5 billion, with plans to scale up to $120 billion within five years by mobilising private-sector funds. However, it is expected to start operations with initial seed capital of $500 million.
The funding plan is to have the 18 member countries of the APPO contribute $83 million each to the bank as equity for a combined $1.5 billion. Afreximbank, other non-APPO African countries and investors outside the continent are expected to provide the remaining $3.5 billion.
But even the initial $500 million has not been easy to mobilise. In May, APPO Secretary-General Farid Ghezali called on members to deliver on their pledges towards the startup goal before the end of June. But the delays suggest this may not have been met, with experts saying Africa may be finding it difficult to self-fund its oil and gas projects in the absence of international capital.
Lamarré said every extension of the deadline points to the fact that “raising fossil fuel capital in Africa without the majors and their financing networks is brutally hard”.
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Since 2020, Western lenders, export credit agencies and insurers have been in steady retreat from African hydrocarbons, he said, while oil majors are divesting their African assets, handing over fields to smaller local operators whose credit ratings are not high enough to borrow cheaply.
Even capital from China and the Gulf, which has partially filled the gap, cannot match the volume, tenor or pricing that Western investors once offered, Lamarré argued.
“If mobilising the first $500 million of seed capital [for the AEB] has taken this long, that’s the clearest signal yet of how steep the climb to $120 billion looks,” he said, noting that the continent’s energy financing gap is as large as $30 billion-$45 billion per year.
Africa’s investment landscape, meanwhile, has been shifting. While foreign direct investment dropped from a 2024 peak, inflows remained roughly one-third above the continent’s long-term average in 2025, according to the 2026 World Investment Report from UN Trade and Development (UNCTAD). They are concentrated in a few sectors including critical minerals needed for renewable energy technologies, battery manufacturing and advanced industrial production.
At the same time, data on global energy investment from the International Energy Agency (IEA) shows that fossil fuel investment in Africa has declined over the last decade.
“Trojan horse” for fossil fuels
While the Africa Energy Bank struggles to get off the ground, climate campaigners have criticised its primary aim of financing oil and gas on the continent at a time when the world is starting to move away from high-carbon fuels to cleaner alternatives.
Bhekumuzi Dean Bhebhe, founder of Africa Change Lab, described the bank as a “Trojan horse”, arguing that its focus on fossil fuel financing runs counter to the global energy transition and the African Union’s Agenda 2063 goals of sustainable development and inclusive growth.
The energy bank, he warned, “risks locking Africa into a new cycle of debt, dependency and fossil fuel entrenchment”, adding that its financing blueprint does not pave the way for a climate-resilient future. “In truth, it is to deepen the same extractive, carbon-heavy pathways that the continent should be moving away from,” he added.
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Kenya-based climate and energy expert Joab Okanda said the AEB’s plan to finance oil and gas is “a misplaced priority” and it should instead back clean energy in line with the policies of some of Africa’s major export markets like Europe.
In addition, the new bank could struggle to mobilise enough resources to advance large-scale oil and gas projects, he added, noting that its proposed $5-billion initial capital is equivalent to the cost of the East African Crude Oil Pipeline alone.
The AEB’s aim of backing more fossil fuels should be flipped “to support countries that are oil-dependent to start working on their transition plans”, Okanda said.
The post Launch of Africa Energy Bank delayed again in blow to oil and gas hopes appeared first on Climate Home News.
Launch of Africa Energy Bank delayed again in blow to oil and gas hopes
A booklet published by the UK’s opposition Conservative party includes a “cost of net-zero” that appears to have been doubled by a spreadsheet error.
The “common sense” policy document argues that “what people ultimately want is a government competent enough to solve the problems for which it takes responsibility”.
In a section that says “sophisticat[ed]…modelling” should not be a substitute for “political judgement”, the “Right Way” document disparages various estimates of the cost of net-zero.
The Conservative document then claims – incorrectly – that the government’s official adviser, the Climate Change Committee (CCC), had put the cost of net-zero at close to £1tn. It says:
“In 2020, the CCC estimated that its route to net-zero would cost £957bn.”
In fact, the CCC’s 2020 estimate was exactly half this amount – £478bn – and last year it published a revised figure of £108bn, largely as a result of the falling cost of electric vehicles (EVs).
Spreadsheet error
The Conservative party’s erroneous claim appears to stem from another report that had accidentally added up numbers twice, using a spreadsheet published by the CCC in 2020.
The 2020 spreadsheet contains a table listing the additional investments that would be needed to build a net-zero economy, from low-carbon electricity generation through to heat pumps and EVs.
These extra capital expenditures, listed as “CAPEX”, add up to a total of £1.38tn over the 30 years of 2020-50. They are set against operational savings, listed as “OPEX”, of £0.90tn.
Added up over 2020-50, the combined CAPEX and OPEX figures come to a total of £478bn.
In addition to the annual sectoral CAPEX and OPEX figures, the CCC’s 2020 spreadsheet also has a line giving combined totals for each year. It appears that someone has added all of these numbers together, resulting in the savings and costs being counted twice.
This double-counted total for the cost of net-zero amounts to £957bn – as shown in the image below – and it appears to be the source of the claim in the Conservative booklet.
At the time of publication in 2020, the CCC said that the £478bn net cost of net-zero amounted to less than 1% of GDP over 30 years – and that the large investment needed would not only result in savings due to lower fossil-fuel imports, but that it would boost GDP overall, by around 2%.
In 2025, the CCC revised its estimates for investment costs and operating savings to £670bn and £562bn respectively, giving a net total of £108bn over 2025-50, or less than 0.2% of GDP.
Earlier this year, the committee said that cutting emissions to net-zero would cost less than a single fossil-fuel price shock and that doing so would have benefits worth £110bn per year.
Paper trail
The erroneous claim in the Conservative document is referenced to the CCC’s 2020 advice on the UK’s sixth “carbon budget”, which, as explained, does not contain the £957bn figure.
The earliest online use of the £957bn figure found by Carbon Brief is a 12 January 2026 article in the Spectator, by retired engineer and self-described “accidental energy analyst” David Turver.
A day later, Turver repeated the mistaken number in a report for the free-market Institute of Economic Affairs. His report cites figure 5.3 of the CCC’s 2020 advice.
However, as set out above, the CCC spreadsheet containing the data for figure 5.3 only adds up to £478bn, half the figure claimed by Turver.
It appears that Turver accidentally added up all of the numbers in the CCC spreadsheet, without noting that it already included a line for the annual total. This results in double-counting the cost.
(Turver’s report also triggered a slew of inaccurate headlines stating that net-zero would cost £7.6tn – or even £9tn. These figures, which came from Turver’s report, were based, among other things, on the implicit assumption that fossil fuels and the cars, boilers and power plants that use them are all free.)
After Turver’s report and article in January 2026, the erroneous £957bn figure was repeated