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Climate change and the economy
Addressing the complex challenges posed by climate change requires an understanding of how they will impact on the economy, and how economic interventions might be used in generating solutions. Research has identified a range of options for climate mitigation and adaptation, but focused policy work — both nationally and globally — is required to action them.
In the past year, CSaP Policy Fellows and events have considered the relationship between climate change and the economy. CSaP events have concerned policy topics such as maritime decarbonisation, retrofitting to decarbonise housing, and whether supporting green investment is a growth strategy.
Maritime decarbonisation
A policy workshop on maritime decarbonisation was held in collaboration with the Department for Transport (DfT). Policy makers and relevant experts were brought together to help strengthen the DfT's evidence base in support of their maritime decarbonisation programme. The discussion covered how the maritime industry can be confident regarding where to direct their investments regarding future fuel types, how to disincentivise the uptake of transitional fuels (e.g. liquefied natural gas) while incentivising the adoption of more sustainable alternatives, and where to source alternative maritime fuels (domestically or on the international market). The feedback and recommendations generated by the discussion are resources which the DfT can use in determining which specific policies to explore next.
Retrofitting to decarbonise housing
At the 2024 CSaP Annual Conference, Becci Taylor (Director of ARUP) chaired a panel dicussion on retrofitting the UK’s housing stock to meet decarbonisation targets, noting the need for clearer economic strategies. Discussion highlighted the role of incentives. The current incentives system is complex and opaque. In the rental market, comprehensive retrofitting campaigns are impeded because landlords lack the incentives to make the required changes. The panel underscored the importance of accessible data to support multifaceted decision-making and improve stakeholder engagement. Support was raised for a place-based approach to retrofitting: reducing costs and introducing new economic models that benefit the whole community. With such an approach, economic and climate change goals work in close harmony.
Is supporting green investment a growth strategy?
At the 2024 CSaP Annual Conference, Nick Godfrey (Distinguished Policy Fellow at the Grantham Institute) chaired a panel discussion on whether supporting green investment is a growth strategy. The panelists highlighted the significant economic risks posed by unmitigated climate change and emphasized reinforcing feedback as the key mechanism driving the green transition. This feedback loop includes falling costs for technologies like solar PV and wind generation, which, as they become market-ready, prompt stronger political support for decarbonisation. This increased political momentum leads to further deployment of green technologies, which in turn reduces production costs even more. The panel also discussed the government's crucial role in addressing market failures and encouraging private sector investment to maximize the benefits of this reinforcing feedback cycle.