Government adopts Carbon Budget target to achieve 87% emissions cut by 2040

Following the Climate Change Committee’s (CCC) recommendations on the Seventh Carbon Budget, the UK government has proposed a legally binding carbon reduction target for the period 2038-2042. The recommended level of greenhouse gas emissions over this five-year period has been set at 535 MtCO2e, including international shipping. These limitations will be introduced to reduce UK greenhouse gas emissions by 87% compared to levels from 1990.

A new legally binding carbon target

The 2008 UK Climate Change Act requires the government to regularly propose legally binding goals to make the 2050 net zero target achievable. The CCC is required to work alongside the government to advise what these milestones should be. The most recent of these milestones, the Seventh Carbon Budget, is described as ‘ambitious but deliverable’ by the CCC, provided that rapid action is taken.

Rapid electrification at the core of emission reduction

A government statement explains these targets have been produced through evidence-led assumptions, based on how households and businesses are predicted to adopt sustainable technologies.

The CCC believes electrification and low-carbon electricity is the most effective strategy for emission reduction. It is predicted that approximately 60% of emission reductions will be achieved through electrification, meaning moving to electric vehicles and shifting from fossil fuels to renewable energy sources is vital. Mass transitions from gas boilers to electric heat pumps in both homes and businesses is expected.

The proposal was welcomed by the Confederation of British Industry (CBI), which said clear targets provide the policy certainty businesses need to invest, but urged the government to tackle the roadblocks to achieving net zero. Tania Kumar, the CBI’s Energy Transition Director, said: “Continuing on this pathway will require a relentless focus on tackling the barriers to electrification, the deployment of low-carbon technologies, and infrastructure build-out.”

Households playing a key role

The carbon budget pathway expects one third of the UK’s emission reductions to come from households, mainly through increased installation of energy efficient, low-carbon heating systems such as heat pumps.

The current rate of heat pump installation in the UK is approximately 60,000 a year. The CCC expects this figure to increase to 1.5 million a year with homeowner and landlord support in order to achieve this target.

Economic impacts

The CCC predicts that achieving net zero through its recommended pathway will cost approximately 0.2% of the UK GDP each year. However, independent research also points to net zero as one of the UK’s biggest economic opportunities. An independent report from the Energy and Climate Intelligence Unit, supported by analysis from the Confederation of British Industry Economics shows that the net zero economy supports over one million jobs in the UK, adding £105 billion in gross value added (GVA). 

Broader impacts

The Health Alliance on Climate Change has stressed that the benefits of the pathway extend beyond emissions reductions. It highlights wider health and wellbeing outcomes, including energy efficient homes, increased active travel and improved public transport routes, reduced pollution, healthier plant-based diets and diverse natural habitats.

Barriers to net zero

Whilst the Seventh Carbon Budget presents plans to achieve net zero, its success depends on overcoming financial barriers. A government impact statement suggests that over 25 years, the UK would need to invest around £880bn to meet the budget. However, these upfront costs are arguably outweighed by the long-term benefits, including increased energy security, reduced emissions, and new economic opportunities. Investment and development will be crucial in determining whether net zero can be achieved.