Climate change 'not affecting UK economy'

Business competitiveness in the UK has not been affected negatively by policies aimed at tackling climate change, economists will announce today (July 7th). Business Green reports that a new study will detail how climate change policies have not damaged the UK's economy.

The report comes from Dimitri Zenghelis and Samuela Bassi from the German Research Institute. It states that not only has the economy not experienced a shortfall as a result of new policies for climate change, but businesses could actually see a beneficial increase in competitiveness as a direct result. According to the report, the economy could benefit in the long run as these policies encourage companies to invest in new technologies and innovations.

Ms Bassi and Mr Zenghelis looked at several studies that suggested companies could decide to move away from the UK as a result of climate change policies. Several studies have said that companies could start to move to countries that don't have such strict emissions rules; however, the new report found that this has not been the case.

According to the authors, the carbon prices of the UK's policies have not been high enough to cause carbon-intensive firms to leave the UK. This means studies that suggest climate and emissions policies are resulting in companies heading elsewhere to avoid the initiatives could be incorrect.

The report said, as a result of there being no detectable carbon-intensive company relocation, the ambition of the UK's Fourth Carbon Budget for 2023 to 2027 should not be lessened. The budget was agreed on in 2011 at the recommendation of the independent Committee on Climate Change (CCC) and aims to see carbon emissions in the UK reduced by 50 per cent in 2025 compared to 1990's figures.

The Fourth Carbon Budget is set to be reviewed this year and could be revised upwards if domestic emissions commitments mean the UK is on a different trajectory than that set by the EU. Some politicians have said that the UK is on a different trajectory and have argued that the budget should indeed be revised as soon as possible.