Decarbonizing UK's industry would only make things 1% more expensive
Who said sustainability has to be expensive?
The whole world is talking about decarbonizing and reducing greenhouse gas emissions. Talking. But oftentimes, what it all comes down to is money — and that’s where the talking stops. If a decarbonizing approach is cheap or cost-effective, then it’s far more likely that it gets implemented; if not, it gets axed. This is exactly why this study is so important.
Using the UK as a case study, researchers from the University of Bath and the University of Leeds found that implementing low-carbon technologies across all the UK’s industrial processes would come with a price increase of just 0.8%. This low cost shows that we can’t afford any more delays, and we can’t blame decarbonization on the cost.
A small price to pay
It’s not like 1% isn’t a significant increase. In any competitive industry, 1% can make a significant difference. But it’s shocking how small of a difference it is when compared to the ‘business as usual’ scenario. In fact, for some industries, the price tag is significantly lower, says Sam Cooper, one of the study authors.
“Many industrial sectors — manufacturing, construction, food and drink, and mining — could absorb these costs with a relatively modest impact on their profits (or gross operating surplus) of 2% to 7% by 2050.”
“Others, including metal production, cement and minerals and waste treatment might find this option more challenging, but even in these cases the effect on profits would be less than the fluctuation they have experienced over the last decade — the equivalent cost would be 15% to 46% of profits.”
“On the other hand, if each sector can pass on any cost increases to their customers, the average final price increases would be less than 0.8% by 2050.”
This cost could be distributed in three main ways, the researchers say:
- They would be absorbed by the industry companies;
- They would be passed on to consumers; and
- They would be shared along the relevant value chains.
No matter how this is done, however, the impact is likely to be so small that it would be obfuscated by other market factors.
Decarbonizing industry
Industry currently accounts for around a third of global greenhouse emissions; in the UK, where the study was carried out, it’s around 25% of emissions. Like other countries, the UK has a Net Zero plan, a strategy for decarbonising all sectors of the UK economy by 2050.
Eliminating most of these emissions is critical to mitigating climate change and reaching net zero. This new study shows that tackling industrial emissions is well within reach — although it’s still bound to be challenging.
“This work adds to the evidence that decarbonising industrial processes can be managed without prohibitive price increases for consumers. However, overcoming other challenges relating to infrastructure, technology supply chains and investment risks, will require coordinated support.”
But what this analysis truly shows is that there truly is no excuse for avoiding decarbonizing the industry. Granted, the results from the UK may not translate exactly to effects in other countries, but the takeaway message is that, from an economic perspective, decarbonizing is often very affordable. We can’t afford to delay anymore, says Steve Allen, senior lecturer in Bath’s Department of Architecture and Civil Engineering and also one of the authors of the study.
“A key to achieving these relatively low costs is taking the opportunity to improve the energy- and resource-efficiency of processes when the low-carbon technologies are adopted. The potential for these improvements is typically tied to investment cycles and so it is important that any opportunities here are not missed.”
The study was published in the journal Energy Policy.
