Climate for growth - Productivity, net zero and the cost of living

And the costs of a 3oC world will be disproportionately higher than the costs of a 1.5oC world.3 The link between UK productivity and action to reach a net zero carbon economy is less clear, not least because the country can influence, but not control, global action on climate change. [...] The innovation required to reach net zero, to develop new technologies, adopt new processes, increase efficiency and save labour, is an opportunity to raise productivity directly and through spillovers to the rest of the economy. [...] The Treasury’s view of productivity and net zero In October 2021 the Treasury produced a Net zero review to highlight the issues around its role and the economy as the UK decarbonises. [...] 9 Making sense of the link between the green economy and productivity The high level interactions between climate action and productivity suggest that looking at them together will increase the efficiency of policy making, helping the government to achieve two of its major priorities under one framework. [...] 22 A green plan for growth “When designed in the right way, net zero policies will provide the productivity and growth that the Treasury is trying to stimulate.” The Treasury’s Plan for growth, the replacement for BEIS’s earlier industrial strategy, refers to net zero as a policy that will benefit from higher growth.