Report on the impact of climate change on cost of living in the UK

This report was written by leading climate author Dr Paul Behrens and was commissioned by Scientists Warning Europe, a registered charity based in the UK.

Underestimating the UK’s exposure to climate damage

Past assessments found that northern Europe and the UK would experience equivalent climate impacts later than the rest of the world, due to the more temperate climate. However, Northern Europe has seen earlier-than-expected impacts from extreme weather events. For example, the UK’s Third Climate Change Risk Assessment (UKCCRA3), paint a stark picture for communities across the UK in the short- and medium-term. These impacts will inevitably have a strong bearing on the cost of living across the UK. 

An increasing cost of living drives social instability 

Conflict in Ukraine, post-COVID supply chain interruptions, and Brexit have also all driven increases in UK cost of living. Climate impacts combine with other geopolitical and national pressures. A recent example is the limited availability of imported fruit and vegetables driven by a 2022-2023 winter drought across southern Europe coinciding with Brexit-related trade difficulties, and farming expenses due to the Ukraine war. The UK is more reliant on international supply chains than similar countries and is particularly exposed to climate damages across international trade partners. International climate impacts are estimated to account for roughly half the UK’s economic climate costs. These trends are set to continue in the short term (for the next two decades), but rapid emissions mitigation can have a substantial easing effect over the medium- to long-term (from around 2040 onwards). 

Increases in cost of living are felt most across the lowest income groups in UK society, just as they are in the lowest income nations of the world. These groups spend a larger percentage of their total income on basic goods such as food – goods that are most exposed to climate risks and price increases. The poorest will continue to experience impacts earlier and more deeply than other income groups. However, higher income groups are already seeing impacts, given the broad scope of climate threats to society’s support systems. 

The report finds significant climate impacts on the cost of living across food, energy, health, and built infrastructure.

The report also explores how net-zero transitions in energy and food are often cheaper than business as usual in purely market costs. If non-market costs such as air pollution are included, they can be orders of magnitude cheaper. Transitions will have dramatic impacts on cost of living. 

Net-zero climate mitigation policies often represent no-regret options. They are cheaper in economic, health, environment, and climate adaptation costs. They will limit the increases to cost of living from climate impacts.

The net-zero transition has been identified as the economic opportunity of the 21st century by numerous agencies and reviews. It has been estimated that the market opportunity of net-zero to British businesses is worth £1 trillion 2030, growing larger past 2030. Government estimates place the number of jobs required in the transition at 480,000 (reviews place the estimate somewhere between 135,000 and 725,000 net new jobs). An estimated 250,000 new jobs have already been created in the transition so far. The race for net-zero is speeding up internationally, with the US, EU, and China all releasing major investment packages. However, there are no signs of any similarly ambitious package being developed in the UK. 

Read the full report here.

The Climate Party firmly believes the UK can be a leader in decarbonisation through investment in renewable energy, rewarding low-carbon and carbon reduction business solutions, incentivising renewables and nature restoration innovations and electrifying our transport infrastructure to allow all our communities to live with cleaner air, water and complete food security.