Recently introduced to parliament, the seventh carbon budget (CB7), which applies from 2038 to 2042, will be the next major step in the UK’s journey towards net zero. It is part of a framework that will strengthen energy security, drive economic growth and reduce emissions in the coming decades. Its importance is reflected not only in the clear scientific case to act on climate change but also in the sustained support among voters for more ambitious environmental policies.
Polling consistently shows people across regions, income groups and different political perspectives support measures to reduce emissions, strengthen the UK’s overall resilience and protect the natural environment.
Climate policy has stimulated new business
The cross party consensus that established the Climate Change Act in 2008 was built on this shared understanding and has since helped to position the UK as a global leader in climate policy. It has spurred a wave of new UK businesses across the country. Providing certainty into the 2040s, CB7 builds on that legacy, and will lead to even more benefits for households, businesses and communities.
It arrives at a moment of both challenge and opportunity. Its most significant contributions include strengthening energy security and resilience and protecting households from volatile global fossil fuel markets. Recent geopolitical shocks, including conflicts affecting global energy supplies, have once again shown how especially vulnerable the UK is to price spikes.
Pursuing the long term goal will cut costs
Analysis by government advisers, the Climate Change Committee, shows the total cost of moving the UK to a stable net zero carbon economy is lower than the economic damage of a single major fossil fuel price shock. As domestic North Sea reserves decline – around 93 per cent of likely recoverable oil and gas has already been extracted – the imperative to move towards clean, homegrown energy becomes increasingly unavoidable.
Doing it well will be essential to turn this direction of travel into real world outcomes. Alongside the carbon budget framework, forthcoming supportive legislation, such as the Energy Independence Bill, should play an important role in ensuring alignment of the practical actions capable of accelerating investment in clean energy infrastructure, grid upgrades and electrification. In this way, the abstraction of long term targets can be translated into progress households and businesses can feel.
The economic case is equally compelling. The UK’s green economy is growing at more than three times the rate of the wider economy, supporting over one million jobs and contributing more than £100 billion in value. Employment in clean energy industries is projected to double to around 800,000 roles by the end of the decade. This growth is underpinned by the certainty provided by successive carbon budgets, so investors and businesses can plan with confidence over decades, rather than short electoral cycles.
Current technological and market shifts are already demonstrating what this transition means for people and the economy. Wind generation alone reduced wholesale electricity prices by an estimated £38 per MWh in 2025, while record solar deployment – over 269,000 installations in a single year – and rapidly rising electric vehicle adoption are cutting household costs now and improving our energy independence.
The economy has grown as emissions have fallen
The UK’s track record also matters. Our emissions have fallen by 54 per cent since 1990 while the economy has continued to grow, outpacing any other major G7 economy. This has inspired other countries to establish similar legal frameworks, reinforcing the UK’s role in global climate governance when progress by other major economies is uneven and, in some cases, slowing down. Maintaining this leadership will be increasingly important as countries diverge in the pace and ambition of their climate transitions. Without countries willing to lead and demonstrate that emissions can be reduced alongside economic growth, the world is far less likely to deliver the rapid collective action needed to limit global warming to well below 2°C, increasing the risks of more severe climate, economic and social disruption.
Carbon budgets aren’t just technocratic milestones or distant emissions targets: they are a practical framework for a safer, fairer and more resilient future for the UK. They are the signal of intent, which gives investors and ordinary people certainty about the direction of travel, while allowing flexibility in how outcomes are achieved.
Approached fairly and with sufficient ambition, this will ensure UK climate leadership is a marker of economic strength, energy independence and real improvement in people’s lives.
Photo by Karsten Würth on Unsplash
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