Distributional impacts analysis of engineered Greenhouse Gas Removal technologies in the UK

Report prepared for the National Infrastructure Commission

Global net-zero emissions are essential to keep global warming to 1.5 degrees Celsius and limit the worst impacts of climate change. The net-zero commitment by the UK assumes the use of greenhouse gas removal (GGR) technologies and all the net-zero scenarios produced by the Climate Change Committee (CCC) include varying amounts of GGR deployment.

Despite the prevalence of GGR technology in Paris-consistent scenarios, and the UK’s own net-zero technological pathway, there is neither sufficient regulatory support for emerging technologies in the UK, nor an understanding of how they might be funded and who will bear the cost.

As the UK looks ahead to meeting its net-zero target – with GGR playing a role – it is important to understand how the costs of funding these technologies are distributed across society. The aim of this study is to provide information and analysis to the National Infrastructure Commission (NIC) to support its evaluation of the potential distributional impacts on UK income and expenditure deciles if costs for deploying and operating GGR technologies are placed on different sectors of the economy.

Main messages

Most pathways to net-zero in the UK include the deployment of greenhouse gas removal (GGR) technologies.

How the costs of deploying GGR technologies are apportioned between sectors significantly impacts the distribution of costs between income groups in the UK.

Funding GGR via sectors that will have large residual emissions in 2035 and 2050 would increase household costs associated with aviation and land use the most.

The costs of GGR policy would only exceed 1% of income for income deciles 1–7 in 2050 if GGR deployment costs were very high (£400 per tonne of carbon dioxide-equivalent). Overall, lower-income groups would be disproportionately affected, but the implications differ for each sector.

As higher-income households have much larger carbon footprints derived from aviation than lower-income households, passing on GGR costs via aviation has the potential to curb emissions while having minimal impacts on social welfare.

Regarding the impact on food costs, it is important to understand demand changes in the short and long terms in response to changes in price. This will vary between food and income groups and will determine overall equity.

Any rises in household energy costs associated with the use of GGR technologies would further entrench inequality, as low-income households currently pay disproportionately more towards low-carbon policy costs in the UK.

This report only considers costs to households from the domestic deployment of GGR technologies. Many goods and services bought by UK households have their supply chain located abroad and there will be further costs associated with imported goods that have been impacted by GGR deployment elsewhere.

You can read the NIC’s final report here: nic.org.uk/studies-reports/greenhouse-gas-removals/engineered-greenhouse-gas-removals/

The supporting evidence, including the Grantham Research Institute’s report, is available here: nic.org.uk/studies-reports/greenhouse-gas-removals/#tab-evidence