According to the non-profit organisation, Greenpeace, the UK’s booming financial sector, which makes up the heart of London as well as the rest of the UK’s economy with a value of £132 billion, according to the House of Commons Library, holds a significant stake in the CO2 emissions of the UK economy.
The non-profit organisation had stated that the financial sector should be considered as “high carbon,” alongside other industries such as the oil and gas industry, coal mining, aviation and transport.
The study itself illustrated that if the UK’s banks and investors were pooled together into a country, they would be the 9th highest emitter of CO2 and other greenhouse gases compared to other global economies.
This would mean that the UK financial sector, which, according to the Guardian, produces 805Mt of greenhouse gases, outputs more greenhouse gases than the whole of Germany which is accountable for a total of 776.61Mt.
So, reducing emissions from the financial sector would greatly benefit the UK economy as
business-related emissions account are the third highest emitter of greenhouse gases, accounting for 17% of the total pie.
This means that reducing emissions from this sector will better air quality in the UK, thus reducing the chance of respiratory issues in the UK population which is significant as 36,000 people die from poor air quality in the UK on a yearly basis.
Therefore, because of this, the UK populous will see an increase in public health as fewer individuals suffer respiratory problems, consequently, this will alleviate pressure from public health services such as the NHS which has seen its capacity being tested during the pandemic with 5 million outstanding patients waiting for treatment.
Because of this, the UK populous will see a reduction in waiting times as the NHS can allocate more resources towards treating outstanding patients, as a result, individuals will spend less time being ill as they can receive treatment much faster.
This will lead to an overall increase in output per person as workers can return to work faster which leads to an increase in the productive capacity of the UK economy, helping to achieve long term economic growth and illustrating why bettering air quality due to a reduction in emissions from UK businesses benefits the UK economy.
However, despite the benefits, the UK has apparently not seen much change regarding the business sector, why is this?
The non-profit organisation partially placed the blame on the government, the executive director, John Suaven had stated that ‘Banks and investors are responsible for more emissions than most nations and the UK government is giving them a free pass.’
He had also further criticised the government’s efforts of becoming carbon neutral by stating that the claim that we are leading the forefront in climate change at the same time as spending billions on fossil fuels laughable.
However, once we actually look at the data and the trends, this claim becomes much less valid.
According to a study conducted by the ONS, the Energy Trends 2021 publication illustrates the UK’s drastic measures in decreasing the nation’s spending on fossil fuels with examples such as drastic decreases in energy generation from coal by 51%.
Although coal imports and energy generation has drastically reduced, energy generation from other fossil fuels such as oil still makes a large portion of the energy supply.
Consequently, due to oil’s large consumption, transportation is the highest emitter of greenhouse gas emissions accounting for 27% of emissions, however, government schemes such as the ban on new petrol and diesel cars by 2030 will likely reduce oil consumption and emissions from transport.
Additionally, oil is used by businesses for manufacturing and energy generation purposes, which is probably where the non-profits statement regarding fossil fuel spending stems from, however, the UK is taking steps to reducing oil consumption in the energy supply too.
This is evidenced by an increase in renewable energy generation of 11% in 2020 which will most likely accelerate with Siemens setting up in the Humber-Estuary.
Although the criticisms may be valid in the sense that the government may not be acting fast enough, one thing is clear, and that is that the UK government is certainly moving towards carbon neutrality and likely fulfilling the 2050 Paris agreement, helping to achieve the government objective.
If you enjoyed this article and love what we are doing please consider showing us further support by following our social media accounts, we also appreciate any feedback as we aim to improve our work.
Written by Hubert Kucharski
Research compiled by Billy Ryan and Jonas Theaker