The transition to a green economy will require large investments by firms. This column uses new survey data to study the importance of climate-related investment for UK firms. Over half of firms expect climate change to have a positive impact on their investment in the medium term, and around two-thirds of these investments are expected to be in addition to normal capital expenditure. Climate investment will be driven by larger firms and those in more energy-intensive sectors. Nevertheless, under reasonable assumptions, these investment plans are still not sufficient to meet the estimated targets implied by the UK Net Zero Pathway.
Nicholas Bloom, Philip Bunn, Paul Mizen, Prachi Srivastava, Gregory Thwaites and Ivan Yotzov
20 November 2024
Vox EU
https://cepr.org/voxeu/columns/firm-climate-investment-glass-half-full
This work is published under POID and the CEP's Growth programme.