Bringing forward the date from which new petrol, diesel and hybrid cars and vans can no longer be sold in the UK to 2030 could create 32,000 new jobs by the same year and increase GDP by 0.2% – or £4.2 billion pounds – a new report published today by Greenpeace UK has found.
Increases in employment and resulting higher levels of economic activity from a 2030 transition to electric vehicles would provide the government with a £1.9 billion net increase in revenue by 2030.
EVS and climate targets
The report – which was written by Cambridge Econometrics and supported by Element Energy, on behalf of Greenpeace UK – uses the DfT’s (Department for Transport) transport model and a macroeconomic model to assess the impact of a faster transition to electric vehicles on consumer spending, emissions, government revenues, the car industry and the economy as a whole.
The analysis looked at the impacts of a more ambitious transition to electric vehicles in 2030 – a date understood to be under consideration by ministers.
On its own, a transition from this date would reduce emissions enough to enable the government to meet its current legally binding climate commitments.
The analysis modelled the outcomes of this earlier transition compared against a later 2035 phase out date, which is the current government commitment.
The findings come ahead of an announcement expected from the Prime Minister on Thursday (12 November), in which it is anticipated that a decision on the date will be made.
32k jobs created
The findings of the report should allay any fears that an earlier phase out of the internal combustion engine would have an overall negative impact on jobs or the economy.
It shows that being as ambitious as possible with our transition to electric vehicles will bring about the biggest benefits on an economy-wide basis.
Compared with the later 2035 date, moving the ban on sales of new petrol, diesel and hybrid cars and vans forward to 2030 would create 32,000 more jobs across society.
Thousands of new jobs would be created across a range of sectors directly linked to the rapid transition to electric vehicles including energy, battery manufacturing and a mass roll out of charging infrastructure.
However, the majority of new jobs would be created in the service industries, such as retail, entertainment and leisure.
This increased economic activity is a result of the lower overall costs of owning and running an electric vehicle, lower demand for imported oil and its replacement by UK-generated electricity.
The result is that consumers have increased disposable income and spending is reallocated, frequently towards industries that are currently struggling under Covid restrictions.
The increase in employment and public spending resulting from a faster transition to electric vehicles would boost GDP in 2030 by 0.2%, equivalent to £4.2 billion.
The report also highlights that further substantial economic opportunities could arise from an early phase out of polluting vehicles, as the UK could be in a position to capture a larger share of both the domestic and European markets for electric cars and vans.
If UK manufacturers were able to increase their share of the UK market from 34% to 42% over the next 20 years, which would need to be supported through proactive government policies, the analysis shows that GDP would rise by a further 0.4% in 2030, equivalent to £10.3 billion.