Our mission is to accelerate the decarbonisation of household activities in the UK and improve levels of productivity.
The UK urgently needs to make progress on reducing emissions if it is to meet the legally binding goal to reach net-zero emissions by 2050 (2045 in Scotland). At the same time, productivity in the UK is far below that of comparator countries. These challenges go hand in hand: an economy that succeeds in reducing emissions but does not protect or improve economic well-being is no more sustainable than one that is productive but fails to reduce emissions.
Our goal is that, by 2030, the UK will have reduced household carbon emissions by 28 per cent from 2019 levels, and will be on track to reach zero by 2048.
We want to accelerate the UK’s transition to a low-carbon, productive economy by cutting UK household emissions, and to reduce skills mismatches – a major factor in lost productivity – by using data-driven approaches to give people better information about their options as they navigate the labour market.
Over the past decade, UK greenhouse gas emissions have fallen substantially as the UK has invested heavily in producing low-carbon electricity. In the next two decades, however, decarbonisation will mean more substantial changes for consumers. They will need to insulate their homes, move to electric cars, replace their gas boilers and help the grid by shifting electricity usage away from peak production times.
Our aim is to help rapidly accelerate the reduction of household emissions by 2030, and to ensure that policies and conditions are in place to support continued reduction from 2030 onwards. To achieve a 28 per cent cut in household emissions over the next decade, we need to save some 19 million tonnes of carbon dioxide (MtCO2e) per year by 2030, compared with 2019. Among other measures, this will require at least five million households to switch to low-carbon heating solutions, and over ten million to install cavity wall, solid wall or floor insulation.
We will explore many avenues to support this transition. We will look at increasing consumer take-up of low-carbon heating solutions, for example by using data science to identify households with a higher likelihood of adopting low-carbon heating, and by mobilising ‘social referents’ such as heat installers who may be the most credible group to influence levels of take-up.
We will work with energy companies to test different business models that generate revenue by helping consumers reduce or shift their energy consumption. We will help de-risk policy changes by testing the viability of new regulatory frameworks, or by using online and field experiments to test the potential benefits of financial incentives to change behaviours.
Since 2008, productivity growth in the UK has been slow, with knock-on effects for household incomes and economic inequality. People may resist climate action if they feel a green economy is leaving them behind. As we look to decarbonise the economy, we need to make sure it is productive and delivers a good standard of living for all.
Low productivity sectors like accommodation and food have been particularly hard-hit by COVID-19. Our work will build on Nesta’s Rapid Recovery Challenge Prize and Open Jobs Data tools to support those who have lost work to find roles that use their skills and talents, and to retrain where appropriate. As well as supporting economic recovery, this work aims to tackle skills mismatches, one of the long-term problems behind poor UK productivity growth. OECD modelling suggests UK labour productivity could increase by 5 per cent if skills mismatches were lowered to ‘best practice’ levels.
Through Nesta’s Creative Industries Policy and Evidence Centre we will continue to support the creative industries as a productive and growing part of the UK economy. The Innovation Growth Lab will continue to work with partners in the UK and internationally to build a rigorous evidence base for interventions and policies that address productivity.