The climate change crisis has reached a crunch point, according to a UN report, that warns human activity is unequivocally driving global warming.
The impact of global warming is already being felt across the globe, and governments are being urged to act quickly.
Targets set by the UK government include ditching gas boilers, ramping up the electric car rollout, insulating houses and reducing transport emissions. The cost of these changes will be felt by households. According to experts, households may a squeeze on their finances in the face short-term but switching to greener lifestyle choices will ultimately save money.Will it cost the earth to save the earth? Here is a look at the impact that changing our behaviour could have on our finances.
How much could it cost to make a home more energy-efficient?
In the short-term, consumers will face higher prices as we make the switch to greener energy sources.
Sarah Coles, personal finance analyst at Hargreaves Lansdown, said: “In the long run, cutting our emissions will make life better in so many ways, in the short-term, however, we face the pain of higher prices.
“Upgrading our homes to make them more efficient isn’t cheap. Retro-fitting energy savings measures on to an older home can easily cost tens of thousands of pounds, and many of the measures will take 10 to 20 years to recoup the cost through lower bills.”
Ditching the gas boiler
Homes contribute around 15% of the UK’s carbon emissions and cleaning up fossil fuel heating systems, mostly gas boilers, is needed to meet legal targets to cut climate pollution to zero overall.
By the mid-2030s, all newly installed heating systems are expected to be low carbon, such as air source heat pumps, or be appliances that can be converted to a clean fuel supply, such as hydrogen instead of natural gas.
Backers of heat pumps say installation costs, which can be around £10,000 at the moment, will fall as the industry scales up, and they will help tackle climate change and air pollution, require less maintenance, use less energy and create jobs.
The Government has pledged 600,000 new heat pumps will be installed a year by 2028, but its plans so far will fund just 12,500 homes a year to switch to low carbon heating systems, and ministers have not yet published a long-awaited strategy on making the shift to clean heating.
What are the key findings from the UN climate change report?
While heat pumps are several times more efficient than gas boilers in terms of the amount energy they use, they do not necessarily save consumers money at the moment to run, as electricity is several times more expensive than gas because electricity is taxed 10 times more than gas is.
Again, this is something campaigners hope will change.
Octopus Energy expects to halve the costs of installing heat pumps before the end of 2022 and is investing £10 million in a research and development and training centre to slash costs further and create jobs.
Insulating your home
One of the best ways to cut costs and carbon footprint is by insulating your home.
Unfortunately, the government's Green Homes Grant that was launched last year and aimed to help install green measures in homes was closed after problems and delays.
While a full scale retro-fit could set you back thousands, little fixes around the home can make a different. For example, fitting your hot water cylinder with an insulating jacket will save you £18 a year in heating costs and 110kg of carbon dioxide emissions.
Draught-proofing windows and doors, gaps between floorboards or chimneys is a cost-effective way to save energy and reduce your household’s carbon emissions. It’s easy to do and, in many cases, doesn’t require a professional.
Similarly, LED lightbulbs bulb use 80-90% less energy than a traditional lightbulb, which helps to lower your carbon emissions and bills.
How could I cut down on my carbon emissions - and save money?
People may be able to make lifestyle changes to help reduce their costs.
Ms Coles added: “You can use energy efficiency measures that don’t require an outlay, such as turning the heating down, or only filling the kettle with as much water as you need, which can make inroads into your bills.
“Likewise, you can cut down on car use, or drive more efficiently at lower speeds with less acceleration or braking.”
Will travel become more expensive?
Ms Coles said flights could become more expensive, although local travel could become cheaper.
A report from think tank IPPR’s cross-party Environmental Justice Commission recommended an upgraded local public transport system that is free at the point of use by 2030 – starting with free bus travel by 2025 – to make green travel easy.
What about the move to electric vehicles?
GoCompare recently said it had seen an 84% increase in electric car insurance quotes over the past year.
However, the comparison website predicts there will not be a mass uptake of electric vehicles ahead of a planned 2030 ban on the sale of petrol and diesel vehicles.
Ms Coles said: “Electric cars cost more than their petrol or diesel equivalents, so if you’re buying new, you can easily spend £5,000 to £10,000 more.
“Buying second-hand electric cars, meanwhile, comes with the difficulty of taking on an older generation of battery, with a smaller range, so those who have tended to drive second-hand vehicles may need to buy new for the first time.
“The lower running costs mean you’ll eventually recoup the cost, but it will take years.”
But the cost of building an EV is falling all the time, so it won’t be too long before carmakers will be able to sell them for a purchase price that is comparable to vehicles with internal combustion engines (ICEs).
Bloomberg estimates EVs will be able to compete with the upfront, purchase price of conventional petrol and diesel cars around 2025/26.