Study: Phase out of polluting vehicles by 2030 would create 32,000 jobs and boost UK economy

Moving forward the phase out date for internal combustion vehicles would benefit not just energy and manufacturing industries but also the retail, leisure, and entertainment sectors, a new Greenpeace analysis argues

Bringing forward the date at 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 and increase GDP by £4.2bn, according to a new report published today by Greenpeace.

Implementing a full transition to electric vehicles (EVs) for the auto market by 2030 would increase employment and stimulate economic activity, resulting in a £1.9bn net increase in government revenue by the end of the decade, the report argues.

The new analysis comes as Number 10 is expected finalise a long awaited decision on the coming days on when to end the sale of petrol and diesel cars and vans. The current date for ending the sale of internal combustion engine cars is 2040, but the government has already said it will pull it forward to 2035 and is investigating whether to bring the date further forward still.

The target date is set to form the centrepiece of the government’s much anticipated 10 point green recovery plan, which reports over the weekend suggested would be launched next week. However, sources have indicated the question of when to end the sale of conventional cars remains the subject of fierce debate within government. Some ministers are said to accept a 2030 or 2032 date is needed to put the UK on track for net zero emissions by 2050 and cement the UK’s leadership position in the fast-expanding EV market, while others fear a media and public backlash to a policy that would effectively halt the sale of internal combustion cars within a decade.

However, today’s new report, compiled for Greenpeace by the data and energy consultancies Cambridge Econometrics and Element Energy, argues there is a compelling economic case for an early phase out date.

The analysis draws on the Department for Transport’s (DFT) transport model and a widely used macroeconomic model to assess the economic impact of a faster transition to electric vehicles. It concludes that jobs would be created across a range of sectors, including energy, battery manufacturing, and charging infrastructure deployment, as well as within the retail, entertainment, and leisure industries. According to the report, these latter sectors would benefit from increased economic activity that would result from the lower overall costs of owning and running an electric vehicle, as well as lower demand for imported oil, which should lead to consumers having increased disposable income.

Under both the 2030 and 2035 scenarios analysed, EV adoption would undergo a rapid increase over the coming decade, the analysis suggests. However, just 60 per cent of the new car market would be made up of EVs by 2030 with a 2035 phase out date, whereas EVs would account for almost 100 per cent of market by the end of the decade under the 2030 scenario. 

The increase in employment and public spending resulting from a faster transition to EVs would boost GDP in 2030 by 0.2 per cent, equivalent to £4.2bn, the new analysis finds.

The report further argues that phasing out polluting vehicles earlier could help UK firms 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 per cent to 42 per cent over the next 20 years – supported by proactive government policies – the report claims that GDP would rise by a further 0.4 per cent in 2030, equivalent to £10.3bn. Such an approach would also create 31,000 more jobs, the report adds, including 10,000 in vehicle manufacturing, compared to the status quo. 

In addition to exploiting this ‘first-mover advantage’, the report argues that increasing the UK’s role in the nascent battery market, such as through the development of a UK-based Gigafactory, could lead to further economic gains.

“Now more than ever we need bold government policies that create new jobs and economic growth whilst driving the UK forward on climate action,” said Greenpeace UK’s policy director Doug Parr. “Here – staring Boris Johnson right in the face – is one that will do just that, while making the UK a world leader in electric vehicle manufacturing. Delivered with the right policies, a 2030 phase out really would be win-win all round.”

Read more: businessgreen.com