The government’s narrow approach to climate change, focused on expanding renewables and phasing out coal, will not cut nearly enough carbon to meet the UK’s net zero goal. Sectors like transport, buildings and industry are way behind on having effective carbon cutting strategies. Together, they are only on course to deliver about ten per cent of the emissions savings they need to over the next 12 years.
A new report by think tank Green Alliance says that reducing energy demand must be central to UK energy policy to cut carbon at the scale necessary.  And the research shows that, far from being a ‘hair shirt’ approach, this will benefit people and businesses financially, improve public health, and create an economy fit for the future.
Focusing only on energy supply in key sectors like transport, building and industry ignores the significant impact of high demand, not only on carbon emissions but also on everyday lives.
- Transport has the highest carbon emissions of any sector, but policy is only guaranteed to deliver about nine per cent of the reduction needed by 2032. Policy that prioritises active travel, like walking and cycling, and public transport and shared mobility would reduce energy demand and also save the NHS £2.5 billion a year – nearly two per cent of its budget – by reducing the cost of tackling health problems like cardiovascular disease and diabetes, caused by inactive lifestyles. , 
- Building energy efficiency policies have stalled in the UK and policy has too often ignored improvements needed to existing buildings. Along with new incentives for those who are able to pay for improvements, an additional £1 billion per year to 2035 could upgrade the low income households that need it. This could also help to prevent the estimated 10,000 early deaths caused by cold homes each year. 
- Industry policies largely ignore the potential of greater resource efficiency to cut energy use and therefore carbon emissions. Resource efficiency could lead to carbon savings three to four times greater than those envisaged for energy efficiency by 2050.  Changing how UK manufacturing businesses use resources could also raise profit margins by as much as £10 billion across the sector. 
- Avoid unnecessary energy use. This would include reducing dependence on cars, and introducing new infrastructure or business models that reduce the need for materials and products, including services that replace ownership of cars or appliances.
- Improve technical energy efficiency. Technical solutions already exist to reduce energy waste and loss by buildings, transport and products. These include better insulation and sensor controls in buildings so they need less heating or cooling and industrial processes that minimise energy use, and use fewer resources to make the same products.
- Flex energy demand. Aligning demand better with supply, for instance by introducing new ‘time of use’ tariffs, would make the most of intermittent renewable energy sources and reduce the need for fossil fuel back up supply.
“Going to the effort of decarbonising all of the energy we currently use is not a sensible strategy to bring about a sustainable energy system unless we also take steps to cut demand. This needs to be a dominant part of energy system change.”
Libby Peake, head of resource policy at Green Alliance, said:
“The government’s approach to energy is self defeating. It ignores half of the equation and denies people considerable benefits. Not only would reducing demand help to reach carbon reduction targets earlier, it would also reduce infrastructure costs and benefit everyone – through cleaner air, more comfortable homes and healthier lives.”
Notes for editors
Green Alliance is a charity and independent think tank, focused on ambitious leadership for the environment. With a track record of 40 years, Green Alliance has worked with the most influential leaders from the NGO, business, academic and political communities. Our work generates new thinking and dialogue, and has increased political action and support for environmental solutions in the UK. www.green-alliance.org.uk
The Centre for Research into Energy Demand Solutions (CREDS) is a research programme with a vision to make the UK a leader in understanding the changes in energy demand needed for the transition to a secure and affordable, low carbon energy system. It is made up of a team of over 100 academics at 15 leading institutions across the UK. www.creds.ac.uk
 The research is published in a new report, Balancing the energy equation: three steps to cutting UK demand, available at: https://www.green-alliance.org.uk/resources/Balancing_the_energy_equation.pdf
 See: Ricardo-AEA, 2013, Review of the impacts of carbon budget measures on human health and the environment
 NHS budgets in 2018/19 totalled around £ 140 billion, the majority of which was in England, £114 billion: https://researchbriefings.files.parliament.uk/documents/SN00724/SN00724.pdf
 BRE, 2015, The cost of poor housing to the NHS. Excess cold is the number one hazard from poor housing to the NHS. The BRE report broke down costs according to Category 1 hazards in the housing health and safety rating system (HHSRS), and found that excess cold cost the NHS nearly £850 million out of a total £1.4 billion from these top hazards (60 per cent of the total). When HHSRS Category 2 and ‘worse than average’ hazards were calculated, the total figure rose to £2 billion. Although excess cold was not calculated independently in this total, assuming it was responsible for the same proportion of hazards (60 per cent) would mean cold would cost the NHS £1.2 billion a year.
 See: CREDS, July 2019, Shifting the focus: energy demand in a net-zero carbon UK
 See: Institute for Manufacturing, 2013, The next manufacturing revolution: non-labour resource productivity and its potential for UK manufacturing