UK green incentives polling

How tax can shape the UK’s journey to a Net Zero economy

Insight
October 18, 2023

The road to net zero will require widespread behaviour change in the UK and our choices now will be definitive for future generations. The UK needs to increase its current rate of decarbonisation by 50% to meet interim targets to net zero by 2050. According to our analysis, the UK is not on track to meet the 2030 target.

PwC instigated research of 4,000 UK consumers to understand better public attitudes towards tax and incentives towards increasing action towards achieving the net zero targets. Three things stood out: the UK public is open to going greener and reasonable about the impact to their lives, cost remains a significant barrier, and alleviating the transition will greatly assist in the journey. Overall, the public is hungry for change, but the carrot incentives need to be appetising and the taxation sticks cannot leave too bad of a taste in the mouth.

42%

of UK adults want the government to make greener alternatives cheaper. 23% would like polluting alternatives to be made more expensive.

43%

support taxpayer funds to level the playing field even if the UK cannot match the scale of subsidies provided in the USA’s Inflation Reduction Act.

71%

of rural voters are supportive of onshore wind farms being located within a 3-mile radius of their home, but believe discounts on energy bills would help build greater local support.

19%

of drivers on average incomes are considering swapping to an EV and 10% of homeowners on average incomes are considering swapping their gas boilers for a heat pump.

Government intervention is popular

The polling shows that 42% of respondents support using taxpayer money to subsidise green technology, with a quarter (23%) taking a pro-tax and pro-stick approach, saying that taxing high emissions purchases is a good tactic to discourage them.

42% of UK adults would prefer using taxpayer funds to reduce costs of green technology, compared to only 23% who would support raising the cost of products with high emissions.
43% support taxpayer funds to level the playing field even if the UK cannot match the scale of subsidies provided in the USA’s Inflation Reduction Act. Among key swing voters, who supported the Conservatives in 2019 but now back Labour - 54% are supportive.
Over half (56%) of UK adults would support the Government using taxpayer money to fund EV battery production in the UK.

Infrastructure

From an infrastructure perspective, NIMBYism is so often associated with challenges in constructing large projects, but mindsets have softened among the UK public for green technology. 71% of rural voters say they’d be happy to have a wind farm within 3 miles of their home, but this falls to 56% for new pylons needed to upgrade the grid. The more sceptical suggest a fair compromise; you can build them, but we’d like a discount on energy bills for the inconvenience.

The public is less supportive of using taxpayer funds to assist business, instead wanting companies to pay for their own emission reducing initiatives, with taxpayer money only used to support companies committed to keeping operations and jobs in the UK.

More than half (52%) would rather pay increased prices for the goods and services from these businesses, than for public funds to be used, if that was to mean less money would be available for public services.

NIMBYism is so often associated with challenges in constructing large projects, but mindsets have softened among the UK public for green technology.

Housing energy efficiency

The public is already making behavioral adjustments regarding their home’s Energy Performance Certificate (EPC) rating. There is widespread implementation of cheaper upgrades, such as energy saving light bulbs and insulation, costly solar panels or heat pumps remain beyond reach, with only 3% implementation recently. Access is also an issue - highlighting the importance of investment in apprenticeships and training so people can find local tradespeople to install heat pumps or solar panels.

The Government’s pathway to Net Zero envisages 250,000 heat pumps to be installed in existing homes each year by 2025, however, only 40,000 were installed into existing homes in the UK. The findings show one in nine (12%) of all homeowners are likely to consider switching from a gas boiler to a heat pump in the next few years. Additionally, only a small number (3%) have recently made the switch. Of those aged 65+, only 6% are likely to consider switching.

The high upfront cost of home-based energy efficiency products and a lack of trust in green technology are cited as the biggest barrier. Reducing the cost of heat pumps will be a crucial step – but so too will be building consumer confidence and engaging older consumers, who are less willing to major changes or pay higher upfront costs despite longer term household bill savings.

The high upfront cost of home-based energy efficiency products and a lack of trust in green technology are cited as the biggest barrier.

Electric vehicles

Only one in five (20%) of the country is likely to consider switching from a petrol or diesel car to an electric vehicle in the coming years, with nearly half (49%) citing cost as the single biggest barrier. Additionally, 21% worry about the extent of charging infrastructure.

Business Support

The public has a clear preference for carrots over sticks to spark more activity towards Net Zero. However, while there is notable support for the use of taxpayer funds, it is not universal, and the Government may have to find a mix of levers. Not everyone is motivated by the same things and there are variations by demographics and geography. Deeper research is needed to ensure effort is focused on the things that will work - and ensure taxpayer's money is well spent.

It’s a reminder that while tax and incentives have an important role to play in solving societal problems, ensuring public support for measures is far from straightforward. However, the road map to change can be seen in the UK public’s views: make it easy to engage, highlight the benefits of good choices and the impact of bad, remove cost and access barriers, and where possible make it financially attractive so taxpayer’s money is well spent.

The road map to change can be seen in the UK public’s views: make it easy to engage, highlight the benefits of good choices and the impact of bad, remove cost and access barriers, and where possible make it financially attractive so taxpayer’s money is well spent.