Understanding How Greenhouse Gas Emissions Impact the UK Economy

by | Jun 9, 2023

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Understanding how greenhouse gas emissions impact the United Kingdom’s economy has been deemed crucial based on recent data and trends. Recent data sheds light on key sectors, emission intensity, energy use, and the burgeoning environmental goods and services sector (EGSS).

In 2021, U.K. GHG emissions reached just more than 502 million metric tons of carbon dioxide equivalent. The transport sector witnessed a significant 9% reduction in emissions, following a 28% decrease in 2020, marking the largest decrease (34%) across all sectors since 2019. 

However, emissions related to consumer expenditure, primarily from heating homes and travel, rose by 7% to reach 135 metric tons of carbon dioxide equivalent, contributing 26% to the total emissions. The energy sector emerged as the second-highest emitter, increasing by 7% to 86 metric tons, accounting for 17% of the total emissions.

Energy Usage and Greenhouse Gas Emissions

When it comes to energy usage, its impacts constitute a significant portion of greenhouse gas emissions. In 2021, the U.K. consumed nearly 176 million metric tons of oil equivalent of energy, with fossil fuels contributing 80% of the total. Renewable energy sources accounted for 13% of the U.K.’s energy use, showing a steady increase from 0.9% in 1990. 

When recent shifts from coal to lower-emission fuels, such as natural gas, have helped reduce the amount of emissions associated with energy usage. 

Environmental Goods and Services Sector

Other areas that contribute to the U.K.’s greenhouse gas emissions levels are various environmental goods and services. With the increased production of renewable energy, output in the EGSS has seen a consistent increase each year since 2010.

In order to take appropriate EGSS measures, the U.K. utilizes the System of Environmental-Economic Accounting (SEEA) framework in order to provide a comprehensive relationship between the economy and the environment. The SEEA is a flexible system that can be adapted to countries’ priorities and policy needs.

The latest data on emissions in the U.K. presents a mixed picture, with positive trends observed in sectors like transport and renewable energy. 

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