Spend £40bn on green investment: note

Central fiscal result

+£40.0bn - Net fiscal impact in 2028-29

Low case: +£30.0bn. High case: +£65.0bn. Positive numbers are fiscal costs or borrowing pressure. Negative numbers are Exchequer savings or receipts.

Scenario and baseline

• Models spend £40bn on green investment by 2028-29.
• Baseline is current policy or published departmental plans.
• Central case uses published party or official anchors where available.
• Wider manifesto interactions are excluded unless stated.

Affected population

• Affected units are people, firms, households or providers depending on policy.
• Direct exposure follows the manifesto or government target group.
• Indirect exposure includes suppliers, workers, consumers and taxpayers.
• Weakest counts are widened in the low and high cases.

Gross impact

• Published anchor or scenario central is +£40.0bn in 2028-29.
• Gross costs or receipts are adjusted for behaviour and delivery risk.
• Tax, benefit or procurement offsets are separated in the fiscal build-up.
• The range is deliberately wider where implementation detail is thin.

Fiscal build-up, central case

• Gross programme or delivery cost: +£46.0bn
• Tax and receipt offsets: -£3.2bn
• Administration and evaluation: +£0.1bn
• Behavioural and pass-through effects: -£2.9bn

Central net impact: +£40.0bn in 2028-29.

Behaviour and pass-through

• Low case assumes stronger delivery or receipts than central.
• Central case applies moderate behavioural leakage and pass-through.
• High case allows weaker delivery, larger take-up or higher costs.
• Output effects follow incidence, capacity and investment channels.
• Distributional gains do not automatically imply GDP gains.

Phasing

• 2026-27: +£4.0bn. Phased implementation and take-up.
• 2027-28: +£22.0bn. Phased implementation and take-up.
• 2028-29: +£40.0bn. Phased implementation and take-up.
• 2029-30: +£40.0bn. Phased implementation and take-up.

Main source groups

• Acemoglu, Aghion, Bursztyn and Hemous, "The Environment and Directed Technical Change" (American Economic Review, 2012): Climate policy can redirect innovation, but transition dynamics and path dependence matter; relevant to green investment and clean-power policy.
• Institute for Fiscal Studies, "Green Party manifesto: a reaction" (2024): Used to define the pledge wording, policy scope and implementation scenario being modelled.
• Local Government Association, "Green Party manifesto summary" (2024): Used to define the pledge wording, policy scope and implementation scenario being modelled.
• Metcalf and Stock, "The Macroeconomic Impact of Europe’s Carbon Taxes" (NBER, 2020): European carbon taxes show limited adverse macro effects in studied cases, partly depending on recycling; relevant to output and inflation risk.
• Climate Change Committee, "Progress in reducing emissions" (2025): CCC reports persistent delivery gaps across buildings, transport, power and land-use decarbonisation; supports the need for investment while cautioning on deliverability.
• HM Treasury, "Spending Review 2025" (2025): Spending Review settlements set the counterfactual for departmental capital and resource budgets; used to separate new spending from existing baselines.
• Green Party of England and Wales, "Manifesto for a Fairer, Greener Country" (2024): The manifesto defines the tax, spending, climate, housing and public-service proposals modelled here; used to define the scenario, not as an official costing.