Something has changed dramatically in your home in a way you won’t have even noticed.
The electricity in your plug socket no longer comes from coal, the workhorse of the industrial revolution that powered our economy for decades but which is also the most polluting fossil fuel.
Now it is generated by cleaner gas, renewable and nuclear power.
That shift has helped the UK cut greenhouse gas emissions by 50% since 1990 – a world-leading feat – and you won’t have batted an eyelid.
That’s about to change.
The country’s climate advisers, the Climate Change Committee (CCC), say in new advice today that emissions of greenhouse gases need to fall 87% by 2040.
Image: Emissions need to fall by 87% by 2040, during the period covered by the ‘seventh carbon budget’, published today by the CCC
One third of those emissions cuts will come from decisions made by households.
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While the first stage of the country’s national climate action has “gone largely unnoticed”, the next phase will be “a lot more difficult”, said Adam Berman from Energy UK, which represents energy suppliers.
“It’s going to be technically more difficult, it is going to be much more visceral and tangible to people in their everyday lives. It affects how they get to work, what they use to heat their homes and even diet.”
Experts say if we get it right, it will make our lives better with cleaner air and better public transport.
It would also shave hundreds of pounds off annual household bills.
But it depends on what the government does next to help people.
The way we travel
The two “most impactful” things households can do are replacing their car with an electric one and a gas boiler with a heat pump (only when they pack up, and not before), the advice said.
By 2040, the share of electric cars on the road needs to jump from 2.8% in 2023 to 80% in order to meet net zero, according to the recommendations, which the government is not obliged to accept.
They are already cheaper to run than petrol or diesel cars, while the falling cost of batteries means EVs should finally cost the same upfront in the next three years.
The committee’s chief executive Emma Pinchbeck said: “Frankly, by the time a lot of people are going to be choosing a new car, the electric vehicle is just going to be the cheapest [option].”
Image: The share of heat pumps must jump to 52%, while electric cars need to reach 80% by 2040, the CCC said
How we heat our homes
But while the switch to electric vehicles is powering ahead, the move to greener home heating has barely left the starting blocks.
Homes are currently the second highest-emitting sector in the UK economy, and much of that comes from the way we heat them.
The CCC today put to bed calls to keep gas boilers but run them on hydrogen, recommending there be “no role for hydrogen heating in residential buildings”.
Hydrogen is hard to produce in a green way, and so would be reserved for other sectors that have no other viable alternatives.
The government is yet to confirm this decision, which would dismay the gas networks and boiler manufacturers.
Instead, the advisers said people should eventually replace boilers with heat pumps, which run on electricity and work a bit like a fridge in reverse: grabbing and compressing warmth from the outside air and using it to heat your home.
Amid a political row over the costs of net zero, the analysis concluded these two switches could save households around £700 a year on heating bills and a further £700 on motoring costs.
Cutting down on meat and on excessive flying will also play an important, but smaller role they said.
The upfront investment will cost the equivalent of 0.2% of GDP, most of which would come from the private sector.
Overcoming the costs
But at the moment the benefits of these green switches are not spread fairly, and some people can’t access them at all.
The upfront costs of a heat pump – and home upgrades needed alongside – are “sizeable” and price out poorer households, even with current government subsidies, campaigners and the CCC said.
Zachary Leather, an economist at the Resolution Foundation thinktank, said: “While politicians fret and argue about the cost of net zero, today’s report shows that there are long-term benefits for consumers and the environment.”
But the government needs to “get serious” about helping lower-income households to adopt heat pumps and EVs so they can save money too, he said.
Meanwhile, it is still cheaper for someone with a driveway to charge their EV than someone who charges theirs on the street – and electricity prices overall should be made cheaper to help people reap the benefits.
Mr Berman from Energy UK said: “All through the energy system there are these small examples that tend to mean working class households find it more expensive to take up low carbon alternatives.”
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The energy transition is ‘not fair yet’
It also comes at a time of wavering support for climate action. While Labour was elected on a mandate to go faster on climate action, the Conservatives have retreated from green issues, and Reform UK wants to dismantle net zero altogether.
Mr Berman said a way to “resolve that question of public consent is to ensure we’re rolling out that infrastructure in a really, really fair and inclusive way. And we’re not there yet”.
The public are also confused about if, when and how to switch to these green technologies, and which government should tackle this with clearer guidance, the CCC said.
Energy Secretary Ed Miliband said: “This advice is independent of government policy, and we will now consider it and respond in due course.
“It is clear that the best route to making Britain energy secure, bringing down bills and creating jobs is by embracing the clean energy transition. This government’s clean energy superpower mission is about doing so in a way that grows our economy and makes working people better off.
“We owe it to current generations to seize the opportunities for energy security and lower bills, and we owe it to future generations to tackle the existential climate crisis.”
Tesla’s board has signed off a $29bn (£21.8bn) share award to Elon Musk after a court blocked an earlier package worth almost double that sum.
The new award, which amounts to 96 million new shares, is not just about keeping the electric vehicle (EV) firm’s founder in the driving seat as chief executive.
The new stock will also bolster his voting power from a current level of 13%.
He and other shareholders have long argued that boosting his interest in the company is key to maintaining his focus after a foray into the trappings of political power at Donald Trump‘s side – a relationship that has now turned sour.
Musk is angry at the president’s tax cut and spending plans, known as the big beautiful bill. Tesla has also suffered a sales backlash as a result of Musk’s past association with Mr Trump and role in cutting federal government spending.
Image: Tesla’s Elon Musk is seen on stage during an event in Shanghai Pic: Reuters
The company is currently focused on the roll out of a new cheaper model in a bid to boost flagging sales and challenge steep competition, particularly from China.
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The headwinds have been made stronger as the Trump administration has cut support for EVs, with Musk admitting last month that it could lead to a “few rough quarters” for the company.
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Tesla is currently running trials of its self-driving software and revenues are not set to reflect the anticipated rollout until late next year.
Musk had been in line for a share award worth over $50bn back in 2018 – the biggest compensation package ever seen globally.
But the board’s decision was voided by a judge in Delaware following a protracted legal fight. There is still a continuing appeal process.
Earlier this year, Tesla said its board had formed a special committee to consider some compensation matters involving Musk, without disclosing details.
The special committee said in the filing on Monday: “While we recognize Elon’s business ventures, interests and other potential demands on his time and attention are extensive and wide-ranging… we are confident that this award will incentivize Elon to remain at Tesla”.
It added that if the Delaware courts fully reinstate the 2018 “performance award”, the new interim grant would either be forfeited or offset to ensure no “double dip”.
The new compensation package is subject to shareholder approval.
Banks will still most likely have to fork out over discretionary commissions – a type of commission for dealers that was linked to how high an interest rate they could get from customers.
The FCA, which banned the practice in 2021, is currently consulting on a redress scheme but the final bill is unlikely to exceed £18bn. Overall, the result has been better than expected for the banks.
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Car finance ruling explained
Lloyds, which owns the country’s largest car finance provider Black Horse, had set aside £1.2bn to cover compensation payouts.
Following the judgment, the bank said it “currently believes that if there is any change to the provision, it is unlikely to be material in the context of the group”.
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‘Don’t use a claims management firm’
The judgment released some of the anxiety that has been weighing over the Bank’s share price.
Jonathan Pierce, banking analyst at Jefferies, said the FCA’s prediction was “consistent with our estimates, and most importantly, we think it largely de-risks Lloyds’ shares from the ‘motor issue'”.
Bank stocks have responded robustly to each twist and turn in this tale, sinking after the Court of Appeal turned against them and jumping (as much as 8% in the case of Close Brothers) when the Supreme Court allowed the appeal hearing.
Concerns about this volatility motivated the Supreme Court to deliver its judgment late in the afternoon so that traders would have time to absorb the news.
Thousands of motorists who bought cars on finance before 2021 could be set for payouts as the Financial Conduct Authority (FCA) has said it will consult on a compensation scheme.
In a statement released on Sunday, the FCA said its review of the past use of motor finance “has shown that many firms were not complying with the law or our disclosure rules that were in force when they sold loans to consumers”.
“Where consumers have lost out, they should be appropriately compensated in an orderly, consistent and efficient way,” the statement continued.
The FCA said it estimates the cost of any scheme, including compensation and administrative costs, to be no lower than £9bn – adding that a total cost of £13.5bn is “more plausible”.
It is unclear how many people could be eligible for a pay-out. The authority estimates most individuals will probably receive less than £950 in compensation.
The consultation will be published by early October and any scheme will be finalised in time for people to start receiving compensation next year.
What motorists should do next
The FCA says you may be affected if you bought a car under a finance scheme, including hire purchase agreements, before 28 January 2021.
Anyone who has already complained does not need to do anything.
The authority added: “Consumers concerned that they were not told about commission, and who think they may have paid too much for the finance, should complain now.”
Its website advises drivers to complain to their finance provider first.
If you’re unhappy with the response, you can then contact the Financial Ombudsman.
The FCA has said any compensation scheme will be easy to participate in, without drivers needing to use a claims management company or law firm.
It has warned motorists that doing so could end up costing you 30% of any compensation in fees.
The announcement comes after the Supreme Court ruled on a separate, but similar, case on Friday.
The court overturned a ruling that would have meant millions of motorists could have been due compensation over “secret” commission payments made to car dealers as part of finance arrangements.
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Car finance scandal explained
The FCA’s case concerns discretionary commission arrangements (DCAs) – a practice banned in 2021.
Under these arrangements, brokers and dealers increased the amount of interest they earned without telling buyers and received more commission for it. This is said to have then incentivised sellers to maximise interest rates.
In light of the Supreme Court’s judgment, any compensation scheme could also cover non-discretionary commission arrangements, the FCA has said. These arrangements are ones where the buyer’s interest rate did not impact the dealer’s commission.
This is because part of the court’s ruling “makes clear that non-disclosure of other facts relating to the commission can make the relationship [between a salesperson and buyer] unfair,” it said.
It was previously estimated that about 40% of car finance deals included DCAs while 99% involved a commission payment to a broker.
Nikhil Rathi, chief executive of the FCA, said: “It is clear that some firms have broken the law and our rules. It’s fair for their customers to be compensated.
“We also want to ensure that the market, relied on by millions each year, can continue to work well and consumers can get a fair deal.”