Explainer: How Carbon Neutrality Increases Your Disposable Income

Carbon-intensive lifestyles have long been considered the mainstream route to wealth and success, both on a personal and societal scale. However, as we say goodbye to many of the Earth’s safety mechanisms and await a global climate that is in a state of transition, many have begun to look at what advantages may exist without fossil fuel dependency. Given that we will have to end all fossil fuel use by the end of the century, or more like 50 years according to the IPCC, it might be worth seeing how this will affect the budget of the average consumer.

A net carbon-zero lifestyle or ‘carbon-neutrality’ may seem like a purely aspirational concept, and almost one to intuitively avoid in order to save money and live a normal life. However, looking more closely, the advantages of a low carbon lifestyle begin to assert themselves.

The first change that can be made quite easily is to switch energy provider to a renewable energy utility. This can be done at no cost, and customers will often be surprised to learn that they will save money on their annual bills. Many people save approximately 25-35% and many renewables providers keep their rates capped, avoiding fuel price rises in the future.

Some people may decide to go all the way and have a solar PV system fitted, meaning a reduction in bills of about 50% against traditional utilities, and more in sunnier regions. Depending on the quality of the panels, further savings can be made as the output (usually rated 80% efficiency after 25 years under warranty) could last a total of 50 years or more at lower efficiencies. Solar panels have also come down in price by 40% in the last two years, and are set to decline further as economies of scale progress. Also, government grants may be available in some areas, such as compensating for the cost of installation, increasing the cost-effectiveness of owning a PV system.

New technologies are also shaping how we can reduce our bills when heating our homes. An Imperial College London study outlining ‘UK 2030 low carbon scenarios and pathways’ envisages changes in store for the home heating sector, using different technologies. One particular technology used in the study that is expected to become widespread are air-source heat pumps (ASHPs), which basically act like a refrigerator in reverse, and currently save between £360-£1,295 on an annual heating bill depending on what type of technology it is replacing. It is worth noting that they are currently cheaper than their nearest competitor natural gas by about 10%, and with bills set to rise 25% will contribute even greater savings.

A further quotient of our electricity bill is lighting, and despite the mandatory introduction of CFL bulbs around 2010, many have complained about them due to issues such as light quality and ‘warm-up’ time. A subsequent alternative is LED lighting which is now set to be the prevalent lighting solution being both durable, inexpensive and high quality. In a range of hues, LED bulbs last up to 87 years and cost virtually nothing to run. They have also come down in price by 90% during the last three years. Overall, the introduction of this technology alone will make a significant impact on the environment.

Additional bill reductions can be made by replacing outdated refrigerators, which can cost up to $200 (£160) a year to run for a 10 year old model. Energy efficient A++ fridges cost just £25 a year to run – a substantial saving if switching from an older unit.

So looking now to cars, and we see that the overall cost of an electric vehicle including charging and servicing is expected to fall below conventional cars around 2022, and the purchase price around 2024. The electric vehicle has many advantages over combustion engine vehicles, offering what many describe as a ‘superior driving experience’ – quieter, smoother and faster. Electric cars are already cheaper in China where some EVs can cost not much more than $10,000, but most manufacturers are gearing up to manufacture electric versions of most models within the next few years. Small differences such as magnetic regenerative braking and moreover the replacement of the engine itself mean that servicing will become almost obsolete, bringing the cost of ownership down further.

In the medium-term, electric scooters and bikes offer increased mobility for those commuting, as well as car-pools and lift-sharing. In the longer term, autonomous driving may offer leasing options and/or lower priced travel in comparison with taxis, for those that only have an occasional use for a car, such as those living close to urban centres.

So finally we reach a state where we are not spending money every month on outgoings such as heating, lighting, transport and refrigeration – what do we do with all this money? Well, many will say that it will simply go to some other equally carbon-intensive product or service and consequently we have not lowered our overall footprint at all. However, the reality is becoming quite different.

Many large consumer brands have started to factor a carbon budget into their accounts, with many larger corporations aiming for 100% renewable energy. That large multinational corporations are all subscribing to the simple fact that sustainable business makes sense, and that there are dangers, may be a sign of things to come. 81 multinationals including Walmart, Microsoft, Google, IKEA, Toyota, Unilever, Johnson & Johnson, Starbucks, H&M, Nestle, Nike, Philips and HP have all committed to joining RE100, the 100% renewable energy initiative promoted by The Climate Group. In doing so they provide an example to the wider industry that the path to carbon-neutrality is not just possible but profitable.

Apart from some of the world’s biggest brands, it is not difficult to be a responsible consumer – buying locally from trusted brands, organic produce and other forms of responsible consumerism are both good for you and worthwhile. The figures show a similar story: £78 of the £286 billion in UK consumer spending of 2013 was spent ethically, according to a recent report. Much of the increases in ethical spending has been in investments, where consumers have shifted their funds away from increasingly unprofitable fossil fuel-based companies to more stable returns from renewable energy. The consultancy firm Globescan has recognised that sustainability has become fundamental to businesses and that consumer attitudes to have shifted to reflect this – sustainable production is starting to become standard practice.

And so we realise the advantages that exist within a transparent system where accountability does not need to come with a sense of dread, on either a personal or commercial level. Considering the average European CO2 emissions in metric tonnes per capita is 7.1 annually, and these can be offset by a donation of £53.25, many would say there is not much to worry about. However as some companies are realising that climate change will affect us all – landmass available for coffee production will shrink by 50% in the coming decades; for example – we can at least feel somewhat less guilty knowing we did our part to help mitigate some of the effects of climate change for future generations by looking closely at the energy we use.