Funding the Transition: we have the money, but it’s not in the right places
Revealing the hidden costs of climate inaction to make the case for a rapid green transition
At London Climate Action Week, a message is coming through loud and clear: the money to tackle climate change exists – it’s just stuck in the wrong places. And all too often we hear politicians and pundits griping about the cost of climate action – but we rarely hear about the billions poured into propping up our unsustainable fossil-fired economy, in subsidies, tax breaks and health costs.
But what does that really mean for everyday life? To bring this into focus, we’re spotlighting some of the hidden costs of climate inaction - costs that quietly drain our wallets, strain our health, and disrupt our communities. If these were visible, the case for funding a fair, fast transition would be undeniable.
To help illustrate this, we’ve produced a snapshot of how people in the UK are already footing the bill for the climate crisis – and how much money could be saved if we transition to a cleaner, faired system.
Energy Bills
- £17.5 billion every year – that’s how much the UK Government spends to subsidise the fossil fuel industry, the highest level of direct state support since 2016, according to research from Global Justice Now.
- £2bn every year - could be saved from UK household energy bills by delinking the cost of renewable electricity from gas
- £1000 – is added to the annual energy bills of new build houses thanks to lax building regulations that allow housebuilders to continue constructing poorly insulated, gas-fired houses. As well as the savings, imagine the difference that better quality homes would make to peoples lives, if low-carbon building regulations hadn’t been scrapped in 2016.
- £1400 – the average annual saving made by UK households by 2050 on heating bills and motoring costs if household heating and transport is electrified.
Home insurance
- $1.2 billion – the estimated cost to the US property market in 2025 caused by uninsured damage to property, tumbling home values and rising insurance premiums due to worsening climate change risk in the US - some 19,000 properties will be foreclosed this year in just three states (Florida, Louisiana, and California).
- £36,000 and £1,000 - the average cost from 2022 of repairs for flood and storm damage. Almost a quarter (24%) of homeowners are not currently protected by a home or contents insurance policy - despite 38% living in areas susceptible to flooding or other extreme weather events.
“ The cost of living is rising, inequality is growing and with it social cohesion is fraying. We need to factor these costs into the equation of transition.”
Food prices
- £1bn – amount lost by UK farmers in 2025 after climate-related extreme weather wiped out arable crops, according to DEFRA.
- €28 billion - damage to the European Union's agriculture sector from extreme weather made worse by climate change.
- £192 a year – is added to every UK household’s annual food bill by climate-linked food price instability, according to the Energy & Climate Intelligence Unit.
- Chaotic weather, rising temperatures and increased flooding – all linked to climate change – are already driving up food prices; the potential disruption to the international food system is nothing short of terrifying.
Health
- £500m a week - the cost to the UK economy of air pollution, which drives illness, NHS care and lost productivity, according to the Royal College of Physicians. Dirty air is killing more than 500 people a week, with health harm to almost every organ of the body caused by air pollution, even at low concentrations.
Hopefully these stats you give you a sense of how flawed the premise is of whether we can afford the transition. Truly we can’t afford not to. The transition is inevitable.
As with any change there are winners and losers. Part of what makes the transition difficult is we can’t clearly see the additional costs involved in propping up the existing system – much of which feeds into the record profits of fossil fuel companies.
Our current fossil fuel economy is costing us, and our bills are more expensive – for food, insurance, home prices, transport, energy; all are all higher than they need to be. The cost of living is rising, inequality is growing and with it social cohesion is fraying. We need to factor these costs into the equation of transition.
These hidden costs of climate inaction are something that requires greater visibility and scrutiny. With more and more people believing that the “system is rigged”, we need to get better at illustrating who the system is benefitting, how it is rigged and how this harms us all.
- Jean McLean
