In June, the Government published the conclusions of the 2025 Spending Review, including allocations to net zero spending over the five years from 2025-26 to 2029-30. In this box we reviewed how the Government's Spending Review plans compare to the CCC's central scenario above for the public investment costs needed to achieve net zero emissions by 2050.
This box is based on CCC and OBR data from .
In June, the Government published the conclusions of the 2025 Spending Review which set departmental budgets for day-to-day spending until 2028-29 and for capital investment until 2029-30. Within these budgets, the Government has allocated £59 billion to net zero spending over the five years from 2025-26 to 2029-30, or an average of £12 billion a year. a,b We set out below how the Government’s Spending Review plans compare to the central scenario set out above for the public investment costs needed to achieve net zero emissions by 2050.
Chart A: 2025 Spending Review plans versus public investment costs in scenarios
At £59 billion, when including £19 billion of investment in nuclear energy, the Spending Review departmental spending plans are £7 billion lower than our central scenario for the government’s share of investment costs over the next five years. Investment in nuclear energy was not included in the CCC estimates because of uncertainty around whether this would be classified as public sector or private sector spending. It is therefore also not included in our scenarios. Excluding nuclear, the Government plans to spend £39 billion over the next five years, which is £26 billion lower than the central scenario and close to the low scenario of £38 billion.c
Looking at specific sectors, allocations for residential buildings and “other” (which includes aviation, land use, waste, and agriculture) are broadly in line with the estimates in the central scenario, although the degree to which this applies to each subsector varies. However, for the surface transport, non-residential buildings and removal sectors, the committed spend is lower than the central scenario. In surface transport, a sector that the CCC assumes is responsible for the largest proportion of emissions reductions by 2040, the Government’s plans are less than a quarter of the central scenario, and lower than the CCC’s low investment share scenario. However, some wider active travel funding may not be included in these figures as it will be allocated locally from sources including other devolved transport funds and local resources.
The Government can also use non-fiscal regulatory levers rather than public spending to achieve its net zero ambitions. In the case of surface transport, the CCC has noted in its latest progress reportd that “the uptake of electric cars is having a measurable and rapidly growing effect on emissions” and that growth in the market highlights that the zero-emissions vehicle “mandate is working”, but sales will still need to accelerate sharply to meet Government targets.
Overall, this comparison suggests that the Government’s planned level of spending on the net zero transition lies within the CCC’s range for public sector investment and, if nuclear investment is included, is close to this report’s central scenario. The CCC’s public share and government spending allocations are also not directly comparable in all areas. The Government’s allocations are for gross investment, while the CCC’s investment estimates reflect marginal, or additional, costs of decarbonisation over and above the costs incurred in a fossil fuel-based economy.
This box was originally published in Fiscal risks and sustainability – July 2025