Capturing the distributional impacts of long-term low-carbon transitions

Major policy proposals often require a distributional impact assessment, focusing on differential financial and other impacts across population segments. Such assessments are rare, however, at the multi-decadal scale addressed in long-term (e.g. to 2050) low carbon transition modelling. There is therefore a risk of socially inequitable outcomes, which in turn presents a socio-political risk for decision-makers driving transitions. This paper uses a literature review and expert interviews to identify mechanisms by which low carbon transitions could differentially impact population sub-groups. As well as impacts of policy costs on bills, this includes factors such as ability to connect to heat networks or install onsite generation or storage. An approach to exploring distributional impacts across a range of long term scenarios from a United Kingdom energy model (ESME), is proposed. This sets out how bill changes and other costs associated with low carbon transition could impact different income quintiles in the UK