Cost-effective climate policies can help address cost-of-living crisis, says WWF

19 Sep 2025 12:18 PM

A new report from WWF shows how cost-effective climate policies can help the UK Government tackle the cost-of-living crisis, saving households and farmers money while boosting the UK’s energy and food security.

The report recognises the economic headwinds that the Government is facing, so focuses on ways to boost living standards and growth across the UK that don’t require large public spending commitments.

Rick Parfett, WWF’s acting head of climate policy said: “The Government is rightly focused on driving up living standards and these changes would give them more bang for their buck. These policies would put pounds in people’s pockets and turbocharge investment for farmers at limited cost to taxpayers.” 

“They could stimulate the green economy, which grew 10% in 2024 and is the fastest growing sector in the UK, as well as increase our energy and food security.”

The report highlights how the National Wealth Fund and Great British Energy could be used to cut bills for social housing residents and renters in blocks of flats by enabling access to solar and battery storage. For homeowners, a stamp duty rebate on home energy improvements could save them almost £4,000 and stimulate 93,000 additional heating retrofits each year.

It also sets out a range of options for rebalancing gas and electricity pricing to encourage a switch to clean heating and ensure British industry benefits from cheap, clean, homegrown power. Alongside this, a social tariff is proposed to cut bills for households on means-tested benefits.

WWF also set out how Government can ensure farmers are better rewarded for protecting nature and the climate. Changes to unlock investment from business into more resilient food supply chains could mobilise £480 million per year for sustainable agriculture.

Incentives for organic fertiliser use could shield farmers from the volatile prices of fossil fuel-based alternatives, reducing greenhouse gas emissions by 80% per kilo substituted and saving farmers who fully adopt low-carbon fertiliser £60 per hectare.

Making it easier to do nature-friendly projects like ponds and wetlands could save farmers £149 per 0.1 hectare in application fees – a 50% saving - and up to five weeks planning approval time. 

The report demonstrates that climate and nature policies could deliver clear economic benefits to households and farmers within the next five years, addressing cost-of-living pressures while tackling the climate crisis. 

These policies are designed to work within the current challenging economic context, with limited expense to the Treasury. This includes non-spend levers, like regulation and planning reform, making use of existing budgets for institutions like the National Wealth Fund and GB Energy, and low-cost policies that have a multiplier effect on private investment.

Introducing these policies would help deliver the Government’s missions of raising living standards and growth, boost the UK’s energy and food security, and help reinforce public support for action to protect nature and the climate. 

Notes to editors

A summary of the report is available at: Pounds in Pockets Summary | WWF

The full report is available at: Pounds in Pockets | WWF

The report recommendations:

Power 

• Provide low-interest loans through the National Wealth Fund (NWF) to install solar panels and battery storage on social housing. This could directly reduce energy bills for tenants, delivering annual savings of around £100 per household.
• Offer subsidies via GB Energy to unlock community solar and storage schemes for residents of low-income blocks of flats. The proposed GB Energy-backed PPA scheme could save low-income households an average of £130 annually.
• Gradually rebalance policy costs, which currently fall disproportionately on electricity bills. Redistributing costs between electricity and gas would decrease electricity prices by 9% and reduce the average household’s electricity bill by almost £70 per year, while encouraging the switch to clean heating and ensuring that British industry can benefit from cheap, clean power.
• Implement a social tariff to lower energy costs for those on means-tested benefits. The auto-enrolment scheme would reduce gas and electricity bills by around £250 per year each, saving eligible households an estimated total of £500 per year. 

Heating and buildings 

• Offer a stamp duty rebate of up to £3,750 to homebuyers who invest in energy improvements within two years of purchase. This could cover the full cost of some types of energy efficiency upgrades or cut the cost of a heat pump installation by 31% (based on an assumed installation cost of £12,000) or by 92% when combined with support from schemes like the Boiler Upgrade Scheme. The policy could result in around 93,000 additional retrofits each year.
• Offer a government issued guarantee to suppliers or companies offering heat-as-a-service (HaaS), covering up to 40% of potential net losses. This could reduce HaaS subscription costs and equate to annual bill savings of around £230, depending on the extent of retrofit (not including additional bill savings from improved energy efficiency and smart operation). 

Land use and agriculture 

• Support a blended finance model which enables business to co-invest in sustainable outcomes across food supply chains through insetting, de-risking the adoption of these sustainable practices for farmers. This would involve Defra formally enabling a mechanism for Value-Chain Insetting Partnerships, allowing farmers to blend ELM scheme payments – particularly SFI and Countryside Stewardship – with private insetting finance from food retailers, processors and brands. Corporates would pay farmers for the incremental carbon or biodiversity landscape outcomes associated with practices they’re already encouraged to adopt under ELM, provided they go beyond the public baseline (e.g. greater scale, duration or ambition). This model is aligned with principles laid out in Defra’s ongoing Voluntary Carbon and Nature Markets) consultation and could be implemented through Defra’s ongoing SFI review, with changes made to guidance rather than legislation. The policy could mobilise £480 million per year for sustainable agriculture, on top of current ELM payments.
• Introduce structured incentives for farmers to adopt low-carbon fertilisers to reduce their dependency on volatile market prices of synthetic fertilisers. Farmers fully adopting low-carbon fertiliser could expect to save £60 per hectare, with 80% greenhouse gas (GHG) emissions savings per kilogram of low-carbon fertiliser use.
• Expand permitted development rights to reduce the cost and complexity for farmers seeking to adopt nature and climate-friendly practices, such as ponds, wetlands, or composting on their land, including those actions taken under ELM schemes. Farmers could expect to typically save £149 per 0.1 hectare in application fees – a 50% saving and 2 to 5 weeks of planning approval time.