The UK market for low-carbon goods and services could grow to between £510bn and £1,400bn by 2050, according to a report by the Committee on Climate Change (CCC) released today.
UK business opportunities of moving to a low carbon economy shows that the sector could create five million jobs by this time if it harnesses the potential of markets such as those for low emission vehicles and low-carbon financial services.
In addition, it reveals that the UK and EU are likely to make the transition to a low-carbon economy (LCE) around ten years ahead of the world average, and identifies areas where Britain might have an advantage over other countries.
The report states: "Over the last 15 years, the UK has made a substantial investment in energy and low-carbon technology research, development and demonstration.
"These investments, and others related to the wider impact of climate change on business and society, mean that the UK is well placed to obtain a share of the growing market associated with transition to a LCE.
"Businesses and government can enhance the exploitation of these opportunities through identification of and investment in the range of areas where the UK has particular business strengths and leading technologies."
Transport telematics, offshore wind, solar PV, smart grids, energy storage, and biofuels, have been identified, along with electric vehicles, as areas of the LCE market where the UK has particular strength.
Low-carbon financial services including insurance coverage and de-risking consultancy, is another key area that Britian should look to exploit, according the report.
"There are significant opportunities for the UK services sector to establish itself as a financial hub for green finance and gain a sizable share of the financial services associated with the estimated capital investment of between $1.5 (£0.89) and $6trn per annum needed to deliver the global transition," it adds.
However, there are barriers that have been identified in moving towards the LCE, such as funding (which is a major concern following Brexit), sufficient expertise to exploit research, a conservative culture, and a lack of UK manufacturing leadership.
"Realising this potential depends on maintaining and improving on the UK's competitive position in the global low-carbon technology market, and investing in the development of new products and services across a wide range of technologies and applications," the report concludes.