Net zero: a money machine for finance capital

Why is capitalism so keen on net zero by 2050? Any sane, rational person would wonder why successive governments have been happy to decimate industry, impoverish households and jeopardise energy security when even a slower and more rational approach would save jobs and lower the cost of living.

Any sane person might wonder why Britain has been leading the charge to net zero by 2050. Why?

Heed the advice of Deep Throat in All the President’s Men: “Follow the money”. When you do, you’d almost think that the concept of net zero by 2050 was invented purely to make money for finance capital – because that’s what it has ended up doing.

Not that finance capital invented the idea, and it is even less capable of convincing the world to back it. 

What finance capital is very good at, though, is recognising and seizing opportunities to make a profit. More than that, it knows how to create the conditions for profit to continue to flow.

Any sane person would be in favour of lowering carbon emissions where practical and affordable. But what Britain has is neither practical nor affordable.

For finance capital, the key concept is not net zero per se but the target, net zero by 2050. Once a target was set, governments and companies had to try to make sure it is reached.

Imposed

Big investors realised at once that a big business opportunity had arrived. A whole new set of industries, a whole new set of markets, imposed on the world and needing investment. But they wanted big incentives as well. And they pushed the incentive agenda wherever they could, for instance through the UN Environment Programme Finance Initiative.

‘For finance capital the key concept is not net zero per se, but the target, net zero by 2050…’

The UN said the investors underlined “the importance of investment-grade policy which will enable institutional investors to allocate capital towards climate change solutions, including appropriate government incentives to compensate for heightened risk and sufficient scale of technology deployment”.

They also emphasised “that long-term policy stability is critical and retroactive changes can significantly damage investor confidence”.

The language is obscure, but the meaning is clear. “Investment-grade policy” means issuing bonds with cast-iron guarantees from governments, which means the bonds are backed by taxpayers, you and me. “Appropriate government incentives” means giving money to finance capital. “Long-term policy stability” means no changes for years and years.

In other words, investors wanted governments to underwrite their investments, to boost their profits, and to set those commitments in stone for decades to come.

In June 2019, that is precisely what they got when the May government introduced the Climate Change Act 2008 (2050 Target Amendment) Order 2019. 

At the end of June, May left. In her final act of spite, she bequeathed Britain Net Zero by 2050. The term “net zero” doesn’t actually appear in the legislation. Its first official use was in the press release Downing Street sent out on 12 June – and hit the headlines.

Now the term is so heavily used, and has attracted so much criticism, that in the middle of September the House of Commons Energy Security and Net Zero Committee complained, “The term net zero has become a distraction from the broader aims and the benefits of the energy transition and the politics of the energy transition have become mired in a stale debate on the cost and feasibility of achieving an emissions target.”

A stale debate? What MPs mean is that the country is not convinced.

When the 2050 target was put in UK law in June 2019, Britain was the first major economy to do so, as noted by Energy and Clean Growth Minister Chris Skidmore.

How, then, was/is the net zero target to be achieved? At the most fundamental level, the overwhelming assumption is that “the market” will do it, provided that “the market” has sufficient incentives.

Of course, “the market” is just another term for finance capital. What we are told is that properly incentivised, banks and finance companies will save the world.

And, indeed, the incentives are enormous, wide-ranging and long-lasting. The British government, along with governments around the world, has said that it will be supporting the “green transition” for decades – a certainty that investors have never seen at any other time in history.

Risk free

Instead of heightened risk, what finance capital has got is investment without real risk at all. And it even gets to set the ground rules.

The UK government uses the term green financing when it borrows money on the capital markets to invest in green projects. What is a green project? The government hasn’t bothered to define that itself. Instead, explicitly, it uses the definition produced by the International Capital Market Association.

Selling green gilts (government bonds) and Green Savings Bonds (for individuals) had, by mid 2025, raised £51 billion for the government (Green Savings Bonds account for about £2 billion of this total).

These incentives are replicated around the world. No wonder, then, that for the past four years banks and investment companies have made more money out of the financing of green projects than they did from investing in fossil fuel production. That’s according to Bloomberg.

Much of this is not actually investment by the banks – it’s fees for facilitating other investors. Every time a bank facilitates a transaction, it takes a cut. A cut from financing a project, then another cut from selling it on, and another for refinancing. The merry-go-round can go on and on. Easy money. 

Providing finance to reach net zero has become a major part of the world’s banking business, and is set to be so for decades.

Britain is not incidental to this. If ministers have their way, London will be the global centre for green financing. The ambition was spelled out by Energy Secretary Ed Miliband in June 2025. The government press release had the bald headline, “Plans for UK to become sustainable finance capital of the world”.

However the idea of net zero began, it is now also a policy for the development of finance capital. The two are now so intertwined that the decline of one would entail the decline of the other.

Carbon has been a commodity for a long time, incorporated into physical matter, sometimes as pure carbon such as diamonds, or graphite. Sometimes as hydrocarbons, such as coal, oil and gas. Now, for the first time in history, carbon as an abstract chemical element has become a commodity. Carbon credits are one of the main levers governments have to force manufacturers and industries (see Box 2) to produce products with lower emissions.

The carbon credit market is huge, and growing. According to estimates, the global carbon market – made up almost entirely of government-regulated carbon credits – is set to reach over $6 trillion by 2033.

Most of this market is centred in Europe, and particularly in Britain, where the market is forecast to reach $1.5 trillion in 2030. It’s a huge number, equivalent to about 80 per cent of the total value of the world’s motor industry market.

The numbers relate not to the value of carbon credits in themselves: they reflect the volume of trading in carbon credits, which can be bought and sold multiple times. It’s a machine for making vast profits – and all without producing a single thing or even having any noticeable effect on the continuing rise in carbon dioxide (CO2) concentration in the atmosphere.

That machine was invented in Britain, in the City. On its Global City website, the City of London discloses that Britain launched the first national pilot of a carbon credit trading scheme in 2002 – and boasts that “many of the technical design features pioneered for the scheme informed the development of the EU Emissions Trading Scheme launched in 2005 and became part of a blueprint for compliance markets around the world.”

‘The financing of an entire industry has been handed by government to finance capital…’

That same website says that the total “gross value added” by the UK carbon market is £1.2 billion, and that carbon credits and “related derivatives” worth roughly $1.4 trillion were traded last year via the UK arm of Intercontinental Exchange. Trading volumes are not the same as production, of course, but $1.4 trillion is about a third of Britain’s entire GDP.

If all this were just about finance and how rich banks might be growing, it would be bad enough. But another insidious result of consistent government policy is that the financing of an entire industry deemed essential for Britain and the world – taking in electricity generation and transmission, housing renovation, transport of all kinds – has been handed by government to finance capital.

All the aspects of green infrastructure have become tradeable commodities. So what happens – whether our homes are properly insulated, the price of electricity, the building of essential new parts of the national grid – depends not on what society needs but on the attractiveness of each new project to banks and investors.

Pressure on manufacturers

The demands from government on auto manufacturers are growing. Yet actual production is declining. In June 2019, when the net zero target was announced, Britain produced some 109,000 new cars. In June 2026, a mere 65,000 new cars were made here: most are destined for export.

This year, a third of cars made in Britain are supposed to be ZEVs, zero emission vehicles. The reality, according to the latest forecast from the Society of Motor Manufacturers and Traders, is 27.4 per cent. The gap of 5.6 per cent is filled by buying credits (see Box, opposite).

The targets rise and rise until 2035, when no one will be able to buy a new car or van unless it is fully electric. How long before we are forced to ditch perfectly serviceable cars and buy new electric ones?

The statistic of 27.4 per cent of new car sales being electric vehicles is just an overall figure, including sales of ZEVs imported from abroad. Astonishingly, there are no publicly available figures for how many new ZEVs sold here are made in Britain. 

Not many. In the year to August 2026 just over 3,000 – a mere 6.2 per cent – of the cars sold here by Nissan, Britain’s biggest car maker – were battery powered.

The government’s handily named Jet Zero Strategy pledges net zero aviation by 2050 from Britain, and by 2040 for domestic flights. Yet the Grangemouth refinery closed last year with no support for potential developments in sustainable aviation fuel. Jet Zero? More like Zero Jets.

The government is currently reviewing its electric vehicle targets, faced with a barrage of complaints from the motor industry that they are unattainable. But with a sizeable proportion of the green finance sector literally banking on the net zero targets, the government may find it hard to make substantial changes.

That’s what happens when you put all your eggs in the net zero basket, then set out to make Britain the world’s centre for green finance. You create a massive market, and expectations of an even more massive one, and then it’s hard to stop.

Green capitalism – surely a contradiction in terms – is not finance capital’s main source of income or main focus of activity yet. For that you have to look at, for example, sovereign debt. In fact, ten or even five years ago, the contribution of net zero to financial markets might have been minimal. 

But that is changing. Four years ago, one estimate put green financing at 12 per cent of overall market activity in Europe. That same website also estimated that meeting the 2050 net zero target would require a doubling or tripling of investment levels. 

That’s big money, and good news for finance capitalism, not least because sovereign debt is no longer the ultra safe haven it was thought to be. The green bond market isn’t just highly profitable, it enables finance to spread the risk.

The City of London’s website estimates the potential growth of the market in carbon credits by 2050 as between 50 and 190 times its current size. Hundreds of trillions of dollars. This activity is all driven by net zero targets announced by governments.

All these grandiose targets will require massive amounts of investment in new plant and processes. Management consultants McKinsey estimated in 2022 that between then and 2050 governments and households (that is, higher prices and taxation) would need to invest some $275 trillion to reach net zero globally.

That figure is vast almost beyond imagining. It is more than eight times the GDP – total market value of all the goods and services produced – in the US each year.

When you follow the money you can see the method in the madness. Banks and investment companies want to keep their certainties, keep their profits. That’s why net zero by 2050 will be so hard to shift.

Assault on workers

Hard, but not impossible. One consequence of this analysis is that the idiocies and aberrations of net zero policy, the wasteful wind plant here, the factory closure there, the surging cost of electricity, cannot be treated as individual acts of destruction. It is a systemic assault on the working class.

Why should fuel prices be determined by global events when we have what we need in the seas around our islands? Why should the government refuse to fund decarbonisation projects unless there’s matching private finance?

Workers in Britain must unite to demand, for example, that the process of decarbonisation is brought fully into public ownership and public control.

Crucially, it must become compatible – ironically, as the 2015 Paris COP Agreement said, with sustainable development and the eradication of poverty. What the market and net zero by 2050 have actually brought us is unsustainable deindustrialisation and an increase in poverty.

The fight will be every bit as revolutionary as the fight for sovereignty and independence – indeed, an essential part of it.

Don’t expect help from the Labour Party – or any parliamentary party, for that matter. They cannot and will not oppose finance capital.

The inescapable conclusion is that the working class must develop itself into a force able to run things for an independent Britain. In other words, informed decision making by workers in the mass who no longer want to be spectators to this mess.

• Related article: Credits and profits

• Related article: Who invented net zero?