Price of going zero carbon by 2050 is more than £1tn, Chancellor says
Image credit: reuters
The UK would need to spend £1tn to bring its greenhouse gas emissions down to net zero by 2050, 40 per cent higher than previously estimated, according to a leaked letter from Chancellor of the Exchequor Philip Hammond to outgoing Prime Minister Theresa May.
Last month, the UK Committee on Climate Change (CCC) said the country should aim for a full elimination of net greenhouse gas emissions by 2050 compared with an earlier target of an 80 per cent reduction, in order to limit future global temperature rises.
The CCC said this would cost one to two per cent of GDP each year, or about £50bn annually.
Hammond said such spending would have profound implications for households, businesses and the Exchequer and would cost closer to £70bn annually according to estimates by the Department for Business, Energy and Industrial Strategy (BEIS).
“The Committee on Climate Change estimate that reaching net zero emissions by 2050 will cost c. £50bn per annum by 2050. BEIS’s own analysis find the costs to be 40 per cent higher, at around £70bn per annum,” he wrote in the letter, a copy of which the Financial Times published online. “While these costs are extremely significant in their own right, they fail to describe the impacts on different sectors of the economy, as well as the profound implications for households, businesses and the Exchequer.”
Number 10 declined to comment directly on the leaked letter but insisted it was the “right thing to do to protect our planet” and it would be wrong to frame the costs as a “trade-off for public spending”.
The CCC believes the goal could be achieved at the same cost as the existing legal target to cut climate pollution by 80 per cent by mid-century, and would deliver economic opportunities.
Under a net-zero target, emissions would have to be largely eliminated from electricity generation, transport and heating, with a switch to renewables, electric vehicles and an end to traditional gas-fired boilers for heating homes.
Any remaining pollution by 2050 from areas such as agriculture and flying will need to be offset through measures to capture carbon, such as planting trees.
Doug Parr, chief scientist for Greenpeace UK, accused the Treasury of “putting their ideology before our well-being” and failing to include the benefits of a switch to a net-zero economy.
He said: “If you want to know whether a policy is a good idea, you include the benefits as well as the costs, and in this case the benefits include an economy fit for the 21st century, cleaner air, warmer homes and maximising the chances of civilisation surviving.”
Tanya Steele, chief executive of conservation charity WWF, said: “If we are to leave a viable planet for future generations, the Prime Minister must urgently commit to a net-zero future - a legacy to be proud of. The investments this requires will not only give future generations security, but in the process create jobs from new, clean industries. What’s more, this investment will cost less than dealing with a climate breakdown - the reality if we fail to act.”
A Number 10 spokeswoman said: “We obviously commissioned the committee to look into the target because we recognise the need to go even further than the 80 per cent we committed to back in 2008.
“Our position, as a world leader in tackling climate change, is that this is the right thing to do and it’s a question of ‘when and not if’ we get to net zero.”
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