The push to hit Net Zero will cost a staggering £803 billion [$1.03 trillion US] by 2050, as experts revealed the lights are flashing red on the UK economy. [emphasis, links added]
The cost of the transition to meet green targets over the next two decades will hit taxpayers for an average of £30 billion [$38B US] a year, Ministers have been warned.
The independent Office for Budget Responsibility (OBR) says that two-thirds of this sum will be due to lost tax receipts, mainly from the loss of fuel duty income.
They said that climate change “poses significant risks to economic and fiscal outcomes in the UK”.
The body says the impact will be split between investment costs of around £9.9 billion [$12.7B US] a year and the extent of revenue losses from declining fuel taxes as petrol-driven cars are replaced by electric vehicles.
But the watchdog says there is considerable uncertainty over the costs, which could be lower if there is a replacement for the loss of fuel duty.
The GDP could fall by 3.3% by 2060 in the event of 2°C [~36°F] warming and 7.8% by 2060 in the 3°C [~37°F] scenario, the report said.
They add that the figure could be even higher if governments fund more of the transition path and “rely less” on regulation or taxation to fund it.
Shadow Energy Secretary Claire Coutinho hit out at Cabinet Minister Ed Miliband, who vowed to bring energy prices down. It comes after Tory leader Kemi Badenoch said hitting Net Zero targets by 2050 was impossible.
Ms Coutinho said:
“Ed Miliband is not being honest about the true cost of his mad Net Zero targets. He promised to cut everyone’s bills by £300 [$384 US], but this is yet more evidence that his plans mean higher bills, jobs lost, and more imports from China.
“Kemi and I have been clear – Net Zero by 2050 is impossible without bankrupting the country. Cheap energy and people’s living standards have to come first.”
The move comes as Chancellor Rachel Reeves is already grappling with the public finances in the short term ahead of the Budget in the autumn.
The warning on climate change costs comes as the OBR says the UK’s public finances are in a “relatively vulnerable position”.
They say there has been limited success in recent years to put them on a sustainable footing.
The reversal of planned tax increases and spending, such as recent welfare reforms and winter fuel cuts, has added to government debt.
The OBR said its annual fiscal risks and sustainability report that debt is projected to be “above 270% of GDP by the early 2070s”.
The forecaster added that recent rises in debts have led to “a substantial erosion of the UK’s capacity to respond to future shocks and growing pressures on the public finances.”
The watchdog also says that the triple lock, which helps boost pensioners’ state pension, has cost three times what it was initially assumed to cost when it was brought in back in 2012.
Read rest at The Sun
