Report: Cost of Net Zero Could Top £4.5 Trillion

A man climbs stairs on day two of the COP 26 United Nations Climate Change Conference at SECC in Glasgow, Scotland, on Nov. 1, 2021. Ian Forsyth/Getty Images

The government’s current plans to achieve net zero by 2050 will cost £4.5 trillion, three times as much was previously thought, according to a report by a think-tank.

The think tank Civitas has claimed that the real cost of net zero “risks the very fabric of the UK economy and genuine societal hardship.”

A government spokesman told the Epoch Times that “we simply do not accept these figures.”

In the report, author and economist Ewen Stewart calculates that estimates set by the Climate Change Committee (CCC) in its 2020 6th carbon budget to achieve net zero by 2050 were too low.

The CCC is an advisory body that provides guidance and recommendations on climate policy and targets to the UK government.

Three Times The Estimate

The report estimated that the probable costs will be at least £4.58 trillion, well over three times the CCC’s estimate of £1.3 trillion. Mr. Stewart described this as a “best-case scenario.”

He added that the UK is a “global outlier in terms of the strength of its net zero commitments.”

Though despite the fact has already cut emissions harder and faster than almost all other developed nations, its emissions in a global context “are minimal,” and less than 1 percent of the global total.

The UK is also one of the very few countries to tie net zero objectives into law with statutory obligation “regardless of feasibility or cost,” with the Climate Change Act.

Mr. Stewart said that the UK’s approach is “legally enforcing and one-dimensional without due regard to wider economic and societal impacts.”

£6,070 for every household

The £4.58 trillion figure, which the report claims, will cost £6,070 for every household, as opposed to the 6th CCC budget of £1,776 per household per year.

The CCC put the cost of decarbonising the electricity grid at £334 billion. Civitas says this is underestimated as the body assumes, in part, that a “Moore’s Law” of renewables will operate at over two times the carbon improvement rate over the last 100 years.

In simpler terms, it assumes that renewable energy technologies will keep getting better, cheaper, and more efficient as time goes on, making them increasingly attractive alternatives to traditional fossil fuels.

Unproven

He listed other reasons why the CCC’s total capital expenditure of Net Zero is likely to be a “substantial underestimate.”

Some of these included that they “largely ignore the capital cost of early obsolescence and replacing existing infrastructure.” Furthermore, he noted that the CCC report was prepared in 2020 when interest rates were 0.1 percent as opposed to 5.25 percent today.

Mr. Stewart said that the UK “may wish to maintain an aspiration of net zero, as many others have done” and it “should continue to innovate.”

“But to drive a potentially four and a half trillion pound project-based on technology that in many cases is unproven, risks the very fabric of the UK economy and genuine societal hardship,”  he added.

In September, the government announced a u-turn on Net Zero targets.

Prime Minister Rishi Sunak announced an extension of the deadline for banning gas and petrol-powered cars to 2035 as well as delays on boiler bans.  He also ruled out policy ideas that would require people to share cars and eat less meat and dairy.

2050 target

A Department for Energy Security and Net Zero spokesperson told The Epoch Times by email, “We simply do not accept these figures.”

“The report fails to recognise the financial savings from lower fuel costs and technological advances – such as offshore wind costs falling by 70 per cent more than we projected in 2016,” the spokesman added.

A report in the Office for Budget Responsibility (OBR) said that “in the balanced pathway, the CCC estimates the total net cost of abatement across all sectors of the economy between 2020 to 2050 at £321 billion–with £1,312 billion of investment costs mostly offset by £991 billion of net operating savings.”

These figures reflect the whole economy cost of the transition, the OBR said.

The Epoch Times contacted the Climate Change Committee (CCC) for comment.