What will Net Zero cost?

Extravagant plans for a greener country will provide cold comfort for ordinary people


This article is taken from the August/September 2021 issue of The Critic. To get the full magazine why not subscribe? Right now we’re offering five issue for just £10.

Net Zero is the British state’s biggest undertaking for a generation and a strange throwback to the command and control regimes of old. The plan is to end the use of fossil fuels, which currently meet 80 per cent of our energy needs.

It requires a radical transformation of every part of the economy. Every gas boiler will need to be replaced, the freedoms, flexibility and affordability offered by petrol and diesel vehicles will have to be denied, and most industrial processes reimagined. As yet, there are no answers to the obvious question — who pays?

That so many people are treating this huge potential expense so casually is baffling. Parliament needs the best possible analysis of the potential costs so that MPs can take informed decisions about the way ahead. If the cost is likely to be punishingly high, we are going to need an escape route. Surely we cannot simply be obliged to pay any cost, however high and however painful?

Kwasi Kwarteng, the secretary of state at the department of Business, Energy and Industrial Strategy (BEIS), told me that Parliament had voted for Net Zero. In plain terms this is true under the Climate Change Act 2008 (2050 Target Amendment) Order 2019 {SI2019/1056}. This 250-word Statutory Instrument amended the previously ambitious 80 per cent C02 reduction target by 2050 compared to the 1990 baseline, to the full 100 per cent.

The Statutory Instrument was laid before Parliament on 12 June 2019 and 12 days later enjoyed a full 88 minutes of debate. The House was not divided. Attentions were elsewhere at the height of the Parliamentary Brexit battles at the tail end of Theresa May’s administration. To date, there has been no legislation to ban petrol and diesel by 2030 or to ban gas boilers in new homes by 2025, just warm words and ambitions of which there will doubtless be more to come as the government plays a game of trumps at COP26 this October.

Determined to get answers about how much Net Zero might cost my constituents, I examined some of the most high-profile cost estimates. But again and again, I was met with a troubling lack of transparency and routine wishful thinking.

First, I went to the Committee on Climate Change (CCC). They are Parliament’s official climate change advisors who are supposed to provide rigorous, independent advice. When the legislation for Net Zero first came through Parliament, they assured ministers that the cost would be about £50 billion per year in 2050, equivalent to 1-2 per cent of GDP. This was described as modest. For comparison, the entire spend of the Ministry of Defence in 2019-20 was £40 billion.

This is the report that ministers wave around and yet no one can test its credibility because no one can see the calculations that underpin it.

There is no technology to elegantly replace the gas boiler

It gets worse. Thanks to a two-year freedom of information request battle by the Global Warming Policy Foundation, we now know that government advisors didn’t trust the CCC numbers either. The contents of a letter sent to Theresa May by her Chancellor, Philip Hammond, show that civil servants told ministers that their own estimate was “more credible”. This was (BEIS’s internal modelling which showed that instead of costing £50 billion a year in 2050, the cost of Net Zero was likely to be £70 billion a year. This is 40 per cent higher than the CCC figure. In total, it amounts to £1.3 trillion.

Again, whilst we have seen the headline figures for this higher estimate, we still have no idea of the calculations and assumptions they used. Despite being told of this “more credible” estimate for the cost of Net Zero, ministers continue to assure Parliament of the CCC’s lower figure.

The Climate Change Act envisaged an independent body providing impartial scientific and technical advice to Parliament about how Britain could reduce its emissions. Instead, the task has been wholly outsourced to the CCC, a body that makes no bones about the fact it wants the government always to go further and faster, and to support particular technologies. Its pronouncements mostly receive uncritical reproduction by the mainstream media.

More recently, the CCC has come up with a new estimate for the cost of Net Zero that details £1.4 trillion of capital spending that will be required to meet Net Zero. They were keen not to publicise this extraordinary number, and so discounted it with a range of speculative benefits that may or may not materialise.

The £1.4 trillion figure has been brought to public attention because the Office for Budget Responsibility (OBR) recycled the CCC figures for its fiscal risks report. It means households are each facing a £50,000 bill over the next 30 years.

Take, for example, the prediction that the cost of decarbonising residential buildings would be £253 billion. This equates to around £10,000 to decarbonise each dwelling. We know that at present the most affordable alternative to a gas boiler, an air source heat pump, can cost around £11,000, and tens of thousands of pounds-worth of energy efficiency improvement may be required on top of that.

An independent report by the social housing sector magazine, Inside Housing, put the cost of decarbonising the UK’s social housing sector alone at £103 billion, or approximately £20,000 per household. If such costs are replicated across the entire housing stock, we are looking north of £500 billion just for residential decarbonisation.

Air source heat pumps sadly fail to heat homes to the temperatures we are used to, cost more to run, work particularly poorly in winter, and require large water storage tanks. There is no technology to elegantly replace the gas boiler and I’m yet to find a constituent who would assent to pay out £20,000 to be colder and face higher bills.

The pain doesn’t stop there. The use of electric cars, which are already much more expensive than their petrol equivalents and have the obvious limitations of range and charging, are made more expensive if electricity prices rise to accommodate large amounts of additional offshore wind or expanded reliance on interconnectors from the continent supplying coal-powered electricity.

There is little government planning to provide the millions of charging points, no thought as to the security or availability of supply of rare metals to make the batteries and even less thought as to the true CO2 cost of ore extraction, manufacture of the new cars, new batteries nor the nationwide upgrade to the electricity grid to supply.

The batteries are largely unrecyclable without huge energy input and use of toxic solvents to break down the near impenetrable resins. The safety of these batteries, which can burn uncontrollably releasing a variety of noxious substances, has yet to be fully investigated and yet the prospect is for many square miles of grid level batteries to smooth the notoriously unreliable renewable electricity supply.

The CCC is being allowed carte blanche to obscure the true cost of Net Zero

This dash for electric cars has also perversely condemned the country, particularly our congested cities, to more — not less — particulate pollution. No manufacturer will invest further in the design and production of a better internal combustion engine offering enhanced power, better consumption, cleaner-burning and lower particulates. The 2019 engine is as good as it’s ever going to get. It’s a shame, as the 2035 engine would have been so much better across all measures. Natural market-driven technological improvements have effectively stopped.

Yet there is somehow an overwhelming Westminster consensus that this is the right thing to do. The lack of interest in the cost of these policies to ordinary people is palpable.

The Interim Report for the Treasury’s Net Zero Review adopts wholesale the figures from the Committee on Climate Change. Remarkably then, it appears that the Treasury’s work on the cost of Net Zero, the “Net Zero Review”, does not seem to include preparing its own actual cost estimate even though the Treasury will be in the driving seat on many of the key decisions.

Neither the Treasury nor its independent forecasters in the OBR, nor BEIS, nor any other department of government seems willing to do any of their own work to estimate the cost of Net Zero. Instead, the CCC, the loudest cheerleaders of the green lobby, is being allowed carte blanche to minimise and obscure the true cost of Net Zero.

The Government is fooling itself if it thinks we can go down the Net Zero path without instigating a social calamity for those in Britain least able to afford its cost.

I can but guess the response by the public as they watch new coal-fired power stations proliferate across the growth economies of the world and with it cheap energy while they huddle in the cold hoping for the promised tepid warmth of their new heat pump and paying off the loan for the electric car they never really wanted.

We all want to leave the planet in a better condition than we found it, but we should pause for breath, inject some rational thinking and consider the alternatives before it is too late.

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