Britain\u2019s official energy system operator has attempted to work out what achieving net zero carbon emissions will cost, with its figures showing surging spending in the coming years.<\/p>\n
The scale and speed of the shift to a low-carbon economy, and how to fund it, are hotly debated by political parties.<\/p>\n
According to the Intergovernmental Panel on Climate Change, the body of the world\u2019s leading climate scientists convened by the UN, governments must drastically reduce emissions in the next decade to avoid a catastrophic situation in which extreme weather across the globe devastates lives and livelihoods, as well as food systems and wildlife.<\/p>\n
Investing in clean generation projects, distribution networks and replacing fossil fuel cars and boilers could be many billions of pounds cheaper if the UK was less ambitious, the report suggests. However, among the downsides would be that the benefits from net zero emissions, which include far lower energy costs, would be delayed.<\/p>\n
Here we look at the different scenarios laid out by the energy system operator, and the costs for households, businesses and the planet.<\/p>\n
What is the cost of the government\u2019s net zero plans?<\/p>\n
In the first analysis of its kind, the National Energy System Operator (Neso) set out the cost of meeting a range of scenarios that tally with the government\u2019s green agenda.<\/p>\n
The UK already spends about 10% of its gross domestic product on investments related to net zero, and Neso expects those costs will climb over the coming years and remain higher than they are today until the 2030s.<\/p>\n
In its most ambitious green scenario, costs peak at about \u00a3460bn by 2029 before beginning to decline to about 5% of GDP by 2050 or roughly \u00a3220bn a year. In the \u201cfalling behind\u201d scenario, which models a future of slow climate action in which Britain misses its net zero target and ignores the cost of climate damage, the total costs are about \u00a3350bn lower.<\/p>\n
This calculation does not include the impact of \u201ccarbon costs\u201d, meaning any tax that puts a price on polluting to disincentivise producing greenhouse gas emissions and help cover the damaging impacts of fossil fuels on the economy.<\/p>\n
If these are accounted for, the greenest scenario would have the lowest cost over the next 25 years, saving \u00a336bn a year compared with a scenario in which the UK takes slower climate action. However, it would still mean a sharp rise in costs over the short term.<\/p>\n
Does this mean higher energy bills?<\/p>\n
Not necessarily. The Neso report has prompted headlines claiming that households could save \u00a3500 a year under a slower path to net zero but \u2013 a) these savings rely on ignoring carbon costs and b) the reality of how energy costs are passed on to consumers is far more nuanced.<\/p>\n
First, the total bill includes spending on a wide range of low-carbon investments that are not included in our energy bills. These include replacing old fossil fuel cars with electric models or replacing old boilers and gas hobs with heat pumps and induction stoves.<\/p>\n
Second, the way costs are passed through to consumers is a question for the government, which can spread out the bill over a longer period to ease the burden on households, business and industry. Investment in the new Sizewell C nuclear power plant over the next decade could reach \u00a338bn \u2013 but the cost to consumers and taxpayers will be spread over the 60-year lifetime of the project.<\/p>\n
The government says the energy costs levied on household bills, such as the cost of upgrading networks and supporting low-carbon electricity, will reduce costly bottlenecks in energy grids and lower the need to buy gas on volatile global markets.<\/p>\n
However, higher investment costs do significantly raise the chances of households paying more.<\/p>\n
The UK\u2019s chief climate adviser said earlier this year<\/a> that ensuring that the costs of decarbonisation are shared fairly across society must be a top priority for ministers or they risked losing public support for net zero. Emma Pinchbeck, the chief executive of the Climate Change Committee<\/a>, the independent statutory adviser, said this would help the government to make a \u201cstrong, confident\u201d case for decarbonisation as an engine of economic growth.<\/p>\n The creation of the Sizewell C nuclear power plant in Suffolk is expected to cost \u00a338bn over the next decade. Photograph: Chris Radburn\/ReutersSo could the costs be lower?<\/p>\n Critics of the government\u2019s green agenda claim the UK could save an average of \u00a314bn a year by dropping the legally binding target to reach net zero by 2050. Instead, the country could take a slower approach to climate action via Neso\u2019s \u201cfalling behind\u201d scenario.<\/p>\n But this would ignore the cost of worsening climate damage. The report cautioned that ultimately the cost of ignoring carbon costs would be higher beyond 2050, owing to the higher cost of fossil fuels.<\/p>\n The UK would also miss out on many of the \u201cnon-financial benefits of net zero\u201d \u2013 such as improvements to public health, the natural environment, and social wellbeing \u2013 and could experience negative trade effects as economic partners targeted faster emissions reductions.<\/p>\n \u201cIt would be wrong to interpret a delay in this cost as implying that the cost is avoided entirely,\u201d the report warned.<\/p>\n Can we trust this report?<\/p>\n Neso is a government-owned authority and its scenarios form the basis of forecasts produced by policy and business leaders. But its report has important limitations and cannot be taken at face value.<\/p>\n The path set by the government is unlikely to follow any one individual scenario produced by Neso, and the final cost will depend on myriad regulatory decisions. Neso said its models were \u201cnot fully optimised to minimise cost\u201d, meaning further savings could be found. The models are also based on a range of assumptions \u2013 including the future market price of fossil fuels and cost of low-carbon technologies such as heat pumps and electric vehicles.<\/p>\n \u201cThis implies that the efficient delivery of any given pathway may be as important for cost as the choice of pathway,\u201d the report added.<\/p>\n What does the government say?<\/p>\n The government was quick to underline the limitations of the report in estimating the costs of net zero, while backing its findings on its benefits. \u201cWe fundamentally reject the idea that these illustrative scenarios accurately reflect the cost of moving to clean energy, which has enormous benefits in bringing down bills for good, energy security and securing well-paid, skilled jobs,\u201d a spokesperson said.<\/p>\n \u201cNeso makes clear that driving for clean energy saves money by protecting future generations, and fundamentally reduces our exposure to fossil fuel markets, which have caused half of all recessions since the 1970s. As Neso says, they do not reflect or predict the cost of net zero, recognising the likely path is highly dependent on future fuel prices and the advancing pace of private sector rollout of net zero technologies.\u201d<\/p>\n So does it still make sense to accelerate our green ambitions?<\/p>\n Absolutely, according to world-leading scientists and experts. Greenpeace UK\u2019s head of climate, Mel Evans, said the report set out \u201cthe clear and positive impacts of Britain standing firm on its path towards clean energy\u201d.<\/p>\n \u201cNot only will it help eliminate our planet-heating emissions and make the UK a global leader on climate action \u2013 inspiring others to follow in our footsteps \u2013 but it will also slash our energy costs in half.\u201d<\/p>\n He added: \u201cOne thing this report \u2026 doesn\u2019t account for, however, is the huge cost of failing to shift to clean energy, and therefore tackle climate change. Damage caused by the climate crisis has cost a whopping \u00a313m an hour globally for the past 20 years, making the economic argument for investing in net zero just as strong as the environmental one.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Britain\u2019s official energy system operator has attempted to work out what achieving net zero carbon emissions will cost,…\n","protected":false},"author":2,"featured_media":178974,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[22],"tags":[273,111,139,69,147],"class_list":{"0":"post-178973","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-environment","8":"tag-environment","9":"tag-new-zealand","10":"tag-newzealand","11":"tag-nz","12":"tag-science"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/178973","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=178973"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/178973\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/178974"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=178973"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=178973"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=178973"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}