How much will it cost?Last week a letter from chancellor Philip Hammond surfaced, warning the Prime Minister that net zero could cost the economy more than £1 trillion. Some industries could become “economically uncompetitive,” he said in the letter seen by the Financial Times. Downing Street later hit out at the chancellor. The CCC estimates it will cost one to two per cent of GDP per year. This falls within current spending limits set in 2008 legislation.
What happens next?CCC chair Lord Deben said it was now vital the government backs up its commitment with credible policies.
His organisation has recommended using one fifth of land to plant trees, restore peatland and plant energy crops. It also advocates banning all new petrol and diesel cars by 2035, five years earlier than the government’s current target. “Strong, early action on cutting carbon emissions is vital and will help ensure the UK reaps the health, environmental, and business benefits of achieving net zero,” said Rachel Reeves, Labour MP and chair of the Business, Energy and Industrial Strategy (Beis) Committee. Britain is already bound to reduce its greenhouse gas emissions by 80 per cent by 2050, compared to 1990s levels. The CCC says technological progress has meant the new target can be achieved at no extra cost. And it stressed that the cost will encourage new industries, and cleaner air will reduce strain on the NHS. “The UK is already a centre for clean growth and innovation. Low carbon technology and clean energy contribute £44.5 billion to our economy every year,” said business secretary Greg Clark.