6 june 2019

Cutting UK emissions to net zero would cost £1tn, says Hammond

Chancellor says target would mean less money available for schools and hospitals

Seth Jacobson, The Guardian, Thu 6 Jun 2019

The chancellor, Philip Hammond, has warned Theresa May that reducing greenhouse gas emissions to net zero could cost the country £1tn and lead to industries becoming “economically uncompetitive” without government subsidies.

In a letter to the prime minister, he said the 2050 net zero target – one of the most far-reaching proposed in the world – would mean less money for schools, the NHS and police forces, the Financial Times reported. The target has the backing of the Committee on Climate Change (CCC), the government’s advisory panel.

The current policy is to cut emissions by 80% over the same time period, which Hammond said was already off track. For any such targets to have credibility the government would need to have an “ambitious policy response”.

“This would almost certainly include increased government spending, meaning less money available for other areas of public spending,” he wrote.

To reach net zero, the country would have to offset all carbon emissions with schemes such as planting trees or through processes such as carbon capture and storage. Hammond also said that the country would need to decarbonise virtually all heating, meaning households would need to spend thousands of pounds replacing gas boilers and installing insulation.

He also claimed that there would need to be a ban on petrol and diesel cars as well as a massive increase in the number of charging points for electric cars.

The CCC has previously estimated that achieving the net zero target would cost £50bn a year, but the chancellor used a figure of £70bn, which has been calculated by the Department for Business, Energy and Industrial Strategy.

“On the basis of these estimates, the total cost of transitioning to a zero-carbon economy is likely to be well in excess of a trillion pounds,” Hammond wrote to the prime minister.

May is understood to be keen on having the emissions legislation as one of the key legacies of her time in office, and will enshrine the target in law on 11 June, according to civil servants.

Liz Truss, the chief secretary to the Treasury, has cautioned against rushing the legislation through, saying that it should be a decision made by the next prime minister.

May’s stance has the support of the frontrunner for the Tory leadership, Boris Johnson, who tweeted on Wednesday that a “government I lead would win our bid to host COP 2020, legislate for net zero emissions by 2050 & embrace the opportunity of green growth for the UK as a global decarbonisation leader”.

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