Net-zero by 2025 ‘practically impossible’ due to spiralling costs, report finds
Moving the UK's net-zero emission target forward 25 years is "practically impossible", according to new thinktank research which found that setting a net-zero target for 2025 would cost £200bn each year at a minimum - more than the NHS's annual budget.
Thinktank Onwards has analysed the figures from the Climate Change Committee’s (CCC) recommendation report to Government on legislating net-zero. The organisation found that hitting net-zero by 2025 would cost £200bn annually, at an absolute minimum, far more than the NHS’s £134bn annual budget.
Onwards’ report claims that net-zero by 2025, which is being demanded by climate activists group Extinction Rebellion is “practically impossible”. Notably, attempting to reach net-zero by 2025 would require 9% of GDP to be set aside for the target – in contrast, both the Climate Change Act and the new net-zero for 2050 target should be achievable by allocating up to 2%.
Alternatively, the cost of achieving a net-zero target for 2030, which has been put forward by the Green Party and Labour – although the latter has softened its stance on a definitive timeframe – would cost £100bn each year, or 4.5% of GDP.
Richard Howard, co-author of the report, said: “The Government’s net-zero pledge is a huge and necessary step forward, but it is not sufficient – they now need a plan to deliver it. This plan needs to be rooted in centre-right beliefs in open markets, prudence, pragmatism, and investment in innovation – to avoid UK competitiveness, hard-pressed consumers or taxpayers being excessively hit.
“This is not only the best electoral strategy, but also the right thing to do – and essential to avoid the climate debate being used as a trojan horse to overthrow the market economy and impose state control.”
Onwards is “explicitly aligned to the Conservatives”, according to the New Statesman and was conceived by Conservative MP Neil O’Brien, a former head of Policy Exchange.
While it is no surprise that the thinktank would back the 2050 goal set by the Tories, the CCC’s chief executive Chris Stark has also reiterated that is was not advisable for the Government to look for a net-zero carbon economy before 2050, arguing that doing so would be “very risky” from a social and economic perspective.
The report was published as party leaders prepare for the first “leaders climate debate” on Thursday (28 November) at 7pm on Channel 4. The major parties have all published their manifestos legislating for varying levels of ambition to reach net-zero and combat the climate emergency (Read more here).
However, the Onwards report found that a 2025 target would require replacing gas boilers with low-carbon alternatives such as electric heat pumps in 22.8 million homes, at a current cost of £8,400 a home (or £192 billion in total). On current installation rates, this is 270,000 more plumbers than the UK currently has in operation. Additionally, 5.2 million homes annually would require energy efficiency upgrades – 30 times greater than current improvement levels.
For transport, another notoriously hard-to-decarbonise sector, up to six million motorists would be required to trade in for an electric vehicle (EV) each year up to 2025 at a cost of £1trn. Currently, Onwards claims that 25,000 motorists are trading-in.
The thinktank is calling for new measures to reach net-zero at the current 2050 deadline without spiralling costs or harming UK competitiveness. The group has called for Contracts for Difference to be replaced with a “carbon contracts” system, where carbon emissions are priced into the cost of non-green electricity sources.
The group has also called for energy levies to be removed so that decarbonised electricity is subject to zero VAT, while high-carbon gas is charged at 20% VAT.
Over the last seven years, the UK has spent 60% of its overseas support for energy investment in developing countries on fossil fuels, with more than £4.6bn spent on climate-wrecking projects. Onwards has called for the end to this spending.
Finally, Onwards has called for reforestation efforts to be increased so that 1.4 billion trees are planted by 2050, by redirecting agricultural subsidies towards an expanded Woodland Carbon Guarantee scheme.