Rishi Sunak says he cares about decarbonisation, yet he’s granting new oil extraction licences. That may be a logical political strategy. Still, relying on volatile gas over renewable power could be a pricey mistake, writes gfhay
Sunak’s critics could just focus on Britons’ moral responsibility to decarbonise for the sake of future generations. But they can also reasonably argue that the cost of the green transition is far from excessive. The OBR reckons that cumulative savings to the running costs of heating and electric vehicles from binning fossil fuels could amount to over 1 trillion pounds by 2050. As such the net cost of net zero may be more like 344 billion pounds over three decades, or perhaps only 0.
. By comparison, it expected the pandemic to increase the same measure by 23% of GDP between 2020 and 2022., with certain forecasters taking a more pessimistic view on how fast the cost of key pieces of kit like batteries will fall. Political ructions and the balkanisation of global trade could cause the cost of critical raw materials from states like China to jump.
An alternative argument is to take aim at the implicit assumption underpinning the Conservatives’ net-zero “pragmatism” – that things can carry on the same if Britain decarbonises more slowly. True, the price of natural gas, which provides 40% of the UK’s domestic energy consumption, has fallen back from epic 2022 peaks. But the OBR stillscope for fossil fuel price shocks in future, and views wind and solar power as tangibly cheaper.
The cost of delay could be even higher, however. If the UK drags its feet on net zero, it could then be forced by rising temperatures to slam on the brakes after 2030 by implementing a carbon tax price high enough to compel rapid decarbonisation.
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