THE £1trillion figure is propaganda, not analysis; you can pluck any number you want.’ So said Adair Turner, the former head of the Committee on Climate Change (CCC), according to the Telegraph on Wednesday.
Turner was lambasting Whitehall estimates of the cost of taking the country to net zero carbon emissions by 2050. It’s unclear whether there is any meaningful analysis behind the £1trillion (£1million million, or £1,000,000,000,000) figure, which was put together by the Department for Business, Energy and Industrial Strategy. Turner may therefore be correct. But the CCC’s own figure (1 to 2 per cent of GDP in 2050) is just as dubious. Despite having published a raft of papers to support its contention that net zero was a plausible goal, none of these, including the one on the ‘costs and benefits of net zero’, had anything like a breakdown of costs or of benefits. Lord Deben seems to have plucked the 1 to 2 per cent figure, fully formed, from the air, in just the same way Turner had slammed the Treasury for doing.
The question of the costs involved in the net zero project is impenetrable to say the least. The CCC is not advancing a plan for achieving this goal so much as making a sales pitch. So you will look in vain for a definitive picture of how it thinks energy should be provided in 2050, say, or what we might need to spend to get it. There is an example of how the energy system might be constituted, though, and from this you can estimate that we might have to spend a quarter of a trillion pounds on wind turbines. However the CCC has made some astonishingly optimistic assumptions about how much electricity each one of these will provide, so the cost will almost certainly be much higher. Similar figures emerge elsewhere in the CCC’s papers; its own figure for decarbonising housing is close to half a trillion pounds. Refuelling equipment for electric or fuel-cell powered vehicles will be another 0.1 trillion.
I could go on, but you will have grasped my point by now. These sorts of numbers, coming out from just a small fraction of the actions the CCC is demanding, suggest that the Treasury’s £1trillion is not only plausible for the outlays required for reaching net zero emissions, it’s almost certainly a gross underestimate.
As for the alleged benefits, these are even harder to pin down. This is because the authors take the view that many of the technologies involved haven’t been invented yet. However, they assume that the costs involved will fall precipitously in future, so our trillion or more pounds of spending on whatever it is we decide to spend it on will actually save people money in the long run. Magic! But it also looks very much as if the CCC assumes that benefits received far in the future will have a value commensurate with one received today. If this is the case, then the report is – not to put too fine a point on it – a scam.
This is no way to run a whelk stall, let alone a large economy. Yet despite this, our political establishment is quite united on the idea that ‘net zero’ is the way forward. It’s hard to imagine a more complete dereliction of political duty than a decision to attempt a megalomaniac project like this without even considering the costs and benefits. Yet that is what the Conservative and Labour parties seem to agree we should do.