Britain’s transition to net zero will cost the economy in excess of £125billion over the remainder of this decade, according to the Government’s official climate advisers.
The Climate Change Committee published a report on Wednesday revealing that annual expenditure on the green energy shift would climb from approximately £15billion in 2025 to more than £30billion by 2029.
These figures include spending across Government, households and businesses, even after taking into account benefits such as cleaner air, improved energy efficiency and lower fuel costs.
The committee’s analysis suggests the financial benefits of decarbonisation are unlikely to appear until around 2040, prompting renewed scrutiny of Ed Miliband’s target to deliver 95 per cent clean electricity by 2030.
Claire Coutinho, the shadow energy secretary, condemned the Government’s approach, stating: “It’s a slap in the face for families still struggling with the cost of living that Ed Miliband is asking them to spend tens of billions of pounds rushing towards net zero targets that are just going to make life harder for people.”
She called for scrapping net zero altogether, instead backing greater North Sea oil and gas production and increased investment in nuclear power to help reduce electricity prices.
Reform leader Nigel Farage said on Tuesday that his party would introduce a 5p cut to energy levies, funded through £12bn in reductions to green spending.
Conservative leader Kemi Badenoch has previously argued that net zero policies are “bankrupting” the country and has pledged to scrap climate legislation that mandates emissions targets.
Ed Miliband is the Secretary of State for Energy Security and Net Zero
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The CCC defended its findings, maintaining that over the longer period from 2025 to 2050, net zero costs would average just £4billion annually, representing roughly 0.2 per cent of GDP.
The watchdog insisted that “in all scenarios, achieving net zero was found to be a more cost-effective path for the UK economy than continued reliance on fossil fuels”.
Nigel Topping, the committee’s chair, acknowledged public concern about transition costs but stressed the importance of accurate information in policy debates.
He added: “In light of current world events, it’s more important than ever for the UK to move away from being reliant on volatile foreign fossil fuels, to clean, domestic, less wasteful energy.”
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There will be no financial returns until around 2040
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PAThe CCC suggested that a single fossil fuel price shock, such as the current Iran crisis, could potentially cost as much as the entire net zero transition.
Business groups offered a mixed response to the report’s findings.
Tania Kumar of the Confederation of British Industry said the war in Iran “has shown that the UK remains vulnerable to fossil fuel price shocks” and described net zero as “one of the most significant growth opportunities for the UK”.
The impact of current geopolitical tensions on consumer bills remains uncertain
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GETTYHowever, she emphasised the urgent need for a comprehensive national strategy to address elevated business energy costs.
Dhara Vyas, chief executive of Energy UK, cautioned that the impact of current geopolitical tensions on consumer bills remained uncertain, expressing hope that Britain would avoid repeating the dramatic price increases seen following Russia’s invasion of Ukraine.
She noted that the Government had previously spent more than £40billion supporting households and businesses during that crisis, arguing that delivering on the energy transition was essential to prevent similar interventions.
