The UK’s climate targets will cost the government less over the next 30 years than the price of battling the Covid-19 pandemic if it acts quickly, according to the UK’s fiscal watchdog. Forecasts from the Office for Budget Responsibility (OBR) show that ending the UK’s contribution to the global climate crisis would add 21% of GDP to the national debt by 2050, or £469bn in today’s terms. But those costs could climb twice as high if the government delays action to cut emissions. The independent spending forecasts found that taking early action to decarbonise the economy would have a smaller net impact on the UK’s finances than Covid or the 2008 financial crisis. But the spending watchdog said that delaying climate action until the start of the next decade, which is considered crucial in averting dangerous levels of global heating, would end up adding twice as much to the national debt as acting fast. Failing to take action could have a catastrophic impact on the public finances, the OBR warned.
Guardian 6th July 2021 read more »
The transition to net zero will cause the public debt to rise by 20 per cent but the damage will be less severe than that inflicted by the pandemic, according to the Office for Budget Responsibility. The watchdog said that the changes would add £469 billion, or 21 per cent of GDP, to the debt in the next 30 years. This is slightly less than the £520 billion associated with the pandemic in just two years. Lost fuel duty will have the biggest impact on the government’s fiscal position as petrol and diesel vehicles are phased out. Investment in zero carbon technologies will also add to the costs and this will be only partly offset by higher carbon tax revenues. The OBR said that additional carbon tax revenues would raise 1.8 per cent of GDP in 2026-27 but that revenues would decline steadily to 0.5 per cent of GDP in 2050-51 “as falling emissions more than outweigh the effect of the rising tax rate”.
Times 7th July 2021 read more »
THE UK faces three large and “potentially catastrophic” risks from the pandemic, climate change and a ballooning debt mountain, the UK’s fiscal watchdog has warned. The Office for Budget Responsibility (OBR) said the UK faces the triple threats as it emerges from the “largest peacetime economic and fiscal shock in three centuries”. In its latest fiscal risks report, it cautioned that delayed action on climate change could lead to a marked hit to Britain’s economy and impact the mammoth public debt levels, currently at more than £2 trillion.
The National 6th July 2021 read more »
Britain is off course in its efforts to meet its target of net zero emissions by 2050 because the Government’s plans to tackle climate change are not aligned with the economic recovery from the pandemic, a report warns today. The audit by the Institute for Government (IfG) says that with just four months to go until Boris Johnson hosts the COP26 climate change conference in Glasgow, the UK is wasting “a vital opportunity to show leadership in combining the Covid recovery with efforts to tackle climate change”. Assessing Britain’s progress so far on reaching net zero in three decades’ time, the IfG claims that the nation’s green recovery package has been “less ambitious” than other major economies in policy areas such as housing, electric vehicles and research and development.
iNews 7th July 2021 read more »
We look at the UK Treasury’s reluctance to finance bolder action on climate change despite Johnson’s grandiose pledges of a “green revolution”. A recent editorial in The Times warned that Rishi Sunak is “balking at the likely cost of the green transition”. He’s also attempting to placate the climate sceptics in his party whose reaction to the Chancellor’s Covid measures has frightened the horses in terms of a repeat on cost and spend when it comes to vital decarbonisation measures and building back better. The independent body which advises the UK Government on emissions targets, the Climate Change Committee (CCC), is well aware of this reticence on the part of, not just the Treasury, but also across governmental departments to act together on climate change. To be brutally blunt, “balking” at “cost” now will not save us from irreversible climate change and threats to human existence. The bare financial facts of a continued head-in-the-sand attitude to climate action should be a wake-up call to people who think that net zero will be too expensive or doesn’t need an over-arching, ambitious financial thrust.
The National 7th July 2021 read more »