In the email, The Treasury said: “The CCC estimate that meeting net zero will cost £50bn annually in 2050. BEIS [The Department for Business, Energy and Industrial Strategy] estimates put the figure at £70bn per annum. We consider the BEIS figure to be more realistic.”
The “more realistic” BEIS figure is the one that the government fought to withhold from publication, before a ruling by the Information Commissioner last month.
They also described Number 10 and BEIS as having “distanced themselves from the £1 trillion figure” and said they have been “following public lines” including “The Committee on Climate Change say this will cost £50bn annually in 2050.”
Speaking on Monday, the Prime Minister insisted his Net Zero agenda would not result in any new carbon taxes for consumers. He told The Sun he was planning “an agenda for an economic bounce back…”
The existence of internal government estimates of the cost of Net Zero had first been acknowledged in a leaked letter that appeared in the Financial Times in June 2019.
We now know that BEIS modelling estimated that the cost of Net Zero would amount to £1,275bn by 2050. The annual cost was modelled to rise from £15bn a year at present, to approximately £70bn in 2050. This is illustrated by a Treasury graph showing an increasing divergence with the CCC calculations.
The revelations have prompted calls for greater transparency.
Victoria Hewson, Head of Regulatory Affairs at the Institute of Economic Affairs, said:
“To scrutinise new environmental regulations properly, Parliament and the public need access to all the relevant information. It is disappointing that the Government chose to withhold this crucial cost assessment for so long, and that the Treasury’s view seems to have been based on such vague projections. Transparency and rigorous cost benefit analysis is in everyone’s interest, both to minimise costs and to ensure the best policy alternatives are chosen.”
In December, the Institute for Government published a report arguing: “The government must shake up the way it collects evidence to inform net zero policies and consult a broader range of stakeholders if it wants to avoid costly policy failures.”
The civil servants’ estimate contradicts the government’s official advisors on climate change, the Committee on Climate Change (CCC). The CCC is led by Lord Deben, who has admitted receiving hundreds of thousands of pounds from ‘green’ companies. It had put forward a lower estimate of £50bn a year by 2050, but the Treasury said the BEIS figures were ‘more realistic’.
Andrew Montford, Deputy Director of the GWPF, said:
“After almost two years contesting my Freedom of Information request, I am glad that the Treasury has finally agreed to release this information. It shows that despite being aware of a more credible higher estimate for the cost of Net Zero, government ministers and officials chose to conceal vital information. We now need to see the methodology behind these estimates, so that Parliament can properly scrutinise the cost of decarbonisation policies.”