Sam Hall, Director of the Conservative Environment Network, argues YES
The government’s new climate target for 2035 doesn’t just fulfil our responsibility to be good stewards of our environment for future generations, but will benefit our economy and strengthen our post-Covid recovery.
On the economic counterfactual, the evidence is clear: the cost of climate action is significantly lower than the cost of inaction. One recent study estimated that, if the world continued on its current trajectory, global GDP would be hit by at least 10 per cent by the end of the century. By contrast, the Climate Change Committee estimates that the cost of our net zero target will be around 1 per cent of GDP.
Meeting the new 2035 target will require new investment. But two key points often get lost in the debate about costs. The first is that, although the Treasury will need to find extra cash to accelerate the commercialisation of new technologies and to fund enabling infrastructure, the bulk of decarbonisation will be financed by the private sector.
Second, there are many clean technologies – whether it’s offshore wind or electric vehicles – which are already cheaper than fossil fuel equivalents across their lifespan. Others – like heat pumps and green hydrogen – will come down the cost curve rapidly as the industries scale up, innovators find cheaper ways to do things, and capital is derisked.
Of course the UK can’t stabilise the climate alone. But time and again the UK strategy of climate leadership has been vindicated. In 2019, we set a net zero target, and the following year China, Japan, and South Korea all set net zero targets. After we ended new public financing for overseas fossil fuel projects, six European countries followed suit.
By going first, we inspire others to increase their ambition and, in the process, we get a head-start on developing and commercialising some of the key clean technologies, creating jobs, export opportunities, and prosperity for UK businesses.
Bruno Prior, renewable energy expert and trustee of the Institute of Economic Affairs, argues NO
To be precise, we don’t know. Innovations may make it feasible. But rationing carbon by quantity rather than price takes those innovations for granted. There are no circumstances in which quantity rationing delivers a more efficient result. If innovation delivers, you’d get the big savings either way, and possibly more with price rationing because it’s not limited to a target. If innovation disappoints, price rationing avoids expenditure whose cost is not justified by the social cost of carbon.
The target reduces the likelihood of successful innovation because it forces the government, with all the false reluctance of the Speaker being dragged to the chamber, to pick winners.
If it happens to pick the right winners, the market would have done the same, because the right winners are the most competitive. But if the government picks the wrong winners, there is no route for better solutions to thrive. The incentives and expertise of entrepreneurs versus politicians and civil servants hardly favour the latter.
In my opinion, the government’s winners are not credible. I might be wrong. After 30 years in renewable energy, I don’t know all the answers, but I do know that those who claim they do have not understood the problem. If I’m wrong about that, and governments really can plan the best solutions better than markets can discover them, the logical conclusion is oligarchy. Unless you think that’s a good outcome, the 2035 emissions target is bad policy.