Zero Sum Game: UK’s Economy Wrecking Zero CO2 Emissions Target Would Cost Brits £1.5 Trillion

If the UK’s suicidal renewable energy policy weren’t enough, British climate boffins are pushing for a zero carbon dioxide gas emissions target. There’s something comical about watching virtue signallers trying to outdo each other. For the true zealot, emissions targets are always too soft, and anything short of a 100% renewable energy target, is not good enough.

To hell with economic growth, jobs and prosperity. When you’re keen to drive your countrymen into poverty, why not go all the way?

As Andrew Montford points out below, Britain’s Climate Change Committee is dedicated to doing just that.

The economic case for net zero carbon emissions is hokum
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Andrew Montford
24 June 2019

Last month, the Committee on Climate Change issued itsreport on how the UK could reduce its carbon dioxide emissions to “net zero”. Since its recommendations are for a complete upending of the economy and our way of life, it is, not to put too fine a point on it, a document of historic importance.

You might, then, have hoped for some careful consideration of the report’s contents, but alas that is not the way of the political class. This week, Parliament will be asked to pass the statutory instrument to embed a net zero target in law and will probably do so on the nod.

The public debate, such as it has been, over the last few weeks has been almost entirely superficial. In particular, nobody seems to have worked out that the CCC has pulled the wool over everyone’s eyes about the scale of what is planned. They did this through a carefully worded headline message, which said that net zero could be achieved at a modest cost of 1–2% of GDP in 2050.

This claim seems to have caused some consternation at the Treasury, who issued their own claim that the cost was going to be £1 trillion or more. The result was a public lambasting, with Ambrose Evans-Pritchard in the Telegraph saying the claims were “innumerate nonsense”. He alleged that the Chancellor had conflated spending with investment.

In order to get to the truth, this all needs very careful unpacking. First let’s look at the claim that the cost is 1-2% of GDP in 2050. If you dig and dig and dig through the CCC’s reports and the supporting information on its website, you end up at an obscure spreadsheet from which it is possible to work out that the 1–2% figure represents a sum of £50.8 billion, set against £3.9 trillion GDP. But this is the annual figure, not the total to 2050. Over 30 years, it will add up to £1.5 trillion. So we can see that the Treasury’s figure is indeed innumerate nonsense, but as a result of having understated the number and not, as Ambrose Evans-Pritchard suggested, because they had overstated it.

Moreover, Evans-Pritchard’s claim that spending has been conflated with investment is not true. The returns are included. The CCC explains in its report that when it refers to “cost”, it is talking about something called “resource costs”, which it explains are:

…estimated by adding up costs and cost savings from carbon abatement measures, and comparing them to costs in an alternative scenario (generally of a hypothetical world with no climate action or climate damages).

The quote repays careful reading. The CCC says that the resource cost of getting to net zero is 1–2% of GDP. But they aren’t using the word “cost” – in the way normal people do – to mean “how much you have to spend”. They are talking about the extra spending over business as usual, and net of any savings generated along the way as well. The “impact” might be a better word. There are hints elsewhere in the report that the gap is narrowed by adding a value for climate damages to the business as usual case, completely ignoring that the most likely scenario is that most of the rest of the world fails to follow suit – in other words the climate damages value should appear on both sides of the equation. I have been unable to ascertain what value the committee has used though, so whether it is reasonable is anyone’s guess. But what seems clear is that we are being told that we are going to be considerably more than £1.5 trillion worse off than if we did nothing at all. This is a rather extraordinary argument for a policy proposal.

How much actually needs to be spent is not a subject that the CCC addresses, but it’s clear that it is a mind-bogglingly large sum. To give just one example, Professor Michael Kelly, a former chief scientist at the Department of Communities and Local Government, has reported the results of a government project to retrofit insulation to houses. The spending, of £150,000 per home, reduced energy bills by more than half. But this means that, even if the cost could be halved in future, retrofitting all of the UK’s 29 million homes would still cost £2 trillion, money that would have to come out of the pocket of homeowners or taxpayers.

Normally in a cost-benefit analysis, you discount future benefits somewhat to recognise the fact that a pound in the pocket today is worth more than one arriving ten years in the future. However, it’s  clear from the CCC’s quote that they don’t do this, which is probably just as well, since applying even a modest 2% discount rate to Professor Kelly’s figures would mean that the payback period becomes absurdly long. Telling voters that they are going to have to spend £75,000 on an “investment” that will never pay for itself is going to be a hard sell at the ballot box.

And as you trawl through the rest of the CCC’s report, you see again and again that the gap between what is the net zero case and business as usual has been narrowed by means of wildly optimistic assumptions about the future. In essence, the whole of the CCC’s case for net zero can be summarised as “everything we believe in will become cheaper; everything else will not”.

Take offshore wind power for example, which the CCC has suggested might be at the centre of our future electricity supply. The International Renewable Energy Agency recently reported that cost declines in offshore wind have stalled, having barely reduced at all in the last three years. It expects little change in the foreseeable future either. Yet the CCC is basing its projections on costs falling by half in the next two years and by another quarter by 2050. Meanwhile, by also assuming that the cost of gas-fired generation becomes more expensive between now and 2050 (they don’t explain why – it’s their own analysis apparently), and by ignoring the costs of fixing the intermittency of the renewables, they are able to reach the conclusion that spending money on offshore wind power will save us money.

In places, the plan verges on dangerous fantasy. Bioenergy with carbon capture and storage (BECCS) is touted as a way to generate electricity on demand so as to deal with the intermittency of renewables. The CCC freely admits the problem with this idea, namely that “relying entirely on BECCS could require very large amounts of land and may create conflicts with food production and biodiversity.” So in their example generation scenario, only 41 TWh of electricity generation, 6% of the total, comes from this source. Unfortunately, the land requirement for bioenergy is in the range of 1-2000 kmper TWH, so we are looking at something like 80,000 kmfor the Climate Change Committee’s plan. That’s roughly a third of the UK’s land area. The idea would be comical were it not so dangerous – recall the drive for biofuels ten years ago, which resulted in hunger across Africa in a disaster that the United Nations described as “a crime against humanity”.

The CCC’s plan to get us to net zero is in essence a dodgy sales pitch rather than a serious attempt at policy development. It uses a series of tricks and deceptions that if tried by someone promoting shares in the City of London would see them unceremoniously flung in jail. As this analysis makes clear, if the plan is put in place, the best-case scenario is that we end up worse off by £1.5 trillion, or £50,000 per household, than if we did nothing. Given the disastrous record of government in delivering projects a fraction of the size, the reality could be still worse.

Yet the remarkable fact is that as it sits to consider the statutory instrument this week, Parliament is being asked to believe that the plan will have “no significant impact on businesses” and no impact on local government. Extraordinarily they asked to consider the legislation without an impact assessment. This, parliamentarians are told, is unnecessary.

In an era when politicians are increasingly viewed with contempt, a decision to embark on such a madcap scheme without even considering the costs or benefits will surely be seen as wholesale dereliction of duty, the ultimate virtue-signalling insult to the electorate. Supporters of the scheme can surely no longer claim to be a serious party of government.
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About stopthesethings

We are a group of citizens concerned about the rapid spread of industrial wind power generation installations across Australia.

Comments

  1. Serge Wright says:

    When it comes to energy, climate zealots live in a world of inverse economics. The normal logical view is that you want the cheapest source of energy and as few people as possible involved in producing that energy, to make sure your productive human capacity is maximised to produce goods and services from the cheap energy.

    The illogical green zealots picture a utopian world where everyone is employed in the production of unaffordably expensive green energy that leaves no spare human capacity to actual use that energy for productive capacity, even if it were affordable.

    When watching peole such as AOC promote this utopian deam, the term negative IQ springs to mind. Nothing else can explain this zombie paradox.

  2. Charles wardrop says:

    ACC,s J.Selwyn Gummer (Ld Deben) is not trustworthy, we know, from his corrupt siphoning of funds to personal businesses, but now his committee’s advice amounts to treason for murder of enterprise in the UK.
    Why do so few of our politicos oppose him, ignorance and/or groupthink?
    We desperately need a saviour from the madness that is climate alarmism.

  3. It is incredible that this Zero Target was nodded through a brain dead UK Parliament in 90 minutes with a large majority without reference to any assessment of costs or consequences.

    Tharl’l be trooble a’ mill methinks.

  4. Peter Pronczak says:

    The royals started the climate change/overpopulation push so why don’t they put money in for it?

    Start with all the inheritance from intestate deaths not going to Duchies but into public funds instead. Then the Queen could set a precedent by closing all her tax havens and donating some profits from all their companies.
    Or the lowly taxpayer $4.3M for Frogmore Cottage (a quaint olde worlde cottage?) renovation could have been cut back a bit. According to Reuters an extra 25% came from surplus revenue from the Crown Estate – what else could be done with a surplus? But at least it was less than the apartment reno at Kensington Palace only about $5.72 million. How much for a unit, flat or bungalow reno? One person’s trash is another’s treasure so it’s all relative, and so many of them.

    Being so loved they could cut down on some security as well, plus travel that adds to CO2; video conferencing is cheaper.
    There’s plenty of room on Buckingham Palace for BP Solar panels as well.

    With sea level rise, is it really a good idea to put more water displacing wind farms in the ocean? Hope it doesn’t seem cynical but it’s basic hydrodynamics, actually.

  5. Son of a goat says:

    The Rent Seekers and Zealots Handbook
    Tip No. 101
    When seeking donations via a social media tweet from the faithful in the fight for a renewable powered utopia, don’t follow it up with a tweet with a picture of yourself holidaying on the shores of Lake Como in Italy.

    Truly the enlightened are hard wired differently to your average citizen.

  6. Reblogged this on ajmarciniak.

  7. Reblogged this on Climate- Science.

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