A stark new analysis has warned that the total cost of the UK's transition to a net zero economy could be vastly higher than officially stated, potentially exceeding £6 trillion.
Official Estimates Versus 'Fantasy' Figures
The report, published by the free-market think tank the Institute of Economic Affairs (IEA), directly challenges the cost projections made by the government's independent adviser, the Climate Change Committee (CCC). The CCC has estimated a cumulative cost of around £108bn, or roughly £4bn per year, up to 2050.
However, energy analyst David Turner, author of the IEA paper, suggests the true cash costs could reach a staggering £7.6 trillion. He accuses public bodies, including the CCC, the Treasury, and the Office for Budget Responsibility (OBR), of not being "truthful" about the scale of investment required.
"If we are to have a serious debate about net zero, the various public bodies need to be more transparent and, frankly, more honest," Turner stated. "They have made fantasy assumptions about the cost of renewables and low-carbon technologies."
Questioning the Calculations
The IEA's analysis is based on data from the National Energy System Operator (NESO) and independent research. It argues the CCC presented its figures by "moving the goalposts," using different cost metrics and relying on "unrealistic assumptions."
The paper claims that projected expenditures for key technologies like offshore wind and electric vehicles, as well as assumptions about borrowing at below-market rates, are overly optimistic. It cites specific examples, including higher actual costs for solar power plants in Stokeford and Alfreton and for wind farms than were estimated by the CCC and NESO.
Lord Frost, IEA Director General, said: "Net Zero is already one of the most economically damaging policies in modern British history. We can now see it was sold to the public on the basis of fantasy numbers."
Political and Industrial Backlash
The report has ignited criticism from political and business figures. Conservative shadow energy secretary Claire Coutinho accused public bodies of "wildly optimistic assumptions" and "crippling groupthink," which she claimed has led to "the highest electricity prices in the world and our industry fleeing overseas."
Industrialist Sir Jim Ratcliffe, chairman of INEOS, commented: "Decarbonising Europe by deindustrialisation is idiotic. We lose jobs and security, and the CO2 simply floats back over Europe anyway." He advocated for a US-style approach of competitive energy and incentivising clean technology growth.
The CCC has previously argued that its figures account for operational savings that offset capital investments and that the private sector can provide most of the funding with the right incentives. It also warns that the costs of not acting on climate change could be higher.
The Department for Energy Security and Net Zero, the Treasury, and the OBR were approached for comment on the IEA's findings.
