Net Zero Costs Less Than One Fossil Fuel Shock, UK’s CCC Says
(Bloomberg) -- The cost of meeting net zero is less than a single fossil fuel price shock, the UK’s official climate adviser said.
About £4 billion ($5.4 billion) of additional spending per year to 2050 is required to stay on track for net zero, according to a report published Wednesday by the Climate Change Committee. That compares with the overall cost of a gas price spike similar to 2022 when wholesale prices surged after Russia’s invasion of Ukraine.
The CCC modeled a 2022-equivalent fossil fuel price spike occurring once in the period to 2040, and found that the average household energy bill increased by 59% if fossil fuel use was maintained, but by only 4% if progress to decarbonize is made, according to the report.
The CCC report cites an estimate by the Office for Budget Responsibility that the cost of energy bill support in 2022-23 following the fossil fuel price spike was £41.7 billion. The total impact of higher energy prices was £183 billion over four years, according to an estimate by the Energy & Climate Intelligence Unit.
UK gas prices have risen more than 50% since the conflict in the Middle East began, reignited a debate over Britain’s approach to energy security. So far the government is sticking to its strategy of expanding renewable power generation and a ban on new exploration drilling in the aging North Sea basin.
That approach is coming under fire from opposition leader of Reform UK, Nigel Farage, who wants to expand domestic oil and gas production as a way to lower bills.
“Producing our own gas would reduce everybody’s electricity bills significantly,” Farage said on Tuesday. “What is within our control is to produce the oil and gas that we need in this country, not to be reliant upon it coming in from the rest of the world.”
The CCC was established by Parliament in 2008 to act as an independent body to advise the government and present reports on the country’s progress in cutting greenhouse gas emissions.
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