Climate change: Emissions target could cost UK £1tn, warns Hammond

Climate change: Emissions target could cost UK £1tn, warns Hammond

The chancellor has warned Theresa May that reducing greenhouse gas emissions to net zero by 2050 could cost the UK more than £1tn.

The Financial Times reports that the PM wants to introduce the legislation to Parliament next week as “one of her most important legacies”.

Philip Hammond has written to her, saying it would mean less money for schools, police and hospitals.

The Committee on Climate Change recommended the target in May.

The BBC’s assistant political editor Norman Smith said next week would see the first stage in the process of making this new target law – but any legislation would “have to wait until after Mrs May and after Brexit, so it could still be some time off”.

Labour’s shadow chancellor, John McDonnell, criticised his opposite number, saying: “We are facing a climate emergency and Philip Hammond clearly doesn’t get it.

“The Tory party is way overdue in adopting a target already put forward by Labour, and now the chancellor is creating obstacles to prevent the action we desperately need to take.”

A No 10 spokeswoman said there were “a lot of figures out there on this issue that don’t factor in the benefits or consider the costs of not doing this”.

She added: “The costs relating to meeting this target are whole-of-economy costs, not a fiscal cost, and so it’s not really right to frame it as a trade-off for public spending.”

The CCC, which is the independent adviser to government on climate change, put the cost at £50bn a year.

It said, while the UK would not be able to hit “net zero” emissions any sooner, 2050 was still an extremely significant goal.

According to the letter, seen by the FT, the Department for Business, Energy and Industrial Strategy believes it will cost more, estimating £70bn a year.

Mr Hammond said: “On the basis of these estimates, the total cost of transitioning to a zero-carbon economy is likely to be well in excess of £1tn.”

The chancellor also warned the move could leave some industries “economically uncompetitive” – unless other countries the UK competes with follow suit.

He said it was right for the UK to lead when it came to climate change, but the implications of pursuing the target needed to be “better understood”.

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