Why Boris Johnson’s Net Zero green rush risks economic catastrophe – Nigel Lawson
Net Zero – the idea that we should eliminate carbon dioxide emissions from our economy entirely – has the potential to bring about economic disaster.
Carrying on in this direction in the aftermath of the pandemic would be foolish in the extreme.
Recently, the press latched onto reports that it is going to cost most households as much as £20,000 to replace their gas boilers with electric heat pumps.
This seems to have made many Conservative MPs very nervous about the Net Zero policy, which they nodded through Parliament back in 2019.
It has also been reported that Conservative backbench MPs are in the process of forming a Parliamentary group to bring the Government’s plans some much needed scrutiny.
So the news last week that Boris Johnson has decided to kick the much-trailed ban on gas boilers into the long grass is a welcome development and an important reversal.
He would be wise to reconsider other expensive Net Zero plans too. Although the Government says that decarbonising the economy could cost £50,000 per household, that figure is probably not even half of the true bill to be paid.
Analysis by the Global Warming Policy Foundation (GWPF), the think-tank I founded in 2009, shows that you would probably need close to £50,000 per household just to decarbonise UK homes, once you had taken into account the increased electricity bills, the upgrades to the electricity grid and insulation works.
The other sectors of the economy – commercial and public property, transport, industry, commerce and agriculture – would each need UK householders to cough up tens of thousands of pounds more, either through direct payments, taxation or higher prices in the shops.
If Boris really is going to take a step back from this extraordinary plan, we should breathe a sigh of relief. A bill running to over £100,000 per household is simply unaffordable and politically suicidal.
How did the Government get it so wrong on the costs?
Its advice came initially from the Committee on Climate Change (CCC), but the controversy over the cost of heat pumps shows that their figures seem to lack any basis in reality.
Worryingly, it looks very much as if their estimates for decarbonising other parts of the economy are just as bad.
They appear to use electricity cost figures prepared by the Department of Business, Enterprise and Industrial Strategy (BEIS), but these also appear to bear little resemblance to the real world.
For example, they assume that the cost of building an offshore wind farm is around half of what wind farms’ financial accounts say it is.
As Steve Baker MP has pointed out, there is a desperate need for Ministers to find more balanced sources of expertise: people who will challenge the official advice, whether from civil servants or bodies like the CCC.
Good policymaking needs people who will shake the policy tree, and guide the Government towards practical and realistic policies, which the man in the street can afford and will support.
Until this is done, the Government will continue to be pushed around by their advisers, and will continue to inflict painful – and ultimately futile – policies on the general public.
And in the realms of Net Zero policy, each time they do so, they will ultimately be forced to reverse course once the real costs hit home and public anger results.
It doesn’t have to be this way.
There are a variety of policies that could please both those, like Boris and his wife, who are concerned about climate change, and those, like me, who are not.
As we at GWPF have pointed out, if the Government were to accelerate the small modular nuclear programme, we could have similar levels of decarbonisation to what has been achieved with renewables, but at a fraction of the cost and without the looming threats of blackouts and rationing.
Better still, so-called Allam-cycle turbines, of the kind planned for Teesside, might deliver carbon-free electricity at competitive prices.
Wouldn’t it be better to wait for these cost-effective alternatives to break through rather than blindly building wind farms, which we know can’t do the job?
There is a better future, but delivering it needs Ministers to receive sound and balanced advice, and a pause in the blind rush into an economic and political Net Zero fiasco.
Lord Lawson of Blaby was Chancellor of the Exchequer from 1983-89. He is a Tory peer.
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