The CCC said this would cost 1%-2% of gross domestic product each year, or about 50 billion pounds ($64 billion) annually. But new estimates by the government's Department for Business, Energy and Industrial Strategy (BEIS) pointed to costs at the higher end of this range, finance minister Philip Hammond wrote to Prime Minister Theresa May.
"The Committee on Climate Change estimate that reaching net zero emissions by 2050 will cost c. 50 billion pounds per annum by 2050. BEIS's own analysis find the costs to be 40% higher, at around 70 billion pounds per annum," Hammond wrote in the letter, a copy of which the Financial Times published online. Either way, the total cost would comfortably exceed 1 trillion pounds, Hammond said in the letter.
"While these costs are extremely significant in their own right, they fail to describe the impacts on different sectors of the economy, as well as the profound implications for households, businesses and the Exchequer," Hammond wrote. Key industries such as steel risked becoming economically uncompetitive or in need of permanent public subsidies, he added, while millions of households would face the disruption and expense of replacing natural gas-powered boilers.
Britain's finance ministry declined to comment on the leaked document, and a spokeswoman for May also declined to comment directly on the estimates in the letter. Many estimates did not factor in the cost of not acting on climate change, and costs were for the economy as a whole, not just for the government, she told reporters.
"It's not really right to frame it as a trade-off for public spending," she said. Britain's government is in the process of deciding whether to adopt the CCC's recommendations, potentially before May steps down as Prime Minster after the Conservative Party selects a new leader. (Additional reporting by William James; editing by Stephen Addison)
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