Leading economists have warned the Lords Economic Affairs Committee that the UK’s transition to net zero will be more expensive than the public believe.
Peterson Institute for International Economics senior fellow Olivier Blanchard said the net zero transition is “necessary” but “much more expensive than people imagine”, the Telegraph reported.
“The public does not believe, or has not been made to understand, that it is going to be costly for them. It is going to be costly and that message has to be sent out.
“I think realistically we have to accept the fact that for a while it will have to be financed by debt, namely the primary deficit will have to be a bit larger as a result.
“I suspect that for the next few years, probably 0.5% more is the absolute minimum needed.”
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Oxford University economics professor Sir Dieter Helm told the Lords committee it was “delusory to think” the net zero transition would pay for itself.
Helm added it was “intergenerationally wrong” to “make the next generation pay by giving them the debt to replace the polluting system that we have run and polluted their environment [with]”.
“The customers and the taxpayers are going to have to fund, in one way or another, costs greater than they assumed to be the case and they’re assumed by the OBR (Office for Budget Responsibility) and by others because they get the costs of new technologies wrong and the direction of that error is very large.”
