Craig Mackinlay MP is the MP for South Thanet.
The Public Accounts Committee, on which I sit, has today published a new report on Achieving Net Zero. This was a chance to take a serious look at the potential costs of Net Zero, both to the Exchequer and to individuals.
While it acknowledged that “many of the technologies the strategy relies on are currently very expensive”, it failed to establish what reasonable limits on the cost of Net Zero would be or suggest any mechanism for keeping costs under control.
To be fair to the Committee, it relies upon evidence from departmental luminaries; the Government’s various papers are long on words but light on detail. Rubbish in usually generates rubbish out.
The report is, in my view, an opportunity lost and amounts to yet another call to go further and faster without giving consideration to the enormous damage that Net Zero could do, or its geopolitical implications.
We can’t go on like this. The shocking events in Ukraine have surely demonstrated unequivocally the importance of energy security, and the broader global context in which our energy policy sits. The fact that the West has paid for, and continues to fund, Putin’s war machine should be a source of shame.
Now must be the time to review our Net Zero policies in light of the incontrovertible need for secure and affordable energy supplies. We’d hardly be alone in this reconsideration, with Green Party ministers in the German government proposing exactly that.
There is a worrying temptation for politicians, quite evident in this document, to demand an illusory certainty that Net Zero targets will be met. This flows from the legally binding nature of our Net Zero objectives, which invites the demand to know in detail how every tonne of carbon dioxide will be removed.
This mindset is deeply misguided. Committees and Politicians don’t know which technologies will be most competitive in bringing our emissions down, and by inviting the forced adoption of expensive and immature alternatives we are risking storing up huge and unnecessary costs for consumers and, perversely, slowing the pace of emission reductions.
My primary complaint was that the witnesses we questioned were reluctant to be drawn on what the future costs of achieving Net Zero would be. It’s true that this is a very challenging calculation; transforming an economy from being almost entirely powered by fossil fuels to being powered by zero carbon alternatives within a generation is a complex task.
But can we realistically tell the public that this must be achieved at whatever cost? What we can do is look rigorously at policy proposals that are on the table, and at the prices we are currently paying for energy.
Chief amongst these policies are the planned phase-outs of gas boilers, along with petrol and diesel vehicles. Text-book examples, in my view, of the kind of polices that risk completely undermining the Net Zero agenda. Ultimately, by restricting consumer choice, these bans are certain to leave consumers worse off, and the only real question is by how much? Looking at the current prices of electric vehicles and heat pumps, the working assumption has to be: a great deal.
If Net Zero has to be met by the arbitrary deadline of 2050, which is the current legal position applying to the UK’s one per cent of global emissions, we are being forced to accept any cost in its pursuit. This is inherently irrational, and it’s my view that there must be limits on what we’re prepared to pay for decarbonisation.
The idea of the ‘social cost of carbon’ is instructive here. The costs associated with our emissions must be recognised, but if policy costs exceed this amount, then they should be questioned, and adaptation rather than mitigation might be the more cost-effective strategy for a better outcome.
We also mustn’t be distracted from the bigger picture of energy policy either. Decarbonisation is one element, but by focussing on it to the detriment of other considerations we have created a perfect storm of high energy prices and an unhealthy reliance on energy imports. Efforts to boost our own domestic production of oil and gas could give us greater geopolitical leverage, as well as keep jobs and tax revenue here in the UK.