Reaching net zero: what will it cost the UK and is it a price worth paying?

"In the first analysis of its kind, the National Energy System Operator (Neso) set out the cost of meeting a range of scenarios that tally with the government's green agenda. The UK already spends about 10% of its GDP on investments related to net zero, and Neso expects those costs will climb over the coming years and remain higher than they are today until the 2030s."

"Carbon costs refer to any tax which puts a price on polluting to help disincentivise producing greenhouse gas emissions, and are used help cover the damaging impacts of fossil fuels on the economy. Reform UK has proposed scrapping carbon costs, a move which critics have warned would undermine investment in the UK's green economy and put the UK at odds with its trade partners in developed economies."

"In its most ambitious green scenario, costs peak at around 460bn by 2029 before beginning to decline to about 5% of GDP by 2050 or roughly 220bn a year. In the falling behind scenario, which models a future of slow climate action in which Britain misses its net zero target and ignores the cost of climate damage, the total costs are about 350bn lower."

The National Energy System Operator (Neso) modeled costs across scenarios aligned with the government's green agenda. The UK currently spends about 10% of GDP on net-zero-related investments and those costs are projected to rise through the 2030s. In the most ambitious scenario costs peak near 460bn by 2029, then fall to roughly 5% of GDP or 220bn annually by 2050. A slower-action 'falling behind' scenario reduces cumulative costs by about 350bn but delays benefits. Carbon pricing taxes internalize fossil-fuel damages. Accounting for carbon costs makes the greenest scenario cheapest over 25 years, saving about 36bn annually despite short-term cost rises.

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