Net-zero Emissions Target: Affordability

Lord Turner of Ecchinswell Excerpts

Thursday 3rd April 2025 Lords Chamber

[Lord Turner of Ecchinswell (CB)]

My Lords, I declare my interest recorded in the register, which relates to a battery-manufacturing company. Our debate today asks us to take note of the affordability of getting to net-zero emissions, but of course we know that the background is that the leader of the Conservative Party has asserted that getting there is unaffordable, and indeed impossible without a serious drop in living standards. She has also declared that the UK has foolishly committed to achieve net-zero emissions without any plan in place for how to get there.

Nothing could be further from the truth. There are very clear plans set out in the immensely detailed reports of the Climate Change Committee that have been accepted by Governments, both Labour and Conservative, over the past 17 years. The latest CCC report estimates that the overall cost of getting to net zero could amount to around £4 billion per annum over the next 25 years, which would be about 0.2% of GDP over that period. Let me be absolutely clear: that includes incredibly detailed analysis of the costs of the storage and flexibility assets required to offset the intermittency of wind and solar, which is absolutely technologically possible.

I would note, in response to the comments of the noble Lords, Lord Offord and Lord Howell, that there is a tendency for many people to mention intermittency as if they were the first person to think about it and nobody had looked at it before. In fact, it is an issue on which the CCC was focused right from the point in March 2008 when I became the first chair. It has been analysed in detail by many people and is achievable.

Of course, it is possible to debate any of the numerous specific assumptions that the CCC makes. If you look back at old CCC reports, you will find that they have often been dramatically wrong—and most dramatically wrong when I was chair of the CCC back in 2008. But, crucially, all the big errors that we made reflected overpessimism, not overoptimism, about the costs of key technologies.

In 2008, we estimated that the cost of solar PV panels might fall by 25% between then and now. We thought we were being pretty wild, but the cost has fallen by over 95%. In 2011, we believed that the cost of offshore wind in the early 2020s would still be above £150 per megawatt hour, but it is now well below £100. We assumed that battery pack costs, which in 2010 were about $1,000 per kilowatt hour, might reach $320 by 2020; in fact, they reached $150 by 2020 and are going below $100 today.

All of that explains the point that the noble Lord, Lord Sharma, made: the reasonable estimates of the cost of getting to net zero have relentlessly come down, not gone up. Given these cost reductions, it is reasonable to believe that the costs of achieving net zero will be roughly as the CCC estimates. I do feel that anybody who argues against that should tell us which specific assumptions in the CCC reports they consider overoptimistic—but that is not something I have heard in any one instance from the leader of the Conservative Party, nor, I must say, from the noble Lord, Lord Offord, today.

The CCC’s 0.2% of GDP figure adds together investments in the new clean energy system and subsequent operating cost reductions. It is important to recognise what is clearly set out in figure 4.1 of the latest report: because investment comes before operating cost savings, the net cost is higher in the earlier years—a bit over 1% or so of GDP for a decade, but delivering lower costs for the whole economy and consumers from 2040 onwards. That captures the essence of the UK’s net-zero commitment: a small but not zero investment by today’s generation for the benefit of future generations in the UK and across the world.

In 2019, when the CCC recommended a 100% net-zero target, there was close to unanimous support in both Houses and in all major parties for accepting the need for that small but not zero investment. What has changed since then is not reasonable estimates of the cost. It is not that those cost estimates have increased, but we now have political voices who believe that around 1% of GDP is too much for today’s generation to invest on behalf of future generations. That is quite a legitimate argument to make; people can differ in their view of what this generation owes to future generations. But, if you want to make that argument, it should be made explicitly and openly, rather than on the basis of unfounded assertions that the costs are much higher than those that the CCC has estimated.