Net-zero Emissions Target: Affordability

Earl Russell Excerpts

Thursday 3rd April 2025 Lords Chamber

[Earl Russell (LD)]

My Lords, I thank the noble Lord, Lord Offord, for bringing this timely debate and for the clear explanation of his personal position. I also congratulate the noble Lord, Lord Rees of Easton, on his very interesting maiden speech. Clearly, the Prince’s Trust invested well in him. If he does not mind my saying so, I am sure that all his relatives are proud of the speech he has just given.

The question before us is a loaded one, examining only the cost of the transition while ignoring any savings from net zero or the costs of climate change itself. The UK’s territorial greenhouse gas emissions are now 54% below 1990 levels. They are now at their lowest level since 1872, when Queen Victoria was on the throne. Our GDP has grown by 84% during the same period, and the UK’s green economy grew by 10.3% last year, adding £83 billion in GVA.

The costs of achieving net zero have halved from the sixth to the seventh carbon budgets as renewables prices have continued to fall—points that the right reverend Prelate the Bishop of Southwark and the noble Lord, Lord Sharma, have made. There is more to be done, but we have reasons to have hope. Further progress can be made without the proverbial sky falling in.

I want to thank the Conservative Party—the party of the noble Lord, Lord Cameron, who visited the Arctic, of the noble Baroness, Lady May, and the Climate Change Act, and of the noble Lord, Lord Sharma, and others. It is their work that got us here. Just at the point when the Conservative Party should be taking a standing ovation for all it has done, its leader has decided to wave the white flag of surrender—the white flag with a message saying to our young people, “Sorry we have given up. We offer no solutions; we offer no alternatives; indeed, we offer no hope for the future at all”. I question a political strategy which argues that it is worth saving a few pounds today merely to hasten our own communal demise tomorrow—do spend any savings quickly.

I believe in manmade climate change, and I also believe in manmade solutions to it. I am disappointed that we no longer have an all-party political consensus on climate change, as the noble Baroness, Lady Hayman, and others have said. These matters are hard enough when we have a basic level of agreement, and they are made even more challenging when we do not. The noble Lord, Lord Sharma, made the point that this may be one of the most damaging aspects of all, because it will damage inward private investment and confidence and thus probably cause higher prices.

I state unequivocally that achieving net-zero emissions by 2050 is not only affordable but the most economically sound and responsible path forward. Any deviation from this path will just end up costing people more. I disagree profoundly with the recent statements of the leader of the Conservative Party and her self-professed declaration that this vital target is impossible. The dismissal of our legally binding targets is deeply troubling and flies in the face of a huge body of scientific evidence and economic analysis.

The most expensive course of action we could possibly take is to do nothing. The longer we do nothing, the longer we will continue to pay more. The Office for Budget Responsibility has estimated that unmitigated global warming could lead to UK debt growing up to three times larger than our economic output by the end of the century. It also warns of greater and more frequent economic shocks caused by climate change. A study just published by Australian scientists suggests that average per person GDP across the globe will be reduced by 16% even if warming is kept to 2 degrees Celsius. Today, a top global insurance company has warned that the climate crisis is on track to destroy capitalism. The noble Lord, Lord Sharma, spoke of global insolvency resulting from climate change. To ignore these potential catastrophes in favour of short-sighted scepticism is not fiscally prudent; it is a dereliction of our duty to future generations. The noble Lord, Lord Stern, reminds us that we must keep climate science at the forefront of our minds, particularly in the face of Trump’s denial of it.

The claim that achieving net zero will bankrupt the country is simply not supported by any evidence. Analysis by the London School of Economics has found that, while reaching net zero by 2050 will involve initial costs, it is projected to save money by around 2040. The noble Lord, Lord Freyberg, reminded us that the OBR’s analysis of the Climate Change Committee’s plans also indicates that, from 2040 onwards, net operating savings are projected to outweigh investment costs, with a potential £19 billion annual saving by 2050 relative to baseline scenarios. The OBR has clearly stated that the cost of climate inaction is much larger than the cost of transitioning to net zero.

The continued reliance on importing gas is a significant drain on our economy and a major source of economic instability. The Energy and Climate Intelligence Unit has estimated that the UK spent around £140 billion in total on wholesale gas between the start of 2021 and the end of 2024. The surge in energy costs during the gas crisis is a stark reminder of the vulnerability of our energy system to international fuel markets. The transition to renewable energy offers a pathway to greater energy security and more stable and cheaper energy bills. Suggesting that abandoning our net-zero targets and continuing our dependence on the volatile international markets is a more affordable option is utter madness.

Renewable energy now accounts for just under half, or 45%, of the UK’s power generation. The shift towards a low-carbon energy future is not a pipe dream; it is today’s reality. The noble Lord, Lord Stern, said that this is the growth story of the 20th century and the noble Lord, Lord Freyberg, reminded us that the tech is here today.

The Climate Change Committee’s seventh carbon budget outlines an ambitious yet deliverable pathway to net zero by 2050, based on detailed modelling of cost effectiveness and feasibility of decarbonisation options. While upfront investment is required, significant savings and operation costs from more efficient low-carbon technologies will begin to outweigh these investments during the seventh carbon budget period.

The leader of the Conservative Party has claimed that there have never been any detailed plans. The noble Lord, Lord Turner, is right that nothing could be further from the truth. This assertion is unequivocally contradicted by extensive legislation, including that passed by her own party. The comment is disingenuous and ignores the significant work that has been undertaken by so many to date.

The claim that the target is “impossible” simply does not align with the expert analysis and modelling that has been done. The transition to a net-zero economy also presents significant economic opportunities. Being against green technology is the equivalent of saying at the start of the Industrial Revolution that you do not support steam power. The noble Baroness, Lady Curran, reminded us that the net-zero economy is already growing three times more quickly than other sectors. Adding political uncertainty now will only undermine investor confidence.

The noble Baroness, Lady Jones, also raised the important point of the just transition, and it is important that we leave no one behind as we transition. This means supporting workers in sectors that are in need of transition and investing now in the skills and infrastructure required for the green economy. It also requires policies that address the potential for distributional impacts, ensuring that the costs and benefits of the transition are shared fairly across society.

The noble Baroness, Lady Curran, spoke of the emphasis on affordability, and this is a welcome part of this debate. As I have said before—and I say it again—more must be done now to reduce the costs of energy and to improve our energy efficiency. The noble Lord, Lord Stern, is also right that we must work now to reduce electricity prices. I am pleased that this Government will be considering at least some aspects of electricity market reform. These matters require much greater urgent attention from this Government. We must include people and take them with us on this journey. There must be less “done to” and much more “done with”. The citizens’ panel covering the Climate Change Committee’s seventh carbon budget highlighted the importance of upfront affordability and protecting vulnerable groups during this transition. Policies that penalise those who cannot afford the transition are not in people’s interests. It is fundamental to our energy security. We can have cheaper bills and households will save money. It is important that we do not give up hope now.

In conclusion, achieving net-zero emissions by 2050 is not only affordable but an economic imperative and a moral responsibility. The evidence overwhelmingly demonstrates that the cost of inaction far outweighs the investments required for transition. The biggest cost we face is not the investment in our future but the catastrophic price of doing nothing. We must not falter now.