Oral Answers to Questions

Debate between Nadia Whittome and Gareth Davies

Tuesday 5th September 2023 Commons Chamber

[Wera Hobhouse (Bath) (LD)]

16. What assessment he has made of the potential impact of climate change on the economy.

[The Exchequer Secretary to the Treasury (Gareth Davies)]

The Treasury’s 2021 net zero review noted that unmitigated climate change damage has been estimated to be the equivalent of losing between 5% and 20% of global GDP each year. The costs of global inaction significantly outweigh the costs of action, and McKinsey estimates that there is a global market opportunity for British businesses worth £1 trillion.

[Nadia Whittome]

A recent report from Carbon Tracker found a huge disconnect between what scientists expect from climate change and what our financial system is prepared for, with flawed economic modelling leading pension funds and others to seriously underestimate the risks. Meanwhile, Energy UK warns that we are lagging behind on green energy investments. Surely the Minister agrees that to revive our economy and avert climate catastrophe we must rapidly phase out fossil fuels and invest in a green new deal to reach net zero.

[Gareth Davies]

It is important to point out that we are the fastest decarbonising economy in the G7. Since 1990, we have decarbonised by 48% while growing our economy by 65%, but the hon. Lady is right: this will take a balanced approach involving both public spending and private investment, including pension fund investment. The recent pension fund reforms, for example, should unlock some new assets for green infrastructure.