Thread by @DrSimEvans

The UK is aiming for net-zero emissions by 2050

Because climate change is "the greatest and most pressing challenge facing the modern world" (UK govt Jan20)

But what will it cost to get there?

Let's take an "honest" look at the evidence, shall we?

(sources at the end)

THREAD

According to official adviser @theCCCuk, annual investment would need to be in the region of 1-2% of GDP in 2050.

That's <£50bn a year.

Let's make it sound scary & multiply by 30yrs!

£1.5tn 😱

Now for context remember UK households spend >£30bn/yr, just to fill up their cars.

But wait!

If we invest £50bn a year, we get to transform the entire UK economy, enjoy cleaner cities, cut emissions to net-zero and help avoid dangerous climate change.

Missing out the benefit in cost-benefit analysis is a classic scare tactic.

carbonbrief.org/uk-climate-cha…

(Just as a side note, the Conservative election manifesto promised to implement net-zero as part of Boris Johnson's personal "guarantee")

carbonbrief.org/election-2019-…

Moreover, the investment "costs" of net-zero are not the same as impacts on GDP, as a report for the CCC explains.

Sure, aiming for net-zero could shrink the economy.

Or, as the CCC notes:

"The overall economic impact…could turn out to be positive"

Let's not forget that cost estimates looking decades into the future are inherently uncertain – and tend to have been overestimated.

In 2003, the cost of a 60% cut was up to an estimated 2% of GDP. In 2008. parlt approved an 80% target, costing 1-2%.

carbonbrief.org/in-depth-the-u…

Now, with all that in mind, let's take an "honest" look at the cost of net-zero.

The CCC published a detailed breakdown of the cost of required investments, in each sector of the UK economy.

(NB the total £50bn / 1.3% of GDP in 2050 on the right)

carbonbrief.org/in-depth-the-u…

But climate sceptic lobby-group GWPF thinks it has some better numbers

It says net-zero will have "ruinous" costs of £3tn

At £100bn/yr this is at least 2x the CCC range

It's also 1/10 of annual consumer spending

But apparently it "will bankrupt Britain" 🤔

Shall we dig in?

There are too many howlers to highlight them all, so let's pick out just a few.

Here's one example of GWPF "analysis", no more than finger-in-the-air dressed in mathematical jargon:

"£5k per house is clearly far too low…£500k far too high…£50k gives a starting point"

The numbers on heat are similarly hand-waving and incoherent throughout

Numbers up to £4tn are bandied about but then, without explanation, the GWPF finally comes up with a cost of £0.9tn to decarbonise domestic heat, some £30bn per year

In comparison, detailed analysis for the CCC suggests that it will cost £13-15bn to decarbonise domestic heat

That's in the region of £14,000 per home

(I am personally in the process of looking into home efficiency retrofit + heat pump & let's just say that sounds about right)

Turning now to the GWPF cost estimates for electricity…

It claims astronomical "levelised costs of electricity" for renewables, many times higher than estimates from Lazards, BNEF, IEA, CCC etc etc

But wait, aren't they similar to "DECC"?

Ah yes, DECC estimates from 2013 🤪

How about some real-world data?

The cost of UK renewables has fallen precipitously in government auctions over time, for example

Does offshore wind cost >£120/MWh, as GWPF argues?

No: the govt has signed contracts at £40/MWh

carbonbrief.org/analysis-recor…

…and if you don't believe in those de-risked UK contracts, Lazards says it's $89/MWh without subsidy – £69/MWh

lazard.com/media/451086/l…

As another eg – GWPF cites an academic paper as evidence for offshore wind being costly

Study author tells me:

"Inevitably, the GWPF has taken my analysis and ignored the caveats noted in the paper around discount rate to continue to make its own anti-wind points."

Surprise!

GWPF also assumes offshore wind capacity factors of 39%…

…but the same study author cited by GWPF tells me that's wrong even today, with larger turbines meaning future projects will do even better

"more recent windfarms achieve better capacity factors, well in excess of 39%"

I could go on and on but let's just conclude by remembering what is at stake, with climate change to date already bringing "profound alterations…and causing unprecedented risks"

carbonbrief.org/in-depth-qa-ip…

Finally, the UK govt Treasury is carrying out a review of the costs of reaching net-zero, following CCC advice

Before then, if you want an "honest" debate about those costs, I hope it is clear where not to look

gov.uk/government/new…

Sorry – I almost forgot to mention the venerable Charles Moore in today's Telegraph

Poor Charles is a bit muddled

He thinks that 10 years is the same as 20 years

and that £100bn x 20 = £100bn x 30

Oh no!

Charles mentions the "Green New Deal Group" plan to invest £100bn a year

He says they "project that cost over only 20 years"

D- for reading, Charles, must try harder

To reiterate, for those struggling at the back

100x10 ≠ 100x30

greennewdealgroup.org/wp-content/upl…

Sources:

UK hhold energy costs gov.uk/government/sta…
UK GDP
ons.gov.uk/economy/grossd…
CCC net-zero rpt
theccc.org.uk/wp-content/upl…

Sources cont

Govt says climate "most pressing challenge"
parliament.uk/business/publi…
Advice to CCC on cost/benefit
theccc.org.uk/wp-content/upl…
Academic study on offshore wind
doi.org/10.1016/j.jup.…

Some additional context via @LeoHickman digging into old newspaper clippings on the UK switch to gas central heating

– a fascinating historical precedent for major transition

Cost to switch in 1958 was £100, this ad says, about £2,500 in today's money

@LeoHickman Leo also found this amazing FT letters page, from 1963, where readers dispute a report by commodities editor "Mr Coldstream" on the relative costs of gas vs electric heating…

@LeoHickman Some further additions:

GWPF numbers for electricity are based on a model developed by IESIS (who??)

iesis.org

Apparently the 2016 closure of Longannet created "serious risk" of "crisis"

Safe to say we're still waiting for any crisis.

iesisenergy.org/assets/files/I…

@LeoHickman I didn't link to the GWPF report, on purpose, but you can read it here

web.archive.org/web/2020022509…

@LeoHickman I also failed to acknowledge John Aldersey-Williams, the study author I mentioned (@redfieldconsult )

Thankyou for your responses, John!

Here's another excellent thread digging into the GWPF "analysis" from @_richardblack

https://twitter.com/_richardblack/status/1232042406008295426

Another issue I didn't touch on…

the "system costs" of renewables, which GWPF says adds £85/MWh to the average cost of offshore wind

here's some better evidence on that – more like £10/MWh at low penetration, £20/MWh+ above 50%

carbonbrief.org/in-depth-whole…

theccc.org.uk/wp-content/upl…

even more detail on system costs says £10-25/MWh at up to 65% penetration of wind and solar

(and NB that the CCC net-zero advice suggests limiting variable renewables to this level)

theccc.org.uk/wp-content/upl…