The government’s fiscal watchdog will assess the impact of climate change when it carries out its forecasts of the UK economy if Labour comes to power, John McDonnell has pledged.
In a speech at an economic conference organised by the centre-left think tank IPPR this afternoon (14 November), the shadow chancellor said Labour would ask the Office for Budget Responsibility (OBR) to include the impact of climate change and environmental damage in its long-term forecasts of the economy and the public finances.
McDonnell said the move was designed to “ensure that the overwhelming challenge of climate change is addressed from the very centre of government”.
Noting that the Bank of England already carries out stress tests of financial institutions’ ability to cope with climate change, he said: “We need to take the same far-sighted view of the public finances.”
“The public deserve to know what impacts we might expect on the national purse from the degradation of our environment.
“Sound, responsible economic management should already be accounting for this.”
McDonnell also used his speech to reaffirm Labour’s target that 60 per cent of energy should be generated from renewable sources by 2030
He also said that the shift to a more responsive and smarter energy system offered scope for cutting reliance on emissions generating fossil fuels.
“Smart, interconnected devices offer the prospect of helping to transform our entire energy system, radically decarbonizing our economy.
“As sources of electricity become more distributed, and as the ability to monitor demand becomes more fine-grained, new possibilities open up.”