The Treasury will lead a review into the costs of decarbonisation, the business and energy secretary, Greg Clark, has revealed in a statement to parliament.
The announcement follows yesterday’s pledge to set a legally binding target of reducing greenhouse gas emissions to net zero by 2050. An amendment to the 2008 Climate Change Act has since been tabled by the government.
“The Committee has concluded that a net-zero 2050 target is feasible, deliverable and can be met within the exact same cost envelope of one to two per cent of GDP in 2050 as the 80 per cent target when that was set,” Clark told the House of Commons.
“Such has been the power of innovation in reducing costs.
“It is, however, absolutely right that we should look carefully at how such costs are distributed in the longer term as professor Dieter Helm recommended in his report to the government.
“So the government is also today (12 June) accepting the recommendation of the Committee on Climate Change for the Treasury to lead a review into the costs of decarbonisation and this will consider how to achieve the transition to net zero in a way that works for households, businesses and public finances.
“It will also consider the implications for our UK competitiveness.”
Clark gave reassurances the government will not use carbon credits from other countries in order to achieve the goal.
“I believe that by leading the world and harnessing the power of innovative new technologies, we can seize the full economic potential of building a competitive climate-neutral economy,” he explained.
“But we don’t intend for a moment for this to be simply a unilateral action. If we are to meet the challenge of climate change, we need international partners across the world to step up to this level of ambition.
“And while we retain the ability in the Act to use international carbon credits that contribute to actions in other countries, we want them to take their own actions and we do not intend to use them.”
But he also said the government will review the net-zero target within five years to ensure that other countries are taking “similarly ambitious action” and that UK businesses do not face “unfair competition”.
Ministers were recently accused of trying to “fiddle” the existing targets after deciding to carry over part of the surplus from the second carbon budget to subsequent accounting periods.
The Committee on Climate Change has warned that policies to support decarbonisation will need to be “ramped up significantly” if the UK is to reach net zero emissions by 2050. According to analysis by the Energy Systems Catapult, this will require the installation of low-carbon heating systems in millions of homes over the next decade.