It is not only Extinction Rebellion who say the UK should no longer try to get our growth rate up. The Green Party and many others are inclined to agree. But there are very strong reasons for believing that this is not the right approach – even for people worried about the world’s environment.
Combating climate change has rightly become a high priority, but no one should be under any illusions about how expensive and difficult it is going to be to get all the resources needed in place. If we can’t pay for them, effective policies to deal with climate change simply won’t materialise.
There will be business opportunities in the coming green revolution fighting global warming, so some people will do well out of it. But building defences against rising sea levels, funding research and development to recover carbon dioxide from the atmosphere and paying for scrapping lots of our existing technology – from cars to airports, oil wells to abattoirs – is going to cost the public sector a fortune. The private sector will have to share the pain too with higher costs for food, travel, housing, holidays – indeed, just about everything.
The Government recently suggested that reducing carbon emissions to net zero by 2050 would cost the UK around £1trn. If this sum (which, on past performance is very likely to be an underestimate) has to be found over the next 15 years, it would cost about 3% of GDP or around 4% of aggregate incomes. This is a new and additional claim on our national resources of about £70bn a year.
How are we going to pay for all this? Everyone will have to pay higher taxes and higher prices. But this will only happen if public opinion can be carried along with the changes required – support for the wrenching and expensive revolution will be much more forthcoming if incomes are rising rather than starting to decline.