Net zero could cost the UK trillions more than official estimates suggest, according to a new paper from the Institute of Economic Affairs, which claims public bodies have consistently understated the true cost of the transition.
The analysis argues that the gross cost of achieving net zero could exceed £7.6trillion, and rise beyond £9trillion once carbon costs are included.
It warns that headline figures published by official bodies are driven by what it describes as “fantasy assumptions”, risking the shutdown of serious democratic debate over what it calls one of the most expensive policies in British history.
The briefing paper, The Cost of Net Zero, authored by energy analyst David Turver, examines costings produced by the Climate Change Committee (CCC), the National Energy System Operator (NESO), the Treasury and the Office for Budget Responsibility.
It concludes that official estimates have fallen sharply not because net zero has become cheaper, but because methodologies have changed and assumptions have become increasingly unrealistic.
The CCC now claims that achieving net zero between 2025 and 2050 will cost just £108billion, down from earlier estimates of more than £1trillion. Turver argues this reduction is achieved by shifting away from measuring gross costs and relying on implausibly low projections for the cost of renewables, electric vehicles and heat pumps, alongside borrowing costs well below market rates.
Mr Turver said: “The true cost of net zero is much higher than we have been led to believe. If we are to have a serious debate about net zero, the various public bodies need to be more transparent and frankly more honest.”
The paper concludes that without transparent and honest accounting, public support for net zero risks being undermined by the growing gap between official projections and real-world costs.
However, the green lobby has quick to dismiss its findings. Lily Rose Ellis, Climate Campaigner for Greenpeace UK said: "Whatever the current government's challenges, they're unlikely to be desperate enough to take the IEA's advice."