Pursuing net zero is the ‘opportunity of the century’ which will create tens of thousands of well-paid green jobs and slash our energy bills. That is this Labour government’s official line, at least, as it was the last Tory government’s. Now we know, thanks to a leaked study, that is not quite how the Department for Business and Trade sees it. Rather, it seems, net zero threatens the recession of the century.
The Macroeconomic Impacts of the Net Zero Transition, prepared by the Economic and Strategic Analysis team at the Department for Business and Trade in November 2023, warns that net zero targets could provoke an economic shock on the scale of the 1973 oil crisis, which led to global recession and a decade of high inflation. A rapid transition, it forecasts, could take 10 per cent off UK GDP by 2030. It goes on to warn ministers that an abrupt transition ‘creates the potential risk of destabilising the financial system’, thanks to industrial plants and other assets being forcibly retired before their time.
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