Ross Clark Ross Clark

What does the government’s green target mean for your money?

Image: Getty

As if Covid hadn’t caused a big enough disruption to the economy and investors, along comes another shocker: the government’s announcement of an even-tighter target for reducing carbon emissions. Britain has now been put on a legally-binding commitment to reduce carbon emissions by 78 per cent on 1990 levels by 2035.

What does it mean for your money? Quite a lot. For one thing it means that it is more likely that the government will adopt the proposal by the Committee on Climate Change to ban the sale of all homes by 2028 unless they achieve a ‘C’ rating in an Energy Performance Certificate. That potentially exposes millions of homeowners to bills of £20,000 or more for insulation and other energy improvements. At present, just 10 million of Britain’s 29 million homes qualify for a ‘C’ rating. Many – especially the 7.8 million homes with solid walls – may have to be fitted with external or internal wall insulation at a cost of £10,000 to £15,000 as well as with heat pumps (another £10,000 if you are lucky). Solid Victorian homes which form a huge part of the country’s housing stock, could become a financial burden.

Then there is the stock market. We have become used to former Bank of England governor Mark Carney and others warning about ‘stranded assets’ in the oil and coal industries. But the new target will have far more serious implications than that, not least because, for the first time, the target will include emissions from aviation and shipping. We don’t as yet have any means for running passenger planes without fossil fuel, so either it will require the development of new technology (which could prove elusive) or it will mean flights becoming wildly more expensive as they are forced, perhaps, to offset emissions through very expensive carbon capture and storage.

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