Page last updated at 03:53 GMT, Tuesday, 25 November 2008

Climate law 'could cost billions'

By Richard Black
Environment correspondent, BBC News website

Coal-fired power station on the outskirts of Beijing (AFP/Frederic J Brown)
The UK may be leading climate opinion - but at what cost?

The UK's Climate Change Bill - due to become law this week - may represent a poor deal for taxpayers, a former Conservative minister has said.

Peter Lilley MP says government figures show the bill's costs up to 2050 may far outweigh its benefits.

The worst-case scenario could put a net cost of 10,000 on each UK household, he says in a BBC News website article.

The government said the costs of not acting on climate change would be higher than the costs of acting now.

Mr Lilley says he does not oppose action to curb climate change.

"We all want to save the planet from overheating, just as we all want to save the financial system from meltdown," he writes in the BBC's Green Room series of environmental opinion articles.

"We accept that both rescues may cost us a lot."

But, he says, the Climate Change Bill, which is broadly supported by the Conservatives, may not represent value for money.

Green Room logo (Image: BBC)

The government has published an impact assessment for the bill that puts its costs at between 30bn and 205bn between now and 2050.

The benefits, it calculates, will lie between 82bn and 110bn.

"Would you insure your home with a company if they charged premiums which could be double the value of your house?" asks Mr Lilley, who has held the posts of secretary of state for social security, and for trade and industry.

Extra monies

The cost figure in the government's calculations represents the predicted difference between the UK economy with and without carbon-constraining measures.

It does not include costs associated with the transformation from high-carbon to low-carbon technologies, and the government acknowledges it "could be higher".

Sir Nicholas Stern (Image: AP)
The government's own assessment contradicts the Stern Review

The monetary figure for the benefit of the bill does not represent a direct financial sum - instead it is designed to be a measure of the damage avoided by curbing greenhouse gas emissions.

The government believes there will be additional benefits not captured in this figure.

A spokesman for the Department for Energy and Climate Change told BBC News: "Our impact assessment estimates a range of costs and benefits, and it's not possible to simply assume the upper end of both.

"Depending on factors like fossil fuel prices and the availability of low carbon technologies, there may equally be a net benefit of 52bn.

"Costs and benefits will of course be spread over the 42-year period."

The Climate Change Bill will set targets of reducing emissions by 26% from 1990 levels by 2020, and by 80% by 2050.

This is designed to be "legally enforceable". But Mr Lilley notes that the bill "will not punish ministers if they fail to achieve these targets".

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