Boris unveils plan for Green Britain… but at what cost?

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Boris Johnson today unveiled his plan for turning Britain green by 2050 – but was warned by the Treasury that making the change to Net Zero probably means tax rises and he must not borrow to pay for it.

The PM has published the most detailed proposals yet for how the country will achieve the ambition and contribute to the fight against climate change, rejecting alarm at the potential costs to consumers and business.

As well as clean flights, a shift to electric cars by 2035, and gas boilers out by 2030, there will be a focus on encouraging homeowners to be more environmentally-conscious. That could include incentivising mortgage lenders to prioritise properties with better energy ratings.      

In typically bullish style, Mr Johnson insisted that he is not afraid to ‘lead the charge’ – saying ‘history has never been made by those who sit at the back of the class’.

He claimed that Russia and China are ‘following our lead’ – even though both Xi Jinping and Vladimir Putin are expected to snub the COP26 summit in a fortnight, where the premier wants world leaders to commit to slashing carbon emissions.   

The government says that switching from fossil fuels to clean energy, including wind, new nuclear and hydrogen, can ease the reliance on imports and protect families from price spikes. It says 440,000 ‘well-paid’ jobs can be created over the next decade.  

However, there are growing concerns from the Tory backbenches at the consequences of the push, with fears that the bill will be unsustainable and put the UK at a competitive disadvantage. 

And the Treasury delivered a stark warning about the burden in a separate document, saying the transition will have ‘material fiscal consequences’.

Although it acknowledged that the costs of global inaction on the climate were greater than those of action, the assessment said that the government must take into account ‘wider long-run pressures to the public finances’.

Without putting a price on the overhaul, the Treasury said: ‘There will be demands on public spending, but the biggest impact comes from the erosion of tax revenues from fossil fuel-related activity,’ the paper said. 

‘Any temporary revenues from expanded carbon pricing are unlikely to be sufficient to offset the structural decline in tax revenues, but will be important in supporting the transition and can help manage any demands for public spending to support the transition. 

‘If there is to be additional public spending, the government may need to consider changes to existing taxes and new sources of revenue throughout the transition in order to deliver net zero sustainably, and consistently with the government’s fiscal principles.’ 

In what appears to be a barb at Mr Johnson’s free-spending habits, the Treasury said: ‘Seeking to pass the costs onto future taxpayers through borrowing would deviate from the polluter pays principle, would not be consistent with intergenerational fairness nor fiscal sustainability, and could blunt incentives. This could also push up the economic cost of the transition.’  

In a foreword, to the main document – titled Net Zero Strategy: Build Back Greener – Mr Johnson said: ‘The United Kingdom is not afraid to lead the charge towards global net zero at COP26, because history has never been made by those who sit at the back of the class hoping not to be called on. 

‘Indeed, as we set an example to the world by showing that reaching Net Zero is entirely possible, so the likes of China and Russia are following our lead with their own net zero targets, as prices tumble and green tech becomes the global norm.’   

Earlier, Mr Johnson vowed to make Britain the ‘Qatar of hydrogen’ as he wooed businesses chiefs including Bill Gates at a glitzy summit – urging them to invest ‘trillions’ in tackling climate change.

The PM gave a speech and chatted to the Microsoft billionaire on stage as he asked industry leaders to commit funding to decarbonising the world economy – insisting ‘green is good, green is right’.

He said the UK had a responsibility to act on cutting emissions as ‘we were the first to knit the deadly tea cosy of CO2’ – pointing to the ‘big bets’ the government is making on electric vehicles and gigafactories for battery production.

Mr Johnson also played down concerns that the looming COP26 summit in Glasgow will be a failure, saying he is hoping for a ‘good turnout’ of world leaders.  

The plans include making mortgage lenders disclose details about the energy performance of properties they underwrite. 

There will be voluntary targets for improving the efficiency.

The government is also reserving ‘the option of making this target mandatory if insufficient progress is being made’. 

At the business summit, Mr Johnson said there were $24trillion represented in the room at the Science Museum conference London. 

‘I can deploy billions – with the approval of the Chancellor, obviously – but you in this room, you can deploy trillions,’ he said.

‘I want to say to each and every one of those dollars, you are very welcome to the UK and you have come to the right place at the right time.’

He said hydrogen would be a significant part of the solution to replacing fossil fuels. ‘To drive a digger or a truck or to hurl a massive passenger plane down a runway, you need what Jeremy Clarkson used to call ”grunt” – I think there may be a technical term for it – but ”grunt”.

‘Hydrogen provides that grunt, so we are making big bets on hydrogen, we are making bets on solar and hydro, and, yes – of course – on nuclear as well, for our baseload.’  

Mr Johnson channelled the spirit of Michael Douglas’s character from the film Wall Street as he told business chiefs: ‘To adapt Gordon Gekko – who may or may not be a hero of anybody in this room – green is good, green is right, green works.’ 

The UK Government has already committed £200million for the development and demonstration of projects for green hydrogen, long-term energy storage, sustainable aviation fuels and direct air capture of CO2 as part of a £1 billion portfolio of investments. 

Mr Johnson and Mr Gates announced that the Breakthrough Energy Catalyst will match that £200million funding over 10 years to help develop the cutting-edge technologies.

The PM said: ‘It will help to bring innovative technologies to market globally, while building new skills and creating high-quality jobs across the UK.’

Mr Gates said the partnership would ‘accelerate the deployment of these critical climate solutions, helping to make them more affordable and accessible’.

Downing Street dismissed questions about whether it was appropriate for the PM’s to share a stage with Mr Gates after he was criticised for his acquaintance with Jeffrey Epstein. 

‘Our focus is on working with those individuals who are committed to working on this issue,’ the PM’s spokesman said.  

However, despite the enthusiastic words, Mr Johnson seems to have ditched the idea of a total ban on gas boilers from 2035 in the face of anger from Tory MPs and homeowners. Instead there will be a ‘target’ for all new installations to be environmentally-friendly options such as heat pumps. 

Families will be encouraged to install low-carbon systems from April with £5,000 grants, costing taxpayers in England and Wales at least £450million.

But the funding will cover just 90,000 heat pump installations over three years – far short of the PM’s goal of 600,000 a year by 2028. 

Mr Johnson has launched the Heat and Buildings Strategy, mapping out how the UK will move away from polluting energy sources in homes and public buildings. 

It comes amid signs of rising tension between Mr Johnson and Chancellor Rishi Sunak as the Treasury warned of ‘diminishing returns’ from green investment – at a time when the UK’s post-Covid economic recovery has slowed amid rising inflation and widespread shortages.

Prince Charles has increased the pressure on minister to act on climate change by describing how his grandson Prince George has been learning how global warming is causing ‘the big storms, and floods, the droughts, fires and food shortages’ around the world. 

In an interview with Bloomberg last night, Mr Johnson said: ‘The UK is deciding to make a big bet on green technology so the government is going in, setting the regulatory framework to encourage the private sector to come in, in the way that they are – and I’ve quoted some of the numbers for the investment that we are seeing. 

‘So we are making a big bet on wind power, on hydrogen, on electric vehicles, on gigafactories, on carbon capture and storage, all those things. And that’s driving a lot of the investment.’ 

Speaking to broadcasters this morning, Trade Secretary Anne-Marie Trevelyan confirmed that the government was stopping short of introducing a future ban on gas boilers.

She told BBC Radio 4’s Today programme: ‘At the moment we’re encouraging the market to drive those changes.’

However, she did not rule out forcing the move later. 

‘In the short term, yes, of course this is a voluntary scheme,’ she said.

‘There will be a point at which that changes but, yes, for now that’s the case.’ 

The Government unveils its details plans for achieving Net Zero today, detailing the full list of changes being adopted so that the UK can reduce its carbon emissions to ‘net zero’ by 2050.

Mr Johnson will deliver a speech outlining the case for the drive to go green, with less than two weeks before world leaders descend on Glasgow for the COP26 climate change summit.  

Writing in The Sun, the Prime Minister vowed ‘the greenshirts of the boiler police’ won’t kick down doors to rip out dirty gas boilers and said no one will have their ‘trusty old combi’ torn out by ‘sandal-clad’ inspectors. 

‘We’re going to make carbon-free alternatives cheaper to install so that when you or your landlord next come to replace your boiler it makes more sense to go with a cleaner, more efficient replacement that you know will help the planet,’ Mr Johnson added.

The boiler plans are outlined in the Government’s long-awaited ‘heat and buildings strategy’, to be published today. 

Switching to low carbon heating in the coming years will cut emissions, and reduce the UK’s dependency on fossil fuels and exposure to global price spikes in gas, the Government said.

Government sources also confirmed ministers will press ahead later this year with a plan to pile new ‘green’ levies on to gas bills. Levies on electricity will be cut in a bid to persuade consumers to switch to greener energy. 

Friends of the Earth’s Mike Childs said the Government’s plans were ‘quite modest’.  

He added: ‘Housing is one of the hardest sectors to decarbonise but the Government is making it all the more difficult by leaving half its tools in the toolbox, with unambitious policies and inadequate funding.’

Mr Johnson is to announce £9.7billion of overseas investment in the UK, creating 30,000 jobs, Downing Street said. 

The deals will support growth in areas such as wind energy, sustainable homes and carbon capture.

The Prime Minister will host business leaders including Microsoft co-founder Mr Gates at the Global Investment Summit at the Science Museum in London.

Yesterday also saw Ford reveal it is investing £230million to transform its Halewood factory on Merseyside to help build a new generation of zero-emissions cars. Its first electric vehicle parts hub in Europe will safeguard 500 jobs. 

Prince Charles was introducing a documentary ahead of Cop26. He is shown holding a revolving earth in the footage, telling viewers: ‘Your future depends upon the future of the planet.’

The Sky Kids documentary Cop26: In Your Hands features six young activists who highlight the impact of climate change on their corners of the Earth. The prince tells viewers: ‘I’m old enough to have a grandson.

‘Like you, he is learning how climate change is causing the big storms, and floods, the droughts, fires and food shortages we are seeing around the world.’  

Charlie Mullins from Pimlico Plumbers has warned that putting new energy sources into 30million-plus homes ‘would keep the country’s current crop of heating engineers busy for a hundred years’.

There are also major questions about how some of these new solutions such as ground source heat pumps, can work for the millions of small homes and flats in Britain’s cities because they need a hole between 50ft and 300ft deep – or long trenches measuring around 7,000sqft in the garden or grounds.    

A leaked Treasury briefing ahead of the COP26 summit says the spending needed to achieve Net Zero is ‘uncertain’ and the positive impact of ‘ever more investment’ in greening the economy is likely to reduce. 

The document, which according to the Observer accompanied a presentation to key groups outside government, also cautioned that tax rises could be required to balance the ‘erosion of tax revenue from fossil-fuel related activity’.

As frictions bubble up between the two most powerful figures in government ahead of the Budget on October 27 and crucial summit, Treasury officials have also been complaining about ‘economic illiteracy’ at No10 over lavish spending promises and the danger of inflation running out of control. 

There are claims that Mr Sunak privately lamented the ‘sh**show’ in Downing Street at the height of the pandemic. 

Meanwhile, the Chancellor also faces a wave of counter-briefing, with swipes that he is turning into Bond villain ‘Dr No’ and has been ‘rattled’ by the possibility that he could be replaced. 

The infighting emerged as the PM tries to position the UK at the forefront of the battle against climate change, with the UN summit taking place in Glasgow in a fortnight.

The feuding hit a new level last week as No11 brutally slapped down Kwasi Kwarteng over his public suggestion of a bailout for energy-intensive firms struggling with soaring gas prices – only to be effectively overruled by Mr Johnson.

An admirer of Mr Sunak told the Sunday Times that the relations between the Chancellor and the PM were now starting to resemble those between Tony Blair and Gordon Brown.

However, they pointed out that in this case there was no doubt about who was in charge of government policy. 

‘I’ve been watching the Blair-Brown documentary and I’m worried we are falling into the same thing with Boris and Rishi only this time it is the prime minister with the ”great clunking fist”,’ they said. 

Tory aides pointed out that new Foreign Secretary Liz Truss openly covets the Treasury job and Mr Sunak is ‘rattled’. 

‘Rishi has become Dr No, while Liz is Mrs Yes, Yes, Yes,’ a former minister said.

Rumours have been circulating that Mr Johnson appointed 6ft 5in Simon Clarke as Treasury Chief Secretary partly as a joke at the expense of the rather more diminutive Mr Sunak.

One senior Tory told the Sunday Times that a crunch moment is approaching on the PM’s free-spending habits. 

‘The moment is coming, a bit like Nigel Lawson and Mrs T, where he will have to make a decision as the chancellor whether he is going to continue going along with it,’ they said. 

A Treasury spokesperson said: ‘The Government is committed to tackling climate change and the Prime Minister has set out an ambitious Ten Point Plan to help us achieve that. 

‘The Treasury is playing a crucial role in this effort, by allocating £12billion to fund the Ten Point Plan, setting up the UK Infrastructure Bank to invest in net zero, and committing to raise £15billion through our Green Gilt for projects like zero-emissions buses, offshore wind and schemes to decarbonise homes.’  

How much will gas boiler alternatives cost you? 

GROUND SOURCE HEAT PUMPS (£14,000 – £19,000)

Ground source heat pumps use pipes buried in the garden to extract heat from the ground, which can then heat radiators, warm air heating systems and hot water.

They circulate a mixture of water and antifreeze around a ground loop pipe. Heat from the ground is absorbed into the fluid and then passes through a heat exchanger.

Installation costs between £14,000 to £19,000 depending on the length of the loop, and running costs will depend on the size of the home and its insulation.

Users may be able to receive payments for the heat they generate through the Government’s renewable heat incentive. The systems normally come with a two or three year warranty – and work for at least 20 years, with a professional check every three to five years. 

AIR SOURCE HEAT PUMPS (£11,000)

Air source heat pumps absorb heat from the outside air at low temperature into a fluid to heat your house and hot water. They can still extract heat when it is as cold as -15C (5F), with the fluid passing through a compressor which warms it up and transfers it into a heating circuit.

They extract renewable heat from the environment, meaning the heat output is greater than the electricity input – and they are therefore seen as energy efficient.

There are two types, which are air-to-water and air-to-air, and installing a system costs £9,000 to £11,000, depending on the size of your home and its insulation.

A typical three-bedroom home is said to be able to save £2,755 in ten years by using this instead of a gas boiler.

HYDROGEN BOILERS (£1,500 – £5,000)

Hydrogen boilers are still only at the prototype phase, but they are being developed so they can run on hydrogen gas or natural gas – so can therefore convert without a new heating system being required.

The main benefit of hydrogen is that produces no carbon dioxide at the point of use, and can be manufactured from either water using electricity as a renewable energy source, or from natural gas accompanied by carbon capture and storage.

A hydrogen-ready boiler is intended to be a like-for-like swap for an existing gas boiler, but the cost is unknown, with estimates ranging from £1,500 to £5,000.

The boiler is constructed and works in mostly the same way as an existing condensing boiler, with Worcester Bosch – which is producing a prototype – saying converting a hydrogen-ready boiler from natural gas to hydrogen will take a trained engineer around an hour.

SOLAR PHOTOVOLTAIC PANELS (£4,800)

Solar photovoltaic panels generate renewable electricity by converting energy from the sun into electricity, with experts saying they will cut electricity bills.

Options include panels fitted on a sloping south-facing roof or flat roof, ground-standing panels or solar tiles – with each suitable for different settings. They are made from layers of semi-conducting material, normally silicon, and electrons are knocked loose when light shines on the material which creates an electricity flow.

The cells can work on a cloudy day but generate more electricity when the sunshine is stronger. The electricity generated is direct current (DC), while household appliances normally use alternating current (AC) – and an inverter is therefore installed with the system.

The average domestic solar PV system is 3.5 kilowatts peak (kWp) – the rate at which energy is generated at peak performance, such as on a sunny afternoon. A 1kWp set of panels will produce an average of 900kWh per year in optimal conditions, and the cost is £4,800.

SOLAR WATER HEATING (£5,000)

Solar water heating systems, or solar thermal systems, use heat from the sun to warm domestic hot water.

A conventional boiler or immersion heater can then be used to make the water hotter, or to provide hot water when solar energy is unavailable.

The system works by circulating a liquid through a panel on a roof, or on a wall or ground-mounted system.

The panels absorb heat from the sun, which is used to warm water kept in a cylinder, and those with the system will require a fair amount of roof space receiving direct sunlight for much of the day to make it effectively.

The cost of installing a typical system is between £4,000 and £5,000, but the savings are lower than other options because it is not as effective in the winter months.

BIOMASS BOILERS (£5,000 – £19,000)

The renewable energy source of biomass is generated from burning wood, plants and other organic matter such as manure or household waste. It releases carbon dioxide when burned, but much less than fossil fuels.

Biomass heating systems can burn wood pellets, chips or logs to heat a single room or power central heating and hot water boilers.

A stove can also be fitted with a back boiler to provide water heating, and experts say a wood-fuelled biomass boiler could save up to £700 a year compared to a standard electric heating system.

An automatically-fed pellet boiler for an average home costs between £11,000 and £19,000, including installation, flue and fuel store. Manually fed log boiler systems can be slightly cheaper, while a smaller domestic biomass boiler starts at £5,000.