Leaked documents have shown the Government’s Net Zero plans could wipe 10 per cent off economic growth by the end of the decade.
The documents show Labour’s proposal could lead to a financial crash and a huge rise in the country’s national debt.
Poor planning for the country achieving the target of Net Zero emissions by 2050 could risk destabilising the financial system in the UK.
The leaked Whitehall assessment of the effects of Net Zero, seen by The Sun, warned that billion pounds worth of assets being retired before the end of their shelf life could cause a huge drop in the value of firms which own them.
Assets such as power plants, chemical factories and aircrafts could become ‘stranded assets’ and are therefore being overvalued by companies.
Around £1.6trillion worth of assets may be retired early, which could cause a major knock on effect on the British economy.
Under the terms of the Paris Agreement, coal-fired power plants would have to retire up to 30 years early, wasting potentially billions of pounds of investment.
Such power plants were already closed in the UK long ago, but the impact of the plants closing in other countries may yet affect UK markets.
Leaked documents have suggested the push for Net Zero could cause a financial crash
The UK government is committed to becoming carbon neutral by 2050 as part of the Paris Agreement
The Prime Minister has hailed Net Zero as ‘one of the economic opportunities’ of this century
It comes after Conservative leader Kemi Badenoch vowed to ditch the target, claiming it would bankrupt the country.
The Conservative leader used a speech to reject plans introduced by then-PM Theresa May in 2019 and backed by other Tory leaders including Boris Johnson.
Dubbing herself a ‘Net Zero sceptic’ she argued that drastically cutting carbon emissions cannot be achieved without serious financial problems hitting living standards at a time when families are struggling.
She also claimed it would make the UK dependent on authoritarian regimes for its energy supply.
Mrs Badenoch sought to put clear blue water between her party and Labour, blasting Energy Secretary Ed Miliband for spending ‘all of his time serving up dollops of lofty rhetoric’.
The Tories are also struggling to win back voters from Reform, which has made Net Zero scepticism a key plank of its platform.
However she failed to set out any immediate Tory counter-proposals, instead setting up a taskforce to find ‘achievable solutions’ to delivering cheap and clean energy, led by shadow energy secretary Claire Coutinho.
Prior to winning last year’s general election, Labour pledged to decarbonise the UK’s electricity grid by 2030 as part of accelerating Net Zero efforts.
Tory leader Kemi Badenoch said the government’s Net Zero plans would ‘bankrupt the country’ in a recent speech
Early closures of assets as part of the move to Net Zero could cause huge losses for firms
Solar and wind projects have been accelerated under the Labour government since the election
Since entering Downing Street, Sir Keir Starmer has lifted a de facto ban on onshore wind farms in England and given consent for a slew of solar projects.
The PM has hailed Net Zero as ‘one of the economic opportunities’ of this century, while business chiefs recently pointed to an £83billion boost from the sector last year.
Earlier this month, economists claimed the UK’s Net Zero drive is making families poorer by squeezing living standards, .
The report, by researchers at investment bank Peel Hunt, questioned whether Britain’s decarbonisation efforts were to blame for the country’s productivity crisis.
They found a ‘clear link’ between falling energy capacity and weak productivity in the UK, which has ‘hurt economic performance and growth in living standards’.
In the Peel Hunt report, authors Kallum Pickering and Charles Hall wrote: ‘Our analysis challenges the Government’s claim that there is no trade-off between Net Zero and economic growth. Two decades of experience suggests otherwise.
‘The result of the UK’s decarbonisation efforts, so far, appears to be weak economic growth, high energy prices, de-industrialisation and no significant impact on the overall trajectory of global emissions.’
