Climate Policies To Cost £66bn In Next Five Years

By Paul Homewood

The Office for Budget Responsibility has just published the latest fiscal supplementary tables following the Budget.

It confirms the rising cost of the Climate Change Act, which will reach £14.4bn in 2022/23.

The total cost over the next five years will be £66bn, equivalent to about £2500 per household.

2.7 Environmental levies
	£ billion
	Outturn	Forecast
	2016-17	2017-18	2018-19	2019-20	2020-21	2021-22	2022-23
CRC Energy Efficiency scheme	0.5	0.6	0.5	0.5	0.0	0.0	0.0
Warm home discount1	0.0	0.3	0.3	0.3	0.4	0.4	0.4
Feed-in tariffs1	0.0	1.4	1.5	1.5	1.6	1.6	1.6
Renewables obligation	4.7	5.4	6.1	6.4	6.6	6.8	6.9
Contracts for difference1	0.0	0.7	1.3	1.9	2.5	2.8	3.0
Capacity market	0.0	0.2	0.8	1.1	1.3	1.4	1.4
Environmental levies	5.2	8.6	10.5	11.7	12.3	12.9	13.3
Memo: Expenditure on renewable heat incentive (RHI)	0.5	0.7	0.9	1.0	1.1	1.2	1.1
Note: The ‘Environmental levies’ line above is consistent with the ‘Environmental levies’ line in Table 4.6 of the November 2017 Economic and fiscal outlook.
1 The ONS have yet to include Warm Home Discount, Feed-in Tariffs and Contracts for difference in their outturn numbers. If they were included, they would have been £0.3bn, £1.3bn and £0.1bn respectively.

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The Climate Change Levy will add an extra £10.6bn to this cost over the next five years, but is classified as taxation revenue, whereas Environmental Levies are added to energy bills.

One other notable item is the projection for Fuel Duties.

Despite all of the efforts to promote electric cars, the OBR is still forecasting a steady rise in Fuel Duties: