If Net Zero is more expensive then we should have less Net Zero

As we’ve pointed out a number of times here the heart of the climate change decision is simple enough. Assume - just to avoid that argument - that emissions lead to heating, heating will lead to costs. Also assume - because this is blindingly obvious - that reducing the costs of heating by reducing emissions will also have a cost. Doing anything has a cost.

OK, so how much reducing of heating should we do? Where the costs of reducing emissions are equal to the cost of the heating avoided, obviously. To do anything else makes us poorer. Not just us in hte here and now it makes all humanity poorer over time.

By Glover’s calculations that would have meant promising developers between £65 and £75 per MWh for the power generated from wind farms, as opposed to the £44 that was actually on the table.

And yet look where we are today, less than two years later. The strike price for offshore wind in the subsequent round actually turned out to be even higher than Glover’s demands, at £82.

Now Miliband is willing to pay up to £113 in the upcoming round, a 38pc leap from that and a whopping 57pc more than the wholesale price of electricity last year.

He has clearly allowed the disastrous cancellation of several major wind projects to spook him into being even more generous this time around.

This is the wrong reaction. We are specifically warned against doing this in the Stern Review. Do not set a target for emissions reductions and then meet any price necessary. Rather, set the price we’re willing to pay for emissions reductions and shell out for however much turns up at that price.

The implication of this - well, not implication, direct result of - is that if emissions reductions, or offshore wind, or solar, or whatever, Net Zero itself, become more expensive then we should have less of them. So that future humanity is as rich as it is possible for them to be given our resource constraints - including that atmosphere and that heating.

The thing that has enraged us for decades now about climate change is that those proposing we do something about it refuse, point blank, to follow the policies their own reports say should be done about climate change. There’s an optimal amount of warming - and if prices change then that optimal amount changes. If cooling us all is more expensive then we should all be a little warmer.

Tim Worstall