To remind: Investment is a cost

We are really very certain indeed that someone will try this:

Britain’s electricity network will require up to £240bn of upgrades to support clean power targets, the Department for Energy Security and Net Zero (DESNZ) has admitted.

In new estimates released by the Government, the cost of building new pylons and power lines will skyrocket in the next 24 years to achieve the Government’s net zero ambitions.

The “this” being that someone, somewhere, is going to try to claim that Net Zero is just great because, look, it produces £240 billion in investment!

No, investment is a cost of doing something, not a benefit.

The thing being done might be worth it - perhaps not broiling Flipper in the fumes of the last ice floe is worth £240 large. Perhaps it’s not worth doing - reversing the greening of the Earth from higher CO2 would be a bad idea. Or even, there could be other, cheaper, ways of doing this. We tend to think that space solar is going to arrive and then that will be that, job done.

But our point here is not about whether Net Zero, or upgrading the grid, or £240b spent on power lines, is worth it. Rather, it’s about how we decide whether such an expenditure is worth it. We must start by insisting that the expenditure is a cost. Investment is a cost of a thing, not a benefit.

We really do insist that some are going to - possibly maliciously - get this wrong. There will be claims that this is an advantage, that £240b of investment is a good thing, in and of itself.

How do we know this? Well, seen the number of people who insist that job creation - jobs are similarly a cost, not a benefit - is a positive outcome of a plan, not a downside of it?

Tim Worstall