Renewables aren't so cheap then

Useful information today:

The switch to net zero risks driving up household energy bills by £400 a year after a jump in interest rates, a leading think tank has warned.

Higher borrowing costs will massively inflate the cost of the green transition, the Resolution Foundation said, with families set to spend an extra £29bn annually on energy by 2050 if rates do not return to 2019 levels.

This shouldn’t be a surprise. As with nuclear, the vast proportion of the costs is the financing expenses. Fuel costs are pretty much zero for either, there are some operating costs but it’s the capital costs that make up the vast bulk of the total, those capital costs must be financed. Therefore returning to positive real interest rates - as we have just done, even though only marginally so - means a change in the costs of renewables.

Shrug, obvious, innit?

At which point we can leave it - but we shouldn’t. The entire concept of net zero - or even dealing with climate change at all - is based upon the idea that not dealing with climate change is more expensive than dealing with it. Now we’ve just got evidence that dealing with it through renewables - those oh so cheap forms of energy collection - is more expensive than we’d thought. 25 million households, £400 per, that’s £10 billion a year. That’s also £10 billion a year forever.

So, dealing with climate change is now more expensive than we’d thought it was. The benefit of dealing with it is exactly the same as before. That changes the balance of how much dealing - rather than suffering from - climate change we should be doing. We should leave be more and do less to head it off that is.

No, there is no way out of this logic. For the logic is that preventing climate change is cheaper than suffering it. But the costs have changed, so the amount of preventing/suffering also changes.

A useful guide to who is being realistic - scientific even - on the subject is who makes this point. Those who ignore it aren’t.