The government has set out the terms of reference for a review by HM Treasury of the funding and cost distribution of a transition to net zero. The review was a recommendation from the Committee on Climate Change, accepted by the government.
The review will examine the key choices to transform to a green economy and achieve net zero by 2050 and HM Treasury will publish a report in autumn 2020 setting out principles to guide decision-making during the transition to net zero.
It will consider how the transition to net zero will be funded and assess options for where the costs will fall. This will involve:
- Analysing the range of choices for how households, businesses and the taxpayer could contribute towards different elements of the transition.
- Identifying mechanisms to create an equitable balance of contributions.
- Maximising opportunities for economic growth as we transition to a green economy.
- Evaluating the trade-offs between cost, competitiveness, effects on consumers and impacts on the taxpayer.
The review will consider the full range of government levers, including tax. It will not duplicate existing or ongoing work elsewhere, such as:
- detailed policy to decarbonise specific sectors
- the costs of adapting to the impacts of climate change
- the social and global co-benefits of decarbonisation
The givernment says there will be “close engagement across Whitehall and with the devolved administrations” buy HM Treasury will conduct the review. It will consult widely and draw on evidence from experts and insights from those who will have a role in or will be affected by the transition.