The salience of climate change is growing by the day. It is not going to be very long before the costs of dealing with it start impinging heavily upon both our living standards and our lifestyles. This raises three distinct but overlapping issues. How are we going to pay for climate change? How are we are going to carry public opinion to support the difficult changes which will have to be made? And what are the ultimate limiting factors which we need to take into account?
The UK is in a relatively favourable geographical position in the world to weather global warming, but the bill is still going to be high. Estimates for the costs of climate change vary because they are hard to quantify accurately but they were recently estimated by the Chancellor of the Exchequer, when spread over the period up to 2050, to be of the order of £1 trillion. This is equivalent to about half the value of our current annual GDP.
If this figure is correct, it will equate to a bit over £30 billion a year on average. It will be about 1.5% of GDP and equivalent to around 4% of total government expenditure. Some of these costs will fall on the government, requiring taxes to be raised to pay for dealing with threats such as rising sea levels and combatting climate change consequences such as flooding from more extreme weather conditions. Part will have to be paid by consumers, especially as relatively cheap hydro-carbon sources of energy are replaced by more expensive renewables.
