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Aren’t we being assured that all this net zero will be cheaper?

Summary:
It is possible that dashing to net zero will be cheaper - through technological advance - than the current set up. It is possible that net zero will be wildly more expensive than that current set up. We think it will be the latter for there is a reason we use the current set up, it’s cheaper.What we’d all like of course is some absolute. Some method of being able to decide this question one way or the other, definitively. Here that is:The Government should introduce a carbon tax on imports to protect ­domestic companies that are subject to the UK’s “net zero” climate policies, a report backed by major UK manufacturers has said. A carbon import tax could prevent so-called “carbon leakage” – where Britain cuts pollution at home only to import more dirty goods instead as they are cheaper. It

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It is possible that dashing to net zero will be cheaper - through technological advance - than the current set up. It is possible that net zero will be wildly more expensive than that current set up. We think it will be the latter for there is a reason we use the current set up, it’s cheaper.

What we’d all like of course is some absolute. Some method of being able to decide this question one way or the other, definitively. Here that is:

The Government should introduce a carbon tax on imports to protect ­domestic companies that are subject to the UK’s “net zero” climate policies, a report backed by major UK manufacturers has said.

A carbon import tax could prevent so-called “carbon leakage” – where Britain cuts pollution at home only to import more dirty goods instead as they are cheaper. It could also stop producers moving abroad.

If we need to have trade barriers against people doing it the cheaper way then that is obvious proof that not doing it the cheaper way is more expensive. As with all tariffs this is a call for a tax upon consumers. The total cost to consumers being that tax plus the price rises inside the tariff barriers caused by the tariff barriers.

The very fact that an increase in costs - a decrease in living standards - is being demanded to make such net zero policies work means that, by absolute proof, net zero will make us all poorer.

Making ourselves poorer is not, except among the most ascetic sects, known as an aim of economic policy. Plenty of economic policies - socialism, buy local, vast government, high tax rates - do make us poorer than we need be but even then the poverty is rarely declared to be the aim.

There is an alternative policy available. One which we thoroughly support. We all do know that it is technological advance which will solve the problem. So, let’s develop the technologies first, then deploy them when they are cheaper. This is already true of, say, solar power in Abu Dhabi (we hear stories of 1.5 US cents per kW hour for example) and isn’t of tidal lagoons in the Severn. Do what works and don’t do what doesn’t seems a reasonable enough guide to life and the economy.

As to deciding between what does work and what doesn’t, as always the price system is your friend.

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Tim Worstall
Tim Worstall is a British-born writer and Senior Fellow of the Adam Smith Institute. Worstall is a regular contributor to Forbes and the Register. He has also written for the Guardian, the New York Times, PandoDaily, the Daily Telegraph blogs, the Times, and The Wall Street Journal. In 2010 his blog was listed as one of the top 100 UK political blogs by Total Politics.

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