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UK Climate Policies To Cost £90bn Between Now And 2020

March 31, 2015

By Paul Homewood   




Yesterday I picked up on the Telegraph report that green levies were due to treble to £9.4 billion a year by 2020, according to the OBR, the Office for Budget Responsibility.

As promised, I have been in touch with the OBR to clarify the numbers, and it turns out that the costs will actually be a good deal higher!


First, the OBR have confirmed that the £9.4 billion figure is the nominal value, i.e. at 2020 prices, not at today’s prices. The OBR assumptions show a rise in CPI of 10% between now and 2020, so at today’s prices the £9.4 billion equates to £8.5 billion. (I hope this makes you feel better!).

Unfortunately, though, that is the only bit of good news. The £9.4 billion figure is the cost of what the OBR describe as “Environmental Levies”. These are analysed as :



2.7 Environmental levies

£ billion

Outturn Forecast

2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
Carbon reduction commitment 0.6 0.6 0.8 0.7 0.6 0.6 0.6
Warm homes discount1 0.0 0.3 0.3 0.3 0.3 0.3 0.3
Feed-in tariffs1 0.0 0.8 0.9 1.0 1.1 1.2 1.4
Renewables obligation 2.5 3.1 3.9 4.2 4.5 4.8 4.9
Contracts for difference2 0.0 0.0 0.1 0.5 0.8 1.2 1.6
Capacity market 0.0 0.0 0.0 0.0 0.0 0.6 0.6
Environmental levies 3.1 4.8 5.9 6.8 7.3 8.7 9.4
1 The ONS have yet to include Warm Homes Discount and Feed-in Tariffs in their outturn numbers.

2Contracts for Difference includes early CfDs, or investment contracts, awarded through the Final Investment Decision Enabling for Renewables process.
Note: This is consistent with the ‘Environmental levies’ line in Table 4.5 of the March 2015 Economic and fiscal outlook.



However, there are other green taxes and levies that are not included under the above category.


1) Climate Levy/Carbon Floor Price

This amounted to £1.2bn last year, and is set to increase to £1.6bn by 2020.


2) Air Passenger Duty

Currently raises £3.0bn, increasing to £3.7bn by 2020. 


3) Energy Company Obligation/Smart Meters

The OBR offer no figure for this, as it is outside their remit. However, DECC’s projections show the annual cost of this, which all falls on domestic users, rising from £39 to £59 between now and 2020, (at 2014 prices).

Based on 26 million households, the cost by 2020 would be £1.7bn.  



Putting all this lot together, the total cost of the various levies amounts to £90.6bn between 2013/14 and 2019/20.

2014 2015 2016 2017 2018 2019 2020 TOTAL
Air passenger duty 3.0 3.2 3.1 3.2 3.4 3.5 3.7 23.1
Climate change levy 1.2 1.7 2.0 2.0 1.8 1.7 1.6 12.0
Environmental levies 3.1 4.8 5.9 6.8 7.3 8.7 9.4 46.0
ECO/Smart Meters 1.0 1.1 1.2 1.4 1.5 1.6 1.7 9.5
TOTAL 8.3 10.8 12.2 13.4 14 15.5 16.4 90.6



This is close to the figure of £89bn quoted both in the Telegraph article and by Angela Knight last week. 

£90.6bn equates to £3485 for every household in the country. I cannot recall Ed Davey ever telling us this.   

I wonder why? 




1) OBR schedule of Current Receipts – Table 4.5 – Economic & Fiscal Outlook Charts & Tables March 2015

2) OBR schedule of Economic & Fiscal Outlook Supplementary Fiscal Tables March 2015 – Table 2.7

  1. Joe Public permalink
    March 31, 2015 2:15 pm

    If UKIP pull their finger out, they’d make dynamite out of your research, Paul.

    • March 31, 2015 3:55 pm

      UKIP does publicise the stupid energy policy of LibLabCon, but it can’t get the media publicity and very few of the voting public understand what is being done to our energy supply or even cares.

      • c777 permalink
        April 2, 2015 1:59 pm

        They will do when they’re fumbling around in the dark.

  2. March 31, 2015 2:52 pm

    Reblogged this on the WeatherAction News Blog and commented:

  3. Bloke down the pub permalink
    March 31, 2015 5:49 pm

    If you were an optimist, you might think that George Osborne was relying on scrapping all this after the election when the Lib Dems are history. I wont be holding my breath though.

  4. March 31, 2015 6:14 pm

    UKIP are the only party that can address this issue – Lets hope they hold the balance of power after the next election and not the SNP.

  5. March 31, 2015 6:34 pm

    I think that green energy is ok, it is important to save the actual resources of the planet and to use, for example, the wind or the solar energy. Still, I think that we should be careful t all the aspects. For example, I’ve read an interesting study – – that shows that offshore wind parks may influence the ocean’s temperatures and, thus, the climate. We should pay attention to both sides of one option and choose the one that’s the best for everybody: for us and for the planet.

    • April 2, 2015 12:57 pm

      There isn’t a shortage of anything that it seeks to ‘save’. In addition to which Compact Fusion and or Thorium technology will likely be grid ready long before it could become a concern.

  6. Elaine Supkis permalink
    April 1, 2015 3:56 am

    $90 billion is less than the US wasted going to war against helpless Iraq.

    • April 2, 2015 12:54 pm

      This is £’s not $…..And, like most things the US does, it has nothing to do with Britain, and less than nothing to do with Britain’s energy policy.

  7. Brian H permalink
    April 1, 2015 4:44 am

    It’s all cow excrement; CO2 is not only not a problem, it’s a boon! The planet’s politicians and rent-seekers are committing daylight robbery.

  8. April 1, 2015 4:58 am

    Yes I am beginning to come round and change my opinion after reading what @smarmarver said
    We should consider both sides of the argument : 1. Green Party and 2.Labour
    ..after all Matt Ridley in this podcast tells us the amount electricity from fossil fuels has gone down from 87% 40 years ago 87% now .. great strides have been made


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