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The Treasury has admitted "it is not possible to forecast" how much the government's net zero strategy will cost individual households.
However, the Net Zero Review, a Treasury document laying out the cost of plans to reach net zero by 2050, said that the financial impact of "global inaction" would significantly outweigh any incurred to tackle climate change.
The review said Downing Street "may need to consider changes to existing taxes and new sources of revenue" to fund the plans, warning that the loss of tax revenues from fossil fuel-related activity would wipe billions from the government's balance sheet.
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The question of how the move to net zero will be funded has become a growing issue, as the scale of the structural changes to hit the targets becomes clearer.
The Climate Change Committee has estimated that the cost of the UK moving to net zero by 2050 could be as much as £1.4trn, with the Office for Budget Responsibility (OBR) estimating it could cost around £1trn.
Analysis from the National Infrastructure Commission earlier this year found the poorest 10% would pay an extra £80 per year in bills by 2050.
According to the Treasury's report, net zero costs that will "be borne by households directly" will include buying zero emissions vehicles or adopting low carbon technologies.
Costs will also be passed on to households in other ways, such as through increased prices of certain goods and services.
"It is not possible to forecast impacts on households," the report says.
"The eventual impact will depend on policy choices and the way the economy adjusts overtime, as well as a range of factors such as technological development, efficiency improvements, consumer preferences, interest rates, and income growth over the next 30 years."
Last month, Jonny Marshall, senior economist at the Resolution Foundation, warned of the disproportionate impact heading to net zero could have on low and middle-income households.
“We cannot afford to ignore the significant upfront costs that will be required to decarbonise our homes and our cars," he said.
"We also need to pay particular attention to how low and middle-income households are bearing those costs, and benefiting from future savings too.
“At the same time, we cannot allow the costs of Net Zero to derail our decarbonisation efforts."
Today, the government announced £5,000 grants, enough to cover around 90,000 of the UK's nearly 30 million households, to replace fossil fuel boilers with environmentally-friendly heat pumps.
It is unclear if the funding will be means tested – and the move has already been criticised by campaigners for not going far enough.
The question of funding the move to Net Zero is reportedly causing divisions at the top of government, with documents seen by The Observer suggesting there are serious disagreements over the economic impact of moving towards net zero between Boris Johnson and Rishi Sunak.
The documents show Treasury warnings of future tax rises and significant economic damage to the UK economy if the government spends too much on green investment, or misdirects it.
The chancellor has come under growing pressure in recent months to provide details on how the UK's climate goals will be paid for
During his speech at the 2021 Conservative Party conference, Sunak did not mention climate change.
In contrast, shadow chancellor Rachel Reeves dedicated a section of her speech to the issue, pledging £28bn per year to tackle climate change for the rest of the decade – adding she would be the country's "first green chancellor" if elected.
Sunak is due to deliver the 2021 autumn budget next week, and is expected to outline the country's economic strategy for moving towards net zero.
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