Here are all the ways in which Philip Hammond was wrong about the cost of fighting climate change

Hammond’s letter is an important insight into the structural changes that avoiding climate breakdown will require, but ignores both the opportunities and the potentially unlimited future costs if we fail to act

Chancellor of the Exchequer Philip Hammond has been making headlines this week with a leaked letter sent to Theresa May in which he laid out just how expensive making the UK net zero carbon by 2050 would be. The headline figure was an eye watering one trillion pounds. This came with the observation that it would translate into less money being available to be spend on things like hospitals or police.

Number 10’s response to Hammond’s letter gives every indication that Theresa May was gearing up to prepare the government to make the necessary changes to put the UK on a course towards net zero by 2050. The argument is that this is what the Committee on Climate Change (CCC) recommend on the basis of their new comprehensive report.

Given the CCC is the official advisor to the UK government on climate change matters, this seems sensible. But since when did this government actually listen to advisors when the advice dispensed meant increasing public spending? I suspect the answer here is to be found in that ephemeral political substance of legacy. Given her then-imminent departure Theresa May would perhaps have been seeking something else to add to the epithet of “Probably Worst Prime Minister Ever”. Helping humanity avert disaster should soften the edges of future historical accounts of her otherwise hapless time at the helm of the UK.

While I’m sure Hammond is being celebrated by some for pushing back against all the “green crap”, others are publicly castigating him for demonstrating that once again economists know the price of everything and the value of nothing. Because while a trillion pounds of stacked £50 notes would reach over a mile high, if humanity fails to avert climate breakdown and the worse case scenarios unfold, then its value by the end of this century will be based largely on its usefulness in starting fires that may provide some warmth in a post-apocalyptic landscape.

We can understand Hammond’s letter as the Treasury suddenly waking up to the real possibility that the UK is actually going to try to walk the talk of responding to climate change. That’s surprising to say the least because as the letter says, the UK isn’t even on track to meet the much less ambitious target of 80 per cent reductions from 1990 levels by the middle of this century. Now the government wants to go even further?

With the 2008 Climate Change Act, the UK was internationally leading with its ambitions on rapid decarbonisation, and a great deal has been achieved since then. However, our collective successes are somewhat diminished if you add in the emissions from aviation, shipping, and those produced by the many products that are made in places such as China for UK markets. It’s also the case that the low hanging fruits of decarbonisation were picked some time ago. Most important was the shift from coal to gas for electricity generation. Getting emissions down to zero will be much harder.

What Hammond’s letter spells out is just how significant this remaining work is. UK households will need to have gas fired boilers replaced by technologies such as ground source heat pumps. A massive programme of insulation would be required. Petrol and diesel cars and vans would be not be allowed to be sold after 2035 and would be banned from all roads from 2050.

This rapid transition to electric and hybrid would require 10 times more electric vehicle charging points. The letter also points out that industries would be significantly affected, in particular steel makers who use large amounts of fossil fuels. I’m sure readers of the letter based in Scunthorpe raised their eyebrows at this point because the recent collapse of British Steel and the government’s continued reticence to do anything about it doesn’t give much reason to think there will be a UK steel industry next month let alone by the middle of the century.

The letter also recognises that technology can only get us so far to net zero. We will need negative emissions that will suck out carbon dioxide from the atmosphere to offset sectors such as aviation. There will also need to be behaviour change with reduced meat consumption and lower temperatures set for home thermostats.

Hammond’s letter is an important insight into the structural changes that avoiding climate breakdown will require. But in its playing up of how expensive all this will be, the letter seems to think only in terms of costs incurred while completely ignoring both the opportunities for UK leadership in new technologies, and the potentially unlimited future costs if we fail to rein in our impacts on the climate.

One way or another, climate change will transform the UK. We could have cleaner air, less congested cities, and more comfortable housing. Or, if we don’t begin rapid decarbonising now, our children and future generations face an incredibly bleak future.

The window of opportunity to choose between these two outcomes is rapidly closing. We have to act now. If we fail to do so, then letters from the Treasury to the prime minister penned towards the end of this century will be counting costs not just in pounds, but in people’s lives.