The final bill for the switch to a green economy could be “well over” £1trillion over 30 years, Paul Johnson, the director of the Institute for Fiscal Studies, told BBC Radio 4 yesterday.
Any new tax rises would be politically challenging for the Prime Minister, who has already faced unrest from Tory backbenchers over new taxes introduced to pay for coronavirus pandemic measures.
The UK tax burden is now at its highest point in 70 years, casting doubt over the notion that the Conservative Party is the party of low taxation.
However, the Government argues that the impact of inaction over climate change would far outweigh any financial impacts of making the UK economy greener over the next three decades.
In the report, the Treasury states: “The costs of global inaction significantly outweigh the costs of action.
“Higher temperatures and an increased prevalence of extreme weather events could lead to reduced productivity growth in the UK and significant damage to UK capital stock.”