Tuesday, May 30, 2023

Net-zero carbon impact on UK debt could be less than pandemic hit


© Reuters. A man walks through Greenwich Park as a haze of pollution sits over the London skyline April 3, 2014. REUTERS/Luke MacGregor/Files

LONDON (Reuters) – The impact on Britain’s public debt mountain caused by action to meet the country’s net carbon zero target by 2050 could be less severe than that of the coronavirus pandemic, as long as the government moves quickly, the country’s fiscal watchdog said.

The Office for Budget Responsibility said its early-action scenario added 21% of gross domestic product to public sector net debt in 2050-51, or 469 billion pounds ($650 billion) in today’s terms.

“That is somewhat smaller than the addition to net debt as a result of the pandemic,” the OBR said in a report on the risks facing Britain’s public finances.

In a delayed-action scenario, debt in 2050-51 would be 23% of GDP higher than in the early-action scenario, it said.

($1 = 0.7217 pounds)

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