- Matt Ridley warns that the UK’s Net Zero policy, forcing the public to give up key assets like petrol cars and gas boilers, could reduce GDP by 10% by 2030.
- Ridley criticises the shift to more expensive and less reliable green technologies, arguing it makes the country poorer and transfers wealth from the poor to the rich.
Former Hereditary peer of the United Kingdom, Matt Ridley, released an article about a leaked government analysis that warned that the UK’s Net Zero policy could reduce GDP by 10% by 2030. Surprisingly, the analysis predicts that this could happen if Net Zero succeeds, not fails.
It suggests that forcing people to give up petrol cars, gas boilers, foreign holidays, and beef would leave valuable assets, like cars, planes, and cows, unused, leading to a serious economic disaster.
Ridley’s article focuses on the idea of “stranding” productive assets. The government might retire old technologies too soon and replace them with more expensive and less reliable ones. In response, a government spokesman claimed that Net Zero is “the economic opportunity of the twenty-first century,” promising jobs, growth, and energy security.
However, Ridley questions whether the government understands the difference between economic growth and spending money. He gives the example of a government order for everyone to throw out their socks and buy new ones. This would create more economic activity but leave people with the same number of socks and less money to spend on other things.
Ridley argues that this is similar to the “broken window fallacy,” first explained by economist Frederic Bastiat over 150 years ago. The article also claims that replacing current technologies with more expensive alternatives, like wind farms for power stations or electric cars for petrol vehicles, is a mistake.
These new technologies are often less reliable and need big subsidies to work. Ridley points out that the UK has spent over £100 billion on green energy subsidies in recent decades, making electricity the most expensive in the developed world.
While some have made money from the green energy shift, Ridley says it mainly transfers wealth from the poor to the rich. He believes the government should focus on the needs of consumers, not producers.
He praises Kemi Badenoch, Member of Parliament of the United Kingdom, for recently returning to a consumer-focused approach. In her speech, Badenoch emphasised the importance of thinking about what benefits people, not just businesses.
Ridley argues that true economic growth comes from using fewer resources to produce more. Right now, Net Zero is making the country poorer, not richer.