LONDON (Reuters) - The cost of investing in renewable energy in Britain is 105 billion pounds higher than building the same capacity using gas-fired power plants, an economics professor said in a report published on Friday.
The extra investment cost of building power plants such as offshore wind farms is equivalent to nearly 10 percent of overall British business investment in the next 10 years, Gordon Hughes of the University of Edinburgh said in his study “The Myth of Green Jobs.”
“It is clear that the public and its political representatives have never signed up to the proposition that the UK should sacrifice a minimum of 4-5 percent of GDP annually in order to meet climate change targets,” Hughes said.
The UK aims to cut greenhouse gas emissions by 34 percent below 2009 levels by the end of the decade, compared with a 17 percent reduction in 2010.
Many renewable energy developers, as well as the government, have promoted the sector as a creator of new jobs at a time when unemployment figures are rising.
But Hughes said green job creation was misleading as its impact was only short-term during the production and construction phase, which would also apply to the creation and building of conventional power plants.
If the government’s aim was to create long-lasting job opportunities it should select sectors which generate the highest level of net benefit, he said.
“If (instead) the primary objective of such policies is to reduce CO2 emissions, then we should seek to minimise the costs of meeting that objective, including any wages for jobs directly or indirectly linked to the project,” Hughes said.
At the same time, high investments into renewable energy mean these costs will increase wholesale energy prices which will eventually have to be passed on the consumers, lifting inflation.
Hughes’ calculations show that once the economic growth effects are taken into account, the cost of saving one metric tonne of CO2 will be 270 pounds by 2020.
Carbon prices are currently trading at around 12.50 euros per tonne on the EU’s Emissions Trading System.
Reporting by Karolin Schaps; editing by James Jukwey