In the race to achieve net zero emissions by 2050, many Whitehall departments, Westminster thinktanks and independent bodies have produced cost estimates of the policy. These range from modest percentages of GDP to eye-watering trillions. Often, however, they rely on overly optimistic assumptions about the price of green technologies, and mask the potentially staggering financial burden on taxpayers. If we are to pursue net zero, transparency on this fact is essential.

In 2019, then-chancellor Philip Hammond warned Theresa May against enshrining net zero in law. Citing estimates from the Climate Change Committee (CCC) and the Department for Business, Energy and Industrial Strategy (Beis), he pegged the total cost at over £1 trillion, equivalent to £50-70 billion annually over 30 years. In a moment of prescience, Hammond highlighted risks like higher bills for heat pumps and home insulation, and said it could make making energy-intensive industries uncompetitive.

In 2020, the National Electricity System Operator (now the National Energy System Operator, or Neso) said reaching net zero could cost around £3 trillion. This figure, covering everything from renewables to grid upgrades, implied gross cash outlays of £5-6 trillion, assuming annual spending of £190 billion discounted at 5 per cent. Remarkably, the most aggressive scenario was deemed marginally cheaper than falling behind and not achieving net zero.

The CCC however, which is tasked with advising on carbon budgets, has since repeatedly slashed its cost projections. In its 2020 Sixth Carbon Budget, it outlined a ‘Balanced Pathway’ to net zero with capital costs of £1.4 trillion from 2020-2050, netting down to £957 billion after alleged operating savings from cheaper green energy. By this year’s Seventh Carbon Budget, that net figure had plummeted to just £108 billion over the period 2025-2050 – a mere 0.2 per cent of GDP annually. They achieved this remarkable feat by just reporting the difference between their Balanced Pathway and a notional baseline scenario rather than setting out the absolute costs. This cost reduction relied on dramatic falls in the cost of renewables.

But these reductions strain credulity. The CCC’s latest estimates assumed offshore wind at £37.80/MWh for 2035 delivery. In 2024, contracts for new fixed-bottom offshore wind energy were awarded at £85/MWh. Following the cancellation of the Hornsea Four offshore wind farm, last year’s contract offers were £118/MWh in 2025 prices. Floating offshore wind, crucial for ambitious targets, cost more than twice as much last year than the year before – up to £282/MWh. Solar fared no better. The CCC projections assume it’ll cost £43/MWh for 2035. In reality, contracts were awarded at £72/MWh last year.

Heat pumps, touted as a replacement for gas boilers, were in 2020 assumed by the CCC to cost £6,415, falling to under £5,000 by 2035. Yet government data from early 2025 shows median installation costs exceeding £12,000 for air-source heat pumps and £28,854 for ground-source models. Electric vehicles are similarly underestimated by the body. The CCC says a medium EV will cost £23,160, while a VW ID.3 in fact has a £30,860 starting point.

The CCC compounds the error by using 3.5 per cent discount rate for much of the cost, far below 30-year bond yields and typical car loan APRs of 5.7-14.9 per cent. It also assumes costs of capital much lower than those used by the government. The CCC’s low-ball figures inflate supposed savings and deflate upfront costs, painting an unrealistically rosy picture.

In July last year, the Office for Budget Responsibility (OBR) said achieving net zero by 2050 would incur £803 billion in fiscal impacts, including lost fuel duty revenues and extra public spending. This dwarfs the CCC’s £108 billion ‘whole economy’ cost. The OBR doesn’t fully explain the discrepancy.

It is time for honesty

Neso’s 2025 update is also a mass of over-optimism. Its Holistic Transition pathway (in which net zero is met through a mix of electrification and hydrogen) adds up to £7.6 trillion in gross expenditure, rising to £9 trillion including emissions penalties. Their Falling Behind scenario (in which some decarbonisation progress is made, but at a pace not sufficient to meet net zero_ has gross cash costs of £7.2 trillion, rising to almost £10 trillion including carbon costs. Neso also assumes offshore wind costs £53/MWh by 2035, which is less than half of what was on offer last year, and assumes that carbon prices almost double from today’s elevated level, which makes electricity from gas look pricier than it is. Their Falling Behind scenario also assumes we continue to spend hundreds of billions on renewables and low carbon technologies. The savings they project rely on unrealistic assumptions about the cost of electricity and fictitious costs of carbon. They do not present a ‘Do Nothing More’ scenario. The true cost of net zero will exceed NESO’s estimate.

As net zero scepticism grows, even within the Conservative party that legislated it, it is time for honesty. Public bodies must disclose full gross costs as well as realistic prices for renewables and low-carbon technology. Without that, the policy risks becoming an unaffordable folly, burdening generations with debt while the supposed savings are a mirage. The debate demands facts, not fantasy.