This report, co-produced with the Social Market Foundation, investigates the economic and moral questions surrounding how to share the costs of the Net Zero transition between generations. The paper explores how the following factors shape policymaking decisions on how much we should be spending on the Net Zero transition:
- Moral attitudes to future generations
- Prospects for future economic growth
- Attitudes to inequality between and within generations
- Attitudes to risk
Such considerations are not purely economic but also encompass moral and ethical questions that should be decided by open democratic discussion, not simply left to policymakers.
The report concludes that, in the interests of intergenerational fairness, the government should commit to spending significantly more at present in order to reach our Net Zero commitments. The report also argues that, in accordance with the “polluter pays” principle, this investment should be primarily financed by increasing the carbon price in the UK ETS scheme and carbon taxation today, rather than borrowing from future generations.