Friday, January 21, 2022 at 13:00-14:15 Vienna time (CET)
Mr. James Ebdon, UK Office of Budget Responsibility
Mr. Ruy Lama, Senior Economist, IMF
Mr. James Ebdon of the Office of Budget Responsibility (OBR) of the United Kingdom presented the chapter of Fiscal Risks Report of July 2021 on climate change. In this analysis, the OBR quantified the impact of the transition to net-zero emissions on UK debt levels via several channels: additional public spending on climate change mitigation, losses in tax income due to reduced fossil fuel consumption, additional carbon tax revenues, and the effect of a lower GDP. The approach used in the analysis shed some light on the sensitivities of public debt path to different scenarios, including a delayed policy action on climate change. Mr. Ebdon also discussed the underlying assumptions and methodology for the calculation of the transition costs to net-zero emissions by 2050 and the implications of the associated higher debt levels on current fiscal policy.