Borrowing to save the planet

The government would have us believe that not only can we get to net zero in electricity by 2035, but that it won’t cost very much. All the green investment needed will be paid for through borrowing, and the returns on that investment will pay back the initial outlay and the interest. The problem with this approach is that it is not us, the polluters, who pay for the damage we have caused to the environment, but rather that debt will be passed on to the next generation. This is the result of the shift from pay-as-you-go, the approach that existed from 1945 to the end of the 1970s, with each generation effectively paying through their utility bills for the investment and capital maintenance of the systems (an “intergenerational contract”), to pay-when-delivered, the approach adopted during the Thatcher government in the 1980s and the great privatisation boom. The understanding was then that newly privatised utilities would borrow and pay back from the returns they made from the future customers. Forty years later, and this appetite for debt has become addictive. This podcast looks at the risks of this borrowing, with the result that we are living beyond our means, what this means for the next generation, and what we need to do now to mitigate this.