Over the last five years, the OBR has made great efforts to understand and analyse the fiscal implications of climate change. To date, our analysis has focused primarily on mitigation risks, most notably in the climate change chapter of our 2021 Fiscal risks report (FRR) which provided the UK’s first comprehensive estimate of the fiscal costs of reaching the Government’s legislated net zero target by 2050. However, in order to both put this work estimate of mitigation costs in the appropriate context and to provide a more complete picture of the overall fiscal and economic implications of climate change, it is important to deepen our understanding of the potential economic and fiscal cost of climate change-related adaption and damage – some amount of which is likely to be necessary and inevitable even if all countries successfully meet their net zero objectives.

Against that background, this discussion paper sets out our plans for our future analytical work on the fiscal and economic implications of climate change. It aims to help inform the work plans of, seek feedback from, and facilitate collaboration with other bodies working on the economics of climate change.
In light of the description in our report , we would welcome views on the following questions:

  1. Are these the correct areas of focus (as set out in our discussion paper), given our scope and mandate?
  2. What work have you done that could help in this analysis?
  3. What work do you have forthcoming in this space that we could draw upon in the coming years?
  4. How would our analysis in these areas be of most use to you and your organisation?

We are now requesting responses to these questions and – given our limited expertise in this area – would be particularly grateful for responses that detail further areas of inquiry that may not have been mentioned in the paper supported by research and evidence we can draw on in our future analysis. Please send all comments to [email protected] – ideally by 20 December 2023. Please indicate whether you are happy for us to cite your submissions publicly.