What risks, if any, did the Treasury raise with the Minister as to the exclusion of the updated scenarios, if any, of the potential fiscal costs of offshore mitigation from the Budget Economic and Fiscal Update, given this potential fiscal cost is now within the forecast period?

Answer

The Budget Economic and Fiscal Update (BEFU) includes Treasury's most up to date assessment of the appropriate treatment of these potential costs, which was to disclose climate targets, including Nationally Determined Contributions (NDCs), as a fiscal risk to the forecasts. This disclosure notes that, if a government were to purchase offshore mitigation to contribute to the first NDC, costs would fall within the forecast period. The Treasury on 11 June published a report with updated scenarios that provides more detail on the extent of this fiscal risk. The Treasury has informed me the risk disclosure included in BEFU remains accurate and is consistent with that analysis.