In April there was a news report on citizen’s juries which were set up in areas which would be most affected by decarbonisation. Their deliberations fed into a cross party environmental justice commission along with business leaders, union leaders and the Institute for Public Policy Research which produced its report on the 14th July.

The authors state that the gilets jaunes (yellow vest) protests in France show that fuel tax increases will bring a backlash if they are perceived as unfair. Instead, they cite Canada as an example of redistributing carbon tax revenues among citizens. 

The report is arguing for grants and support for better ‘well being’ rather than the fair dividend paid to the populace regardless of personal merit or circumstance which Canada has implemented and Citizens Climate Lobby, including Citizens Climate Lobby UK support. 

The report suggests using the proceeds of a price on carbon and borrowing at current low interest rates to ensure fundamental change in the ‘country’s economic model’.

The main suggestions are:

Adding £30bn of public investment each year in a low carbon economy until at least 2030.

A new £7.5bn-a-year “GreenGO scheme”, which would serve as a financial one-stop shop, akin to the government’s Help to Buy scheme, to help households switch to green alternatives on heating, home insulation and transport.

Upgrade local public transport and making it free to all users throughout the UK by 2030, with free bus travel by 2025 as a first step.

Introducing a “3 x 30 x 300” rule for local planning that would ensure at least three natural features are visible from every new home, every neighbourhood has at least 30% tree canopy cover, and no new home is further than 300 metres from an accessible green space.

Establish a permanent, UK-wide climate and nature assembly, alongside a “wellbeing of future generations” act in England, Scotland and Northern Ireland (Wales already has this) to ensure that all business and policy decisions must take account of their long-term effects.

Involve communities so policies reflect local priorities. This would include granting local authorities new powers over economic strategy and giving the public a direct say over how local budgets are spent.

Yes, the proceeds of a price on carbon should go to society rather than into government revenue. This plan however would not directly compensate every household for rising fuel prices evenhandedly. Most of the dividend and borrowed money is intended to benefit people living in certain areas, particularly new developments in urban areas.

 It will not directly combat fuel poverty or support rural communities who may not be considered low income but would be hard hit by rising fuel prices in transport and heating. No free bus service would be able to replace the car for every farm and small village. There is a danger in prioritising certain areas which historically has left more rural counties struggling with less money for education, health, social care etc. Note that under the Canadian plan the Federal Government report states that…

In recognition of the fact that people who live in small and rural communities have reduced access to cleaner transportation options, a supplementary amount in addition to the baseline Climate Action Incentive payment is provided for eligible individuals and families who live outside a census metropolitan area, as defined by Statistics Canada. This supplement increases the baseline amount by 10%.(p.26). 

Under the Canadian plan the majority of households are better off, this is a fairer and more politically neutral way to hand out the proceeds of the carbon price.

Illustration by Mini Grey.