I have to apologise for being pressed for time yesterday when writing about the parliamentary debate on the Zero C petition. In my haste I failed to take in the fact that the government had produced a briefing on the petition. The briefing states that…..
The Government response to the petition refers to the UK Emissions Trading Scheme (ETS). The UK ETS sets a limit on emissions from energy generators and energy intensive industries, which incur a cost if limits are exceeded. The Government response also points to the Government’s intention (set out in the Energy White Paper) to extend the scheme, and to explore expanding the UK ETS to cover two thirds of the UK’s remaining emissions.
Carbon pricing can take a wide variety of forms. There were some reports that the Government was considering the options for broader carbon taxes or pricing earlier this year, but that it is no longer the case.
This is very interesting (and disappointing) but it explains why we heard nothing further after the claims that Liz Truss was supporting a Carbon Border Adjustment Mechanism and the July ‘leak’ to the Times about introducing Climate Income based on the Canadian model.
The government also states that support for poorer households will be targetted capital support from the tax payer, arguing that….
Given the significant variation within income groups, it will be more effective to focus on individual technology transitions, with taxpayers providing targeted capital support for those low-income groups most acutely affected by a specific technology transition(and in advance of policies that penalise or phase-out use of high carbon technologies), than to consider the transition in aggregate and develop universal and untargeted policies to support households – such as, changes to tax and welfare. This would also mean that low-income groups could benefit sooner from the household savings that arise from a transition.
It appears that the debate was used by participants to refute these claims rather than debate universal carbon pricing, although Alan Brown did make a strong case for the lost opportunities caused by the lack of tax hypothecation and a sovereign wealth fund.
The complicated, costly and intrusive ‘targetting’ of support envisaged by the government in its net zero strategy will, it seems to me, not lead to fair and equitable transition. There is still all to play for!