A House of Lords sub-committee (recording above) grilled Rt Hon Claire Perry MP (Devizes) Constituency, Robert Jenrick MP (Newark) and the Treasury on plans for carbon pricing, post-Brexit, on 27 Feb 2018.
If we have it right, here’s the Government’s position:
– they are committed to tackling climate change regardless of status in EU.
– to stay in the EU Emissions Trading Scheme (ETS), at least until end 2020. (The ETS is the current system of fossil fuel emissions taxation and is very complicated.)
– to link with the EU ETS. (This should be be a quicker process than with Switzerland because Britain originally formulated the ETS and we account for 10 percent of participants whereas Swizerland has ten times less)
-there’s a lot of admin associated with the ETS. The new IT infrastructure required is expected to cost more than £2.5m
-part of the EU ETS agreement is that participants spend at least 50 percent of the revenue on environment-related iniatives
-they are confident that Britain spends more than 50 percent, but it’s difficult to be exact – particuarly about climate change spend – because the tax is not ‘hypothecated’ ie the government does not tax something to be set aside to be spent on a particular thing, it goes into a general pot and then is budgeted on all sorts of projects.
-they think the ETS has been really working, and has reduced on our reliance on coal, but no mention was made of oil/gas. (ETS only covers about 20 percent of emissions)
-A rate of £16 would apply to each tonne of carbon dioxide emitted over and above an installation’s emissions allowance, which is a ‘continuation’ of the current rate. This was seen to be the simplest course of action.
-Currently, businesses are being consulted.