Market-based measures to drive down CO2 emissions are a key part decarbonisation policy, but the government should not rely on carbon pricing alone to reach the UK’s net zero goal after Brexit, the Committee on Climate Change has warned.
Business Green 9th Aug 2019 read more »
I am writing in response to the request of the UK Government, Scottish Government and Welsh Government of May 2nd to the Committee on Climate Change on the future of carbon pricing in the UK, specifically in relation to the successor to the EU Emissions Trading System after EU exit. In the absence of a Minister, senior Northern Ireland Officials have indicated their support for advice being sought. The coming 12-18 months will be a crucial period for UK climate policy and the global effort to tackle dangerous climate change. Economic theory characterises carbon pollution as a market failure and an externality that needs to be priced in order to ensure that those responsible bear the costs of polluting. Appropriate pricing incentivises emissions reductions by encouraging investment decisions that reduce the damage that greenhouse gases cause. However, carbon pricing alone will not provide sufficient decarbonisation – for example the Stern Review also identifies the need for support for innovation and in tackling barriers to behaviour change. Whilst carbon pricing is essential it needs to be used as part of a suite of policy instruments, as confirmed by real-world experience internationally.
CCC 7th Aug 2019 read more »