09 Feb 2010 08:02:06
Tax needed for transition to low carbon economy
A new report from the Environmental Audit Committee claims that carbon prices are not high enough to make the Emissions Trading Scheme effective.
MPs have warned that the carbon market is too weak to make the Emissions Trading Scheme (ETS) conducive to hitting climate targets.
A new report from the Environmental Audit Committee has found that the current price of carbon per tonne is too low at around 13 euros (£11) to force business and industry to invest in low carbon technology. It needs to be around 100 euros (£88), claim the study's authors.
Recommendations included the introduction of a carbon tax, as well as incentives for low power generation announced last week and emissions standards for electricity generation.
It also said that unilateral action by the UK might be necessary, given the failure of the ETS scheme. The report also called for governments to take on a "full range of fiscal and policy instruments"to estrict the number of available permits and keep prices at levels "where renewable and low-carbon investments become economically viable."http://tinyurl.com/yd4rn8d