
Breadcrumbs
The UK says it wants the world’s first net zero carbon market
But the plans don’t yet add up...
- The government needs to firm up the net zero proposal into a real commitment, and ensure this commitment includes lobbying for the EU ETS to match it.
- The UK should make the Auction Reserve Price (the carbon floor price) permanent, and with an upward trajectory (e.g. LSE suggests a whole economy price of £75 by 2030). Giving a guaranteed minimum cost to carbon pollution makes it much easier for emitters to be certain their investments in low-carbon technology or energy efficiency will pay-off. Supply adjustment mechanisms (as the UK has proposed for the future) have shown themselves to be cumbersome and slow to respond to a changing context.
- The UK should abandon the carbon price exemption afforded to large power stations burning biomass – they should calculate and pay for the lifecycle CO2 they emit.
The UK government’s post-Brexit ambition for a net zero carbon market could be world-leading – but recently released plans repeat many of the mistakes of the EU system, including a very loose cap on emissions, and a market so complex it would make Rube Goldberg weep.
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