Public support for carbon pricing

| 8th July 2020
Boris Johnson
Wikipeda
Strong and consistent carbon price has public support and can help UK government fund green recovery, new report finds.

72 percent of poll respondents supported “taxing big businesses that produce the most (greenhouse gas) emissions, while exempting small businesses”

Leading experts - including the head of Greenpeace, a former Committee on Climate Change chair and the Green Finance Institute chief executive - recommend introducing a phased, sector-based carbon charge to allow markets to play a full role in the transition to net zero. 

Recent public opinion research by the Zero Carbon Campaign revealed that the public are willing to trade off the speed of economic recovery from Covid-19 in order to prioritise environmental progress. They also believe that environmental taxation can play a role in driving a green recovery.

Polling revealed absolute support for a carbon tax, and 72 percent of poll respondents supported “taxing big businesses that produce the most (greenhouse gas) emissions, while exempting small businesses” when asked about potential policies to pay for pollution.

Spending

The findings were underlined by focus group research, which revealed support for carbon pricing when it is considered holistic (applied across the economy) and fair (it does not place unmanageable costs on households when no alternatives are available)

After six months of public, policy and economic research, and consultation with cross sector stakeholders, the Zero Carbon Commission is calling on the Government to introduce a carbon charge of £55/tCO2e (carbon dioxide and equivalents) on greenhouse gas emissions across much of the economy by 2025, rising to £75/tCO2e by 2030.

The Zero Carbon Commission are also calling on the government to use some of the revenue to drive investment in green alternatives, provide funds to cushion households from cost increases, and contribute to core government spending in a way that can incentivises behaviour (i.e home energy efficiency improvements).

In addition, the government shouldtTake a sector-based approach, with varying prices, compensation and incentive mechanisms across electricity, heating, surface transport, aviation, agriculture, and other trade exposed industries. 

The report adds to the chorus of calls for governments to extend carbon pricing from several high-profile organisations, including the International Monetary Fund (IMF), Organization for economic Co-operation and Development (OECD) and most recently, the UK Committee on Climate Change (CCC). 

Transition

The Commission finds that a carbon charge would have the strongest effect on the domestic and commercial gas heating sector, and recommends making financing mechanisms for energy efficiency and low carbon heat solutions available to households in advance of introducing a charge.  

The poorest households should also be compensated for any rise in energy costs. Analysis commissioned from Vivid Economics and LSE suggest that most of the regressive elements of the charge can be mitigated if compensation mechanisms are focused on the poorest 30 percent.

The Commission’s full white paper detailing the strategy for introducing carbon pricing more broadly across the UK will be published in late summer 2020. 

Professor Sam Fankhauser, director of the Grantham Institute at LSE and member of the Zero Carbon Commission, commented: “The Government's future proposal for a UK Emission Trading Scheme does not go far enough to discourage the production of greenhouse gas emissions.

"We need to introduce a stronger, more consistent carbon price signal across more sectors of the economy if we want to accelerate the transition to a low carbon economy. A clear price trajectory - which is consistent with the Government's net zero ambition - can enable businesses and consumers to adapt and provide greater certainty for investors in low carbon technologies”.

This Author 

This article is based on a press release from the Zero Carbon Commission. 

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