Tax carbon to fund renewable 'bonanza'

The Green party is calling for an £80 billion carbon tax ahead of its annual conference, which opens on Friday.

We also know when it comes to tackling the climate crisis, the cost of inaction far exceeds the cost of action.

The fact the Green party has chosen now - a time of steeply rising fossil fuel prices - to call for the introduction of a carbon tax may raise eyebrows.

But it is our over-dependence on finite fossil fuels that has got us into this mess. Only a transition away from oil and gas can get us out of it. And the largest survey of climate policy preferences ever, shows the public are with us

A carbon tax will not only provide a critical lever to help shift the UK towards a clean green economy. Such a tax would also provide a social dividend, especially for those on low incomes.

Cheaper

It could help deliver free home insulation, cheap public transport, and a basic income. A carbon tax is therefore a just tax, protecting those on low incomes.   

Our proposal would see the tax begin at £100 per tonne of CO2 released, rising to £500 per tonne by 2030. With the UK set to release around 800 million tonnes of CO2 this year, the tax would immediately generate up to £80 billion a year.

The escalation in the tax up until 2030 would guarantee momentum to the transition and ensure a more consistent tax yield over time as a move towards green energy and technologies takes place. 

A key justification for a carbon tax is the fact that just 100 companies have been responsible for three quarters of the world’s greenhouse gas emissions since 1988.

So the big polluters would be the ones targeted and the tax would ultimately render coal, oil and gas financially unviable as cheaper renewable energies rise up to take their place.

We also know when it comes to tackling the climate crisis, the cost of inaction far exceeds the cost of action.

Renewable

People who have already insulated their homes, installed heat pumps or solar panels, and bought electric vehicles are much better insulated against wild swings in energy prices.

The repeated failure of government to introduce policies to support such moves for the many means wealthier people are benefiting from these changes, while poorer households bear the brunt yet again.

This is why the billions of revenue paid in carbon tax by giant fossil fuel corporations would be reinvested in paying for those on lower incomes to join the renewable energy bonanza.

Our country would be so much more resilient and better protected against energy price shocks if the government had focused our energy supplies on domestic renewable resources.

Boris Johnson, the UK prime minister used his conference speech to laud ‘home-grown energy’ but this flies in the face of a decade of pulling back from support for onshore and offshore wind and pandering to Tory MPs who joined noisy but minority campaigns to oppose renewable energy projects. 

Invest

But if the government really wants to show leadership, they will announce a carbon tax as a major plank of their COP26 strategy. Such leadership would persuade other countries to follow suit.

And to stifle economic competitiveness arguments as justification for inaction, a tariff or ‘carbon border adjustment’ on goods imported from countries that aren’t playing their part in reducing emissions could be introduced - a policy under active discussion at EU level. 

It is clear that as well as a carbon tax we also need a government-led scheme of large-scale investment in the green economy.

This is where our Green New Deal comes in - a plan to invest over £100 billion a year in building new zero emission homes, insulating millions of older homes and delivering a transport revolution, while creating millions of green jobs in the process. All these measures are strongly supported by the public. 

Supported

We know we can do this. We paid for the NHS after the Second World War and spent billions on providing support to those who needed it during Covid.

At times of national emergency such levels of investment are often needed. We also know when it comes to tackling the climate crisis, the cost of inaction far exceeds the cost of action. 

The climate emergency is a time that will be marked by turbulence, unpredictability and price volatility. People in this country have a right to demand government action that brings security and equity, as well as sustainability.

It is because Green party policies offer all three that they are so strongly supported by the public.

This Author

Adrian Ramsay is co-leader of the Green party.

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