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On a busy day for climate news, we've written to Ministers, following their request for us to consider the future of carbon pricing and the ETS.
Think of this as part one. Part two comes when we advise on the pathway to net zero next year.
bit.ly/2TgC4cR
Think of this as part one. Part two comes when we advise on the pathway to net zero next year.
bit.ly/2TgC4cR
Carbon pricing and the EU ETS are major planks of decarbonisation policy, so this is important stuff. The EU currently has a big influence on UK carbon pricing. Needless to say, the present uncertainty over Brexit means we're watching closely as the date of EU Exit draws near.
Recommendation 1:
The Government should not rely on carbon pricing alone. While carbon pricing is essential, it needs to be used as part of a suite of policy instruments, as confirmed by real-world experience internationally.
The Government should not rely on carbon pricing alone. While carbon pricing is essential, it needs to be used as part of a suite of policy instruments, as confirmed by real-world experience internationally.
Recommendation 2:
We agree with the Government’s preference for a linked UK-EU ETS in the case of EU exit. But if a linked scheme proves not to be possible, we will offer further recommendations as quickly as we can.
We agree with the Government’s preference for a linked UK-EU ETS in the case of EU exit. But if a linked scheme proves not to be possible, we will offer further recommendations as quickly as we can.
Recommendation 3:
We recommend that the cap of the linked UK ETS should be set based on the cost-effective path to the UK’s new net-zero target. We will provide that trajectory in our advice on the sixth carbon budget (covering 2033-2037), which is due in 2020.
We recommend that the cap of the linked UK ETS should be set based on the cost-effective path to the UK’s new net-zero target. We will provide that trajectory in our advice on the sixth carbon budget (covering 2033-2037), which is due in 2020.
And there's an excellent piece of supporting research from @VividEconomics which looks at some of the policy design questions in a really clear-sighted way.
theccc.org.uk/publication/th…
theccc.org.uk/publication/th…
