THREAD: I have just finished reading Government's consultation on "Addressing carbon leakage risk to support decarbonisation" and it's good, very good: gov.uk/government/con… My first observation is that this is a joint consultation from @hmtreasury and @energygovuk, which is a positive thing indeed. Carbon leakage was first addressed in HMT's Net Zero Review (remember that document): gov.uk/government/pub…

MINI THREAD: I've just been catching up on things post holiday and a quick scan of the Government's 'Developing the UK ETS' Consultation document reveals that the Heat & Buildings and Road Transport sectors aren't being considered as part of the initial expansion to new sectors: This goes counter to what we read in the media last summer:

https://twitter.com/danialsturge/status/1410914314865852425

Clearly, the state of the world has changed dramatically since then and the current political economy would make it a very tough sell. Nonetheless, this is an interesting omission.

THREAD: Government have published their long-awaited Hydrogen Strategy, so I thought it was worth summarising @EnergySysCat’s work so far on this important energy vector for Net Zero. gov.uk/government/new… Insights from our Energy System Modelling Environment (ESME) tells us hydrogen is necessary for Net Zero, but the role it will play remains unclear: es.catapult.org.uk/reports/innova…

THREAD: Today, The Times are leading with Government plans to expand coverage of the UK ETS to include heat and transport fuels.

thetimes.co.uk/article/gas-an…

It just so happens that we @EnergySysCat have been thinking about this. We know that 'effective carbon prices' vary widely between sectors. This is no more stark than for transport (rail vs. road vs. air) and heating (gas vs. electricity) as our chart illustrates:

THREAD: Today, we @EnergySysCat have published our report on ‘Developing Carbon Credit Markets’, where we explore how linking sectoral policies through trading can play a key role in opening a pathway to an economy-wide carbon policy framework. es.catapult.org.uk/reports/develo… Such an approach has a number of key advantages for achieving Net Zero, including enabling a cost-effective and efficient balance of emissions reduction across sectors to emerge over time.

THREAD: We @EnergySysCat today published an independent report produced for the @theCCCuk as an input into their Sixth Carbon Budget advice - ‘Industrial Decarbonisation: Net Zero Carbon Policies to Mitigate Carbon Leakage and Competitiveness Impacts’: es.catapult.org.uk/reports/indust… We evaluated a range of carbon policies, including standards, pricing, and subsidies:

The @theCCCuk have published their response to the Government's request for advice on the future of UK carbon pricing: theccc.org.uk/publication/le… (1/5) The first recommendation is key: "The Government should not rely on carbon pricing alone. Whilst carbon pricing is essential it needs to be used as part of a suite of policy instruments, as confirmed by real-world experience internationally." (2/5)

As part of our Rethinking Decarbonisation Incentives (RDI) project we @EnergySysCat have published a report that lays out our key findings from the past 18 months and recommendations for future carbon policy for clean growth (es.catapult.org.uk/news/rethinkin…) #ESCnetzero For reference, we use ‘carbon policy’ as a shorthand for a wide set of policies that create economic incentives to reduce greenhouse gas emissions (including pricing, regulation, subsidies, and standards) #ESCnetzero

As part of @EnergySysCat's project 'Rethinking Decarbonisation Incentives' we have been thinking about the difficult question of what policies are needed to incentivise the agriculture, forestry and other land use (AFOLU) sectors to lower emissions? We explored the specific policy issues around cutting emissions in the AFOLU sectors, commissioning experts (namely @arrhenius) from @IEEP_eu, who delivered a wonderfully accessible report es.catapult.org.uk/publications/r…