Petition Introduce charges on carbon emissions to tackle climate crisis and air pollution

Government responded

This response was given on 30 March 2021

In June 2019, the UK became the first major economy to legislate for net zero emissions by 2050 and the Government remains committed to maintaining an ambitious carbon price.

The Government remains committed to maintaining an ambitious carbon price to ensure that polluters continue to pay for their emissions.

The UK has now launched its own Emissions Trading System (ETS) to replace membership of the EU ETS. This will be the world’s first net zero cap and trade market, delivering a robust carbon price signal and promoting cost-effective decarbonisation by allowing businesses to cut carbon where it is cheapest to do so.

The UK ETS covers emissions from power generation, energy intensive industries and aviation. Alongside this, the Carbon Price Support rate on fossil fuels used in electricity generation will ensure that a strong decarbonisation signal is maintained to ensure a downwards trajectory in power sector emissions as we push to fully drive out coal.

The 2020 Energy White Paper committed to exploring expanding the UK ETS to the two thirds of emissions not currently covered by the UK ETS, and set out our aspirations to continue to lead the world on carbon pricing in the run up to COP26 and beyond.

The UK Government is also determined to tackle air pollution given its significant negative impact on public health, the economy and the environment. Air quality has improved significantly over recent decades thanks to the action we have already taken.

The Government continues to take action to reduce emissions and improve air quality through the vehicle tax system. Users of zero and ultra-low emission vehicles have beneficial Vehicle Excise Duty (VED) and company car tax (CCT) rates in comparison to conventionally fuelled vehicles. To improve air quality, new diesel models that do not meet the Real Driving Emissions 2 (RDE2) standard for nitrogen oxide emissions have also gone up by one VED band on first registration and the CCT supplement for diesel cars that do not meet the latest RDE2 standard has increased from 3 to 4%.

To tackle climate change and improve air quality the Government will also be removing the entitlement to use red diesel from most sectors from April 2022. This means that most businesses using diesel across the UK will need to use fuel taxed at the standard rate for diesel, which more fairly reflects the harmful impact of the emissions they produce.

The European Commission’s figure of €10.5bn for UK subsidies to fossil fuels comes from the report “Energy prices and costs in Europe” which uses OECD inventory methodology as a basis for its findings. This is a broader concept of support than that of the International Energy Agency, which the UK follows. It references a broader range of support measures, including many that do not reduce consumer prices below world market levels. Such mechanisms are classified as support without reference to the purpose for which they were first put in place or their economic or environmental effects. The OECD is clear that they therefore make no judgement as to whether or not such measures are inefficient or ought to be reformed.

To be clear, the UK does not give any subsidies to fossil fuels and is a longstanding supporter of multilateral efforts to promote fossil fuel subsidy reform since these were first proposed in 2009, including through the G20, & the G7. We support the G20 commitment to rationalise and phase out inefficient fossil fuel subsidies across the globe and see clear benefits in doing so.

In June 2019, the UK became the first major economy to legislate to end our net contribution to climate change by 2050. The government also accepted the Committee for Climate Change’s recommendation that the Treasury should undertake a review into the costs of transitioning to Net Zero. The Interim Report, published in December 2020, is the first publication from the Treasury’s Net Zero Review. It is a discussion document that sets out the analysis so far and seeks feedback ahead of the Final Report, due in spring 2021. The Final Report will take this analysis further, focusing on innovation and growth, competitiveness, household impacts, and embedding the findings.

HM Treasury