UK carbon tax: yet more greenwashed billions for government coffers
Another disingenuous green tax helps government revenue without any benefit to the environment
Last week the UK government took Labour’s already renamed and delayed carbon reduction plan – the Carbon Reduction Commitment – and effectively killed it.
Under the original rules the 5,000 businesses involved (including hotel groups) – with annual power bills of about £500,000 each – would pay a tax of £12 per tonne of carbon emitted, compete with each other to be the most efficient energy users, and trade associated permits. The best operators would receive a refund greater than the amount they had paid.
Now, renamed the CRC Energy Efficiency Scheme, it will merely take the money raised – perhaps about £3.5bn over four years – and stash it in the government’s coffers.
“Sure,” wrote the UK Financial Times last week, “the Treasury needs cash, but it is baffling that the unique competition-based mechanism has been junked.
As the scheme was revenue-neutral, keeping it would have made no difference to the chancellor. Now, an all-stick-no-carrot approach will raise costs for business, while killing the incentive for a company to reduce its environmental footprint.
The episode decreases still further the chance that the UK will keep its pledge to cut greenhouse gas emissions by 15 per cent and produce one-third of its energy from renewable sources by 2020.
Labour’s £100bn offshore wind farms announced in February are unlikely to be finished in time.
Meanwhile, the creation and operation of the long-mooted Green Investment Bank will likely soak up much of the £1bn allocated to it before any funds begin to flow to significant projects. Now, the desire to balance the country’s books during this electoral term has nixed a zero-cost scheme that would have got the private sector to do much of the work.
All this comes on top of the increase in Air Passenger Duty – yet another tax vaunted as green with no sustainable advantages except those for the UK treasury.
It appears that whichever colour of politics the UK electorate chooses – none of them have as much as a hint of green except when the purse is open.
Valere Tjolle
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