UK Firms Face Compulsory Carbon Quotas

Something of British feel about the blog today. Struggling to suddenly promote his green credentials in the wake of the Stern report, UK Chancellor, Gordon Brown will outline plans for a carbon trading scheme, more expensive petrol and doubling of flight duty in his pre-budget report today.The chancellor plans to double air passenger duty on flights adding £5 to an economy short-haul flight and £10 to a long-haul flight. Business class travellers would see the duty on long-haul flights rise from £40 to £80.

He is also likely to end the three-year freeze on fuel duty in the face of falling oil prices and will add at least 1p a litre to petrol and diesel prices.

Many of the UK’s big businesses – including supermarkets, banks, universities, hotel chains, hospitals and government departments – will be forced to sign up to a carbon-trading scheme under his proposals.
The proposed system would require firms either to reduce their emissions or buy permits from other companies, giving them the right to pollute above their agreed ceiling. The plan, to be outlined today, would bind 5,000 companies and organisations not included in an EU-wide trading scheme.

The intention is that the UK initiative would cover all organisations with annual electricity bills of more than £250,000, or with electricity consumption above 3,000 megawatts. Collectively, the firms account for annual emissions of about 15m tonnes of carbon, more than a quarter of all UK business and public sector emissions.

Green campaigners are unlikely to be impressed. Friends of the Earth points out that in 1997, green taxes were 9.5% of all taxes but by 2005 it had fallen to 7.7% while, in spite of repeated government promises of substantial cuts, UK carbon dioxide emissions have risen under Labour.

A cynic might also argue that Brown has had ten years as a Chancellor to show off his green credentials. He has not. So why now, just before he vies to become Prime Minister…