LIFE will levy a charge on all fuels related to their carbon/GHG emmissions. The charge (a “Carbon Tax”) will be charged at source on all fuel production in the UK, and assessed on all imports (fuels and products). Activities in the UK that contribute will also be subject to the levy, such as animal farming and concrete manufacture.
This tax, and the empowerment of Community Assemblies to charge “waste taxes”, are the main LIFE Environment policies for funding climate mitigation investments.
Revenues from this tax will be paid into a Climate Mitigation Fund managed by the National Infrastructure Bank and that fund will only finance related projects. Priorities will be insulation of housing stock and a smart grid infrastructure.
The level of the Carbon Tax will be determined by a formula that is open, and can be used to predict and explain the level of the charge. The tax will be introduced in stages over a 5 year period from 2017 to 2022, replacing the carbon price floor (CPF) which is designed to level a charge of £30 per tonne by 2020 on current projections.
It will include assessing mitigation costs, such as building flood defences and other infrastructure necessary to combat the effects of adding the pollution to the air. The carbon output of each fuel type (oil, gas, coal, etc. is a known fact) and will be used to assess the level of the charge for that fuel.
The total cost will be divided by the total carbon (GHG-equivalent) released, to result in a charge per ton of carbon.
Balancing the Cost to Business
Businesses will gain a net reduction in costs with LIFE policies. WellFair will reduce basic labour rates, and that will result in a greater reduction in costs to business than the increase in input costs caused by the carbon tax.
The EU Emissions Trading System
LIFE will lobby for the EU emissions trading system to be replaced by a straight Carbon Tax, harmonised across all member States.
Protecting the poorest
LIFE will isolate most on the lowest incomes through our WellFair policies.
The fastest and cheapest way of reducing energy bills is through better insulation of the UK’s ageing and draughty housing stock, as recommended by the government’s Fuel Poverty Advisory Group. Funding the insulation of our housing stock will be a priority for Carbon Tax revenues, and will be made more affordable by reductions in basic labour rates resulting from WellFair provision.
We will evaluate the possibility of a credit voucher, funded by the carbon tax revenues, for those on incomes less than half the National Median.
4 replies on “Carbon Tax”
http://www.bbc.co.uk/news/business-22267231The CCC’s chief executive, David Kennedy, told the BBC.”High levels of imported emissions reflect the need for emissions reductions in other countries if climate objectives are to be achieved,” he said.”We should focus on reducing emissions produced in the UK, and proactively supporting an international agreement to reduce global emissions, following which our imported emissions would fall.”Mr Kennedy said border tariffs on CO2 embodied in imported goods should not be ruled out as an interim measure while the world struggles towards a global agreement.The report did contain some good news on climate policy for the government.Some lobbyists have argued that UK’s unilateral climate targets are forcing up energy prices and driving manufacturing jobs abroad, but the committee found this false.Impact on jobs ‘negligible’It said the UK exported its manufacturing jobs during the structural changes of the 1980s (during the Thatcher government) and pointed out that few industrial jobs are being lost at present.It said the impact of carbon policies on jobs is “negligible”, although it did not offer a figure.The committee also said that energy costs due to low-carbon policies are expected to rise by 20-25% from 2011 to 2020 for industrial users.But it said that across industry as a whole, energy costs account for around 3% of total costs, so increasing energy prices are unlikely to have much impact.It admitted that the government may need to continue support for firms needing large amounts of power.The energy-intensive industries account for around 2% of UK GDP and 2% of jobs.The committee agreed that if nations fail to agree a meaningful deal on CO2, the UK should reconsider in 2020 its own unilateral climate change targets.
Putting a price on carbon pollution is something that finds support in across the globe, and in some very unexpected places.Large areas of the world have already put a price on carbon:33 countries and 18 sub-national jurisdictions will price carbon in 2013. This comprises 850 million people and nearly a third of the global economy.An official in the Chinese Ministry of Finance said that the country was considering a price on carbon along with a market-based cap-and-trade system. China’s emissions are the largest in the world and if the nation put a well-designed price on carbon it would have a significant impact.Support for pricing carbon pollution is surprisingly widespread in the U.S.:67 percent of Americans would rather reduce the deficit via a carbon tax than through cutting government programs, according to a poll conducted last December. A revenue neutral carbon tax that would provide dividends back to taxpayers and invest in renewable energy received 70 percent support in the poll.Another poll by YouGov found 56 percent of Americans would prefer a carbon tax to help reduce the deficit. The poll used an interesting tool that allowed participants to try to balance the budget themselves, which led to more than half concluding that a carbon tax would be a good idea. (Another poll found less support if the revenue would only be used to pay for renewable energy initiatives, so the fiscal component is key to gaining wider support.)Many businesses prefer taxing carbon pollution: Microsoft founder Bill Gates said it was a matter of when, not if: “When we get a carbon tax we should put some of that into innovation.ExxonMobil nominally supports a carbon tax (largely because of its natural gas investments that would become more valuable compared to coal), though the corporation will not be lobbying for any kind of carbon regulation. It simply views the carbon tax as the most straightforward option if the country decides to do something about carbon pollution.Royal Dutch Shell, Swiss Re, Statoil, and Kodak signed on to a joint statement that called for a “clear, transparent and unambiguous price on carbon emissions.”BP and British electricity producer EDF Energy also signed on to the joint statement.Caterpillar said it preferred a carbon tax over other methods of regulating carbon.Duke Energy announced it would lobby for a carbon tax in 2005.FedEx CEO Fred Smith argued a carbon tax would help solve the “huge costs — externalities — of our national defense”:“A predictable, graduated tax would have an impact on the role of the military overseas, improve the environment and be good for the economy, Smith argued…. ‘If people want to call me a socialist for recognizing these huge costs — externalities — of our national defense … we need to solve this problem,’ he said. ‘The failure to do it is not only going to create serious consequences in terms of our economy, but we’re going to make a big mistake and get into a big conflagration over this thing,’ he predicted.” Read more at http://cleantechnica.com/2013/05/14/carbon-tax-has-very-broad-bipartisan-support-outside-of-congress/#0JS07C9GiAp8E6KF.99
The US Administration this month raised their official social cost per ton of carbon to $36 (£25).if the average cow produces 100Kg of Methane per year, that works out at 2.2 tonnes carbon-equivalent, so a carbon tax at £25 would see farmers paying £55/year/head of cattle.
“A more efficient method of limiting global warming than regulatory controls … would be a tax on carbon emissions.” – Posner