Treasury freeze of Carbon Price Support Rate could ‘endanger’ UK 2030 emissions targets – Response to Autumn Budget announcement
Responding to the Budget announcement today (22 November 2017) Bob Ward, policy and communications director at the Grantham Research Institute on Climate Change and the Environment and the ESRC Centre for Climate Change Economics and Policy at the London School of Economics and Political Science, said:
“It is disappointing that the Treasury is continuing its indefinite freeze of the Carbon Price Support Rate, a move that could endanger the achievement of the UK’s emissions target for 2030. The current combined carbon price of about £24.50 per tonne of carbon dioxide, created by the Carbon Price Support Rate of £18 per tonne and the market price in the European Union Emissions Trading System of about £6.50 per tonne, may be sufficient to complete the removal of coal from UK power generation, which only supplied 9 per cent of electricity in 2016. However, this price is likely to be too weak to create enough shift from gas-fired power stations to low-carbon sources, such as renewables and nuclear. We pointed out in our report earlier this week that such a shift is required if the UK’s power sector is to reduce its emissions by at least 60 per cent by 2030, as required by the UK’s overall target.
“The Government also appears to have frozen its cap on subsidies for renewables from 2021-22 until 2024-25, which should provide some reassurance to investors. However, it is not clear whether such levels of support will be sufficient to ensure the development of enough new low-carbon sources of electricity to meet the UK’s emissions targets.”
NOTES FOR EDITORS
- The ESRC Centre for Climate Change Economics and Policy (http://www.cccep.ac.uk/) is hosted by the University of Leeds and the London School of Economics and Political Science. It is funded by the UK Economic and Social Research Council (http://www.esrc.ac.uk/). The Centre’s mission is to advance public and private action on climate change through rigorous, innovative research.
- The Grantham Research Institute on Climate Change and the Environment (http://www.lse.ac.uk/grantham) was launched at the London School of Economics and Political Science in October 2008. It is funded by The Grantham Foundation for the Protection of the Environment (http://www.granthamfoundation.org/).