Government ‘must not rely on carbon pricing alone to reach net zero’

The Committee on Climate Change says must used as part of a wider suite of policy instruments.

Festival Net Zero 2021

The government must not rely on carbon pricing alone to reach net zero.

That’s the call from the Committee on Climate Change (CCC), which has written a letter to the government stressing the next 12-18 months will be a “crucial period for UK climate policy and the global effort to tackle dangerous climate change“.

It notes while appropriate carbon pricing does effectively incentivise emissions reductions, it cannot provide sufficient decarbonisation alone and must used as part of a wider suite of policy instruments.

The CCC agrees with the government’s preference for a linked UK-EU Emissions Trading System (ETS) in the case of leaving the EU, as it maintains key benefits of membership of the EU system such as access to a wider market and maintaining fair competition.

It recommends that the cap of the linked UK ETS be set based on the most cost-effective path to the UK’s new net-zero target, which it commits to outline in its advice regarding the sixth carbon budget, due in 2020.

The letter argues there is a need for “much stronger action” across government to drive emissions reductions and says in the longer-term, a strong and rising carbon price is required to drive changes to both short term behaviour and longer-term investment decisions.

It suggests supplementary policies will be needed to address barriers and overcome preferences driven by factors other than price, which are likely to be particularly necessary in driving innovation in carbon capture and storage (CCS) infrastructure, energy efficiency in buildings and the decarbonisation of heat.

The letter reads: “In the near-term, effective carbon pricing will remain important in the power sector for
completing the phase-out of coal, and beyond then continuing to incentivise efficient
dispatch and use of lower carbon fuels.”

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