According to the Institute for Fiscal Studies (IFS) think tank, the government should consider a carbon tax if it wants to get serious about tackling climate change.
According to the latest research from IFS, the Nuffield Foundation and Citibank, driving the economy to zero — emitting less carbon dioxide than it consumes — will be messy and costly unless governments try to simplify their approach to taxing greenhouse gas production. A radical rethink about .
It comes as debate over how and for whom the country will pay for its ambitious climate goals. Lawmakers across the political spectrum worry that taxes on carbon-intensive products or high energy bills to support the renewable energy move will fall on the shoulders of those least able to afford it.
Yet it will be a challenge to reform the tax system and policies to support a more coherent approach to cutting carbon, the IFS said.
“However, however the government chooses to encourage more emissions cuts, the delivery results should be given close attention,” said Isaac Delestre, research economist at IFS. “There will be a need for compensation for certain groups that will inevitably be lost by higher carbon prices.”
The think tank said that repeated failure to deal with the way homes use energy by installing energy-saving home improvements such as insulation had also proved “short-term and ineffective”. It added that these failures are “exacerbating the problems of the current gas price rise”.
The IFS said the potential harm to poor households from the campaign to go green is that the government may also have to consider using revenue from green taxes to boost benefit payments.
Current policies also have “wildly disproportionate incentives,” in which end-users let go of the hook for their consumption relative to the costs faced by those directly emitting greenhouse gases. An example of this, the IFS found, is how electricity generation and road fuel are taxed more heavily than private flights, where emissions are “effectively subsidized”.
“The government could look to replace existing policies with a carbon tax, or an expanded emissions trading scheme that covers all emissions,” Mr Delestre said. “There will be huge benefits to moving at least some way towards a simpler set of policies,” he said.
While the UK has made progress on its green targets, aviation’s carbon output has increased drastically, with emissions made within the country dropping by 38 percent between 1990 and 2018. Emissions from international flights more than doubled between 1990 and 2018.
The offshoring, or carbon leak effect, of carbon-intensive products from abroad also gives a false impression of what net zero means in a globalized economy.
Like other regions such as the European Union, the UK will have to consider imposing a carbon tax on imported goods, something that is politically fraught with damage to its international relations. The IFS said such a move is a way to address the inconsistency of UK attempts to cut carbon emissions while ignoring the wider environmental impact of the country’s consumption.
Reaching net zero will require rapid emissions reductions in politically challenging sectors, where incentives to cut emissions are relatively weak, and where progress to date has been particularly slow, including household heating, agriculture, and agriculture. and aviation,” said Peter Lewell, associate director. IFS.
Credit: www.independent.co.uk /