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Carbon taxes would be a powerful tool in the fight against climate change

    Responding to the Prime Minister's reported plans to introduce carbon taxes, Eamonn Ives, Senior Researcher at the Centre for Policy Studies, said: 

     "It's encouraging to see the Government express its interest in carbon taxes - which have been proven to be powerful tools in the fight against climate change, but are woefully underutilised. Ideally, any carbon tax would be applied uniformly across the economy to avoid creating economic distortions, and to capture as many sources of emissions as possible, including from imported carbon intensive goods and energy - as previously called for by the CPS.

     "The Government should also seek to cut other taxes - such as income tax - or explore mechanisms such as carbon dividend payments to redistribute the revenues it raises. This would ensure the carbon tax would not be regressive, and mean that the costs of transitioning to a Net Zero economy are not shouldered by the least well off in society."

    Date added: Thursday 4th February 2021