A Commons select committee warned it could have a ‘devastating effect’ on UK industry, risked artificially raising electricity prices for consumers and might have no overall impact on emissions.
Those were some of the conclusions of a report on emissions trading by the Commons Energy and Climate Change Select Committee published today.
Committee chair Tim Yeo MP said: “Unless the price of carbon is increased at an EU-wide level, taking action on our own will have no overall effect on emissions other than to out-source them.”
He added: “A revenue raising exercise disguised as a green policy won’t help anybody, the price of carbon has to be increased at an EU level to kick start investment in clean-energy.”
By the end of this year, the European Commission will complete the sale of 300 million EU allowances (EUAs). The proceeds will be used to fund carbon capture and storage and renewable energy projects under the New Entrants Reserve (NER300) scheme.
EUAs have been trading around Euros 7 in recent weeks. This time last year they were worth double.