Stephen Fitzpatrick has committed £1 million of his own money to a new campaign to introduce an universal carbon tax on all products.
The chief executive of Ovo Energy said the proceeds of the “general carbon charge” should be returned to citizens in the form of a “carbon dividend”.
“The UK government has now committed to net-zero carbon emissions by 2050,” Fitzpatrick explained. “It’s an ambitious undertaking and one with overwhelming public support.
“But a goal alone is not enough. We need a framework to support and accelerate the transition. And this time, we must make sure the burden does not fall on those least able to pay.”
He continued: “That’s why, today (9 July), I am launching the ZeroC campaign, calling on the UK’s next prime minister to introduce a general carbon charge – one which would account for carbon pollution within the price of goods and return the money raised to citizens in the form of a ‘carbon dividend’.
“I am committing an initial £1 million of my own money to convene a group of scientists, economists and business leaders to work through the challenges of implementing such a policy in the UK.”
Fitzpatrick said the benefits of such a tax are three-fold. Firstly, a market-based mechanism will ensure that the cheapest solutions are adopted soonest, minimising the overall costs of decarbonisation.
Secondly, it will encourage people to change their behaviour, whilst still allowing them to make choices for themselves.
And lastly, it will prevent the costs of decarbonisation from being borne by society’s poorest members and instead place the burden on those with direct responsibility for emissions.
“A general carbon charge is not a silver bullet to tackling climate change but it’s a pivotal part of the solution,” he added. “We will still need new regulations and policies but adopting carbon pricing will help keep these interventions to a minimum.”
The Energy Systems Catapult has previously highlighted a large disparity in effective carbon prices in the UK, which vary between industries by up to £700 per tonne.
It recently urged to the government to develop a “coherent” policy framework on carbon pricing, saying this would be key to meeting the net-zero target.
However, the organisation also warned that implementing an economy-wide carbon tax would be extremely challenging politically. It said ministers should instead seek to recalibrate existing policies to bring them closer into alignment.