Consumer group Which? this week joined a growing chorus of critics of the government’s plan to guarantee a minimum price for carbon. Which? said the tax will pile costs on consumers and fail in its aim to boost investment in green generation.
The government plans to expand the existing Climate Change Levy to create a “floor price” for emissions. According to Which?, government figures predict the carbon floor price will add up to 2 per cent to electricity bills in 2013, rising to 6 per cent by 2016. Which? executive director Richard Lloyd said: “It’s unacceptable for the government to pile yet more pressure on household budgets.”
He has called on chancellor George Osborne to axe the carbon floor price in this year’s Budget.
Lloyd echoed comments by the cross-party Commons Energy Select Committee that criticise heavily the planned carbon price floor. Committee chairman Tim Yeo said: “Instead of going it alone, the chancellor would be better off working with other European governments to make the EU Emissions Trading System more effective as a whole. EU countries must set aside pollution permits to end the glut that has caused the price of carbon to collapse.”
In a report last summer, the Institute for Public Policy Research think-tank described the carbon floor price as “pointless” and predicted it could plunge another 60,000 households into fuel poverty in 2013 when it is applied, rising to 90,000 by 2020.
Critics of the carbon price floor warn that it will subsidise carbon emitters elsewhere in the EU.
This article first appeared in Utility Week’s print edition of 16 March 2012.
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