Leading energy companies have urged the UK to embrace carbon trading after the Brexit transition period concludes and not adopt a carbon tax instead.
In a letter to Boris Johnson, the group, which includes firms such as RWE and Uniper, said that tradable carbon credits remain the best way of cutting emissions.
At the moment, the UK is a member of the EU’s carbon trading system, which allows members to buy and sell credits allowing them to emit a certain amount of carbon.
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Although the government has said that it backs the development of a UK emissions trading system that can be linked to the EU’s, it is also mulling the introduction of a carbon tax if a deal cannot be agreed by 1 January.
In the letter, which was seen by the FT, the firms said: “The evidence is clear — emissions trading is a tried and tested method for reducing emissions in a market-friendly way.
“Opting for a UK emissions trading system would reaffirm the UK as a climate leader, and show that the UK remains a strong advocate for international carbon markets.
“We believe that a UK ETS (emissions trading system) is the most efficient, cost-effective, and transparent mechanism for achieving the UK’s climate goals”, it concluded.
It said that levying a tax on carbon would not have sufficient flexibility, nor would it raise more taxes.
The EU’s ETS has been in place since 2005. In recent years, the rising cost of emissions is one of the reasons why the UK has so rapidly reduced its reliance on coal power plants.
In 2017, it cost €5 to emit a tonne of carbon dioxide, but it now costs €27.
*Report was culled from Oilprice.com
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