OECD report suggests significant changes to UK climate policy
Thu 11 August 2011
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A new report published by the OECD says that while the UK Government has introduced major policy instruments for addressing climate change, some of the UK's success in achieving emissions reductions has been due to one-off reductions not directly releated to climate policy. The authors say that changes need to be made in certain policy areas including carbon pricing, EU ETS quotas and increasing taxation on energy use.
The OECD paper - “Climate-Change Policy in the UK” - summarizes British challenges and progress on emissions reductions; major policy instruments addressing these issues; the governance and long-term credibility of these policies; sector-specific policies; and adaptation to climate change.
The report notes that the UK has very comprehensive climate policies and clear targets for emission reductions consistent with international goals despite current financial challenges. It notes that, unlike most other OECD member States, the UK is likely to surpass these reduction goals, but that some of this success is due to one-off reductions not directly related to climate policy. The authors indicate that these reductions may therefore not be sustainable, especially considering that emissions reductions in the power sector have been limited, as has the roll-out of renewables.
In a brief section, the report comments on UK transport policies to cut carbon emissions. The authors comment that carbon pricing incentives in the form of fuel duties may not be sufficient to provide a sufficiently strong signal to promote the desired changes and that stronger regulation in the form of vehicle emissions standards and fleet average emissions may be required.
The paper makes a number of recommendations, including that the Government should, among others: increase domestic carbon prices and support tighter quotas in the EU Emissions Trading System (EUETS) to bring about higher, more consistent carbon prices internationally; raise VAT on domestic energy use; adjust the Climate Change Levy (CCL) and hydrocarbon fuel duties upwards; investigate ways to give firms greater certainty over carbon prices; and speed up development of low-carbon technologies.
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