Task force backs energy tax plans

The government task force set up to look at ways of reducing industry’s carbon dioxide emissions has concluded that there is a role for an energy tax. Lord Marshall, who led the task force, said a tax was probably the only measure that would persuade small and medium-sized enterprises which account for about 60% of […]

The government task force set up to look at ways of reducing industry’s carbon dioxide emissions has concluded that there is a role for an energy tax.

Lord Marshall, who led the task force, said a tax was probably the only measure that would persuade small and medium-sized enterprises which account for about 60% of the business sector’s CO2 emissions to contribute to cutting national levels in line with last year’s Kyoto agreement.

However, he stressed that the domestic and transport sectors also must play their part in meeting UK climate change commitments.

Welcoming the availability of globally tradeable permits as a second economic instrument to curb emissions, he said it would not yet be practical to introduce a fully-fledged system.

Industry reaction was generally positive. The Confederation of British Industry, which was opposed to an energy tax on business, said it was still ‘not convinced’ that the measure would be the most effective way of achieving the Government’s objective. But it welcomed the recognition of the benefits of tradeable permits.

The Engineering Employers’ Federation highlighted the report’s conclusion that the domestic and transport sectors also had a role to play.

Paul Reeve, the EEF’s head of safety and environment, said: ‘Any attempt to obtain reductions by industry alone is inconsistent with the society-based view of sustainable development and we are pleased that this has been recognised.’

The Electricity Association was also broadly supportive but expressed disappointment that Lord Marshall had not recommended the early adoption of emissions trading.