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Carbon Emissions

Question for Treasury

UIN 7228, tabled on 29 October 2019

To ask the Chancellor of the Exchequer, what fiscal steps his Department is taking to support the UK's transition to a low-carbon economy; and what his policy is on the future of carbon pricing in the UK.

Answered on

4 November 2019

The UK is the G20 leader in reducing the carbon intensity of its economy, and is using a range of policy levers – including spending and taxes – to support the UK’s transition to a low-carbon economy.

The Clean Growth Strategy set out significant investment by the Government in decarbonisation including £2.5 billion to support low carbon innovation from 2015-2021, £4.5bn to support development of renewable and low carbon heating through the Renewable Heat Incentive and £1 billion to support the uptake of ultra-low emissions vehicles. In addition, government has supported the deployment of renewable electricity projects, with annual consumer support now reaching over £10bn.

HMT has accepted the Committee on Climate Change’s (CCC) recommendation to conduct a review into the costs and benefits of transitioning to a net zero economy. The Review will consider how to achieve this transition in a way that works for households, businesses and public finances.

Carbon pricing has helped to drive down UK emissions, in particular from the power sector, and will continue to play an important role to help meet the UK’s legally binding carbon reduction commitments, which are unaffected by leaving the EU.

The government is considering long-term options for carbon pricing including the possibility of linking a UK greenhouse gas emissions trading system with the EU ETS. As announced at Budget 2018, in the event the UK leaves the EU without a deal, the Carbon Emissions Tax would be introduced.

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