Article: Carbon pricing is the missing piece in the Chancellor's green recovery plan

If the UK wants to be a global climate leader and finance hub at COP26, a carbon charge should be a core part of its climate strategy, argues Green Finance Institute CEO Rhian-Mari Thomas

The British government is now at a crossroads of environmental, economic and societal change as it sets out its roadmap for economic recovery from the impacts of Covid-19. With the decisions made now determining the UK's emissions trajectory for years to come, the government must choose consistent carbon pricing to enable markets to play their part in the transition to net zero and a green recovery.

The £3bn energy efficiency programme that the Chancellor introduced recently is very welcome. As the Green Finance Institute's recent report highlights, energy efficiency upgrades could support more than 150,000 skilled and semi-skilled workers across the construction supply chain and contribute to the wider recovery by enabling increased consumer spending as a result of household energy cost savings.

However, the sum announced falls short of the £65bn required to improve the UK's housing stock. This funding gap alongside unprecedented pressure on public finances means additional measures are required to raise the capital needed.

As set out in the Zero Carbon Commission’s latest report, a robust, sector-specific carbon charge offers one clear way for the government to fill this investment gap.