Our reply to the Treasury’s petition response.

The Treasury has published its response to our petition which calls for the introduction of charges on carbon emissions - here's our reply.

Dear HM Treasury,

Thank you for your response to our petition. We were reassured to hear about the Government's commitment towards "maintaining an ambitious carbon price to ensure polluters continue to pay for their emissions."

However, we would be remiss as campaigners if we did not take this opportunity to highlight the gap that exists between the Government’s professed intent to implement the polluter pays principle,* and the reality of the current policy landscape that it presides over. As we hope to emphasise, there is a stark difference between "maintaining an ambitious carbon price" in certain sectors of the economy, and demonstrating robust carbon pricing ambition across our economy, and throughout our climate diplomacy.

The Government must go further to deliver on legislated climate commitments

We fully support the ambition that the UK holds to become a "world leader" on carbon pricing. However this intent is currently being undermined by other jurisdictions – including members of the European Union – who have moved further and faster on carbon pricing than the UK has in recent months. We are concerned that the "world's first net zero aligned ETS" currently exists only in name, rather than nature, and about the state of uncertainty that this delay is causing for those involved.

The time has come to deliver on the “targets”, “aspirations” and “commitments to exploring new measures” that you have cited in your response to our Petition. The Government urgently needs to implement meaningful policies to price out pollution in line with the trajectory required to achieve net zero by 2050.

If the Government wants to become truly world-leading, it should make good on its professed intent to extend a net zero-aligned carbon price across the two thirds of the economy currently not covered. This should be complemented with a more stringent approach towards the free allocation of ETS permits** and accompanied by mechanisms that protect the poorest in our society from bearing the brunt of decarbonisation costs.

Ongoing concerns

In the response to the Petition it is outlined that “air quality has improved significantly over recent decades,” however the European Court of Justice’s ruling last month made it clear that the UK Government was guilty of “systematically and persistently” breaching air pollution limits between 2010-2017. Government data reveals that NO2 limits are still being exceeded in 33 out of 43 air quality assessment zones.

Whilst we recognise that there is an ongoing discussion about the definition of fossil fuel subsidy, there are clear examples of the use of taxpayers’ money to sponsor pollution-generation abroad. Despite a commitment from the Prime Minister to end the widespread*** practice of funding fossil fuel development overseas, funding for a controversial gas project in Mozambique looks set to go ahead; and other projects also remain on the table.

In domestic policy, the decision not to link green metrics to "the UK's biggest ever tax break to business," was a missed opportunity to direct investment toward future-facing decarbonising industries. Other announcements - such as the proposed cuts to Air Passenger Duty, and reductions to funding for the Green Homes Grant - have also cast doubt over the Government’s commitment to its legislated climate agenda.

The Government can best restore faith regarding its commitment towards climate leadership through making tangible policy-based announcements in the months leading up to its G7 and COP26 Presidencies. As outlined in your response, the forthcoming Treasury Net Zero Review presents an ideal opportunity to set out concrete proposals for addressing the urgent challenges the Government recognises need to be tackled. If the Government chooses to seize this opportunity, then it can ensure that polluters across the economy are made to pay the true costs of the damage they do. If it chooses the path of further delay instead, then it will needlessly prolong an inequitable transition and jeopardise our collective efforts to protect our planet and future generations from the worst consequences of the climate crisis.

*As stated in its Energy White Paper, Industrial Strategy and Interim Net Zero Review (to name but a few).

**Approximately 40% of UK emissions trading permits are currently provided for free.

***Over the last decade, 96% of support for global energy projects from the UK’s export credit agency UK Export Finance went to fossil fuel ventures.