In the last decade, dozens of pieces of legislation and regulation have been introduced in the UK to help address climate change. We have decarbonised more quickly than any other G20 nation, but almost all of this has been paid for by increases in household energy bills. As a result, middle and lower income families have borne a disproportionately high cost.
The UK Government has now committed to net-zero carbon emissions by 2050. It’s an ambitious undertaking and one with overwhelming public support. But a goal alone is not enough. We need a framework to support and accelerate the transition. And this time, we must make sure the burden does not fall on those least able to pay.
That’s why, today, I am launching the ZeroC campaign, calling on the UK’s next Prime Minister to introduce a General Carbon Charge, one which would account for carbon pollution within the price of goods and return the money raised to citizens in the form of a “carbon dividend”. I am committing an initial £1m of my own money to convene a group of scientists, economists and business leaders to work through the challenges of implementing such a policy in the UK. At next year’s UN Climate Change Conference (COP 26), I want Britain to back up our net-zero commitment with an undertaking to introduce a general price on carbon.
We need a General Carbon Charge for three reasons. Firstly, a market-based mechanism of this kind will encourage the early adoption of the lowest cost solutions, leading to a lower cost overall. Secondly, it will allow individual choice while encouraging people to change behaviour – just as the plastic bag charge has done, delivering an 86% reduction in plastic bag usage in just three years. Most importantly, it will ensure the necessary transition to net-zero does not unfairly impact the less well off. Putting a price on carbon emissions ensures that those most responsible for pollution pay. Returning the money raised to citizens in the form of a “carbon dividend” ensures that those who can least afford it won’t be unfairly penalised.
A General Carbon Charge is not a silver bullet for tackling climate change but it’s a pivotal part of the solution. We will still need new regulations and policies, but adopting carbon pricing will help keep these interventions to a minimum.
Opinion polls show that citizens want urgent political action on climate change. Leading economists, agree that a price for carbon is the most cost-effective way to reduce carbon emissions at the scale and speed that is necessary. Simply put, we will not reach net-zero until we measure and price all carbon emissions.
Two hundred years ago Britain led the world in the industrial revolution. At that time, huge advances in technology created great wealth for some, but not all. Now we have the opportunity to lead the world again, to swing our economy behind the zero carbon revolution. Let’s make sure this time the benefits are spread fairly across society.