News

OECD Paper Recommends Changes to UK Climate Policies

10 August 2011: The Organisation for Economic Co-operation and Development (OECD) has published a working paper titled “Climate-Change Policy in the UK,” which discusses and makes recommendations on climate change and emissions reductions policies in the UK.

The paper, authored by Alex Bowen and James Rydge, summarizes: British challenges and progress on emissions reductions; major policy instruments addressing these issues; the governance and long-term credibility of these policies; sector-specific policies; and adaptation to climate change. It notes that the UK has very comprehensive climate policies and clear targets for emission reductions consistent with international goals despite current financial challenges. It notes that, unlike most other OECD member States, the UK is likely to surpass these reduction goals, but that some of this success is due to one-off reductions not directly related to climate policy. The authors indicate that these reductions may therefore not be sustainable, especially considering that emissions reductions in the power sector have been limited, as has the roll-out of renewables.

The paper makes a number of recommendations, including that the Government should, among others: increase domestic carbon prices and support tighter quotas in the EU Emissions Trading System (EUETS) to bring about higher, more consistent carbon prices internationally; raise the Value Added Tax (VAT) on domestic energy use; adjust the Climate Change Levy (CCL) and hydrocarbon fuel duties upwards; investigate ways to give firms greater certainty over carbon prices; and speed up development of low-carbon technologies. [Publication: Climate-Change Policy in the United Kingdom]