Beyond our current policies – As minimum to mitigate climate change I would campaign for the extension of the climate change levy into a carbon tax and use it to meet a minimum aim of being a country in the better half of impactors on climate change rather than be one of the the 35rd worst countries (out of around 200) by 2030.
I would set up an organisation whose task is threefold:
- One group of independent experts would estimate the likely production of climate change gas each country would be producing in 2030 and provide the data for a target for Britain. This target to be set so that Britain is on the less polluting side of the median of countries in the world – in the better half.
- A second group of independent experts would analyse the polluting factors involved in climate change and work out whether they are significant to bother counting, can be suitably measured and what the carbon tax figure would be appropriate for them.
- A third group of independent experts would establish the carbon tax rate that would be needed to hit the target set by the first group using the figures produced by the second group. This tax rate would always be set five years in advance.
The target will be dynamic as each country develops in its own way. If other countries become more active in mitigating climate change then our task will be become harder. The carbon tax rate will rise faster. If other countries are lax then our task will be easier and our carbon tax will rise more slowly. However, as we are currently 35rd worst we have our work cut out in any case.
All this work would be public to allow for independent scrutiny.
In independent taxation system will provide a neutral way of nudging consumers into making decisions that favour the environment (often without consciously thinking about it because the cost is subsumed in the purchase price of what they are buying) and nudging industry to invest in more sustainable projects. Because the taxation is set in an independent framework business would be able to rely on the direction of travel. Although having the carbon tax set for five years hence can be quite short term for many industries such a move is far better than what we have now.
This tax would replace road fuel duty either partially or fully depending on whether or not road user charging was introduced. It would also replace all the special charges, grants and funding that government currently undertake to clumsily attempt to influence the economy – picking winners as it is often called. Government investment in research is fine as is investing in demonstration projects but subsidizing industries is counter productive.
The tax could either become part of general taxation to reduce other taxes – to raise the threshold for income tax higher for example and/or fund the insulation of homes and the general decarbonizing of commercial activities.