Budget 2014: U-turn on Carbon Price Floor will ‘muddy an already confused landscape’
The future of the Carbon Price Floor has come under the spotlight this week, with concerns that the Chancellor George Osborne may freeze the policy in today's Budget.
It is predicted that in his Budget the Chancellor will not increase the Carbon Price Floor, designed to encourage investment in green energy and penalise polluting companies.
Many driving the environmental agenda say that the move will reaffirm the Chancellor’s disregard for a pro-green economy agenda, saying that it is likely Osborne will again side line environmental policy in favour of reducing the deficit.
Leading the debate, the renewables sector has expressed concern that a freeze on the Carbon Price Floor will risk investment in clean technology and increase the use of fossil fuels.
CDP chief executive officer Paul Simpson said: “If the Chancellor makes a policy U-turn on the carbon price floor, Government will lessen the incentive for electric utilities, heavy industry and consumers to reduce their dependency on fossil fuels.
“Policy risks are greatly exacerbated by U-turns like this which reduce investment confidence in the country, what companies and investors need is long term secure policy like the carbon budget and price floor. Securing lasting and durable benefits for the British economy will be impossible unless we tackle the root cause of climate change,” he added.
Simpson said many companies have already made and are planning to make investments based on the Government’s previous forecast of a carbon price increase.
“For many companies it presents an opportunity to grow their low carbon businesses and wean our economy of expensive fuels from a volatile international market, driving local investment and green jobs. A freeze or reduction of the carbon price floor will muddy an already confused policy landscape,” he added.
Friends of the Earth climate campaigner Simon Bullock said the Carbon Price Floor is “a tax on dirty coal pollution which is making the risks of climate change and flooding worse”.
Bullock said that instead of freezing the Carbon Price Floor, George Osborne should use the funds raised to insulate homes and help industry become more energy efficient. “This will bring bills down,” he said.
“If we want to reduce the threat from extreme weather, and the expensive misery it will bring, the Chancellor must take urgent action to cut coal pollution and help people save energy,” added Bullock.
Last week, the UK Green Building Council urged the Chancellor to ensure his Budget put energy efficiency as a top infrastructure priority and in doing so “rescue the ailing Green Deal”.
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