UK emissions trading panel offers concrete proposals

Government ministers have welcomed proposals put forward by members of the Confederation of British Industry (CBI) and the Advisory Committee on Business and the Environment (ACBE) for a UK-wide trading scheme for greenhouse gas emissions, to start in April 2001.

The CBI/ACBE Emissions Trading Group has been working with the Government since June to develop outline proposals for a UK-wide greenhouse gas emissions trading scheme open to all companies operating in the UK.

Presentation of the scheme, ahead of the Chancellor’s pre-Budget statement on 9 November, marks the first step towards inclusion in a finance bill to be drafted in April 2000, following the spring Budget, to also include the climate change levy due to come into effect in April 2001.

According to the CBI, the scheme should benefit the UK by:

  • helping to meet reduction targets for CO2 emissions
  • offering an improved degree of economic efficiency
  • giving companies more flexibility in meeting environmental targets
  • encouraging a wider range of firms to make binding emission reduction targets (i.e. more than are involved in negotiated agreements for the climate change levy)
  • ensuring that the UK is in the forefront of international emissions trading and well-placed to get involved in any future global scheme.

Peter Agar, CBI’s deputy director general, told Industrial Environmental Management magazine: “Lord Marshall, in his report a year ago which looked at the role of economic instruments in achieving climate change goals, recommended that a domestic, UK-based emissions trading scheme should be looked at in more detail and encouraged business to take the lead role in that. That is what we have done. We launched the process in June with the commitment of a number of UK companies. Since that time we have been working intensively to get from the concept of emissions trading, which at its heart is rather a simple idea, to a practical framework on which we can build.”

BP Amoco’s Charles Nicholson, chairman of the Emissions Trading Technical Committee, said: “What you will see here is a framework. Of course, there are some key conditions, which will have to be in place to allow the scheme to happen, a number of them requiring a specific response from the Government. It is pretty clear, for instance, that we will need the right legislative framework to engage this process, and what we have termed an Emissions Trading Authority that, again, would have to be contrived on a statutory basis.”

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