Royal Society Targets CO2 in Challenge to Climate Change Levy

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Researched by Industrialinfo.com (Industrial Information Resources Incorporated; Houston, Texas). The influential and august Royal Society (Science) in the United Kingdom has called on the UK government to scrap the existing climate change levy and replace it with a carbon tax or a system of 'carbon dioxide' permits to combat global warming.

Sir Eric Ash, the chairman of a working group on economic measures to reduce greenhouse gas emissions stated that the climate change levy is not an effective way of reducing the amount of carbon dioxide that is pumped into the atmosphere as it is a tax on energy and not on greenhouse gases. Moreover, the levy does not apply to the use of fossil fuels by households and transport, and penalizes electricity sources that do not produce greenhouse gases.

The group's report says that the UK government must address how to set a price for releasing carbon dioxide into the air in a forthcoming official White Paper. Having looked at the options the scientists and economists believe that the most effective way of doing this would be through a tax imposed on all carbon dioxide emissions or a system of tradable permits to control the amount of gas released.

The UK's carbon dioxide emissions have started to rise again, said the chairman. If the government's White Paper misses the opportunity to reverse this trend, the UK could hasten the onset of potentially catastrophic climate change.

The report recommends that the carbon tax or permit system should be applied to all producers of carbon dioxide, including householders. However the government should provide compensation, for example through state pensions, to help the more vulnerable members of the community. A carbon tax might be equivalent, initially, to an extra 1.4 cents per kilowatt hour for electricity bills or 8.4 cents more per liter of petrol.

Permits could be initially allocated to individual companies on the basis of their previous emission levels. However, this should be replaced as soon as possible by a system through which companies purchase the permits by auction. Permits could also be traded by owners.

The assumptions that taxes or permits to reduce emissions of carbon dioxide will cause great damage to the economy are challenged in the report. Sir Eric said that several independent studies have shown that the overall cost of even a drastic reduction in carbon dioxide emission is modest, with estimates in the range of 1% of the world's gross domestic product for the next 100 years. This cost is negligible compared with the expected long-term growth in the global economy over that period of 1% to 3% each year.

Under a carbon tax or permit system fossil fuels would become more expensive, says the report. However, renewable or nuclear energy, which do not emit greenhouse gases, would become more competitive, as would long-term methods of disposing of carbon dioxide so that it does not reach the atmosphere.

The new tax or permit system should be introduced gradually, with the aim of applying it to all the countries of the European Union and possibly extending it worldwide. The report concludes that the UK government should seek an international agreement to introduce the tax or permit system.

As renewable energy and greenhouse gas emission policies and strategies come under review IIR feels that a clearly stated conversion index should be promoted to the broader public. This would enable citizens to comprehend the thousands/millions of tons of carbon dioxide abatement being claimed by all or any interested parties. Are these 'authorities' all reading off the same page with a scientifically established, provable and overt set of conversion rates? If not, the matter needs a quick and public fix. Then anyone playing fast and loose with conversion/abatement claims should be tied to the rotor of a turbine, forever to spin in the wind of spurious claims.