Not all taxes are bad. Sometimes, governments use them to recover money from free-riders. Carbon pricing is an example. It’s a tax that ensures polluters pay the full financial costs of their greenhouse gas emissions.
These are real costs that we all pay. Examples are insurance premium hikes (caused by increased climate-related claims), higher food prices (as climate change impacts agriculture) and increased taxes (to fund flood defences).
Carbon pricing does not increase costs overall (because the costs are already there) but it does change who pays. Quite simply, the more you pollute, the bigger the share of the costs you pay.
Taxing emissions isn’t just fairer. It focusses the minds of millions of people, businesses and organizations on how to avoid the tax by reducing their emissions. Governments then no longer need to decide whether to encourage nuclear power, tree-planting or veganism. Market forces will find the cheapest solutions. And cheap is good—the lower the cost of cutting emissions, the sooner and faster it will happen.
Carbon pricing is such an effective policy that the UK already does it! It’s called the UK emissions trading system (ETS). However, it requires significant changes to make it effective, fair and popular. It currently only covers 25% of UK emissions, the carbon price is too low and, because it does not include any element of revenue recycling, it does not compensate citizens for the resultant increase in energy and transport costs.
Improved carbon pricing is a central pillar of the Citizens’ Climate Lobby. It’s what we campaign for because, when done correctly, it’s the least disruptive, fairest and most cost-effective way to achieve rapid emission reductions.
