UK must swap climate levy for carbon tax-study
"The UK's carbon emissions have started to rise again. If the government's White Paper misses the opportunity to reverse this trend, the UK could hasten the onset of potentially catastrophic climate change," said Eric Ash, vice president of the Royal Society.
The report on measures to cut greenhouse gas emissions urges the government to start charging for the right to emit polluting carbon dioxide (CO2) and to ditch the levy in its White Paper on energy policy which is due early next year.
"The climate change levy is not a cost 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," Ash said.
The levy came into force in 2001 and is imposed on industries that create high levels of CO2 and greenhouse gases.
But early in November British business leaders said the levy left some firms with massive bills while others fare better - regardless of whether they have taken steps to increase energy efficiency.
Ash said the levy was also inefficient because it did not apply to the use of fossil fuels by households and transport, and penalises electricity sources that do not produce greenhouse gases.
The UK aims to cut its greenhouse gas emissions by 12.5 percent by 2010, in line with the Kyoto protocol to curb global warming, but the report said it could fall short of this goal unless a tax was imposed on all CO2 emissions and a system of tradeable permits launched.
Britain has set its own further target to cut emissions by 23 percent in the same period.
Carbon emissions started rising in 1999 and increased by four percent between 2000 and 2001 to 154.4 million tonnes of carbon, according to data from the UK Department for the Environment, Food and Rural Affairs.
Fossil fuels would become more expensive under a carbon tax or permit system, allowing for more expensive renewable or nuclear energy, which do not emit CO2, to become competitive, according to the report.