Tories Carbon Tax Generates Green Investment Bank
The Tories have come out fighting on the green issues debate by saying that they would introduce new carbon taxes on the energy companies and form a new green investment bank to then invest into new renewable sources.
The Tories New Energy Strategy
In the run up to the election the Tories have announced their energy strategy saying they would reform the existing Climate Change Levy on power supplies, instead imposing a levy on the carbon content of electricity production. “Ultimately the cost of achieving a diverse and resilient energy system has to be paid for by consumers and reducing that cost depends on incentivising the necessary investment in the most economically efficient way” said Tory leader David Cameron.
There are critical decisions to be made both in terms of the supply and the cost. With the oil running out Britain would be forced to import energy from overseas whilst battling it out with other countries and higher demand could lead to increased prices for everyone.
The UK certainly needs investment into alternative energy methods and with the reported skills shortage together with the tough targets to reduce emissions and increase the amount of energy derived from green renewable sources tough policies need to be put into place to ensure that “in the next 15 years the lights could go off” as a Tory spokesperson has warned.
The consultation paper also calls for fast track development of nuclear power stations to ensure there is enough capacity in the system to meet demand. Previously the Conservatives have not 100% pledged their allegiance for nuclear power but this has been clarified in this document.
The new green investment bank is loosely modelled on the German scheme by KfW bank that invested nearly €20 billion into green projects during 2009. This would be a consolidating exercise bringing all current funding together including the Carbon Trust and the Marine Renewables Deployment Fund.
There was also talk of home grants for all of the UK’s 26 million homes to encourage everyone to invest in alternative fuel schemes. This would work like the business scheme called the business energy guarantee whereby the government would front up to £6,500 in loans for energy efficiency measures and people would only repay the loan from the savings made from their bills.
This is certainly a bold move but one that needs to be made. The country needs to meet its legal and morale obligations when it comes to CO2 emissions and energy generated by renewable sources and until today not one party has come up with plans that will tackle the problem head on with real strategies for change.
Climate Change Levy Reforms
As part of the overall Tory plan changes in the Climate Change Levy would be made so that companies were penalised for producing fossil fuel energy and this levy would be placed into the green investment bank. The GIB would then invest into new technologies as part of the way forward. The CCL is charged on all electricity production except renewables such as solar, nuclear and wind and the reforms would effectively place a floor under the price of carbon on the European Emissions Trading Scheme (ETS).
With an estimated £200 billion required for the UK to meet its 34% reduction in CO2 emissions by 2020 it’s thought the €13 per tonne is simply not enough to generate the required investment.
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