The carbon pricing emissions trading scheme is set by the market, rather than the Government. The price is effective at driving investment in carbon abatement measures, but it is for individual operators to decide whether the costs of abatement in a project are effective for them.
Last week the Government updated their carbon values to reflect their latest net zero emission target, but the UK emissions trading scheme does not take into account the updated figures. In 2021, it was predicted that carbon abatement for a third runway at Heathrow would cost £100 million, and costs will have only risen since. According to the emissions trading scheme, just 15% of the clean-up costs of expansion will be covered by Heathrow; the rest will fall on the taxpayer. Will the Minister update the UK emissions trading scheme to reflect the carbon abatement costs of major projects such as Heathrow expansion, so that the taxpayer can understand how much they will have to pay for a third runway?
The Government do not comment on or interfere with the carbon price. Ultimately, the price is set by the market to ensure that the ETS drives decarbonisation where it is cheapest. In this way, it can act most effectively as a financial incentive to decarbonise, without specifying the particular technology.
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