Mixed Messages on UK's Commitment to Carbon Trading Post-Brexit
The UK's climate change minister, Claire Perry, has refused to commit the country to carbon trading after it leaves the EU. She argued that the EU emissions trading scheme (ETS) has failed to provide an accurate carbon price signal. In response to questions about whether the UK would try to remain in the EU ETS after Brexit and what alternative policies it would implement if it left, Perry stated that the UK is committed to meeting emissions reduction targets and the goals of the EU ETS, regardless of its membership in the scheme.
These comments come at a delicate time in the Brexit negotiations, as the UK has reportedly requested a two-year extension of its EU ETS membership, while the EU has taken steps to cancel allowances from the UK. Perry acknowledged that the EU ETS is a good scheme but has not provided an accurate carbon price signal, which is why the UK has implemented its own carbon floor. She assured that the UK's domestic emissions targets are more ambitious than its share of the effort within the EU ETS, and even without EU cooperation, the UK would achieve its emissions reduction goals.
Perry emphasized the need to explore opportunities that may arise from remaining in the EU ETS or considering alternative approaches to achieve a better carbon pricing signal. She recognized the UK's role in delivering the EU's ambitions and its importance in the negotiations, highlighting the country as a helpful player in the EU market. However, she also expressed openness to conversations about other options or additional measures that could be taken.
Louis Redshaw, CEO of Redshaw Advisors, argued that membership in a broader emissions trading system is essential to maintain the UK's emissions reduction ambitions at the lowest cost. He highlighted the benefit of being able to take advantage of other countries' emissions reduction opportunities and stated that continued participation in the EU ETS seems like the best approach, despite its flaws. Redshaw warned that without the UK's progressive voice, the EU ETS could be weakened, particularly by countries like Poland.
Perry made these remarks during the annual meeting of the Green Investment Group in London. The stance on carbon trading remains unclear, leaving businesses uncertain about the future direction and potential impacts on the UK's carbon pricing mechanisms.
