ITS NOT THE CLIMATE STUPID ITS THE VOTES THAT MATTER.

Is the UK reneging on its commitment to carbon reduction? The Government has effectively made it cheaper for firms to pollute in Britain in what some see as another anti-green move by Rishi Sunak’s administration. That’s compared to the European Union, where regulations have meant that carbon prices have remained relatively stable over the year so far. In the UK, where post-Brexit our climate policies have diverged from those of the EU, the cost to industry of producing carbon emissions has declined. The specific policy at issue is the Emissions Trading Scheme, or ETS (in the EU it’s the Emissions Trading System, but it’s the same idea). This is a so-called “cap-and-trade” scheme, where the government sets a limit on the amount of carbon that can be produced overall, and then gives (or sells) allowances to industries, allowing them to produce a certain number of tonnes of carbon. If a company reduces its carbon emissions, it can sell its allowances to another company for a profit. Over time, the government reduces the “cap” on emissions, making allowances more scarce, so as to even further incentivise this decarbonisation. Many policy-makers and economists have argued that cap-and-trade is among the best tools we have to efficiently drive down carbon emissions – though there are many variants and there’s debate over exactly how to go about it. But climate advocates, as well as some in the energy industry, are not pleased with the UK’s most recent ETS change, first reported by the Financial Times, where more allowances have been made available. By pushing carbon prices to trade at a steep discount compared with those in Europe, some industry experts have warned that it could increase fossil fuel use as it fails to incentivise firms to reduce their carbon footprint. Not good for the climate but good for the lobbyists who work for the corporations who fund the government that is most sympathetic to their shareholders who vote for less regulation.