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Budget
17 March 1998
The possibility of using economic instruments to improve the industrial and commercial use of energy and to help reduce greenhouse gas emissions is to be examined, the Chancellor of the Exchequer announced today.
In every developed country, there is a debate on how to improve industrial energy efficiency, and how best to meet internationally agreed targets on climate change. So there is a need to consider a new framework to encourage greater efficiency in the use of industrial energy, and to achieve reductions in the emissions of greenhouse gases.
This will include a study of whether or not new economic instruments, such as an industrial energy tax and/or other market mechanisms, should be introduced to help curb industrial emissions; and if so, how.
This study is to be led by Sir Colin Marshall.Gordon Brown said:by Martin Taylor and the task force on tax and benefits.It shows that Government and the private sector can achieve more by working together, harnessing the expertise of both."
NOTES FOR EDITORS
1 The Chancellor announced in his Budget Speech today a study into the possible use of economic instruments to help curb industrial emissions.
2. At the Kyoto international conference on climate change in December 1997, the European Union agreed to reduce its emissions of a basket of six greenhouse gases by 8 per cent on 1990 levels by between 2008 and 2012. The EU will meet its commitment by burden-sharing arrangements amongst member states, to be negotiated during the next few months. Once the UK's share of this legally binding commitment has been agreed, the Government will consult on a package of measures to meet our target.
3. The Government is currently reviewing its wider energy strategy. A more specific review of energy sources for power generation was also announced by the President of the Board of Trade in December 1997. The conclusions of these reviews will be taken into account in developing any proposal for economic instruments relating to the industrial and commercial use of energy. This will include considerations related to industrial and commercial usage of coal, and the use of energy from renewables.
4. Sir Colin Marshall is the Chairman of British Airways, and President of the Confederation of British Industry. He will head a Whitehall Task Force to examine the case for using economic instruments to reduce industrial and commercial sector emissions of greenhouse gases. The Task Force will bring together people from industry and from the Treasury, HM Customs and Excise, the Department of the Environment, Transport and the Regions and the Department of Trade and Industry, working closely with the
ministers in these departments.
5. There have been a number of proposals for economic instruments to improve use of energy in the industrial and commercial sectors. Amongst these, the CBI have expressed interest in the suggestion of tradeable emission permits.
6. For information on the wider environment package in the Budget, see HMT 13.
HM TREASURY PRESS OFFICE
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