HM Customs and Excise CE 12
17 March 1998
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ECONOMIC INSTRUMENTS FOR INDUSTRIAL AND COMMERCIAL USE OF ENERGY
HM TREASURY 14
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:
"I am delighted that Colin will lead this work. These are
issues of great importance, not just today, but also for
future generations. Colin has the breadth of experience,
the intellectual rigour and the standing to make a real
success of this study. I am very grateful to him.
"This appointment follows the successful model established
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