UK should scrap climate change levy: opposition party leader

London (Platts)--21Apr2006

The UK should scrap the climate change levy and replace it with a carbon
levy, the leader of the UK's Conservative Party, David Cameron, said Friday.
Speaking in Oslo after a visit to the Arctic to see melting glaciers,
Cameron said that if elected, his party would replace the climate change levy
with a carbon levy "which better distinguishes between high and low carbon
production of energy, and which retains fiscal neutrality."
The UK currently imposes a levy on all non-domestic energy bills,
typically raising them by 8% to 10%. This is waived for energy from renewable
sources, but is also mitigated by the UK's emissions trading scheme.
The Government also has climate change agreements with individual
emitters, which set targets for emissions reductions. If a company meets its
target, it can get a refund of around 80% of the climate change levy.
Companies can also use the UK emissions trading scheme to reach these
targets, which started in 2002. This allows companies that produce less carbon
dioxide than their target to trade the excess, in a similar way to the EU
emissions trading scheme.
Cameron said the Conservatives would seek a more market-based framework,
adding, "We must make sure that the various methods we use amount to a
coherent whole, ensuring the carbon is priced effectively."

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