Chancellor keeps carbon tax fixed until 2020

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Chancellor of the Exchequer Philip Hammond announced during his first Autumn Statement that UK Carbon Price Support rates (CPS) of £18.00/tCO2e would be unchanged until 2020, uprating with inflation during 2020-21.

The move sees no action from the new Chancellor on the carbon price support rates which are currently in the first year of a five year freeze, with a delay in decision on future years. The government stated that it will “continue to consider the appropriate mechanism for determining the carbon price in the 2020s” but provided no further details beyond 2021 in the statement and only reaffirmed previously announced rates which Mr Hammond said would “provide certainty to business”. The delaying of the action on UK carbon tax rates drew criticism from both those supporting the levy and those who want it scrapped.

There had been speculation that the tax would be scrapped by the Chancellor, which is estimated to add £36 per year to household bills which is roughly 7%. Industrial users have criticised the tax and called for its abolition citing that it has made electricity prices uncompetitive due to the increasing gap between the carbon price faced by UK consumers to those abroad as EU ETS carbon prices are substantially lower than was expected when the tax was introduced.

In a statement that was relatively light in energy news, with decisions on the future of the Levy Control Framework into the next decade also deferred until next year’s budget. The government plans to continue to engage with stakeholders in the development of an Emissions Reduction Plan, which is set to be published at the beginning of 2017.

Source: Cornwall Energy

Paris climate deal comes into force

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The Paris agreement on climate change has now come into effect. In December 2015, governments agreed to keep global temperature rise to degrees Celsius above those before the industrial revolution, with a target of 1.5 degree rise.

The Eiffel Tower in Paris lit up green on Friday in recognition of the Paris climate change deal coming into force, with delegates representing nearly 200 countries meeting in Marrakech today to discuss methods of moving forwards and the creation of a rulebook to measure and review global climate action at the conference named COP22. A key part of the Paris agreement in 2015 commits governments to begin moving their economies away from fossil fuel usage, with the agreement seen as the first tying both rich and poor nations together with the common goal of protecting the climate.

Last Thursday, a United Nations review of national pledges to cut carbon identified that government efforts would fall short of the levels required to keep the global temperature rise underneath 2 degrees. The report showed that if governments acted in line with pledges the world would experience a temperature increase of between 2.9°C and 3.4°C by the end of this century.

The process of the Paris deal is a binding commitment for governments to repeat addressing the climate issue and to increase clean energy targets which were agreed to be inadequate. Other measures agreed were progress reviews every five years, a finance budget of $100bn per year for developing countries by 2020 and to achieve a balance of greenhouse gas emissions in the second half of this century.

Source: BBC