The Green Party is calling on the UK to announce a carbon tax at COP26, describing it as one of the greatest levers to drive change in society. The Greens have proposed that the tax start at £100 per tonne of CO2 released, rising to £500 per tonne by 2030.
Although the tax would apply to all carbon emissions, the tax yield would provide a ‘dividend’ which would prevent poorer people from being hit with higher costs. In part, this would be used to fund a Universal Basic Income (UBI) for all and help those receiving lower incomes meet the costs of transitioning to a carbon-free future.
The party estimates that the UK will be responsible for around £800 million tonnes of CO2 equivalent in 2021. Its proposal for a carbon tax and dividend would result in £80 billion being generated, with the sum being used to invest in the big changes needed for a rapid transition to a zero-carbon economy, and to support UK residents throughout the transition.
As the use of fossil fuel declines, the party says, the carbon tax rate would rise, helping to balance the yield out over time. The ultimate purpose of the tax, however, is to make fossil fuels unaffordable, driving a green transition by totally eliminating their use.
A ‘carbon border adjustment’, or tariff, would be implemented on goods imported from countries that are not seen to be playing their part in reducing emissions to the level required to meet the Paris Agreement limit of 1.5C, ensuring that the tax system would not put the UK at an economic disadvantage.
The party’s proposal also includes a large-scale nationwide home retrofit programme, which would reduce home heating costs, as well as investments in good-quality, cheap public transport and infrastructure for active travel in order to reduce transport-related costs.
Adrian Ramsay, newly-elected co-leader of the Green Party, said: “A carbon tax is one of the greatest levers we can apply to help shift us towards a clean green economy and fairer society. Just 100 companies have been responsible for three-quarters of the world’s greenhouse gas emissions since 1988.
“A carbon tax would target these big polluters, particularly energy and oil companies, and render coal, oil and gas financially unviable as cheaper renewable energies rise up to take their place. But as well as tackling the climate crisis, a carbon tax will offer a social dividend which will help the UK to genuinely become a more equal society.”
“Carbon tax yields will provide funds to invest in cheap and accessible public transport, free home insulation, and a basic income. A carbon tax is a win-win for the climate and for social justice. We urge the government to show true leadership and introduce such a tax as a key plank of its COP26 strategy."