Will the U.K. Bite the Bullet on Logical Climate Policy to Help Its Financial Mess? No it Didn’t (on Paper). It Helped Polluters (6)

OPINION / NEWS BY MATHEW CARR

March 23, 2022 (LONDON) — I remained hopeful that Britain will boost carbon prices, INCREASING government revenue, to help poorer people deal with surging energy prices and speed the climate transition.

I doubted it would happen today, but my fingers were crossed.

I was right, the government didn’t do it.

It instead helped polluters (and drivers) by cutting fuel duty by 5 pence per litre for a year. This will drive demand for polluting fuel by cutting its cost.

The U.K. Chancellor Rishi Sunak did cut tax for those installing solar panels and other energy-saving equipment and materials on / into their homes.

And, the U.K. also cut income tax by raising the threshold a person needs to cross to start paying a type of tax — national insurance. It announced further income-tax cuts on top of that for around 2024.

Britain’s government has been getting more money from the carbon allowance auctions it holds, so that arguably DOES help pay for the tax cuts. Its carbon market covers the electricity and industrial sectors.

ICE — pounds Sterling per metric ton: carbon dioxide allowances

Mr Sunak didn’t link tax cuts to higher carbon-allowance revenues. (Doing so might have demonized carbon prices in the eyes of some voters.)

U.K. to spend more than 80 billion pounds on debt interest in the next financial year.

Britain is expanding exploration and use of crude oil and natural gas even though it’s used more than its fair share of the global carbon budget, which is implied in the UN Paris climate deal struck in 2015.

The Labor opposition said the U.K. government should have and could have implemented a windfall profit tax on fossil-fuel producers that would raise 3 billion pounds a year: Shadow Chancellor Rachel Reeves.

(Clarifies the nature of one of the income-tax changes; earlier added details and opposition comment)

See this:

U.K. Seen Wrongthinking About High Energy Prices

March 21, 2022

Opinion by Mathew Carr

This will go down in history as a stupid reaction. This simply hurts the taxpayer, helps polluters. Discourages adoption of #EVS

The correct policy reaction is to BOOST carbon prices and return the money to the poor.

See this published last year:

Everyone’s Missing the Most Logical Way to Find Money for Britain’s Social-Care Crisis (2)

Opinion by Mathew Carr (Updated Sept. 14)

Sept. 7-14, 2021 — Britain shouldn’t be raising national health insurance rates to fund a boost in social-care costs needed because of the pandemic and decades of neglect.

Prime Minister Boris Johnson and Chancellor Rishi Sunak should instead boost the world’s oldest industrial economy’s carbon price, which is already higher than in the European Union.

Here are a few reasons why this would be a better plan than the current health-insurance-based one.

1. It would use the urgency of the climate crisis to fund the social care crisis

The global climate is collapsing. The U.K. government is assuming much higher prices for carbon going forward — more than 200 pounds ($277) per metric ton of carbon dioxide in 2022 and 300 pounds in 2035. Its expectations range from 100 pounds to almost 600 pounds (see snip and chart here)….

Photo by Oleg Magni on Pexels.com

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