Govt urged to clear the air

Posted on 14 Dec 2010 by The Manufacturer

EEF, the manufacturers’ organisation, has challenged the Government to rationalise the confusing tangle of policies on carbon pricing while sharing the costs of tackling climate change.

According to EEF, the UK needs to generate £200 billion in investment in its energy infrastructure. This week’s announcement therefore marks a significant opportunity to give investors greater certainty to bring these investments forward. At the same time, it must reassure Industry that the UK will be a competitive location from which to deliver the low carbon economy.

After a decade of muddle and growing complexity in climate change policy, the UK needs a much more strategic approach. This would involve consolidating overlapping schemes like the Carbon Reduction Commitment, the Climate Change Levy and the planned Carbon Price Support Mechanism.

EEF believes this would create a cost-effective, transparent and predictable carbon price and simplify the climate change policy landscape. However, to avoid adding extra costs to Industry, there should be an offsetting reduction in the Climate Change Levy to the minimum level required by EU law.

Commenting, EEF Director of Policy, Steve Radley, said: “New low carbon technologies and industries can be key drivers of economic growth, job creation and innovation over the coming decade. But financing this Green Revolution will be challenging.

“The government has already shown its commitment by planning to set up a Green Investment Bank. But it can also send an important signal to investors by establishing a consistent and predictable carbon price. It should also embrace the opportunity to tackle the current confusion of overlapping measures and ensure that the burden of meeting our climate change objectives is shared more evenly across society.

“The government must take care not to add further costs on to the manufacturing industries that will help us to meet these challenges and create the new jobs that our economy desperately needs.”