Carbon Dioxide Tax (Hansard, 15 January 1993)

§ Sir John Cope

In 1992 the United Kingdom signed the United Nations framework convention on climate change,838W which, on entry into force will commit the United Kingdom to draw up a programme of measures aimed at returning emissions of carbon dioxide to their 1990 levels by the year 2000. The Secretary of State for the Environment has recently issued a discussion document designed to stimulate a public debate about how to achieve this target. A tax on carbon dioxide and energy, and a tax on carbon, were included in the summary of possible Government measures.

The European Commission has proposed a draft directive to introduce a tax on carbon dioxide and energy. The draft directive requires the unanimous approval of all member states. The proposal was discussed at the Economic and Finance Council of the European Community on 14 December 1992. The United Kingdom made it clear that the Government are not yet convinced that an EC-wide tax on carbon and energy is a necessary or appropriate response to the problem of global warming. The Council agreed that before a decision could be taken on whether, and if so under what circumstances, such a tax should be introduced throughout the Community, further analysis should be undertaken on the impact of the proposed tax, notably on energy consumption, economic activity and competitiveness.

Further work should also be undertaken on a number of important features of the Commission's proposals, such as the balance between the carbon and energy elements of the proposed tax and the treatment of electricity. This work will take account of the conclusions of the Edinburgh European Council on the principles of subsidiarity. The Government are examining the Commission's proposal carefully but without prejudice as to its final adoption.