The future of carbon pricing: implementing an independent carbon tax with dividends in the UK

Document type
Rooney, Matt; Burke, Josh; Taylor, Michael
Policy Exchange
Date of publication
17 July 2018
Social Policy, Poverty Alleviation Welfare Benefits and Financial Inclusion, Employment
Social welfare
Material type

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A economy-wide carbon tax paid by both domestic and international producers would prevent carbon leakage, level the playing field for Britain’s heavy industry, fund a dividend to be paid to taxpayers and tackle climate change, argues the new report from Policy Exchange’s influential Energy unit.

The UK is already a world leader in climate action and should build on our track record to implement a system of carbon pricing that really works, overcoming a market failure that does great harm to the environment. The report recommends that, although Brexit makes it likely the UK will leave initiatives overseen by the ECJ such as the EU’s Emissions Trading Scheme, the UK should remain a member of the ETS until the end of the third trading period at the start of 2021.

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