Author Archives: Julian Hawkins

I has been interested in environmental issues and active with the Lib Dems and predecessors since the 1970's, including a stint as a local councillor from 1990 to 1998. I like to cycle regularly and look forward to enjoying more of the British countryside - when ever I can find the time

Tax carbon and reduce poverty

By Julian Hawkins | Wed 5th August 2020 - 11:45 am

The 2019 Autumn Conference approved a generally good Policy Motion F29 Tackling the Climate Emergency, listing actions which reduce UK emissions to net zero within a few decades. It included point 2d – “Greening the taxation system to make the polluters pay and to reward progress towards net zero.”

This appears to be a statement of intent rather than a genuine action point. I believe that we should go further, committing to a carbon tax designed to:

reduce carbon emissions – globally
fight poverty
protect the UK economy against unfair competition from overseas polluters

This might sound a classic trilemma (three mutually incompatible goals), but one policy can deliver all three. Here’s how.

We currently have a mishmash of carbon pricing measures (Climate Change Levy, Fuel Duty, etc.) which affect specific sectors.

These only exert downward pressure on fossil fuel consumption in some sectors, and prices are generally too low to drive rapid reductions.
They are potentially regressive, impacting the poor more than the rich.
They risk carbon leakage – when emission reduction policies in one country lead to increases elsewhere.

The solution is a carbon tax, dividend and border adjustment.