CARBON PRICING & INFRASTRUCTURE INVESTMENT
PAUL DAVIES
The introduction of explicit carbon pricing is the recommended policy of the Climate Change Committee, the UN Intergovernmental Panel on Climate Change, and is the stated long-term UK Government policy, who have already committed to introducing a UK Emissions Trading Scheme (UK ETS), which will put a decreasing cap on allowable CO2 emissions, leading to a ‘carbon price’ for available allowances.
This paper reviews the arguments for carbon pricing, but then sets it alongside the need for infrastructure investment and Government policy, which the 10 Point Plan has gone a long way to initiate and address. It describes how a carbon tax can help deliver and fund infrastructure and in turn how infrastructure investment can lower the need for, and size of, carbon tax.