I recently wrote the following for AHDB GrowSave and it was an interesting thought worth sharing here:

Over the last few months there has been discussion about whether the UK would introduce a Carbon Tax or Emissions Trading Scheme (or both) to help drive down our emissions. Ultimately the government decided that an almost (excuse the pun) carbon copy of the EU Emissions Trading Scheme was the best, most straightforward immediate action and the idea of a Carbon Tax has, for the moment, been shelved. However, this may not necessarily be a good thing in the long term, although except for a handful of business, this is certainly the least economically damaging outcome immediately.

An emissions trading scheme provides the opportunity for industry to sell surplus performance or actions to mitigate emissions (offsets) subject to undertaking relevant and compliant actions, currently under UK ETS this is very limited in scope and impact, but the mechanism could well be expanded to encompass this. Subject to agriculture and horticulture being able to make such mitigations then the industry will be able to benefit monetarily and provide additional business opportunity. This is of course assuming that the expansion of the scheme to allow these actions doesn’t also include penalties for other emissions sources that may exist in these businesses.

With Carbon Tax, this would likely to be much more encompassing where all products and materials are affected because of their inherent carbon emissions in production, ultimately this drives up prices for all things, especially energy. Economically, this seems at first glance to be disadvantageous, however it does serve to make carbon emissions reduction actions or mitigations more economically favourable, in the face of currently limited incentive support for actions such as installing renewable energy.

The consideration of either of these systems needs including in any future energy strategy (including that for carbon emissions reductions) you plan to make, either as an opportunity or a threat.

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