In response to the decision to cap the Carbon Floor Price from 2016-17 until the end of the decade - as announced in this afternoon's Budget speech from the Chancellor of the Exchequer - Martin Baxter, Executive Director-Policy at IEMA said:

If the Government is committed to delivering a sustainable economy, it must provide consistent long-term policies that enable businesses to invest with confidence. The decision to freeze the Carbon Floor Price undermines the Government’s approach to tackling climate change”.

Companies that have invested based on the Government’s long-term price signal will be unfairly penalised. Long-term certainty is vital for business to secure investment in measures such as low carbon technology and energy efficiency. By freezing the Carbon Floor Price, the Government risks failing to achieve its climate change policy objectives, or shifting the additional effort that will be required to other sectors of the economy.”

Where there is a genuine issue in certain energy intensive sectors about the impact of carbon taxes on competitiveness, Government should use carbon tax receipts to support targeted low carbon and energy efficiency investments that will allow those businesses to make the low-carbon transition necessary to success over the long-term.”

Click here to access the UK Treasury's full Budget document.

19th March 2014