Measures to drive up the price of carbon will be revealed in the forthcoming budget, according to energy minister David Kidney today.
Speaking at a nuclear new build conference in London, Kidney said there was a “strong argument” for driving up the price of carbon, with the renewable energy and nuclear industries lobbying hard for changes to the EU’s Emissions Trading Scheme (ETS).
Kidney said the ETS would remain the primary tool for determining the price of carbon. “At Copenhagen we worked hard for a deal, but we did not quite get what we wanted.
“In the Budget we will reveal the findings of an ‘emerging energy findings assessment’, and for possible tools you should look no further then the recommendations of the Committee for Climate Change,” he said.
EDF Energy’s head of new build Humphrey Cadoux-Hudson said: “The current trading system is not working effectively. “CO2 is a pollutant, and emitters should pay the social cost for this. With the carbon price so low, the signal for low carbon investment is compromised.
“We need a sensible carbon floor price to be set, so investors can choose between more fossil fuel generation or low carbon investment. We see no reason why the UK government cannot act unilaterally to do this,” he said.
However, Kidney rejected any further subsidy, despite US president Obama recently giving government backing to loans for new nuclear.
“The developers’ plans stack-up in their own right,” said Kidney. “I don’t see the need for soft loans, but we do have to prove we are up for the challenge, and we can be relied upon as a partner.”