O N E U K A L L O W A N C E the future of uK Carbon Pricing

This document is a response by the NGO Sandbag to a joint consultation by the UK, Scottish, Welsh, and Northern Irish governments regarding the future of carbon pricing in the UK. Sandbag argues against the creation of a standalone UK Emissions Trading System (ETS), citing risks of high volatility and market failure. Instead, it recommends that the UK remain part of the EU ETS or, if that is not possible, implement a carbon tax with a price floor based on EU ETS averages. The response also suggests expanding carbon pricing to fossil gas and fugitive methane, ending the zero-emissions treatment of large-scale biomass burning, and distributing carbon revenues to citizens as a 'climate dividend'.

• Sandbag argues that a standalone UK Emissions Trading System (ETS) would likely be non-functional and prone to extreme volatility and speculation due to its small size, which was 128 million allowances in 2018.
• The document recommends that the UK should prioritize remaining in the EU ETS or pursuing a linked system. If these options fail, Sandbag proposes a carbon tax on aviation, industry, and power, with a price floor set at least at the average EU ETS carbon price from the previous year.
• Sandbag proposes a new UK carbon tax where the Climate Change Committee (CCC) recommends a price range to meet carbon budgets, and HMRC sets the tax within that range. Any deviation from the CCC's recommended trajectory would require a public statement by the Chancellor and a vote in Parliament.
• The report suggests that large-scale biomass burning should no longer be treated as zero emissions, as the average emissions intensity of UK electricity generation has decreased significantly.
• Sandbag recommends that carbon revenues be distributed to citizens as a 'climate dividend' to offset transition costs and make carbon pricing politically irreversible.
• The document advocates for expanding the scope of carbon pricing to include fugitive methane, particularly at fossil fuel extraction points, and suggests including interconnectors within the Carbon Price Support to discourage high-carbon electricity imports from Germany and the Netherlands.
• Sandbag argues that the UK should move from a 'net' accounting system for emissions to a 'gross' system to ensure greater accountability and a clearer direction of travel against carbon budgets.

APA

Ember (n.d.). O N E U K A L L O W A N C E the future of uK Carbon Pricing. https://ember-energy.org/app/uploads/2024/12/2019-UK-Carbon-Pricing-plus-consultation_UPD.pdf

Chicago

Ember. O N E U K A L L O W A N C E the future of uK Carbon Pricing. n.d. https://ember-energy.org/app/uploads/2024/12/2019-UK-Carbon-Pricing-plus-consultation_UPD.pdf.

Wikipedia

{{cite report |author=Ember |title=O N E U K A L L O W A N C E the future of uK Carbon Pricing |url=https://ember-energy.org/app/uploads/2024/12/2019-UK-Carbon-Pricing-plus-consultation_UPD.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{emberndfuture, author = {{Ember}}, title = {{O N E U K A L L O W A N C E the future of uK Carbon Pricing}}, institution = {Ember}, url = {https://ember-energy.org/app/uploads/2024/12/2019-UK-Carbon-Pricing-plus-consultation_UPD.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }