Greater taxes on carbon needed, warns parliamentary committee

Tax on carbon emissions needs to rise significantly in order to offset a collapse in the price of carbon, parliament’s environmental audit committee has said.

The recession has caused many big companies to be left with more carbon allowances than they need, resulting in a dramatic drop in the price of carbon and threatening the success of Europe’s Emissions Trading Scheme.

The committee is calling for the government to introduce new measures such as a new carbon tax to raise the price of carbon from its current level of €15 a tonne to around €100, reports the Guardian.

"If the government wants to kick-start serious green investment, it must step in to stop the price of carbon flatlining," said committee chairman Tim Yeo.