TaxCorporate TaxRoyal Society says Climate Change Levy must go

Royal Society says Climate Change Levy must go

The government's controversial energy tax has been slammed by one of the UK's foremost scientific body, which says it should be replaced by a carbon tax.

Climate change levy slammed as stealth tax

In its report to government on measures to reduce greenhouse gas, the Royal Society said a carbon tax or a system of carbon dioxide permits would effectively charge for the right to emit carbon dioxide.

The CCL has come under fire from business groups such as the Federation of Small Business, which has labelled it a stealth tax on SMEs and from within government itself, with the Commons Environmental Audit Committee calling it confused and inefficient.

Sir Eric Ash, who chaired the report’s working group, said: ‘The climate change levy is not a cost effective way of reducing the amount of carbon dioxide that is pumped into the atmosphere, as it is a tax on energy and not on greenhouse gases. Moreover, the levy does not apply to the use of fossil fuels by households and transport, and penalises electricity sources that do not produce greenhouse gases.’

Ash said the government’s White Paper on renewable energy should look to set a price for releasing carbon dioxide into the air.

‘Our group of scientists and economists has looked at all the options and believes that the most effective way of doing this would be through a tax imposed on all carbon dioxide emissions or a system of tradable permits to control the amount of gas released,’ he added.

The Royal Society claims UK carbon dioxide emissions have started to rise again which could have disastrous consequences for the UK’s environment in the future.

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