Comments on October 2011 Guidance Issued by Treasury on Valuation of Greenhouse Gas Emissions

The EU emissions trading system is failing to produce a carbon price that is efficacious in promoting low-carbon investment or a low-carbon economy. Carbon price projections from this scheme are nevertheless incorporated in the formal guidance issued by the UK Treasury to guide government departments in appraising policy initiatives and projects. The Treasury’s guidance deals with this issue of the carbon price by trying to maintain a distinction between emissions in what it calls the ‘traded sector’, i.e. sectors such as power and aviation covered by the EU ETS, and the ‘non-traded sector’, which includes domestic gas and road transport. This distinction is untenable and has the potential to create serious distortions in policy. This Comment explains how these are likely to arise.

By: John Rhys

Latest Tweets from @OxfordEnergy

  • A review of a new OIES paper on oil market conditions and Saudi Arabia’ balancing act: The extent of dislocations i… https://t.co/n8EFPraNEj

    May 24th

  • Jonathan Stern on the latest Groningen earthquake: I think it is likely to accelerate even further the phase-out of… https://t.co/d1tGcAIAjp

    May 23rd

  • About 43% of the industrial gas demand in Europe could, in theory, decline in the 2020s as a result of decarbonizat… https://t.co/0iMqP4dCsd

    May 23rd

Sign up for our Newsletter

Register your email address here and we will send you notification of new publications, comment, articles etc. automatically.