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

  • New OIES paper looks at LNG projects vying for FID in 2019-20, reviews 5 areas, costs and competitiveness, and the… https://t.co/pz3UDcUcQU

    March 20th

  • Outlook for Competitive LNG Supply https://t.co/qmG43CklMw

    March 20th

  • OIES’s @thierry_bros to explain how LNG supply and storage could mitigate the risk of no transit contract in Ukrain… https://t.co/Wl5aj4bEM8

    March 20th

Sign up for our Newsletter

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