Britain yet to choose between carbon tax or trading scheme post-Brexit

LONDON: Britain still deciding whether it should use a carbon tax or a domestic emissions trading system (ETS) once it leaves the European Union's Emissions Trading System at the end of 2020, the British energy minister said on Thursday.

Putting a price on carbon emissions is seen as one of the main tools to help the country meet its target of net zero emissions by 2050.

Earlier this year, the government put forward plans for a domestic ETS to replace the EU scheme from January 2021 - once the Brexit transition period ends - which could be linked with the EU scheme to help increase liquidity.


Yet, with just seven weeks to go, Kwasi Kwarteng, minister for business, energy and clean growth, said the government could introduce a carbon tax rather than a trading scheme.

"A carbon tax has not been removed from the table," he told a cross-party committee of lawmakers on Thursday.

The outcome of ongoing negotiations with European lawmakers over Britain's possible Brexit deal would influence the decision, he said.

"Of course, those negotiations will substantially determine what our carbon pricing position is," Kwarteng said.

He did not say when a decision was expected but said a long-awaited energy white paper would be published at the end of November or beginning of December.

Prime Minister Boris Johnson will co-host a United Nations climate summit on Dec. 12, where Kwarteng said Johnson is likely to reveal Britain's Nationally Determined Contribution (NDC) plan showing how it will meet goals under the Paris Climate Agreement.