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Britain Cool on Carbon Profit Claw Back Proposal |
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| UK: January 18, 2008 | ||
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LONDON - Britain is focused on making power generators buy more permits to emit climate-warming gases, rather than taking back billions of pounds in windfall carbon profits from utilities, the government says.
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Energy regulator Ofgem told UK finance minister Alistair Darling on Tuesday he could redistribute an estimated 9 billion pounds the energy sector stands to gain from trading carbon permits they got for free under the European Emissions Trading Scheme (ETS) to help people struggling to pay their bills. But the government seems unlikely to take back the fat profits to be made from the second stage of the ETS. Instead it wants the European Union to auction off, not give away, most of the credits for the third phase of the ETS. Britain already plans to make polluters pay for 7 percent of the permits they need for Phase 2, which runs from this year until 2012, and hopes a major reform of the European system to be announced next week will make power generators pay more. "For the second Phase of ETS, the UK put all the burden of emissions reductions on the generators, and required them to buy many of their allowances," a spokeswoman for the industry ministry said. "We are constrained by the ETS Directive from going much further...The UK will be pressing for there not to be a similar constraint in future." A finance ministry spokesman said windfall taxes like those proposed by the regulator were not on the government's agenda. "This is an Ofgem proposal. Decisions on tax policy are a matter for the Chancellor in the context of the Budget and Pre-Budget cycles," he said. "We are keen to see a significant increase in the auctioning of permits to the electricity producers, this will help address that issue." (Addtional reporting by Pete Harrison)
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Story by Daniel Fineren
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REUTERS NEWS SERVICE
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