Carbon pricing victory
The Government announced in July 2009 changes to the way it prices carbon.
The move was great news for the climate and a victory for Friends of the Earth campaigning.
Previously the Government worked out a price for carbon using a financial assessment of the damage caused by each tonne.
This flawed approach underestimated the true cost of climate change because many effects simply cannot be priced.
What’s a coral reef worth, for example?
“How many people in Bangladesh will be made homeless, and how much does this ‘cost?'” says Simon Bullock, Friends of the Earth economics campaigner.
“Under the old approach, these impacts were simply not taken into account.”
Friends of the Earth pushed hard for change - and won.
Ministers will now price carbon according to the cost of meeting the UK’s carbon budgets under the Climate Change Act.
This means the new price is higher and also rises steeply over time.
And it makes it harder for Ministers to give high carbon projects the green light.
Take the net economic benefit of the proposed Heathrow expansion – used to justify giving it the go-ahead. Under the new values, this falls from £5 billion to zero.
It even means past decisions could be reviewed in the light of the new price calculations.
Our economics team will keep up the pressure to make sure that climate change is properly included in decision-making right across Government.