Leading environmental think tank Green Alliance and PSI are today releasing the results of their survey of business responses to the Climate Change Levy in a new report: 'Next Steps for Energy Taxation'. The report is a joint publication of Green Alliance and the Policy Studies Institute (PSI), and was jointly authored by Professor Paul Ekins, Head of PSI's Environment Group, Green Alliance Director Becky Willis and Ian Skinner and Claire Monkhouse of the Institute for European Environmental Policy, who carried out the survey. Twenty four large companies and small businesses from across manufacturing and services took part in the detailed survey. In contrast to the negative claims of the Confederation of British Industry these businesses voiced support for taxation as the preferred measure for tackling climate change. There are clear signs that the Climate Change Levy measures are working already, even though it has been in place only 18 months: 19 of the 27 interviewees identified positive effects of the CCL; a third have changed their energy management practices and four companies had switched to renewable energy as a direct result of the Levy. However, businesses want clear signals from Government about its commitment to tackling climate change and moving to a low-carbon future, before they can have the confidence to invest in alternative energy and energy efficiency. As one survey respondent said: "Government incentives need to be strong to get businesses to move towards lower emissions. They need to be a lot clearer on what they're trying to achieve and what they want business to do." The effects of the Levy are being hampered by the lack of government support for renewable energy, and the contradictory policy of driving down electricity prices through the New Electricity Trading Arrangements.
Green Alliance is recommending that:
a. The Government makes a clear commitment to the use of economic instruments in tackling climate change, starting with the new Strategy on Environmental Taxation to be announced in the Pre-Budget Report.
b. The Climate Change Levy needs to be strengthened and simplified to create a carbon tax, sending clear signals to business to enable good investment decisions.
Rebecca Willis, Green Alliance's director, said "With their vocal opposition to the Government's climate change policy, the CBI are not serving the long-term interests of their members. They should be helping to put UK plc on the road to a competitive, low-carbon future - not complaining about sensible policies to combat climate change."
Paul Ekins added: "The businesses in this survey are sending out a very different message from such organisations as the CBI who seem obsessed with getting the Climate Change Levy (CCL) repealed. These businesses recognise the role of the price mechanism in making more efficient use of environmental resources, although they are also clear about ways in which the CCL can be improved. If the UK is seriously to address the challenge of climate change, and become a leader in the low-carbon technologies which will be needed world-wide to address it, it is this kind of enlightened approach to the issues which will need to be adopted. In a few weeks the Government will be announcing their new Strategy on Environmental Taxation in the Pre-Budget Report. It is crucial that Government does not falter under CBI pressure, but gives business the certainty they need for investment in our low-carbon future."
Notes to editors
The survey is based on in-depth qualitative interviews with 24 businesses, representing manufacturing and services, large companies and SMEs. Nine respondents were from large manufacturing companies; three from SME manufacturing companies, eight from large service-sector companies, and four from SME service sector companies. Interviews were also undertaken with the CBI, the Federation of Small Businesses (FSB) and a tax accountant (KPMG). Interviewees were predominantly Environmental Managers or Heads of Environment Divisions. Within SMEs interviews were carried out with the Managing Director or Chief Executive. For further details contact Rebecca Willis on 020 7233 7433 / mobile 07764 586 221 or Joanna Collins on 020 7233 7433 / mobile 078 6655 2933.
PSI is a registered charity and has no association with any political party, pressure group or commercial interest.
Follow this link to find a summary of the report Next steps for energy taxation: a survey of business views