Energy Systems Catapult (ESC) has called for the setting of carbon standards as they could enable the innovation needed to achieve a “Net Zero” economy.
In its report, Rethinking Decarbonisation Incentives, published on 20 June, the ESC explained sector-specific carbon standards would place the UK on a net zero policy pathway while ensuring a lower overall impact on energy prices. In contrast, it concluded that an economy-wide carbon tax or emissions trading scheme would be “extremely challenging to implement”.
The study found incentives to invest in low carbon solutions were too low in several UK sectors – citing heat as a notable one. It suggested that the carbon standards could be introduced alongside a system of tradeable credits. This would allow energy companies to be more flexibility to innovate in meeting the standard.
Head of Markets, Policy and Regulation at ESC, George Day, said: “We believe an economy-wide carbon policy framework – comprising a mix of market, pricing and regulatory interventions – can bring forward investment and innovation to deliver clean growth.”
