Osborne’s Shelving The Fuel Duty Escalator Is The Right, Green Thing To Do
THIS might sound a little odd and I’ll almost certainly be the only person telling you this. But George Osborne’s shelving of the fuel duty escalator is the right thing for him to be doing. No, not because it’s a tax cut, or not a tax rise, but because it’s the correct green thing to be doing for the environment. Yes, this is going to sound a little odd, isn’t it?
We need to go back a few years, to the Stern Review. In it the main recommendation was that we have to have a carbon tax at $80 per tonne CO2 emissions in order to beat climate change. This is the scientific consensus now, that we should have this tax.
Excellent: and $80 per tonne CO2 is around and about 11p on a litre of petrol. Now duty on petrol is very much higher than 11 p but we don’t just tax petrol ion order to save the planet. We want to be able to pay for the roads that cars travel on and, because people really, really, like using petrol we can also gouge them quite a lot to pay for other things, like the NHS and so on. So we do.
However, the fuel duty escalator was specifically brought in by Ken Clarke when he was Chancellor to “meet our Rio commitments”. That is, it was a carbon tax to aid us in the battle against climate change. And over the years that escalator has added some 25p to the duty on a litre of petrol.
So, we now have a carbon tax on petrol, one that is much higher than the Stern Review (recall, that’s the scientific consensus) tells us we need to have. So, we can stop raising it then, can’t we?
For, as far as petrol and cars are concerned we’ve already solved climate change.