Ring-fencing EU ETS revenues for energy and climate ‘inefficient’

The government says it prefers flexibility on use of EU ETS auction revenues, but confirms it is pushing for global linkages in the Paris climate agreement

The government has opposed hypothecation of EU emissions trading scheme (EU ETS) auction revenues for low-carbon investments on the grounds that it is “inefficient”, but strongly supports linking emerging global cap-and-trade schemes. 

In its response to a February report from the House of Commons Energy and Climate Change Committee on international linking of cap and trade schemes, DECC rejects the argument that government should “report on different options for using the revenue including the potential to reduce other taxes and support new low–carbon technologies”.

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