Carbon cash 'should be spent on green measures''Great opportunity' to help cash-strapped homes

20 November 2008

A leading think-tank has urged ministers to use funds from selling carbon emissions permits to pay for energy efficiency improvements that could save people money on their gas and electricity bills.

The Institute for Public Policy Research (IPPR) has said that cash raised from government auctions of permits to power companies over the next five years should be channeled into a separate ‘green fund’ and spent on improving the energy efficiency of people’s homes, investment in renewable energy, and helping poorer countries deal with the effects of climate change.

The first auction of permits, which took place this week, is expected to net the Treasury around £60m. Subsequent auctions are likely to bring the total to some £1.35bn.

Great opportunity

The IPPR said the government should follow the lead of countries such as Austria, Hungary and the Netherlands in using the money for energy and environmental programmes.

Lisa Harker, IPPR co-director, said: ‘This is a great opportunity to help poorer households make their homes both cheaper to heat and warmer, and create jobs through investment in new green technologies.’

Charities Oxfam and WWF also called for the money to be spent on securing a low-carbon economy in the UK and helping the world's poor adapt to climate change.

Revenue not ring-fenced

However, the government has said that while it is committed to reducing carbon emissions, it does not ring-fence revenue for specific uses.

A spokesperson for the Department of Energy and Climate Change (DECC) said: ‘The government has proved that we are committed to domestic reductions in emissions but we do not hypothecate revenue.’

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