A coalition of business and environment leaders today called on the government to use money raised by auctioning carbon emission permits to tackle climate change.
The government is set to receive around £1.6bn from selling permits between 2008 and 2012, as part of phase two of the EU's Emissions Trading Scheme.
Today, the heads of the CBI, its Climate Change Task Force, and the conservation group WWF-UK along with the co-chair of the Energy Research Partnership said the government has a 'tremendous opportunity' to demonstrate its commitment to tackling climate change by announcing a similar scale investment programme in green technologies.
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In its report last year, the CBI Climate Change Task Force argued that the two key pillars of moving to a low carbon economy are carbon trading and new technology. But the UK still lags behind other countries in investment in green research and development.
Today, in an open letter to the Prime Minister, the coalition of business and environment leaders called for positive action to address this.
They said: "We believe that climate change can be mitigated and the UK can meet its long-term emissions targets. But doing so will require imagination, innovation and, in particular, investment from across the public and private sectors."
This will require the UK "substantially to increase spending on energy technology research, development, demonstration, commercialisation and deployment. Significant adaptation spending will be needed...to cope with climate change which is already occurring and prepare for those future impacts that are now inevitable.
The letter has been signed by the director-general of the CBI, Richard Lambert, the chairman of its Climate Change Board, Ben Verwaayen (also the chief executive of BT), Paul Golby, co-chair of the Energy Research Partnership (and also chief executive of E.ON UK), and David Nussbaum, chief executive of WWF-UK.
Richard Lambert, director-general of the CBI, added: "If the government does not recycle the revenue from its carbon permit auctions into green measures then it risks undermining the trust of business and the public in green taxes.
"They will be seen as a convenient revenue-raiser for the government and not as genuine measures aimed at changing behaviour."
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