To buy or not to buy biofuel

I was on Radio 4’s Your and Yours today with Julian Worricker discussing the merits or otherwise of biofuels. You can listen to the item for the next few days here

As we have reported already, Morrison’s is going to withdraw its E30 biofuel supply when the fuel discount is withdrawn next April.

The point I hope I made in the programme was that people cannot be expected to know the ins and outs of every fuel that is or could be on offer – just as we cannot know the safety of an electrical plug. We need a clear, simple and open method to work out the impact that any action makes on the environment and then tax it to reduce its impact.

We need a body rather like the Bank of England’s monetary policy committee with a brief to ensure that, regardless of any other international action, the average Briton has an impact on climate which is less than the average person in the world – this target to be achieved within two decades by the setting of a carbon tax rate five years in advance.

In other words, this committee, appointed by government but not of government, would research all significant impacts on the climate and rate them in terms of tons of carbon dioxide equivalent. For the first two years, say, the tax will be set very low to show intent, the third and fourth year the tax would be set at the current carbon trading price. The fifth year will be set higher, perhaps £20 a ton.

If, when compared to the world average, the British are moving in the correct direction then the tax could be lowered or kept level. If our situation were getting worse compared with the world average then the tax should be raised. It would keep on being raised until we were better than average.

This tax is regressive – poorer people would pay more in proportion to their income or wealth than better-off people, so it would be important to ensure that the tax raised helped them lower their impact on the environment (and therefore pay less carbon tax). The second call on the tax raised would be to help reduce the British impact on the environment in the most cost effective ways and the remainder would go to the general exchequer. The Chancellor needs ever penny he can get at the moment.

Thank you to those who gave such positive feedback to what I had to say.