Work on the development of emissions trading in the UK is already enabling the Government to play a leading role in the development of european and international emissions trading markets. And an early start for the UK scheme will enable UK businesses and The City to drive the market, ahead of plans for european and international schemes to enter into operation over the next few years. The Government is giving concrete backing to an initiative which will deliver a significant reduction in greenhouse gas emissions, while enhancing the UKs competitive position in a major new international market. Details of the scheme will be worked out in detail over the coming months, with a view to starting the scheme as soon as possible. This will maintain the UKs position at the forefront of international developments in this new and exciting policy area.
Companies take on binding limits for their emissions of greenhouse gases.
They are allocated emissions permits, which correspond, to these targets, and they have to ensure that their actual emissions are covered by the permits that they hold. It also received the backing of Ministers from DETR, DTI and HM Treasury. The work of the group has shown that the early creation of such a scheme could yield significant advantages for the UK, including providing an opportunity for the UK to reduce greenhouse gas emissions in a cost-effective way. The Government announced in the Budget that it saw merit in the case put forward by the ETG that some form of financial incentive would be required for companies to take on binding emission targets that generate additional emission reductions. Following on from this latest demonstration of Government support for emissions trading, the Government will continue to work closely with the ETG and others to turn the blueprint into an operational framework for emissions trading.