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Thursday 4 December 2008

Greener than thou: the carbon tax contest

Labour’s climate change levy has led to lower emissions, says Elisabeth Jeffries, but can the Conservative alternative yield better results — or command business support?

There are many ways to eat a potato: chopped into chips and deep-fried, baked in the oven or slivered as crisps. Not many consumers care about the dozens of ways to cut down on the energy used to cook, store or produce it, such as buying a super-efficient freezer. But it is a question many retailers and food suppliers have been trying to unpeel.

McCain chips installed three new wind turbines and an anaerobic digestion facility (which processes food waste to capture emissions of the greenhouse gas methane) at its Whittlesey plant in the East Midlands. Walkers crisps, which has calculated that the manufacturing phase is responsible for 30 per cent of the emissions of a packet of cheese and onion crisps, printed the precise carbon footprint (75g) on the wrapping. The parent company, PepsiCo, has not indicated whether that has persuaded customers to buy more (or fewer) bags of the crisps, or think about their own energy use. Of course, if demand for the crisps did increase as a result, the company might need to increase its plant capacity, using more energy.

Halting the merry-go-round of fossil fuel consumption is still the most pressing problem that needs to be solved if very ambitious emissions targets are to be met by 2050, but many governments do not know where to put on the brakes first. Industry was one of New Labour’s first targets when it introduced the Climate Change Levy seven years ago. One of the Conservatives’ proposals, if George Osborne carries his plans through, will be to create a totally new tax called the Carbon Levy aimed at the same companies. But could this be the first of many more green taxes to come, reaching further down the supply chain, as some policy experts recommend?

More articles from: Elisabeth Jeffries | this section

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