The U.K. government should create a market for greenhouse gas removals and increase carbon prices for businesses to reach net zero emissions by 2050, according to a joint report on Wednesday.
In the report by the Grantham Research Institute on Climate Change and the Environment and the ESRC Center for Climate Change Economics and Policy at the London School of Economics, it recommends that the U.K. create better incentives for investment in negative emission technologies by creating a public procurement scheme or a market for ways to offset emissions.
With such a public procurement system, carbon emitters would pay carbon tax allowing the revenue from carbon taxes to be used to pay negative emission providers for the amount of carbon dioxide that they remove from the atmosphere.
Alternatively, the report advises creating a regulated offset market, in which businesses would pay negative emissions providers to offset their emissions instead of paying the carbon price.
An increase in the price of carbon in key sectors such as aviation, vehicles, and agriculture is necessary to phase out emissions that are driving climate change, the report underlines.
The report estimates that with a carbon price of up to £160 per tonne of carbon-dioxide-equivalent emitted, the target of net zero emissions will be achieved.
By putting a more effective price on the damage that emissions cause, "such as a tax on red meat, an increase in fuel duty, a tax on aviation fuels and a tax on the carbon content in waste disposal," emission reductions from U.K. industries could be encouraged, the research suggests.
Additionally, the report makes it clear that the carbon price and negative emissions market would need to be complemented by other policies, including more funding for energy efficiency measures.
On May 2, the Committee on Climate Change, the non-departmental advisory body, recommended a zero greenhouse gas emissions goal by 2050 for the U.K.
A net zero carbon emissions requires reductions in greenhouse gas emissions and offsetting residual emissions by removing greenhouse gases from the atmosphere via natural solutions such as planting more trees or creating technological solutions.
By Zeynep Beyza Kilic