The funding will "provide the impetus to kick-start an emissions trading scheme in the UK," said environment minister Michael Meacher. Along with Denmark, the UK is pioneering market dealing of carbon pollution in the EU; Germany and Norway are also on the verge of introducing similar schemes. All want to gain experience and to influence an EU-wide scheme expected to come into effect in 2005. The UK, in particular, wants any future carbon bourse to be located in London.
The financial incentives were necessary because the scheme is voluntary, the government said. The UK emission trading group, which is coordinating the pilot scheme, welcomed the move, which will see the funding released in 2003, two years after trading begins. "The government has accepted that firms will need incentives...to cap their emissions at a level which delivers real environmental benefits...without threatening jobs and competitiveness," said the Confederation of British Industry, one of the group's component bodies.
Proposed last year (ENDS Daily 27 October 1999), the UK's pilot trading scheme now has over 100 participating companies and was endorsed in the most recent UK budget (ENDS Daily 9 March). The initiative will be paralleled by voluntary commitments from big energy users to cut emissions in return for rebates on a planned energy tax.
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