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ACBE/CBI UKEmissions Trading Scheme Media Background Briefing The Advisory Committee on Business and the Environment (ACBE) / Confederation of British Industry (CBI) have formed an Emissions Trading Group which has been working with the Government to develop outline proposals for a UK-wide greenhouse gas emissions trading scheme.Chlor-Chemicals and 24 other leading UK companies pledged their support (on October 27, 1999) for further development of the scheme, which would be open to all companies operating in the UK, and would operate alongside the climate change levy as from April 2001. The Emissions Trading Scheme (ETS) will ensure the UK is well-placed for involvement in any future international trading scheme. Business is committed to playing its part in protecting the environment, and this scheme is designed to help companies do this without threatening jobs or competitiveness. The ETS is the result of a process that was initiated following the publication of the Marshall Report in November 1998 and work on the scheme pre-dates the Chancellor's announcement of a Climate Change Levy on UK Business. Lord Marshall recommended that the Government set up a pilot emissions trading scheme with interested UK companies. This idea was taken forward in discussions between CBI/ACBE and the Government resulting in the current proposal. On 30 June the group agreed to design an industry-wide scheme for emissions trading in the UK. That meeting was attended by Michael Meacher, Environment Minister; John Battle, the Energy Minister and Patricia Hewitt, then a Treasury minister. The discussions have involved representatives of around 30 British Companies, as well as industry associations and Government departments. The deadline set was to produce a detailed set of proposals in time for the Chancellor's Pre-Budget report (November 9, 1999). This deadline was met and has resulted in a substantive proposal for an ETS that would be open to all of UK industry. More than purely a pilot scheme, the ETS will work by companies volunteering to take on binding emissions limits and then trading emission permits together to ensure that these limits are met in the most cost-effective way. There will be a finite and annually reducing number of tradable emissions permits in circulation, thus guaranteeing that Kyoto CO2 reduction targets are both measured and met. The establishment of a UK ETS would bring substantial mutual benefits to the environment, Government and industry by:
NEXT STEPS & CONTACT DETAILS There are a number of areas where further discussion between Government and business will be required. These concern the regulatory structure of the ETS, the link to CCL negotiated agreements and incentives. The ACBE/CBI Group will also be putting their proposals into the public domain for discussion with other stakeholders in the issue of Climate Change. The scheme will require further work to be put into action. Issues of detail have to be worked out and the views of other stakeholders will need to be reflected. The objective is that, given the appropriate level of government support, the scheme should be put into operation by 1st April 2001.
Companies supporting the further development of the emissions trading schemeThe following Companies have written to support the further development of the Emissions Trading Scheme. Further work is required at a detailed level, but more crucially, the context in which the scheme will operate will be set by the Government's response on some of the key issues.
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