In the report, Pricing Pollution Properly, it states that by increasing the cost of engaging in activities that contribute towards climate change, such as burning fossil fuels, businesses and consumers should be incentivised to reduce their demand ‘and ultimately switch to zero-emission alternatives.

It also says that this will help incentivise investment in activities that compensate for emissions produced such as carbon capture or sequestration. Eamonn Ives, author of the report, states that ‘this is the primary way in which a carbon tax cuts emissions from the economy’.

The report states that if the UK were to ‘crudely apply a figure of around £50/tCO2 to all emissions in the UK in 2019’ then a carbon tax could have raised around £27.6bn. This is approximately 1.27% of GDP.

The