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Energy: Prices

Volume 494: debated on Monday 15 June 2009

To ask the Secretary of State for Energy and Climate Change what estimate he has made of the effect on the average annual household energy bill of the operation of (a) the climate change levy and climate change agreements, (b) the renewables obligation, (c) the energy efficiency commitment/carbon emissions reduction target, (d) the EU emissions trading scheme and (e) other environmental mechanisms in each of the last three years. (278404)

DECC's analysis estimates that the benefits to the UK of our main measures to help avert climate change could outweigh the costs by more than 10 times. Where these measures lead to an international climate agreement consistent with delivering a 450ppm stabilisation of greenhouse gas atmospheric concentrations, we estimate the total benefits at £241.9 billion. This compares with total costs of £20.6 billion. The Impact Assessment can be found at:

www.decc.gov.uk/en/content/cms/what_we_do/lc_uk/carbon_budgets/carbon_budgets.aspx

Of current average electricity bills for medium-sized household consumers, approximately 12 to 14 per cent. is attributable to climate change legislation (the Renewables Obligation, the EU Emissions Trading Scheme and the Carbon Emissions Reduction Target).

For domestic gas consumers, DECC estimates costs of the Carbon Emissions Reduction Target on average gas bills at approximately 2 per cent. However the Carbon Emissions Reduction Target supports energy efficiency measures for households and so will deliver over time an overall saving greater than its total cost to consumers.

The Climate Change Levy and Climate Change Agreements apply to businesses, not to households.

An energy and climate change strategy setting out the proposals and policies for meeting carbon budgets will be laid before Parliament in the summer. This report will put the Government's carbon reduction strategy in the context of the overall programme for delivering secure and low-carbon energy, transport and housing, in a way which benefits the UK economy into the future. An estimate of the cost of the proposed financial mechanism for carbon capture and storage demonstration will also be published as part of the Impact Assessment alongside the consultation in the summer.