This report examines the potential for reducing economy-wide emissions through extending the UK Emissions Trading Scheme (ETS) to domestic heating and transport fuels, when implemented alongside existing policies.
Our analysis can help inform a number of government criteria for assessing UK ETS expansion, including practicality, suitability, and distributional impacts.
Our modelling aims to illustrate how pricing domestic heating and road transport fuels affect economy-wide emissions, economy growth, inflation, and household consumption. We also present the potential distributional consequences, and demonstrate the impact of coupling it with transfers to (partially) offset these distributional effects.
Extending the UK Emissions Trading Scheme to heating and road transport fuels
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Net Zero Carbon Policy is an Energy Systems Catapult thought leadership project, focusing on how the UK can develop an innovation-friendly, economy-wide framework for Net Zero.
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