LONDON (Reuters) – The United Kingdom has put forward its own Emissions Trading System (ETS) to replace the European Union’s system for trading carbon emissions, which Britain will leave at the end of this year as the Brexit transition period ends.
Small toy figure is seen in front of UK and European Union displayed flags in this illustration picture, October 17, 2019. REUTERS/Dado Ruvic/Illustration
The UK-wide ETS, which will put a cost on carbon pollution to encourage companies to reduce the greenhouse gases they emit, includes plans to cut the emissions cap by 5%, the government said.
The ETS is part of Britain’s plan to reach a net zero carbon emissions target by 2050.
Unlike the European scheme the British ETS would have a fixed auction reserve price, set at 15 pounds a tonne of carbon dioxide.
The British ETS will also include a cost containment mechanism to prevent price spikes.
“In years one and two of a UK ETS the Cost Containment Mechanism will have lowe