Carbon trading expansion plan in UK

The Financial Times reports today that a white paper, which is to be published on Wednesday is "expected to commit the UK government to a world-leading emissions trading scheme going far beyond a European Union-wide system and plans by US states." The new scheme could affect up to 5,000 British organisations going beyond the usual big energy users. Ministers are looking at two options, one covering nearly 5,000 organisations consuming 3,000 megawatt hours or to have a higher threshold of 10,000 megawatt hours covering about 1,200 organisations. The scheme will probably be an auction-based cap and trade programme. The FT reports that hospitals, universities, government departments and local authorities could also be included in what ministers have decided should be a mandatory scheme.

The scheme is intended to cut annual carbon emissions by at least 1m tonnes by 2020.

My concern about this 'go it alone' plan is that it will further encourage British companies to look at relocating abroad and discourage inward investment, in effect exporting our pollution to less environmentally friendly countries. This is one area where I think international co-operation, standards and regulations are essential, otherwise companies will be able to arbitrage national regulations and evade their responsibilities.