Green Alliance calls on UK government to adopt tax roadmap

Independent think-tank Green Alliance has released a report recommending a green tax roadmap for the UK. According to the report, the current tax system is unaligned with the UK’s net-zero ambitions: “The UK’s tax system, currently geared to a high-carbon economy, is becoming increasingly out of date and is hindering this transition.” The report argues that a tax road map for the transition is necessary because “investors, whether businesses or individuals, need confidence in the longer term before they commit money to low-carbon alternatives to reducing their environmental footprint in other ways”. The tax system, according to the report, is a key tool to instil confidence in the transition. In particular, the report claims that taxes can be used to design economic incentives and induce structural changes in the economy: “New petrol and diesel cars will be phased out from 2030. Many millions of homes need to be retrofitted and have electric heating systems installed over the next decade. It is prudent to establish plans for the tax system to accommodate these changes ahead of time, to avoid being forced into reactive or politically compromising positions.”