Carbon tax breaks for poor households could aid drive to net zero, says Mark Carney

“The case is very strong for a price on carbon widely applied,” Mark Carney said.

Mark Carney at a press conference in 2020. (PA)

Carbon tax breaks for poor households could aid the drive to net zero, the former Bank of England governor Mark Carney has said.

There is a strong case for financial firms to face levies on the carbon they generate in their activities, but policymakers should consider the impact on poorer households, the former central banker who is now the special envoy for climate action and finance at the United Nations, told the Lords Economic Affairs Committee.

“The case is very strong for a price on carbon widely applied,” he said. “With maybe some appropriate rebate for less well-off households.”

Mr Carney was quizzed by peers over how the cost of transitioning to a low carbon economy could be fairly applied across the financial sector.

The suggestion comes amid a deepening political row over the cost of net zero and its impact amid a crippling cost of living crisis, despite new evidence that the government’s pledge to hit net zero carbon emissions by 2050 is “overwhelmingly popular” with voters.

The Brexit opportunities ministers, Jacob Rees-Mogg, reportedly warned Monday of the “huge regulatory cost” of the government’s net zero targets, saying efforts to cut planet-heating carbon emissions must not rely on “endless regulation.”

“Net zero is going to be a huge regulatory cost and that is an issue for the country to face and to face up to,” he said at an event organised by the Centre for Policy Studies, according to The Telegraph.

Mr Rees-Mogg also reiterated the burden net zero may place on the poorest households in Tuesday’s cabinet meeting, sources told The Independent.

He is among a number of Conservative MPs who have questioned the government’s roadmap to reach net zero carbon emissions by 2050. Last month the former leader of the Conservative party Iain Ducan Smith described the governmnet’s pledge to reach net zero as a “new religion.”

In January, a group of MPs — that did not include Mr Duncan Smith or Mr Rees-Mogg — wrote a letter to The Telegraph calling on the government to expand North Sea exploration and to support shale gas extraction.

There have been calls for a rethink of the government’s landmark policy that was made legally binding in 2019 from outside the Conservative party too.

Nigel Farage launched a campaign last month calling for a referendum on the government’s net zero aim.