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Last Updated: Wednesday, 5 March 2008, 00:11 GMT
MPs call for rise in green taxes
Aircraft landing at London Airport
The report calls for a significant increase in aviation taxes
The UK Treasury has "continually demonstrated a lack of ambition and imagination" when it comes to green taxes, a report by MPs has concluded.

The Commons Environmental Audit Committee says there is little sign that ministers have acted on the recommendations of the Stern Review.

They also call for a rise in air taxes, especially on long-haul flights.

Failure to act would undermine the government's environmental credibility, warned the MPs.

The committee of 16 MPs said green taxes, as a proportion of all taxes, has declined from its peak of 9.7% in 1999 to 7.6% in 2006.

Sir Nicholas Stern (AP)

"The Stern Review - published by the Treasury in late 2006 - helped change the debate on the economics of climate change," said committee chairman Tim Yeo.

"But the Treasury is itself not responding with the scale and urgency that Stern recommended.

"This is even more remiss, given that since [the review] was published, the science on climate change has continued to harden, with global emissions rising faster than projected."

Taxing time

As for the government's aviation policy, the committee welcomed ministers' decision to switch Air Passenger Duty from per passenger to per flight.

The chancellor must put climate change at the heart of next week's Budget
Simon Bullock,
Friends of the Earth

But the report said more still needed to be done: "It is vital that tax on aviation is not just reformed but significantly increased, so as to stabilise demand and resulting emissions.

"The Treasury should closely examine the merits and practicalities of varying rates by classifying journeys into three bands - short-haul, long-haul, and very long-haul - in order to reflect better the differing magnitude of emissions."

The MPs also warned that spending on environmental solutions had "fallen far short of the step-change required".

"The Treasury has increased funding for carbon-reduction technology, including backing a pilot Carbon Capture and Storage (CCS) power plant," Mr Yeo observed.

"But this still falls painfully short of the scale of investment that is required to decarbonise the economy."

He added: "The Treasury must introduce a financial mechanism to ensure that CCS technology is fitted to all new fossil fuel power stations in the UK."

Friends of the Earth called on Chancellor Alistair Darling to use this year's Budget to deliver on his green promises.

"Carbon dioxide emissions have risen under Labour," said Simon Bullock, the environmental group's economics co-ordinator.

"We've had enough of half measures and green spin. The chancellor must put climate change at the heart of next week's Budget and make it cheaper and easier for people to go green."

Mr Darling will deliver this year's Budget on 12 March.

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