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Last Updated: Sunday, 3 December 2006, 11:02 GMT
MPs urge 'climate change' budget
The Stern report warned that without action flooding could get worse
MPs are urging Gordon Brown to put climate change at the heart of his pre-Budget report next week.

Members of the cross-party Environmental Audit Committee are calling on the Treasury to take action to help curb greenhouse gas emissions.

The influential group of MPs have written a letter asking for financial incentives for those reducing emissions and penalties for those who do not.

They say the Treasury has not heeded recent warnings on climate change.

Economist Sir Nicholas Stern's study in October suggested that global warming could shrink the global economy by 20%.

But taking action now would cost just 1% of global gross domestic product.

The report also said that without action, up to 200 million people could become refugees as their homes are hit by drought or flood.


At the time Prime Minister Tony Blair said the report showed that scientific evidence of global warming was "overwhelming" and its consequences "disastrous".

And Gordon Brown promised the UK would lead the international response to tackle climate change.

But the committee of MPs says that although the chancellor has the power to change the behaviour of both business and consumers, so far he has been reluctant to use it.

We will look, over the next couple of years, at taxation of transport both road and air
George Osbourne
Shadow chancellor

BBC environment correspondent Sarah Mukherjee said the committee was advocating a "carrot and stick approach", which would see fiscal incentives for those making green choices and penalties for those who do not.

The committee, she says, wants Britain to take international leadership on this issue in order to set an example to other countries, such as India and China, on cutting greenhouse emissions.

Speaking on BBC One's AM programme later, shadow chancellor George Osbourne said the Conservatives wanted a shift in taxation away from income and investment, and onto pollution - including a carbon levy on industry.

"Pay as you burn, not pay as you earn is the phrase that I've come up. That involves an increase in green taxes but these are replacements for other taxes," he said.

"We will look, over the next couple of years, at taxation of transport both road and air," he said.

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