ESC1864 - Consistent Economic Signals for Decarbonisation project

In the absence of an economy-wide carbon price, UK policies do not currently provide a consistent set of economic signals to reduce greenhouse gas emissions. A complex combination of tax measures, targeted subsidies and regulatory measures deliver financial incentives to reduce emissions (or 'implicit carbon prices') which vary arbitrarily across different economic sectors and energy-related activities. Similarly, current policy debates on economic drivers for decarbonisation tend to be fragmented and focus on sector-level or incremental changes. There is much less consideration of the pathway towards a more consistent economy-wide framework of price signals or economic drivers for decarbonisation. The Consistent Economic Signals for Decarbonisation project aims to develop and articulate a range of policy options capable of improving the consistency of economic signals for decarbonisation across the whole UK energy system. These options should be credible over a medium term time-frame (i.e. credibly capable of implementation within 5 years), taking account of the practical challenges associated with reform.

The project will adopt a whole-system perspective (building on ETI's experience and analysis of whole energy system transitions), and aim to translate this into a policy context by developing credible approaches to market and incentive design for emissions reduction.

This contract will be to provide key inputs to the wider project in the form of (a) a set of relevant case studies from international examples of policy approaches and frameworks to delivery of environmental improvement and/or pollution reduction; and (b) developing and initial characterisation of a set of reform options for further in-depth analysis in subsequent stages of the project.

The Catapult requires the successful bidder to develop relevant case studies from experience internationally and/or other relevant sectors or examples of environmental improvement, to extract key lessons from that experience and to inform the identification and development of a set of reforms options for further analysis.

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