《Appendixsupplementaryreading.docVIP

This newspaper has long advocated a carbon tax as the best way to deal with a warming climate. This month we asked Cambridge Econometrics, an economic modeling firm, to assess the impact of a carbon tax on the economy. To keep things simple and allow for gradual adjustment, we proposed that it should raise revenues equal to 1% of GDP by 2020, and that other policies with similar objectives (fuel duty, subsidies for renewable energy, Britain’s membership of the European emissions trading scheme — the ETS — and so forth) would be abolished or cut back. The results are surprising. A frequent worry about carbon taxes is that they will hurt business and the economy. But in our simulation Britain’s economic performance would improve. Despite raising an extra ￡11 billion in net revenue by 2015 and ￡18 billion by 2020, our carbon tax (￡31 a tonne in 2015) would help economic performance, not hamper(阻碍) it. Output would be 1.2% higher by 2020 than under the current arrangements. Philip Summerton, of Cambridge Econometrics, explains that, with a general carbon tax replacing specific, expensive subsidies for renewable energy, more gas-fired power stations(天然气发电站) would be built. Since gas power is cheaper than wind power, for example, that would lower the cost of electricity. That, in turn, would boost production: manufacturing would grow by an extra 2.5% by 2020. Admittedly(无可否认), not all the news is good. Britain already depends on gas for around 40% of its electricity, and it is running out of the stuff. The tax would do nothing for security and diversity of supply. Although electricity bills would fall, the price of gas (the most popular home heating fuel) would rise. Average domestic fuel bills would climb by around 0.5% between 2010 and 2020. And Britain is in fact unlikely to withdraw from the ETS, so the relationship between the ETS price for carbon and the one set by the British taxman (in our test, higher) needs some thought. Confining the reven