Cost of green energy schemes

Environmental schemes have cost the average household an extra £120 a year, according to The Times newspaper. The amount of carbon emissions saved is the equivalent of a household replacing two incandescent light bulbs with low energy bulbs, for a cost of £3.

The cost comes from the way the EU carbon trading scheme operates.

When this was established in 2005, it created a system of permits that polluters had to “buy”. The current price is £12 for a tonne of carbon dioxide.

Additional permits could be bought. This created a new market as permits were traded like shares. In 2007, it was realised that permits had been overprovided, so they became largely worthless. The market has now recovered.

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