Question to the HM Treasury:

To ask the Chancellor of the Exchequer, what assessment her Department has made of the potential merits of a financial levy on UK industries historically linked to environmental degradation with revenue allocated to affected countries.

The Government is committed to helping deliver global climate finance, including the New Collective Quantified Goal agreed at COP29 of at least $300bn per year to developing countries by 2035, and responding to the wider call on all actors to increase climate finance to developing countries to £1.3trn per year.

As part of that effort, we are pressing for faster and more ambitious reforms to the global financial system to deliver much more and higher quality climate and development finance. Alongside this, we are supportive of exploring revenue raising mechanisms for climate action.

The Government’s headline carbon pricing measure is the UK Emissions Trading Scheme (ETS), a ‘cap and trade’ system setting a declining cap on the amount of greenhouse gases that can be emitted by covered sectors, which include the power sector, energy intensive industries and aviation.

This approach is viewed by the IMF and World Bank as one of the most efficient tools for promoting decarbonisation.

The Government is committed to the ETS until at least 2050. In 2024-25 the UK ETS raised £3.5bn to support public services and other government objectives like net zero.