London, September 2010

Finding an efficient price for power systems

In the context of a rapidly changing technology mix and environmental constraints, markets will need to be redesigned to allow for fairness and efficiency. The government and regulators will need to clarify the scope and study the social cost of a carbon floor price and the emission reduction efficiency of such a measure. High CO2 prices could make the UK industry and economy less competitive than its neighbouring countries through increased electricity bills for industries, businesses and households, but is that a “price worth paying” to meet environmental objectives?

By Romain Kidd

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