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IMF warns of rising energy bills to avoid climate crisis

Emma Lunn
Written By:
Emma Lunn

The International Monetary Fund (IMF) has warned that a carbon tax could result in energy bills going up by 43 per cent over the next decade.

Increasing the price of carbon is the most efficient method of combating global warming and reducing air pollution, according to the IMF.

A report by economists at the fund said that to limit global warming to 2°C or less – the level deemed safe by science – large emitting countries need to take ambitious action. It suggested these countries should introduce a carbon tax set to rise quickly to $75 a ton in 2030.

This would mean household electric bills would go up by 43 per cent cumulatively over the next decade on average – more in countries that still rely heavily on coal in electricity generation, less elsewhere.

The IMF said governments worried about a political backlash against big increases in the cost of heating homes and motoring, and should use the extra revenue raised from the tax to compensate consumers.

The warning came as Extinction Rebellion protests across the country continue to demand immediate action to cut carbon emissions and avert an ecological disaster. On Friday, protesters tried to shut down the BBC by blockading the entrances and climbing onto the canopy of Broadcast House in London. The group also tried to close City Airport earlier this week.

Victoria Arrington, spokesperson for Energyhelpline said: “There is a possibility that customers need not fully shoulder these projected costs if a carbon tax is introduced. For instance, the burden could potentially be eased if consumers were to adopt greener technologies and power their homes with a 100 per cent renewable electricity tariff.”

“Energy is the easiest big bill to switch. With increasing environmental awareness, the whole energy market is changing quickly, with green becoming the new norm and fossil fuels growing increasingly unpopular. Several suppliers are now supplying renewable energy as standard, often at affordable rates.”