The UK leads the world in using carbon pricing to reduce pollution, according to a think-tank report. The report, by the Climate Institute, said China, the world’s biggest polluter, was in second place.

The Australian-based institute said the research showed Australia’s major trading partners have higher direct and indirect carbon pricing in their electricity sectors in order to drive cleaner energy investments.

“More and more competitors are putting a price tag on pollution to boost clean energy competitiveness,” said The Climate Institute’s deputy CEO Erwin Jackson.

 

These had implemented mechanisms that put an equivalent price tag on pollution in the electricity sector of up to 17 times that of Australia’s.

 

“The UK is reaping the benefits of its policies to price pollution, in addition to its participation in the European Emissions Trading Scheme, and has an equivalent price tag around 17 times that of Australia’s,” he said.

 

“Investment in clean energy in the UK reached around $11 billion in 2009 and captured around 17% of the market in the countries studied.”

He said China’s policies “to meet its targets and dominate the global clean energy race imply a price tag on pollution over eight times higher than that of Australia’s.”

 

Clean energy investment in China reached S$35 billion last year, compared with $18 billion in the USA and less than $1 billion in Australia.

 

According to the report, the “implied” carbon prices in seven countries or regions were: