A carbon dividend would prove that Brexit is more than endless hot air

The World Cup in Russia has provided many of us with sweet relief from the drumbeat of Brexit-related sound bites and Twitter rage.

But even as Westminster politicians head home for parliamentary recess and the long, hazy summer rolls on, the deafening countdown to leaving the European Union cannot be ignored.

Divorce bills, freedom of movement, and border checks have monopolised headlines. But what leaving the EU means to climate change has barely featured – despite it being one of the biggest issues in our lives.

One of the arrangements that the UK is likely to leave following Brexit is the EU Emissions Trading System (ETS) – which is the world’s first major carbon market created in order to reduce greenhouse gases.

Despite recent data indicating that emissions rose in 2017, the European scheme has been considered successful, after emissions fell for six straight years.

The UK itself can point to its own leadership in the bid to “decarbonise”: Britain heads an alliance of nations that are committed to moving the world to cleaner power sources. The UK was the first country to impose legally binding targets on reductions in emissions, and also introduced its own carbon tax in 2013, as a top-up to the European scheme.

But what will happen after the UK leaves the ETS – which will probably be in 2021 – remains unclear.

Today, a new report from the centre-right think tank Policy Exchange has put forward its suggestion: tax the whole economy.

The paper argues that the UK should widen its carbon tax, from one based solely on penalising power generators and heavy industry to a new set-up that includes the firms that sell fossil fuels.

The report’s lead author, Matthew Rooney, said that charging a levy on a miner or an energy company at the point where they sell the raw material would be the simplest and most effective way to discourage intensive carbon use.

But when you tax the likes of Shell, you raise the costs to the whole economy, and surely that must be a hard-sell to the public?

No problem, argues the Policy Exchange paper, which reckons that this could be overcome in the form of a “carbon dividend”.

This annual lump sum would be paid directly to your bank account out of revenue gathered by the tax. Each UK household would receive the exact same amount, benefiting lower income households that typically have a lower carbon footprint.

The paper argues that this dividend would “lock in political and public support for fighting climate change”, rather than being viewed as punitive and regressive.

In a little over eight months Brexit will happen, and as we bicker toward the unknown, it is perhaps time our elected representatives promised the public a little something. A gift if you like, for all the endless hot air.

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