According to the members of the UK parliament, an EU carbon price of €100 per tonne, not about €15 per tonne as it is today, is needed to drive sufficient green investment.

“The recession has left many big firms with more carbon allowances than they need and carbon prices have collapsed. If the Government wants to kick-start serious green investment, it must now step in,” said environmental audit committee chair Tim Yeo.

“UK ministers should seriously explore the possibility of a carbon tax and must press the EU to tighten up the overall caps in the ETS,” Mr Yeo explained.

The committee highlighted that, if need be, the UK should act alone in implementing reforms to increase the carbon price.

“This report confirms what we say all around Europe: The current ETS is not enough to drive the low-carbon investments needed to reach the 80-95% greenhouse gas emission reductions that EU leaders committed to last autumn,”, said director Eivind Hoff from Bellona.