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In the recently published White Paper on Electricity Market Reform, UK Energy Secretary Chris Huhne unveiled a package of measures designed to encourage the investment needed to ensure secure, low carbon energy for the UK.

One of the five key policies outlined in the document was the introduction of a carbon price floor from 1st April 2013. 

Europe was poised this week to poised to make world-leading, unconditional emissions target reductions of 30% compared to 1990 levels (up from the existing 20% target). Yet the European Parliament this week voted only to pass through an amended report, one with numerous compromises on initially ambitious aims.

The UK Government is currently holding consultation on four proposals to reform the UK energy market, with the aim of their introduction by 2013. One of these is the carbon floor price – proposed in order to give long term certainty about carbon prices to encourage low-carbon investment.

The Government yesterday announced a change to the Carbon Rediuction Commitment Energy Efficiency Scheme (CRC) that means medium and large businesses will end up paying £1bn per year in a carbon tax that has the potential to create no net reduction in greenhouse gases.

If you've looked into buying carbon offsets, you'll know that there's a huge range of prices. This might seem strange, given that they're all meant to do the same thing: reduce carbon emissions by one tonne.  What exactly is behind the different prices?  And, given the number of economists, environmentalists and businesses complaining about the price, how much should a tonne of carbon cost?