The Corporate Leaders Group on Climate Change (CLG), which includes Shell UK, also says the government should take ambitious action to stimulate investment in low carbon technology.

Calling for ambitious domestic policy, the CLG sets out seven areas in which business leaders want to strengthen UK leadership on climate change in an open letter to the Prime Minister. Measures include: taking on ambitious targets in Phase 2 of the EUETS and setting targets out to 2025 as well as providing incentives for the development of early-stage technologies such as carbon capture and storage.

The CLG stresses that a strengthened EU Emissions Trading Scheme should be key to the UK’s climate change strategy and calls for the Scheme to be broadened to include sectors such as aviation. James Smith, chairman of Shell UK said: “We need EU governments to set clear targets for the ETS out to 2025 so that our businesses and others can have the confidence to make long-term investments in reducing emissions.”

The CLG, developed under the auspices of the Prince of Wales’ Business and the Environment Programme, also argues that non-ETS countries should enjoy strong incentives to participate in the scheme. Alain Grisay, chief executive of F&C Asset Management, adds: “China and India hold the key to future investment growth, but also have a crucial role to play in global efforts to reduce emissions – we need to enable their economies to participate more actively in the EU ETS so they can start to see a real economic benefit from deploying low-carbon technologies.”