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Washington Watch

With Congress Out, Today's News Comes from London:

Britain Issues Report Calling for Aggressive Measures Against Global Warming

Even Considers a Carbon Tax

A Report that Al Gore Could Have Written...So They Hired Him

Based on reports by AP and The London Times

Kicking Asphalt and Driving Change have highlighted proposals by conservative economists, such as Harvard's N. Gregory Manikow, that the smartest new tax would be an energy tax.

Well American conservative politicians don't agree. But apparently the British Left does. A report released by the the Labor Government on Monday concluded that the current pace of global warming will devastate the world economy on the scale of the world wars and the Great Depression.

British Prime Minister Tony Blair called for bold and decisive action, asserting that otherwise unabated climate change would eventually cost the world between 5 percent and 20 percent of global gross domestic product each year. "It is not in doubt that if the science is right, the consequences for our planet are literally disastrous," he said. "This disaster is not set to happen in some science fiction future many years ahead, but in our lifetime."

"Unless we act now ... these consequences, disastrous as they are, will be irreversible," he added.

The report is expected to increase pressure on the Bush administration -- which never approved the Kyoto Protocol climate-change accord -- to step up its efforts to fight global warming.

AP reported that British Treasury chief Gordon Brown, who commissioned the Stern report, said former Vice President Al Gore would advise the British government on climate change.

Report author Sir Nicholas Stern, a senior government economist, said that acting now to cut greenhouse gas emissions would cost about 1 percent of global GDP each year.

"The evidence shows that ignoring climate change will eventually damage economic growth," said Stern's 700-page report, an effort to quantify the economic cost of climate change.

Consumers could be hit by a tax on a range of goods from food to hotel breaks under plans to tackle climate change being considered by David Miliband.

The Environment Secretary is considering taking sweeping powers to extend curbs on greenhouse gas emissions so that they cover many more businesses, including supermarkets and hotel chains curbs that at present apply only to the big industrial users.

But amid signs of a government split on how to respond to Sir Nicholas Stern’s report on the impact of global warming, Gordon Brown is to reject Cabinet calls for tax rises on motorists and domestic consumers, according to The London Times.

Airline passengers and drivers of large “gas-guzzling” vehicles will bear the brunt of green tax levies, to be introduced by the Tony Blair in his last Budget in March. But Mr Brown is opposed strongly to measures that would allow gas prices to rise even when the world price of oil slumped.

The disclosure over the weekend of Mr Miliband’s “wish list” of taxation measures angered the Treasury and sources were blaming “rogue elements” in No 10 yesterday for its appearance over the weekend. Mr Brown was said to be upset because the leak focused attention on speculation about tax rises rather than on the central message of Sir Nicholas’s report; that if the world took concerted action on global warming growth need not be affected.

Allies of the Chancellor described the leak as an attempt to put pressure on Mr Brown and to test his modernising credentials.

When they appeared with Sir Nicholas at the launch of his report yesterday both Mr Brown and Tony Blair emphasised the importance of international action - rather than domestic taxes - to reduce carbon emissions. Mr Brown made it plain that he was pinning his hopes on a massive expansion of the carbon trading scheme, by which governments aim to reduce pollution through market mechanisms.

He suggested that the scheme, under which firms have to buy credits to emit more than a set level of greenhouse gases, should be extended by linking it with others in California, Australia, Japan and elsewhere.

The Climate Change Bill will enshrine in law the Government’s long-term aim of reducing carbon emissions by 60 per cent by 2050. Thousands of organisations, from supermarket groups to hotel chains, are not covered by EU schemes limiting carbon emissions. The “enabling powers” would allow ministers to extend these curbs at will across the rest of Britain’s businesses with potentially huge cost consequences. Many companies that broke possible limits on their emissions and were forced to buy “carbon credits” would be likely to pass on costs to the consumer.

The Environment Department confirmed that the powers could be used to extend curbs to “non-energy intensive” sectors. It said in the summer that measures for businesses not covered by the EU trading scheme, and which account for a tenth of Britain’s greenhouse gases, could bring carbon savings of 1.2 million tonnes a year by 2020.

David Frost, the head of the British Chambers of Commerce, said that the measures would amount to “stealth tax” in which “business becomes the villain”.