Carbon neutrality plan could cause rise in cost of living

Carbon neutrality plan could cause rise in cost of living

During a public Scrutiny hearing, Senator John Le Fondré said that the Assembly’s decision last month to achieve carbon neutrality by 2030 would conflict with States efforts to combat the Island’s inflation levels, which have increased during the past 18 months.

Jersey’s latest recorded annual inflation rate was 3.6%, which was almost double the UK rate.

Carbon neutrality is achieved when organisations, businesses or individuals remove as much carbon dioxide from the atmosphere as they put into it.

To tackle the inflation issue a specialist panel headed by Economic Development Minister Lyndon Farnham was established. The group is due to publish a draft strategy at the end of the month.

During a Corporate Services Scrutiny Panel hearing, Senator Le Fondré said that the decision to declare a climate emergency was likely to conflict with that work.

‘If you are trying to change behaviour by perhaps increasing transport costs to disincentivise certain modes of transport, in the short term that could have an inflationary impact,’ he said.

The Chief Minister added that such measures could mean that people use their cars less, which could reduce inflation in the long term, as transport costs would fall.

But he added that he expected there would be conflict with efforts to control Jersey’s cost of living as new taxes and levies to reduce carbon emissions were introduced. ‘I think there will be some difficulties and tensions, shall we say, from the two different States policies,’ he said.

‘If, as a result of the decision to vote for a climate emergency, we decide to put the price of petrol up, for example, that will have an inflationary impact. And therefore that will push the cost of living up.

‘But if we don’t do that, it would be against the [climate emergency] policy of the States. So, it is going to be very, very complicated.’

He added that the States could protect people at the ‘lower end’ of the income scale from the rising cost of living through measures such as the income-support system.

Later during the hearing Deputy Jess Perchard asked the Chief Minister whether a congestion charge in St Helier was being considered as a way of reducing carbon emissions.

Senator Le Fondré said that it was, but expressed concerns that the measure could damage the town economy.

‘There has been some discussion about a congestion charge. I know that the officers in transport have raised and mentioned it in the last couple of months,’ he said.

‘Where does that go? I think when the environment plan comes out we need to see exactly what we are trying to achieve.

‘At the end of the day we are a small island and we do want to make sure that we keep St Helier economically active.’

Also during the hearing, States chief executive Charlie Parker said that the government was following the recommendations of the Fiscal Policy Panel, a group of independent economic advisers, to tackle inflation by controlling spending to reduce ‘domestic demand’.

The session was also attended by panel chairwoman Senator Kristina Moore and members Constables Richard Vibert and Karen Shenton-Stone and Deputy Steve Ahier.

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