Report to tell consumers to brace for 'green' taxes

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LONDON -- Britain's consumers will be told today to prepare for new "green" taxes on cars, fuel, air travel and consumer electronics to curb pollution and avert a looming global catastrophe caused by climate change.

A report drawn up by Nicholas Stern, the government's chief economist, says that ignoring global warming could lead to economic upheaval on the scale of the 1930s Depression and turn 200 million people into refugees as their homes are hit by drought or flood.

Ministers plan to use the report to pave the way for "eco-taxes" to persuade people to adopt less-polluting lifestyles. A start is likely to be made in the federal budget in the spring.

Environment Secretary David Miliband has proposed an end to cheaper gasoline, even if oil prices fall. In a leaked letter to the treasury secretary, he called for "pay-as-you drive" charges to be extended nationwide, taxes on inexpensive flights and levies on energy-wasting domestic appliances.

Prime Minister Tony Blair and Chancellor Gordon Brown -- Mr. Blair's likely successor when he steps down next year -- were to signal their support for the potentially unpopular message by attending the formal publication of the Stern report in London today.

Mr. Brown will call for a global carbon market and promise to set targets to reduce greenhouse-gas emissions in a climate-change bill. He will announce that former U.S. Vice President Al Gore, a leading advocate of tackling climate change, has agreed to act as his adviser.

Mr. Stern, whose 700-page report was widely leaked over the weekend, has convinced the Cabinet that urgent action has to be taken now. His report states that no matter what is done, the chance to keep greenhouse gases at a level that scientists say should avoid the worst effects of climate change "is already almost out of reach."

But he says the benefits of worldwide steps to tackle climate change would greatly outweigh the costs.

Mr. Miliband, who is taking the lead in pressing for green taxes, said yesterday that tackling climate change was the "defining challenge for our generation." He acknowledged that the tax system had a part to play, although he refused to comment on the leak of the letter that he sent to the chancellor this month.

"Market-based instruments, including taxes, need to play a substantial role. As our understanding of climate change increases, it is clear that more needs to be done," Mr. Miliband said in the letter obtained by the Mail on Sunday newspaper.

He told Mr. Brown that "a substantial increase" in the tax on higher-emission vehicles should be considered, as well as charging road users for the full environmental effect of their journeys.

He said gasoline prices should be kept high at the pumps by raising fuel taxes if the oil price drops significantly. He proposed charging air passengers an extra $9 per flight and putting a value-added tax on flights to countries of the European Union.

Mr. Miliband also wants to steer consumers toward buying electrical goods that are more energy efficient.

David Cameron, the Conservative Party leader, has said he wants to raise the percentage of revenue that comes from green taxes. "That means we've got to look at things like air transport, like the gas-guzzling cars. We'll come up with those ideas closer to a general election."

He said that he did not want to stop people going on a family vacation but that the Tories would put a tax on air travel if it was thought necessary.