Luke Walsh/ Edie News
An influential committee of MPs is concerned Government policy for a unilateral carbon floor price will devastate UK industry.
A report by the Energy and Climate Change Select Committee the move will 'artificially raise electricity prices' and have 'no overall impact' on emissions.
The report also argues the UK could play a 'key role' in ensuring compliance with EU ETS on aviation.
It calls on the Government to say it will ground flights from any UK-regulated aircraft operators if they refuse to comply with the terms of the EU ETS.
In its report Energy and Climate Change - Tenth Report the committee argues the UK Government should 'push for a strong and stable' carbon price across the whole EU Emissions Trading System (EU ETS) instead.
Committee chairman, Tim Yeo MP, said: "The chancellor was right to say we won't save the planet by putting the UK out of business. "Ironically, however, it is the Treasury's decision to set a carbon price floor that could result in industry and electricity production relocating to other EU countries.
"Unless the price of carbon is increased at an EU-wide level, taking action on our own will have no overall effect on emissions other than to out-source them.
"A revenue raising exercise disguised as a green policy won't help anybody-- the price of carbon has to be increased at an EU level to kick start investment in clean-energy."
