The Government is being urged to put a cost on emissions of carbon dioxide from all sources, including domestic users and transport, to help tackle climate change.
The call comes from the Royal Society ahead of this week's expected Energy Review.
The Royal Society said that the primary emphasis of the Government's current review of UK energy policy should be to introduce a "carbon tax" or system of tradable emission permits that is applied to all sectors, so to find the most cost-effective method of achieving cuts in outpourings of the gas chiefly responsible for global warming. The society said in its submission to the Energy Review, that the current system of taxing energy under the Climate Change Levy is inefficient at reducing emissions of carbon dioxide.
It does not cover households and transport in spite of the fact that these were responsible for almost 40 per cent of all UK carbon dioxide emissions in 2004.
Additionally, the levy is designed to reduce power consumption rather than emissions of carbon dioxide which means that it is applied to low carbon sources of energy such as nuclear power.
Sir David Wallace, Vice-President of the Royal Society said: "The Government has so far chosen not to face head on the issue of rising emissions from transport and UK households.
"Making all energy users pay for the carbon dioxide they emit into the atmosphere may not seem politically expedient, but we need to be moving towards a clean, secure supply of energy. This cannot be delivered by the current system with its reliance on fossil fuels.
"By making clear the long-term intention to increase the cost of emissions of carbon dioxide, either through a carbon tax or emissions trading scheme which applies to all sectors, the Government will encourage investment in low carbon technologies.
"It must give industry a clear steer in this regard since we are at an important juncture with critical decisions being made now concerning the energy system that will power the UK in the future.
"The current debate around whether or not we build a new generation of nuclear power stations, while important, should not distract attention from the fact that we need to address our addiction to fossil fuels on a number of fronts. Any delay in cutting emissions now will make the task of avoiding the worst effects of climate change much harder.
"A key factor driving changes to our climate is the total amount of greenhouse gases emitted into the atmosphere, so what we fail to reduce today will have to be drastically made up for in the future."
The Royal Society's report also says that, "the current market system in the UK does not provide sufficient incentives for research and development at the scale necessary to ensure the sustained growth of energy technologies.
"The spend by the privatised energy industry on research and development has been declining." ..SUPL: