Green taxes could treble by 2020, costing taxpayers more than £16billion a year

Taxes to pay for contentious climate change policies are set to treble over the next decade, soaring to more than £16billion a year.

The hike is the equivalent of 4p on the current rate of income tax, a report from think tank Policy Exchange claimed.

By 2020 the tax take from green levies will be roughly equivalent to total public spending in England on both the police and fire services, the figures show.

Householders will pay £4.3billion in taxes on their energy bills by 2015 – more than double the £2billion they will pay this year. This will soar to £6.4billion by 2020, or around £280 for every household.

Firms will also be hit hard, with energy prices rising from £3.7billion to £9.9billion in the next decade.

The think tank warned that poorer households tended to spend more on energy so would have more of their meagre income swallowed up by taxes levied on household bills.

The policies which are driving up tax are intended to support either carbon emissions reduction or the promotion of renewable energy.

But the report argues many of them do little to curb global warming because they pay householders to produce power uneconomically through technologies such as solar panels.

Policy Exchange’s head of environment and energy, Dr Simon Less, said: ‘Climate policies need to be much more cost-effective, to maximise the impact of available resources on carbon reduction.’

A Department for Energy and Climate Change spokesman said: ‘We need an energy mix which is as affordable as possible for householders and avoids the UK becoming dependant on imports and volatile fossil fuel prices.’