The government should spend the revenues it receives from today's emissions trading scheme auction on meeting the UK's climate change obligations, campaigners have said.
Organisations such as WWF, Oxfam and thinktank IPPR are urging the government to make good use of the estimated £72 million the UK will make from auctioning four million carbon emission allowances today under the EU Emissions Trading Scheme (ETS).
"The UK government should grasp the chance to lead the world in tackling climate change," Phil Bloomer, Oxfam campaigns and policy director, said.
"Disputes about where money comes from should not get in the way of providing the scale of investment necessary to protect poor people from the climate change of our creation."
Between 2008 and 2012 about 85 million allowances will be auctioned, which is estimated to raise about £1.6billion. After 2013 the government could be netting £6 billion per year. By 2020 the EU could be gaining as much as £50-75 billion per year.
Activists believe the money raised should be used to improve energy efficiency in homes (in the UK and globally), investment in low carbon emission products and technology, and helping poorer countries deal with the cost of meeting climate change.
"There are many urgent needs both domestic and international when it comes to tackling climate change, and using the money raised from this auction is one way of ensuring that these needs are addressed during the economic downturn," Lisa Harker, IPPR co-director, said.
"This is a great opportunity to help poorer households make their homes both cheaper to heat and warmer, and create jobs through investment in new green technologies."
European states including Austria, Hungary and the Netherlands have already said the money raised from the auctions will go towards climate change.
But the UK, along with other European nations, has not pledged the funds for climate change because of concerns they breach budgetary principles about earmarking.
"Millions of poor people across the globe are already suffering as a result of climate change, as victims of natural disasters and changing weather patterns that wreck crops and force them to travel further for water," Phil Bloomer, Oxfam campaigns and policy director, said.
"The UK government should grasp the chance to lead the world in tackling climate change. Disputes about where money comes from should not get in the way of providing the scale of investment necessary to protect poor people from the climate change of our creation."