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Young people in China prefer brands that reduce carbon emissions

Concerns about the environment are higher in Asia than in the west.

In a study of 2,500 young adults aged between 18 and 25 across five continents, commissioned by the Carbon Trust and conducted by TNS, 83 per cent of those surveyed in China said they would be more loyal to a brand if they could see it was reducing its carbon footprint, compared to 73 per cent in South Korea, 55 per cent in the UK and 57 per cent in the US.

Sixty per cent of young adults in China who participated in the research said that they would stop buying a product if its producer refused to commit to measuring and reducing its carbon footprint. In Brazil, 57 per cent said they would do the same; in Korea, the figure was 53 per cent; it was 35 per cent in the US and 36 per cent in the UK.

Tom Delay, chief executive of the Carbon Trust, said:

These new findings are startling. Sixty per cent of young adults questioned in China would stop buying a product if its manufacturer refused to commit to measuring and reducing its carbon footprint, compared to just 35 per cent of those in the US.

Perhaps it is the Chinese, and not the US consumer, that really holds the key to unlocking the mass demand for new low-carbon products necessary to deliver an environmentally sustainable economy. If global brands don’t build international carbon reduction strategies even faster, they risk missing out on the spending power of emerging economies.

Eighty-one per cent of those questioned in Brazil said that companies should be obliged to provide proof of their policy to reduce their carbon footprint, higher than any other nation; 68 per cent of those surveyed worldwide want to see companies’ carbon impact quantified by an independent organisation. This is highest in China at 84 per cent and lowest in the US at 55 per cent.

Across all the markets, a third of young consumers (33 per cent) on average say that they are prepared to buy a more expensive product if it has a lower carbon footprint.

When asked which products and categories could do the most to reduce their carbon footprint, 68 per cent of young consumers cited consumer electronics companies, followed by consumer health-care brands (50 per cent), clothes manufacturers and retailers (50 per cent), and food manufacturers and retailers (48 per cent).

Through its carbon-reduction and footprinting services, Carbon Trust customers around the world have put £3.7bn on their bottom line and cut their carbon emissions by 38 million tonnes.

Delay added:

Carbon footprinting makes perfect business sense. We are increasingly advising businesses overseas, and international brands, on their carbon-reduction strategies, as the financial and reputational benefits of lowering emissions go global.

The research, conducted between 24 February and 6 March 2012, found that across the six markets, 78 per cent want their favourite brands to help reduce their carbon footprint; 70 per cent would be more loyal to a brand if they could see it was reducing its carbon footprint.

Meanwhile, 46 per cent would find carbon footprinting on packaging useful and it would influence their purchasing decisions; 33 per cent would buy a more expensive product if it had a lower carbon footprint; 29 per cent want to reduce their carbon footprint but are confused about how to go about it; 28 per cent are trying to reduce their carbon footprint but feel they could do more and 21 per cent feel they are doing their bit to reduce their carbon footprint.

Young adults believe consumer electronics (68 per cent), consumer health-care brands (50 per cent), clothes manufacturers and retailers (50 per cent) and food manufacturers and retailers (48 per cent) have the greatest responsibility to reduce their carbon footprints.

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Q&A: What are tax credits and how do they work?

All you need to know about the government's plan to cut tax credits.

What are tax credits?

Tax credits are payments made regularly by the state into bank accounts to support families with children, or those who are in low-paid jobs. There are two types of tax credit: the working tax credit and the child tax credit.

What are they for?

To redistribute income to those less able to get by, or to provide for their children, on what they earn.

Are they similar to tax relief?

No. They don’t have much to do with tax. They’re more of a welfare thing. You don’t need to be a taxpayer to receive tax credits. It’s just that, unlike other benefits, they are based on the tax year and paid via the tax office.

Who is eligible?

Anyone aged over 16 (for child tax credits) and over 25 (for working tax credits) who normally lives in the UK can apply for them, depending on their income, the hours they work, whether they have a disability, and whether they pay for childcare.

What are their circumstances?

The more you earn, the less you are likely to receive. Single claimants must work at least 16 hours a week. Let’s take a full-time worker: if you work at least 30 hours a week, you are generally eligible for working tax credits if you earn less than £13,253 a year (if you’re single and don’t have children), or less than £18,023 (jointly as part of a couple without children but working at least 30 hours a week).

And for families?

A family with children and an income below about £32,200 can claim child tax credit. It used to be that the more children you have, the more you are eligible to receive – but George Osborne in his most recent Budget has limited child tax credit to two children.

How much money do you receive?

Again, this depends on your circumstances. The basic payment for a single claimant, or a joint claim by a couple, of working tax credits is £1,940 for the tax year. You can then receive extra, depending on your circumstances. For example, single parents can receive up to an additional £2,010, on top of the basic £1,940 payment; people who work more than 30 hours a week can receive up to an extra £810; and disabled workers up to £2,970. The average award of tax credit is £6,340 per year. Child tax credit claimants get £545 per year as a flat payment, plus £2,780 per child.

How many people claim tax credits?

About 4.5m people – the vast majority of these people (around 4m) have children.

How much does it cost the taxpayer?

The estimation is that they will cost the government £30bn in April 2015/16. That’s around 14 per cent of the £220bn welfare budget, which the Tories have pledged to cut by £12bn.

Who introduced this system?

New Labour. Gordon Brown, when he was Chancellor, developed tax credits in his first term. The system as we know it was established in April 2003.

Why did they do this?

To lift working people out of poverty, and to remove the disincentives to work believed to have been inculcated by welfare. The tax credit system made it more attractive for people depending on benefits to work, and gave those in low-paid jobs a helping hand.

Did it work?

Yes. Tax credits’ biggest achievement was lifting a record number of children out of poverty since the war. The proportion of children living below the poverty line fell from 35 per cent in 1998/9 to 19 per cent in 2012/13.

So what’s the problem?

Well, it’s a bit of a weird system in that it lets companies pay wages that are too low to live on without the state supplementing them. Many also criticise tax credits for allowing the minimum wage – also brought in by New Labour – to stagnate (ie. not keep up with the rate of inflation). David Cameron has called the system of taxing low earners and then handing them some money back via tax credits a “ridiculous merry-go-round”.

Then it’s a good thing to scrap them?

It would be fine if all those low earners and families struggling to get by would be given support in place of tax credits – a living wage, for example.

And that’s why the Tories are introducing a living wage...

That’s what they call it. But it’s not. The Chancellor announced in his most recent Budget a new minimum wage of £7.20 an hour for over-25s, rising to £9 by 2020. He called this the “national living wage” – it’s not, because the current living wage (which is calculated by the Living Wage Foundation, and currently non-compulsory) is already £9.15 in London and £7.85 in the rest of the country.

Will people be better off?

No. Quite the reverse. The IFS has said this slightly higher national minimum wage will not compensate working families who will be subjected to tax credit cuts; it is arithmetically impossible. The IFS director, Paul Johnson, commented: “Unequivocally, tax credit recipients in work will be made worse off by the measures in the Budget on average.” It has been calculated that 3.2m low-paid workers will have their pay packets cut by an average of £1,350 a year.

Could the government change its policy to avoid this?

The Prime Minister and his frontbenchers have been pretty stubborn about pushing on with the plan. In spite of criticism from all angles – the IFS, campaigners, Labour, The Sun – Cameron has ruled out a review of the policy in the Autumn Statement, which is on 25 November. But there is an alternative. The chair of parliament’s Work & Pensions Select Committee and Labour MP Frank Field has proposed what he calls a “cost neutral” tweak to the tax credit cuts.

How would this alternative work?

Currently, if your income is less than £6,420, you will receive the maximum amount of tax credits. That threshold is called the gross income threshold. Field wants to introduce a second gross income threshold of £13,100 (what you earn if you work 35 hours a week on minimum wage). Those earning a salary between those two thresholds would have their tax credits reduced at a slower rate on whatever they earn above £6,420 up to £13,100. The percentage of what you earn above the basic threshold that is deducted from your tax credits is called the taper rate, and it is currently at 41 per cent. In contrast to this plan, the Tories want to halve the income threshold to £3,850 a year and increase the taper rate to 48 per cent once you hit that threshold, which basically means you lose more tax credits, faster, the more you earn.

When will the tax credit cuts come in?

They will be imposed from April next year, barring a u-turn.

Anoosh Chakelian is deputy web editor at the New Statesman.