European policies aimed at reducing the impacts of climate change, such as solar power technology and cutting car emissions, are settting the cost of saving carbon at up to 130 times its optimal price and potentially harming the economy, according to a new report.

Different policies in Europe incur varying costs to save a tonne of carbon emissions and several take no account of the penalty of change exacted on the industry and taxpayers through pricing mechanisms, according to a report by investment bank Lehman Brothers entitled: "The Business of Climate Change".