Green Budget?

By Jeff Hardy

On Thursday we witnessed the first budget from Alistair Darling. How did you feel about it? I don’t think anyone was expecting anything dramatic as there isn’t really the wriggle room for big spending and grand gestures. It was built up as a green budget, and there were certainly some announcements relating to sustainable energy within it that were interesting.

Transport featured quite heavily. Gas guzzling cars (greater than 255 gCO2 per km labelled band M) took a bit of a hammering. Vehicle Excise Duty will be raised to £425 in 2009 and in 2010 you will also have a pay a one off cost of £950 when you buy such a car. Additionally, fuel duty will be raised by 2p per litre in October this year.

Biofuels have come under the policy microscope and sensibly the Government is looking to prioritise the most sustainable biofuels – although I’m not convinced that a sustainable biofuel has yet been defined anywhere. I’m also a little dubious of the table on carbon dioxide savings of biofuels compared to fossil fuels (page 98 of budget document) in light of recent studies examining land-use changes.

The aviation sector didn’t escape and the new per flight tax (replacing the per passenger tax) is to be increased by 10% in the second year of operation from whenever it starts – it’s under consultation currently.

New homes are to be zero carbon by 2016 and non-domestic buildings by 2019 according to the budget and this seems a worthy ambition. What I didn’t see, and perhaps I missed it, is any mention of measures to improve the energy efficiency of the existing housing stock. Without a major demolition programme the majority of houses in the UK in 2050 are already built. I’ll come back to this briefly later.

The humble plastic bag is to be phased out! Well, actually the plan is to put a cost (tax) on it so that we stop using it. Whilst I don’t think that this will halt climate change I’m glad that it has finally happened as it has proven successful elsewhere (see for example the Republic of Ireland). One caveat to my enthusiasm is that it’s important that this doesn’t have undesirable knock-on effects such as a switch by supermarkets to paper bags or something else. The idea should really be to encourage people to bring the means to carry their shopping home with them.

I want to comment on the proposed increase in winter fuel duty. I think that everyone should enjoy an affordable and comfortable home in winter (and indeed all year round). Is paying winter fuel duty every year the best way to achieve this or are there other ways to approach this? One thought would be to radically improve the insulation and efficiency of the heating systems in the homes of those at risk of fuel poverty (and in an ideal world, all homes). As a one off cost this is more expensive in a given year, but surely it would significantly reduce heating bills and must be cost effective in the long run? Energy efficient homes require less heating meaning lower heating bills, lower carbon dioxide emissions and ultimately reduced fuel poverty.

What do all these measures mean in terms of carbon emissions reductions? In all honesty, I have no idea! The environmental impacts of the measures are listed on page 107 of the Budget document. I was hoping to add them all up and present it as a lump of carbon dioxide savings. Unfortunately it’s not quite that straight forward as the ways in which the data are reported is not terribly helpful. If it helps then I think that there will be some reduction in carbon dioxide by 2020. Hopefully the very recently formed Committee on Climate Change, including UKERCs own Professor Jim Skea, will be able to help Government present these figures in a clearer and more transparent way.

So was it a green budget – does it put us clearly on a path towards significant carbon dioxide emissions reductions? No, not really. With just 11 more budgets before the Climate Change Bill 2020 target of a 26% carbon dioxide reduction, based on 1990 levels, we’ll need to see a much greater effort coming through. I think that the Committee on Climate Change will have a vital role in this and wish them good luck.