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Pale green budget for the UK

It was budget day today in the United Kingdom and we got a real sense that the new coalition government does not take green issues all that seriously.

Key measures announced include:

·         An additional £2 billion (US$3.2 billion) for the newly formed Green Investment Bank – which will have an initial capitalisation of £3 billion (US$4.9 billion) and will open a year earlier than expected in 2012. Unfortunately, the bank will not be able to borrow until 2015 at the earliest and even then that will be dependent on the UK government meeting targets to reduce debt.

·         A floor on the price of carbon – starting at £16 (US$26) per tonne of carbon dioxide and moving to £30 (US$49) per tonne by 2020.

·         Four carbon-capture and storage demonstration plants will receive public funding, but from general taxation rather than any new levy.

This comes on top of an already announced £860 million (US$1.4 billion) scheme to subsidise clean heating systems through a Renewable Heat Incentive.

By contrast, the budget will do little to reduce carbon-dioxide emissions from transport, with tax breaks for frequent fliers and motorists.

Reaction to the budget was mixed. chinadialogue and Climate Change Capital chairman James Cameron said: “The Budget is a pivotal moment in the evolution of the Green Investment Bank concept into a real and enduring institution. The Coalition is creating something that can make a positive difference to the entrepreneurial enterprises we need to deliver sustainable growth and the green transformation of our economy.”

James Murray, editor of Business Green said the carbon floor-price “will help low-carbon investment, but [is] surely not high enough for many technologies.”

The banks inability to borrow money was also a point of contention, with one commentator likening it to waiting for a very ill patient to recover before giving them medicine. Meanwhile, George Monbiot, writing for The Guardian, called it “the blackest budget in living memory”.

 

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