Page last updated at 08:42 GMT, Monday, 20 April 2009 09:42 UK

Binding green targets in Budget

By Roger Harrabin
Environment analyst, BBC News

Lorries in fuel protest
The 2000 fuel protests were evidence of the public reaction to green taxes

The chancellor this week will revolutionise climate policy by announcing the world's first legally-binding budgets for greenhouse gases.

The Budget statement on 22 April will contain budgets for CO2 emission cuts alongside projections for tax and spending.

The carbon budgets will run for five-year periods up to 2022 when the UK should have cut emissions by between 34% and 42%.

The carbon budgets are strongly supported by industry, but some scientists say they are not ambitious enough.

Climate leadership

Ministers now proudly claim the carbon budgets as an example of the UK's international leadership on climate. Originally the idea was forced upon them by opposition parties and their own backbenchers frustrated that the rhetoric on climate change was often unmatched by policy.

I understand that the government has accepted the recommendations of its advisory climate committee, which based its advice on the demands of climate science, tempered by what is achievable in the economy.

The committee said that to ensure 80% emissions cuts by 2050, the government needs to cut 42% by 2020, against a 1990 baseline.

Business complained that this would risk UK competitiveness unless other big nations cut emissions too, so they recommended a 34% unilateral cut by 2020 pending a global agreement.

Environmental praise

Environment experts reservedly welcomed the budgets.

"This is a ground-breaking move," said Bernice Lee of the Royal Institute of International Affairs.

I fear that the cuts, radical as they may seem, simply do not go far enough to meeting the UK's share of what is needed to stabilise the climate
Dr Kevin Anderson, Tyndall Centre for Climate Change Research

"It is excellent that the UK is taking a lead in this regard with planned phases of emissions cuts in the economy. But now we must make sure that spin does not overtake reality."

Dr Kevin Anderson from the Tyndall Centre for Climate Change Research also congratulated the government on setting an international lead, but warned the cuts may not go far enough.

"I fear that the cuts, radical as they may seem, simply do not go far enough to meeting the UK's share of what is needed to stabilise the climate.

"The science is getting more worrying all the time and it is running away from policy.

"We also need now to see how the government intends to make its carbon budgets work - it is madness for them to think they can hit long-term targets and keep expanding aviation, for instance."

There will not be detailed government plans for emissions cuts until the summer.

John Cridland, CBI
John Cridland from the CBI says a carbon budget is essential

Dr Anderson also condemned the government for planning to achieve some of its targets by buying emissions permits from poor countries - in effect paying them to cut emissions on the UK's behalf.

Some green activists support this policy as it is easier and cheaper to achieve carbon savings in countries which are currently investing in new infrastructure.

But Dr Anderson said he considered it immoral.

Business backing

The carbon budgets are supported by the employers' group, the CBI, who are more positive about climate initiatives than many of their counterpart organisations around the world.

"It's an essential idea to have a carbon budget as part of the main budget," said CBI deputy director general, John Cridland.

"Business knows it needs to invest heavily to get us on a trajectory to achieve our low carbon reductions.

"But it stands no chance of doing that if it doesn't have certainty about where government policy is going forward. Independent carbon budgets give that framework of certainty that will encourage business investment."

Costly investment?

The most recent financial analysis estimated that the benefits of cutting carbon emissions in the UK outweighed the costs by between £53bn and £696bn.

Climate sceptics doubt these figures and believe the money could be better spent elsewhere.

The CBI estimates the carbon budgets will cost every family £100 a year and says the cash is well-spent.

It seems a law is only a law if the government wants it to continue as a law
Andrew Warren, Association for the Conservation of Energy

But the CBI's support is not unqualified.

It wants protection for heavy industries vulnerable to imports from countries without strict carbon laws.

And it wants much faster government action to secure supplies of low-carbon energy. Mr Cridland said the government was performing very badly in this regard.

Loopholes

The budgets will be legally binding except in "exceptional circumstances".

This makes some environmentalists wary.

Andrew Warren from the Association for the Conservation of Energy helped prompt the Warm Homes Act to end fuel poverty. He says the legally-binding Act looked watertight but when the government found the costs of its plans increased, they re-interpreted a clause and announced that the targets could be missed with impunity.

"It seems a law is only a law if the government wants it to continue as a law," said Mr Warren.

Other green measures

Ministers at the green departments are in fact pressing the chancellor to announce much wider measures on home insulation in the Budget.

They point out that in terms of green fiscal stimulus, labour-intensive home insulation offers by far the best ratio of jobs per pound spent.

Unlike road-building it also contributes to reducing dependency on oil and cutting greenhouse gases.

The UK is almost at the bottom of the world league table for the percentage of "New Deal" spending on green objectives.

Alistair Darling
The chancellor will deliver his second Budget on 22 April

Other "green" measures in the Budget may be in fairly short supply. Government sources suggest that it is wary of introducing new green taxes after being "torched" by media reaction to earlier green measures, although green taxes would have to figure in future years as the UK moved to fill the hole in government coffers.

Gordon Brown has already said in a newspaper interview that he planned to ask a number of pilot councils to install charging points to help the UK begin an electric car revolution.

But some analysts fear the revolution will not take place until the price of electric cars plummets, which is unlikely to happen without huge government incentives to increase production volumes.

Huge loss

Any electric car revolution would need to be accompanied by a green tax revolution, because of the huge loss to the Exchequer of people switching from heavily-taxed petrol to barely-taxed electricity.

The chancellor will also make an announcement this week on carbon capture and storage - a way of generating low-carbon energy from coal.

He is expected to say that the UK will fund two demonstration projects instead of one.

The key is whether he earmarks funding for this technology.

It has been described for years as one of the great hopes for combating climate change, in urgent need of development.

But the Treasury, beset by other priorities, has so far refused to put up the cash to make it happen.



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