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Last Updated: Wednesday, 21 March 2007, 15:45 GMT
How green was my Budget?
ANALYSIS
By Richard Black
Environment correspondent, BBC News website

Gordon Brown. Image: AFP/Getty
Gordon Brown: The red box holds only small green goodies

Gordon Brown's 11th - and in all probability, last - Budget did not produce the kind of environmental blockbuster which some in the green lobby have been calling for.

Absent is anything like a 2,000 excise duty for the most polluting cars. Absent are swingeing taxes on aviation, and multi-million pound grants for domestic wind turbines.

It is fundamentally an evolutionary Budget, extending some of the trends which the Treasury and other government departments have been developing in recent times.

So gas-guzzling drivers will have to pay a little more, people installing solar panels or wood stoves a little less. Filling holes in the ground with rubbish will become a little more expensive, while owning an energy-efficient home should get a bit cheaper.

There are also several areas in which the chancellor announced promising ideas, without being minded - or able - to present the whole picture.

Mr Brown in fact delivered one blockbuster in the entire Budget: the announcement of a reduction in the basic rate of income tax. His green steps, by contrast, are little ones, despite a statement right at the top of his speech that "promoting long-term investment and environmentally sustainable growth" was one of three priorities for him and his policy wonks.

Home truths

Of all the various sources of greenhouse gas emissions, industry has been the best dealt with. There are relatively few emitters, and they are big companies, so relatively easy to regulate and to rope into emissions trading schemes.

Homes, which account for roughly a quarter of Britain's greenhouse gas output, have traditionally received little attention by comparison.

Recently the government announced that all new homes will have to fit zero-carbon guidelines from 2016; now the chancellor confirms that any new zero-carbon house built in the meantime will be exempt from stamp duty.

Off-road vehicle. Image: PA
The battle against climate change demands political leadership and a real sense of urgency that, unfortunately, this budget lacks
Brian Robinson, IMechE
"It's a classic market transformation initiative and it's very welcome, although there's work to be done on some of the detail," commented Mark Hinnells from Oxford University's Environmental Change Institute.

But currently fewer than one in 200 British homes would qualify as zero-carbon, so in order to bring major reductions in domestic greenhouse gas emissions, the government has to tackle existing homes too.

The chancellor said he has been talking to mortgage companies, attempting to incentivise them to encourage investment in energy efficiency, but there were no specifics.

He did announce a 50% rise in money for household-scale microgeneration schemes. The cash goes through a Department of Trade and Industry (DTI) mechanism, the Low Carbon Buildings (LCB) programme.

The DTI allocates money monthly; and in recent months, demand has been so high that grants have been disbursed as quickly as tickets to the Glastonbury Festival. So what impact might a 50% rise have?

"It'll probably mean that rather than being gone by lunchtime on the first day of the month, the grants are gone by 3 o'clock in the afternoon of the first day," observed Dr Hinnells.

Mr Brown said he was lobbying other European leaders to reduce VAT on energy-efficient goods from 17.5% to 5%. Yet, environmental groups will argue, he cut VAT unilaterally on products designed to help people stop smoking, so why not do the same on products designed to help people reduce fossil fuel burning?

Modest heights

Outside the home, there was speculation before the budget that vehicle excise duty (VED) would be hiked high, perhaps matching metaphorically the level at which 4x4 drivers perch as they leer down at the supermarket car park.

In the event, vehicles emitting more than 225 grams of CO2 per kilometre - which includes not just 4x4s, but some estate cars and people carriers - will see VED rise from 210 per year to 300 this year and 400 next. Fuel duty goes up by 2p per litre, about 2%.

Model zero-carbon house. Image: Stewart Milne/PA
Zero-carbon homes are a tiny fraction of the total housing stock
Enough to make a real difference? Not according to Brian Robinson, head of environment at the Institution of Mechanical Engineers (IMechE).

"The battle against climate change demands political leadership and a real sense of urgency that, unfortunately, this Budget lacks," he said.

"Putting fuel duty up in line with inflation and raising VED to 400 for the worst polluting vehicles is simply not enough to incentivise the lifestyle changes needed.

"The chancellor really needs to acknowledge that he will need to find significantly more money for the development of a sustainable, low carbon economy," Mr Robinson warned.

Seed money

Internationally, money will go to preserve African rainforest in 10 countries, in an initiative headed by the Kenyan Nobel prizewinner Wangari Maathai. The intention is that spending priorities should be decided partially by local community groups.

Mr Brown clearly sees symbiosis in this kind of initiative between his long-held public commitment to poverty reduction in developing countries and his more recent acknowledgement of the green agenda.

But the fund only gets 50 million.

That forms part of 800 million going towards an international Environmental Transformation Fund, which will pay for projects concerned with renewable energy, energy efficiency or anything else with a low-carbon feel to it; but when, where and how is not entirely clear.

Conservative leader David Cameron, who found his proposals on taxing aviation imperiously dismissed by the chancellor, said that green taxes formed a lower proportion of the government's total take after the Budget than it did before.

Such sums are, of course, easy to tweak in order to get the answer you want.

But Mr Brown has certainly not taken the green tax concept, or the overall environmental agenda, as far as he might have done.

If he has not as chancellor, will he do so as prime minister?

Richard.Black-INTERNET@bbc.co.uk




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