Page last updated at 10:20 GMT, Tuesday, 11 March 2008

Green ideas for Mr Darling's red box

Andrew Simms
Andrew Simms

As Alistair Darling puts the finishing touches to his Budget statement, Andrew Simms of the New Economics Foundation offers the UK's chancellor guidance on what green measures need to be in his red box.

Chancellor of the Exchequer's red ministerial box (Image: PA)
The biggest shift we need is in breaking the mental manacles that clink all along the Treasury's corridors
The government is committed to balancing its books over the course of the economic cycle, but the economic cycle has a flat tyre.

Worse than that, there's what several observers have called a "perfect storm" coming.

We face a credit crunch exacerbated by high and rising prices for oil and gas which, in the medium to long term, can only head in one direction: up. The gap between demand and limited supply can only grow.

Then there's the wild card, the real storm - climate change. It introduces domestic costs of abatement and mitigation that are large but hard to predict, and big new global responsibilities.

Already, Sir Nicolas Stern is saying that he seriously underestimated the costs of climate change in his government review.

How, for instance, should Chancellor Alistair Darling plan for the impact of more extreme weather events, shifting patterns of climate-borne diseases, and international upheavals such as widespread environmental migration?

And what about our new and growing obligations toward innocent, low-polluting countries seriously affected by the fall-out from global warming, which has been driven by our own greenhouse gas emissions?

Although Mr Darling believes that the domestic economy is resilient in the face of broader international volatility, this ignores a number of deeper underlying trends which are likely to increase the UK's insecurity.

Sir Nicholas Stern (AP)

Dependence on imported food and energy, for example, is going up. Once the factors affecting both trends begin to interact, the consequence could be an era-defining economic shock.

However you look at it, improving our "resilience" means we will need to insure against the slowing of the oil that flows through the arteries of the global economy.

In turn, that suggests the need to plan for a higher degree of self-sufficiency.

Delivering real change

Let's set a frame around what the budget should deliver in a fundamental environmental sense.

Analysis by the Tyndall Centre for Climate Change Research at Manchester University suggests that for the UK to play its part over the coming decades, we need to reduce the carbon intensity of our economy by between 9% and 13% year-after-year.

The hand of history might usefully tap Mr Darling on the shoulder as he stands up to give the budget speech
Any delay in hitting those targets - which already go far, far beyond anything achieved in recent history - simply raises the bar further for what needs to be achieved in later years.

Put simply, those targets are what the budget must put us on a course to meet.

What would that look like in practice? To get a feel for the scale of the transition required, the chancellor should be thinking in terms of an environmental war budget.

When dealing with the biosphere, it's worth remembering that you cannot even negotiate with the weather.

In this sense, the hand of history might usefully tap him on the shoulder as he stands up to give the budget speech, and a voice from the past whisper in his ear Winston Churchill's advice to a nation under siege that it is not enough to do one's best; you have to do what is necessary.

Aircraft landing at London Airport

The cost of carbon clearly has to go up. But taxes to change behaviour are a blunt tool that cannot guarantee that a particular emissions reduction target is met.

Emissions trading is also meaningless unless it is part of an inclusive global system whose emissions budget is set in accordance with science-based targets for avoiding runaway warming.

It would be better to force fossil fuel companies like BP and Shell to introduce a new category for their reserves of "unburnable".

Currently, reserves are labeled either as "proven" or "probable". The new category would reveal what should be left in the ground to prevent dangerous climate change.

'Ring-fence green taxes'

To win public sympathy for any new or raised taxes that are branded "environmental", the Treasury needs to break the habit of a lifetime.

It must concede that proceeds be earmarked for measures to solve the problems that the taxes are ostensibly addressing.

Otherwise they will be met with cynicism, and be hard to implement. Obvious examples would include major investment in public transport, renewable energy and tackling fuel poverty.

Boldness is needed. Fossil fuels are an unrepeatable windfall from nature; but instead of prudently managing their income to prepare for the future, to date the UK has squandered it.

Now that prices are high and before North Sea oil is exhausted, a windfall tax is the logical, not to say, poetic solution.

Bus (Image: PA)
Ring-fencing green tax revenues for public transport is one solution
Norway, by contrast to the UK, did look ahead. Its oil surpluses have woven a safety net for future generations that is today worth around 260bn euros (£198bn), or 75,000 euros (£57,000) for every man, woman and child in the country.

In this light, the UK could learn from Norway's experience, and set up an Oil Legacy Fund, paid for primarily by a windfall tax on oil and gas company profits.

Mr Darling could then re-commit to the fuel duty escalator which would help progressively change behaviour, whilst having the resources to invest in a range of measures to smooth the transition.

These might include:

  • expanding the use of school buses to tackle both congestion and energy-inefficient private vehicle use on the school run
  • lowering the age for free public transport, and allowing adults with children to go free
  • helping local authorities with the complexities of managing new, decentralised renewable energy services and technologies
  • the rapid roll-out of micro, small and medium scale renewable energy technologies that would create countless thousands of "green collar" jobs

Such a new fund, coupled with a new "Demand Reduction Obligation" placed on the energy utilities to manage better what is left, could help achieve the needed shift of policy gear.

No reverse gear

Just as important, Mr Darling should use his power as chancellor to ensure that any positive new environmental measures are not neutralised or reversed by conflicting government action elsewhere.

For example, he won't be taken seriously on green issues if severe funding cuts hang over the environment department Defra and bodies like Natural England, whose job it is to oversee our increasingly fragile life-supporting ecosystems.

But perhaps the biggest shift we need is not in the details of plans to tax and spend, but in breaking the mental manacles that clink all along the Treasury's corridors.

These have locked in the notion that economic growth is more important than anything else; but the evidence for the UK is to the contrary.

Woman carrying shopping bags

While our economy has grown continuously over the last few decades, study after study shows that our sense of satisfaction with life has flat-lined.

The economy should be there to help deliver long, satisfied lives, and it must do so within environmental limits.

The greatest mark of a conversion to new environmental realities in the Treasury would be the national adoption of a measure that showed the resource efficiency with which we help achieve good lives.

Such measures exist; the so-called Happy Planet Index devised by the New Economics Foundation (nef) is one.

The other message to take away is that there could be an upside to the downturn.

The financial crisis is driven by debt that has allowed us to live beyond our means. The climate crisis is connected because it is driven by the resulting over-consumption.

The problems and solutions appear linked. Because high levels of life satisfaction can be achieved at low levels of consumption, a new system of incentives to encourage thrift could help tackle the debt and climate crises simultaneously.

As a nation, the best thing we could do for the environment is to reduce our overall consumption.

Taken together, these measures might re-inflate the environmental wheel on the economic cycle, and help us all get moving toward a more promising future.

Andrew Simms is policy director of nef, head of nef's climate change programme, and co-editor of the book, Do Good Lives Have to Cost the Earth?

The Green Room is a series of opinion articles on environmental topics running weekly on the BBC News website

Do you agree with Andrew Simms? Does the Treasury need to "break a habit of a lifetime" and only spend green tax revenues on tackling environmental problems? Should oil and gas companies pay a windfall tax on their profits? Or will the Budget include measures that will deliver the necessary solutions?

Green taxes are a total con trick. People use their cars because they have no PRACTICAL alternatives. Green living should be encouraged by making it easy, not just by hiking taxes. Can the Government genuinely show that car journeys and sales of gaz guzzlers have declined as a result of the increase in fuel tax? I think not. Even if they could, would it be significant and would I believe them? Lastly - do the 4x4 manufacturers have a legal case? Restriction of trade on 4x4's and unfair promotion of a single product (Toyota's Prius).
Jeff, Kent

Unless the public and companies are prepared to make good choices on the environment, it will unfortunately have to fall to the government of the day to make them instead. We all had no problem with getting the kids around before Chelsea Tractors and People Carriers. Put VAT on these "little monster vans" and charge £2000 tax per annum on them. Maybe use the money for school buses to stop the school drop off and pick up fiasco? Public transport needs a boost - I dont mind rail subsidies - makes good sense and works elsewhere.
Dave, northampton

instead of freezeing fuel duty it could have been dropped by about 25p or more also garages put up there prices the night before ,will they be told to drop it . as you know we call it rip of britain)
Joseph Quinn, Little Paxton

Change is coming and the eight ball is going to drop - the only question is does it mean mankind wins the game or loses or is there still time to take another shot. I'm betting there is. I hope Britain acts boldly against global warming while we here in the United States are still bottled up trying somehow to successfully go against the forces that would derail the election of a new President who truly wants change and can make it happen. I want to say thanks to the people of the UK for all your efforts to help protect the environment and for helping to promote the free expression of ideas around the world.
Dale Lanan, Longmont, Colorado USA

This man is speaking sense. I find it amazing how many British citizens still don't 'get' the point. We still want to fly abroad because it makes us happy, still use our cars because its wet outdoors and everyone blames the politicians because, obviously, our hands are tied aren't they? We've ALL got hard decisions to make about the future and if we blow this, we don't get a second chance. As Andrew says, we can't negotiate our way out of this. It's time for change and if that makes you feel unsatisfied, tough!
Keith, Sheffield, UK

The main problem is that politics is essentially a short-term business. Short-term goals such as winning the next election always become the priority over dealing with the medium- and long-term issues such as the looming oil and climate crises. As a result the really big issues never get the priority that is required. I like the proposal to ring-fence money raised from so-called green taxes, but I think what is really needed is for political parties to co-operate on climate change policy. All serious political parties agree that the dangers of climate change are real. In war-time we have had national governments. We can scale that model of government down to a cross-party committee on climate change making decisions that will be binding on all future governments.
Paul A, London, UK

I have just returned from India; not holiday, business. And to my shock my first thoughts were that the planet is doomed! As I have never seen so many cars and pollution on scale like it. Its impossible to see the sun until late afternoon due to the pollution over the skies, and it would make no difference if we stopped driving for ever in the UK, as our efforts would be like a grain of sand compared to the desert of population out there and no doubt other up and coming countries. Green tax is a complete con, and lets face it, the oil companies wont be satisfied until they extract every little bit drop of oil from the earth, so one way or the other we will burn it eventually. Therefore, governments like this will take extra taxes while they can and the 'greenies' out there should wake up and get a life; you are being robbed in broad daylight whilst being sucked into the whole green issue.
Terry Barclay, Worcester

Working people should be taxed on the distance from their home to their work place. This would be much easier to implement than road pricing because IR already have the information, and would have the effect of reducing the demand on our infrastructure. The income could be used to subsidise public transport, and the data collected used to target improvements in routes and services. It could also reduce traffic in rural areas and reduce rural house prices.
jc, Bedford

I live 6 miles from car hating Oxford where I work. Every day I'm forced to sit in traffic for nearly an hour to cover that distance, not because I want to, but becuase over the last 10 years the bus service to the village where I live has been cut and cut again to the point where it now only runs 4 days a week. Increasing fuel duty or road pricing or other "green" taxes isn't going to get me out of my car becuase there isn't an alternative. What is needed is a public transport system that's run as a public service rather than a private money making enterprise.
James Tipler, Oxford

My biggest concern is that as we steadily dismantle our economy on the alter of 'climate change' we will find ourselves like Bangladesh - pennyless victims of nature. The big players like China are forging ahead - economically and emmissions - whilst we go backwards. Soon they will have the big purse when it comes to buying food. Our former economic power meant we haven't had a famine in England for hundreds of years but I am pesismistic about future. I wouldn't want to be living here in a hundred years time.
John, England

Both Ben & Andrew touch on a similar issue. Conventional approaches have been about penalising "non-green" behaviour. The government need to invest in things which encourage "green" behaviour. Consumers will not sacrifice lifestyle for the environment. If public transport is quicker, cheaper and more reliable than taking your car into the city centre people will use it, if not they won't. I do like the individual accountability and wealth equalisation that Ben's personal carbon allocation would achieve.
Stephen Burt, Cardiff

"How, for instance, should Chancellor Alistair Darling plan for the impact of more extreme weather events, shifting patterns of climate-borne diseases, and international upheavals such as widespread environmental migration?" What a load of absolute nonsense, pure fantasy and no evidential basis for these claims. This guy has swallowed the "climate porn" computer model scenarios hook line and sinker. There has been no warming since 1998 - unassailable fact from the official monitoring records. Green taxes are in theory self defeating. If they really alter behaviour then revenue decreases and they have to look for something else to make up the shortfall. We need to drive, green taxes simply push up the cost of living for the people on fixed incomes like pensioners.
Dennis Ambler, United Kingdom

Ringfence green taxes.... use to tackle 'fuel poverty'... couldnt help it could you? why is the agenda of the left ALWAYS wealth redistribution? lame poorly researched article that completely misses the point - green taxes are regressive so will never gain popular support - until you start making exceptions for the 'poor' and means testing them... thats clled income/wealth taxes.
marco, london

I personally do not agree that MMCC is our biggest problem, our biggest problem is over-population. There are simply topo many people on this planet and far too many on this small island we live on. All those people advocating couples having loads of children should be ashamed of themselves. As far as this government and its tax policies go, we have been over-taxed in this country for far too long, yet we see no benefit for all the taxation that has been lumped on the hard working people of this nation. Another 'green-tax' would just be seen as another way to rob us of a decent standard of living.
Rick Davis,

Successive governments have handed away billions of taxpayers money and North Sea oil revenues to third world countries in aid that has in many cases only helped them fund internal and external conflicts, this money should have been spent in building the ground for a future Britain - now is too late - the promised mess of pottage has not materialised.
peter marton, middlesbrough, uk

Considering some of the first acts of Gordon Browns government involved slashing the UKs spending on science and technology and leaving our already struggling university scientific research community dead in a gutter I wouldn't trust him to organize research into the Da Vinci code, let alone alternative energies.
Thomas, Berkeley

Ben, that's an attractive idea at first glance, but it doesn't actually do anything about CO2 emissions; it just relegates them to the situation of Someone Else's Problem. Rather, we should be trying to introduce hard schemes to lower our use of fossil fuels and other non-renewable resources and sources of CO2. Nuclear power seems a good place to start - it's just as inexpensive once online as current-generation coal- or oil-fired power plants in terms of cost to the consumer, it's more reliable than wind power, and on top of all that, as well as lowering our nation's pollutiveness, it also lowers our dependence on (increasingly expensive) foreign oil which in turn means we don't have to be so disturbingly far in bed with repressive and dictatorial régimes like Saudi or wherever. The French have been using nuclear power since the late 1970s. It now produces about 80% of their electricity. Why don't we have this?
Jon S., London, UK.

Er...Darling wants to slap "green taxes" left, right & centre with the ostensible aim of reducing pollution..........yet the goverment wants a titanic increase in air travel......please reconcile! Does the idea of joined up thinking ever occur to nulab???
William Fletcher, Fareham

Why is nobody considering curbing population growth? A few million pounds spent on proper contraception education would save megatonnes of carbon emissions over many potential lifetimes as well as reduce the intolerable burden on public services in this country, not least maternity wards.
Neil, York

Wow.....why is Andrew not the prime minister- or chancellor -all he says is true and is better than meaningless words that the government always speal out. Andrew talks sense and the government should do as he recommends !
john, sheff. uk

Green Taxes? Oh Yes! The world is doomed, the seas are rising, hurricanes are blowing and droughts are coming! And its all your fault ! Green taxes = another excuse to tax the poor and give to the rich!
Christopher Reeves, Hampshire, England

The public should pay taxis in order to provide for the services they receive in the way of NHS, Police, Armed Services Etc. The Public should not be taxed in an attempt to influence the products they buy,the food they eat, the cars they drive, the drinks they buy and all the dubious "Green" taxing ideas that Friends of the Earth and others come up with. These so called "Green" taxes with the proceeds going to the government do not improve the environment and do not achieve a change in peoples Habits and customs. The taxes just drive up inflation and work they way into higher wages. The government needs to consentrate on the big issues. Provide direction to ensure that we have a clean(CO2)free electricity supply system as France has done. Nuclear, Wind, Hydro and other proven systems. Encourage farming , fishing and other forms of food production with marketing outlets to reduce the import of food via the Super Market chains. The EU farming and fishing polices have been a disaster for the UK and the nation must use its resources more sensibly to combat climate change in the future.
Graham Johnson, Bristol

As far as oil companies are concerned, the rarer oil gets the more profits they make. fossil fuel tax revenues must be spent on renewable technology NOW to create a sustainable U.K. with a smaller, happier population. In addition, the government and NGO's need to concentrate on the one factor they have failed to address and links all the environmental problems together- population. There should be benefits given to those who have small familes (i.e. two kids) and extra taxes for those who have more than three. This is the fairest way of lowering our effect on the environment across the board. Reducing our overconsuming population would reduce the need for a growing economy. After all, a shrinking more sustainable economy is not the same as a declining one.
bruce phillips, bristol U.K.

Green taxes are a Total Fraud, Simply a smoke and mirrors trick increase total tax revenue. The original idea was carrot and stick, unfortunatly all we see is the stick.
Ray , Southamptoni , Hampshire

Welcome to Narnia. Neither the UK nor the EU has the power to reinvent global economics on top of which Jo public would run a mile from the realities of the puritan distopia that would underly Andrew's vision.
andy, Gloucester

Britain's dependence on imported food and energy has nothing to do with climate change, rather they are the result of government policy decisions (or lack thereof). How then can anyone put on a straight face and use them as examples of why government needs more taxes to mitigate climate change? Global warming is so warmly ebraced by governments precisely because it gives them the excuse to levy more and more taxes and acquire more and more power over our lives. You're being scammed people.
Scott W, Port Orchard, USA

My own preference is to have rebates for green behaviour, rather than simply taxing for all emissions. Sure, we can earmark all the revenue, but New Labour might not manage to get it spent wisely (their record on value for money being somewhat questionable). Councils are already trying out schemes designed to force citizens to do the labour of segregating their refuse in whatever way the council finds most convenient. But have any of them offered a brass farthing to pay for all this extra work? And the existing official line ("what are YOU going to do to achieve YOUR x% reduction?") seems to utterly deny the existence of those who are already ahead of the game (or simply too poor to afford to pollute) and are living exemplary green lifestyles. That's an insult. In contrast, think how many hearts and minds might be won by the use of rewards. The pressure is in the the same direction, but it doesn't take money away from citizens without immediately and palpably returning it. Of course the exchequer would end up with less, but that might be remedied by increasing the penalties on the really big polluters.
arthur priest, leicester, UK

Why is it always the man in the street that has to pay these taxes? As far as I can see, climate change is being used simply by the politicians to hit the public with more taxes. Politicians are the ones who can make the real difference. Stop selling standard lightbulbs and only sell the energy efficent ones. More expensive yes, but they last longer and that single act would probbaly have a large impact. Pass legislation to reduce the amount of packaging (The big killer is coming up... the amount of packaging on easter egg's is shocking!) Other simple legistlation done will make more impact, then the dubiouse nature of taxing someones "Carbon Footprint", and cost me alot less in taxes which i will effectivly see zero return on.
Rich, Hull

Green taxes are a superficially attractive idea, but in practice they are likely to be highly regressive, i.e. they will hit the poorest hardest. There is a strong correlation between wealth and carbon emissions: the richer you are, the more carbon you emit. So a tax that is high enough to deter the polluters would leave those on a low income unable to pay their gas bills. A far more sustainable, effective and fair solution is to give each adult an equal carbon allocation, based on what the country can afford to emit each year. Then those with modest lifestyles (generally the poor) could sell their excess carbon ration to people who want to drive big cars or fly off on long haul holidays (generally the richer members of society). It's a matter of when, not if, such a scheme is introduced. The longer we leave it, the more painful it will be. But no politician wants to do it on his watch, so as usual, we'll get the same tired old rhetoric but very little action.
Ben Murray, Edinburgh, Scotland

The real underlaying problem is excess population on a rock about 8,000 miles across. Until politicians fully comprehend the implications of that and act accordingly green taxes will be just a futile irritation.
Tony Metcalfe, Kirkby Stephen, England

These are very interesting comments - I found myself nodding most of the way through. Getting our country back to a state of self-sufficiency is vital in our ever changing world, and we have the means and the land to do it. This Government up to now has simply tried to line the rich's pockets, while it should be creating an environment for UK citizens to live safely, peacefully and self-sufficiently. His grean measures ring true, where others whittering on about single solutions simply mislead and divert funding.
Kolya, Sussex

Andrew says "While our economy has grown continuously over the last few decades, study after study shows that our sense of satisfaction with life has flat-lined." - this is a fact (in as much as many studies have looked into it and got similar results). However, he then says "Because high levels of life satisfaction can be achieved at low levels of consumption..", but he does not say _HOW_ this can be achieved. For example, I love travelling, seeing the world, and broadening my horizons. I get a great deal of personal satisfaction from this. If I was prevented from travelling, I would deem my life to be significantly less fulfilling and I am unsure how I would "fill the void" that a lack of travel would leave behind. Given that travelling is increasingly seen as a "decadent" and "wasteful" activity, that we should feel guilty about, my future looks bleak. What can I do stay "satisfied", in light of this?
Bruce Freshwater, Edinburgh, Scotland, UK

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