How Green Was Mr Darling’s 2009 Budget?

On Wednesday Mr Darling presented his budget for the United Kingdom. I have listed to his speech and read the official budget papers about the environment, which are headed “Building a Low Carbon Recovery. I downloaded the document from but no doubt you can find it elsewhere. The Chancellor claims that this budget will build a economic recovery which is founded upon a low carbon economy.

The section of the official Government document on climate change says “Climate change is one of the greatest global economic and environmental challenges.” That is a statement with which I agree. However, how far has Mr Darling’s budget met one of the greatest economic and environmental challenges?

Has the “challenge” been met? If you think of climate change as a medieval knight who has slapped Mr Darling with his gauntlet and then thrown down the glove, has Mr Darling picked up the gauntlet or has he ignored that challenge, and shuffled off to a quiet corner pretending not to have been insulted? The truth will emerge in time.

You will see that the document begins with a plain untruth – “The UK has led the world in taking a strategic and long-term approach to the problem of climate”.

The strategic and long term approach has been simply to set targets (they cost nothing) and to carry out almost no measures. Mr Darling claims existing policies are “already enabling £50 billion of low-carbon investment over the three years to 2011, and helping to support 900,000 jobs. Budget 2009 builds on these foundations and provides over £1.4 billion of extra targeted support in the low-carbon sector. Together with announcements made since last autumn, measures announced today will enable an additional £10.4 billion of low carbon sector and energy investment over three years.

Hmm, sixty billion over three years is 20 billion a year. That is not a large amount of money; the BBC costs the nation nearly 4 billion each year. It is all about priorities and climate change measures set priorities for the long term.

The carbon reduction target has been upgraded to 34% by 2020 – a higher target Mr Darling claims to be legally binding, but there is no legal sanction if the target is missed. It is a curious concept of “legally binding” to have an obligation without any sanction. It is a bit like creating another a crime but without there being any fine or punishment for the new crime.

Nevertheless it would be churlish to not praise the ambition to reduce carbon emissions by 34% in the next eleven years, even though the target should be set much higher.

The detailed measures are:-

·        375 million for more insulation

·        70 million for small scale community energy

·        405 million for low carbon and green manufacturing, although how that support can be legally provided, puzzles me as the EU has strict state aid rules.

·        Increasing the climate change levy to help CHP plants

·        £90 million for carbon capture demonstration (as opposed to research and development of this unknown technology)

·        Fuel duty increases by 2p a litre

·        Landfill tax increases by £8 a tonne (which makes landfill more important environmentally to the government that carbon emissions)

·        Energy efficiency £8.9 billion (most of this will be paid by levies on your energy bill, so look forward to higher bills in future)

·        Vat reductions on energy saving materials

·        Support for renewable of £6 billion (wind, public buildings, new manufacturing, carbon capture, and community scale energy systems; Warm Front gets an extra £1.1 billion)

·        Technology Research (6 billion)

·        Reducing greenhouse gas emissions from waste (£2.4 billion)

·        Improvements in the grid (£7.6 billion)

·        Public transport and electric cars (£23.2 billion)

This is not, of course, new money, but budgeted proposed expenditure, although where all the money will come from in a recession is not clear. It ultimately depends on people from all over the world having the confidence to buy Government bonds and the confidence that the UK currency will not devalue compared to other major currencies.

In other words, the environmental expenditure will depend on the money that the government can raise, just like all its other expenditure. The Government has to appear confident that it can raise the money, but so much depends on whether the country can get out of recession quickly. If it cannot, then the Government will have to make real hard decisions – whether increased expenditure on climate change is more important than increased expenditure on the health service or on Members of Parliament’s expenses.

The Government’s broad policy is to use the environmental imperative as the means of getting us out of recession and keeping us out of it. The policy in broad terms is right, even if it has taken a recession to get us into the position where expenditure on fighting climate change is at last being recognised as important and necessary.

I do not think that we will be able to understand whether the budget is good for the environment or not until the Government publishes its Energy and Climate Change Strategy in the summer. Until then we must reserve judgement.


4 Responses

  1. […] Java One Buzz added an interesting post on How Green Was Mr Darling’s 2009 Budget?Here’s a small excerptTogether with announcements made since last autumn, measures announced … In other words, the environmental expenditure will depend on the money […]

  2. I think Alistair Darling really needed that slap !

    Robert, you are thinking in ‘old money’ £60 Billion will be easier to find if the £ is devalued any more than it is, and then the government starts printing money again!

    With regards to ‘old money’ and hyper inflation in an orwelian britain just see this article from a few days ago very funny;

  3. Robert, I didn’t remember if you reply the comment about but I think it will help you ! Hey remember you are not getting any younger, and you know the problems of memory loss ! just joking ! Heres the one for Renewable energy again;

    it’s my pleasure to give you more tools to fight for Renewable energy because reading your Blog is expanding my own knowledge and stretching me! So its true Iron sharpens Iron !

  4. […] Fuel Standard | MN Ethanol…New budget commits UK to 34% carbon cut by 2020 | Government and Law…How Green Was Mr Darling’s 2009 Budget? « Robert Kyriakides’s Weblog…Celebrate Earth Day by Traveling Green! Find Carbon Offsets, Hybrid Rental Cars, Green Hotels… […]

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