The 2010 Budget and its environmental aspect

Today in the United Kingdom the Chancellor of the Exchequer – effectively the finance minister of the country – laid out his budget statement. Mr Darling headlined his budget as one to secure the recovery. What recovery? Well, the bankers have seen their bonuses recover greatly but for most ordinary people the recession is a reality and the recovery a myth. The environmental impact of the budget is dealt with separately these days, and that is a “Good Thing” because it enables us to see the actual measures that will affect the environment in some detail.

You can download the environmental part of the budget at http://www.direct.gov.uk/prod_consum_dg/groups/dg_digitalassets/@dg/@en/documents/digitalasset/dg_186420.pdf

Where there are fourteen pages of self styled environmental budget matters. Apparently there will be a new Green Investment Bank; its purpose and remit is unclear from the report, but it will get a billion pounds from the Government selling infrastructure assets (yes, the family silver goes along with the dining room table, the tablecloth and the chinaware) and they hope that private investors will match that money. Quite what the Green Investment Bank will do with the money remains to be heard.

There are some welcome small amounts (in relative terms) for offshore wind, and a pious hope to reduce carbon department’s carbon feet by 30% in the next ten years. Petrol duty price increases are partly postponed (but still fill that tank now if you can). About 10% of the environment budget report explains climate change, although I cannot see the need for this padding. In fact so much of this part of the report is vague padding, as though someone has deliberately added on an environmental section to the Budget and having realised how short it was, decided to add some more blurb, to fill it out.

For me the most interesting part is the graph on page 107 Chart 7.1, which shows how the Government expects different sectors to contribute to emission reductions. They expect at the end of 2012 for the EU Emissions Trading Scheme to provide by far the bulk of the savings for seven years. This is in my view complete and utter nonsense. The ETS will only provide savings if those industries who are affected by it hare forced to make emission savings by measures. I think that there are too many loopholes, to many uncertainties to rely on the EU ETS to save a single emission.

If they are going to be savings by the industrial and generating sectors why not simply force them all in the EU to carry out the measures, not have the chance of buying their way out with what may be fictional savings in a market with few players which might be easily rigged by unscrupulous traders and dealers to keep the emission price low? I ask the question rhetorically, of course. It may be that there have never been rigged markets or fictitious carbon savings certificates.

There are other good bits for the environment , particularly help for householders who want to save emissions, but these are still undefined and will be welcomed only when we see them enshrined in law.

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