Thoughts on the Budget

Pete peter.shield at
Thu Mar 22 08:51:32 GMT 2007

Having ploughed my way through the 30 or so pages on the environment 
I came up with this- I ahve to say I wasn't impressed, however I 
would like to hear what others thought.

Brown's budget a lighter shade of Green 21.03.07
Gordon Brown's 11th budget held few surprises for the environment. It 
continues Brown's theme of carrot and stick, encouraging `good' 
behaviour rather than punishing `bad'.

>From an environmental side there has been some movement on transport, 
fuel tax will rise 2p, delayed until October, another 2p in 2009 and 
1.8 in 2009. On current prices this brings unleaded to 91.5p a litre 
and diesel to 94.8p. The return of the fuel escaltor is good news, 
the scandal was that it was pulled in the first place, now will the 
Government have the bottle to stand firm to motorist pressure?

Vehicle Excise Duty, which ranks cars from A-G depending on their 
size and increases slightly as the car gets bigger, has always been a 
bit of a joke, a top efficiency car gets charged £50 a thirsty huge 
sports lump £210 – hardly a disincentive when according to the site a top of the range BMW X5 comes in at £49,980 and a VW 
Toureg a cool £57,535. Brown announced today that the top range will 
rise from £210 to £300 immediately and to £400 next year, whereas the 
greener cars will see a decrease to £35. So someone thinking of 
buying all toys equiped Toureg is faced with a huge price increase of 
0.0015%, this year and a behaviour changing 0.0033% in 2008. Of 
course higher parking, congestion, and of course fuel consumption 
increases the cost of running large cars, particularly in London. To 
make a major change in behaviour something a little meater would be 
more appropriate, like £2,000 which would add 10% to the price of a 
new short wheel based Landrover Defender.

After December's increase in the Air Passenger Duty the budget avoids 
any responsibility for aviation. Commenting on the Conservative idea 
of introducing VAT on flights Brown said, "I have investigated the 
detail of this proposal. It gives me no pleasure to tell the House 
that the substance of this measure has not been properly thought 
It would apply only to domestic flights, business would be 
able to claim back VAT, and even by 2020 it would save just 50,000 
tonnes of carbon - less savings in one year than achieved by the 
climate change levy in just one week. So I have rejected this 
proposal in favour of the 6 million tonnes of carbon saving achieved 
by the fairer and more environmentally efficient measures I have 
outlined in the budget today."

6 million tonnes? Well that's a bit of a stretch as so much of the 
proposals are more hot air than carbon saving. Running through the 30 
pages of I can find a conference on carbon trading schemes, to 
explore ways to get national and regional carbon trading schemes to 
work together, a competition to develop a demonstration of a large 
scale carbon capture and storage scheme (Isn't that one funded by 
Brussels?), and a review, a joint on between the Department of 
Transport and the Treasury on the effectiveness of low and no carbon 
emitting transport to "de-carbonise" road transport, run by Professor 
Julia King From Aston University, and former Director of Advanced 
Engineering at Rolls Royce and Nick Stern.

There is a cut in tax on biofeuls by 20%, alongside a commitment to 
investigate both their efficiency in reducing carbon emissions and 
equally importantly their sustainability. The whole bio-fuels area 
remains controversial, in reality it has more to do with energy 
security than carbon reduction and the effects of palm oil 
plantations in Asia, and ethanol production in Brazil give the whole 
sector a dubious reputation.

On the domestic front there is a relief from stamp duty for new build 
zero-carbon house below £500,000, and a £15,000 reduction for those 
over- sounds good but how many zero-carbon houses have been built in 
the UK and how many are being planned?

The Low Carbon Building Programme has had its fund raised by £6 
million, demand is so high for this support for solar, wind, CHP and 
other renewable that the monthly allocations usually are finished 
within 45 minutes of the new months starting. The British home power 
movement is way ahead of the Government and needs more active support 
than a paltry 6 million.

The other nod towards home power generation was the exclusion of 
income generated by selling power back to the grid, and any income 
generated from the Renewable Obligation Certificates, and last but 
not least a request to Ofgen to look at the revenue received by home 
generators for excess. All sounds good until you look at the actual 
figures involved.

Chris Goodall, in his recently released book, "How to live a low-
carbon life - an individual's guide to stopping climate change" has 
the following calculations for a wind turbine plant on home in a 
windy location- estimated ROC payments £168, total export payment £80 
and that is based on the manufacturers production estimates, for a 
Photovoltaic array of 12 square metres in a Southern location the ROC 
revenue may be £72 and the export revenue another £24. Given the 
costs of the system and their long term payback these figures 
combined with the low level of government support means that even 
with the tax breaks it still means that home / local generation is 
powered by commitment and not by economics.

The push for insulation continues, with pensioners receiving grants 
from £500-£4000 to improve the fuel efficiency of their homes. But of 
those 3.7 million homes living in fuel poverty- 10% or more of income 
going out on energy- who are not pensioners the Government proposes 
no more help than waiting for their local supplier to call and keep 
their fingers crossed.

>From an environmental point of view this budget, while making lots of 
noise fails to make meaningful impacts on the key areas of aviation, 
thirsty car use, home generation, fuel poverty, and public transport. 
We await the passage of the Climate Change Bill to see if the 
Government shows it is capable of dealing with climate change in a 
meaningful way.

Peter Shield 

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