On the 23rd March 2011 the Coalition government announced its first budget.
We're all familiar with the deficit, the cuts, and the Age of Austerity. Analysts at Deloitte, who provide a good, balanced overview of the Budget, thought it was pretty neutral with few surprises.
But what did the Budget 2011 mean for the environment? Some respected journalists, particularly at the Guardian have seen it as an unmitigated disaster, a missed 'golden chance to use the wreckage of the recession to build a greener, cleaner, sustainable economy'.
At LoCO2 Energy we have been over the budget to boil it down to the green measures. We want to lay out the proposals to allow our customers to make up their own minds about the Budget, and to understand what 2011's Budget may mean for the economy and the environment.
- The Fuel Duty Fall
- Perhaps the biggest headline grabber of the whole budget and seemingly unexpected, fuel duty will actually fall by a penny. It had been expected to rise by a penny above inflation.
- This will hearten motorists but arguably encourage more car journeys and discourage fuel economy in driving.
- The lost revenue from the duty fall will be paid for by an increased tax on North Sea oil.
- Taxes for companies exploiting North Sea oil will rise from the current 50% level to 62%.
- The Green Investment Bank
- The Green Investment Bank, or GIB, has been of great interest to the green community.
- The GIB will provide funds for 'green' investment.
- When the policy was first announced in 2010, it was suggested that £1 billion of funds would be provided by the government for initial lending.
- The good news is that this has been increased to £3 billion and pulled forward by a year to 2012 and the government expects the GIB to generate £18 billion worth of green investment by 2014/2015.
- The bad news is that the GIB won't be able to borrow money, and therefore lend more to potential green investors, until 2015/2016 and this is only if the national debt is deemed to have dropped to an 'acceptable level'.
- This becomes more important when one considers the £450 billion worth of investment we are predicted to need to really transfer to a low-carbon economy.
- Aviation tax
- Currently, aviation taxes are levied per passenger. It was suggested last year that this should be moved to a per plane tax.
- By taxing per plane, it was planned to reduce the number of empty flights flown to maintain berths at airports as well as cutting the number of half-full planes, obviously all good news for the environment.
- Apparently, this is against international law so the government has pledged to engage in international negotiations to solve this problem. Opponents would suggest that the government has not tried hard enough to push this through and does not wish to jeopardise the UK's position as a world-leading transport hub.
- Carbon Capture and Storage
- The government has confirmed it's commitment to spending £1 billion on a demonstration coal-fired carbon capture and storage plant.
- A further 3 CCS plants will be paid for from government spending, rather than through increased energy bills.
- Low-carbon electricity and Climate Change Levy
- Business renewable energy will now get cheaper in order to make it more competitive with brown energy tariffs.
- Companies opting for a low-carbon business supply, like LoCO2 Energy offers, will now receive an 80% reduction on their CCL charges. This does not affect domestic consumers.
- Landfill tax rises
- The price to dump rubbish at landfill sites will rise. This will affect large users, such as local authorities (and all of us through our council tax as a result).
- This may, however, discourage wastage and encourage recycling.
- Carbon floor stabiliser
- Fossil fuel electricity producers will now pay £16 per tonne of CO2 from 1st April 2013. This is a £2 a tonne rise on the EU Emissions Trading Scheme.
- It will rise to £30 per tonnes by 2030