Tiny steps in a marathon

We still have a long way to go, but this week's climate decisions inch us towards the big target

Nicholas Stern, Alex Bowen and Sam Fankhauser
The Guardian, Friday 24 April 2009

There was much to welcome in Wednesday's budget but many more bold steps towards a low-carbon economy need to be taken over the next few years, as part of a coherent, consistent and credible strategy to tackle climate change.
Most significant was the ground-breaking carbon budget, setting out limits on UK greenhouse gas emissions in future years. The government committed to a reduction of 34% by 2020 compared with 1990, but recognised that this was an interim target. It will ask the Committee on Climate Change to revise the target once the expected international agreement on emissions reductions is reached at the UN climate change conference in Copenhagen in December. The committee has already called for a 42% cut in UK emissions as part of an international agreement.
We need a strong carbon price so that people are faced with the true costs of emitting greenhouse gases. The increase in fuel duty above inflation from September signals to consumers they need to help the transition to a low-carbon economy, by paying more in "green taxes" or buying "green" products.
Energy efficiency is the main focus of the green elements of the UK's economic stimulus package. The £375m in the budget, coupled with £210m from the pre-budget report, is a significant investment for the long term that can yield immediate benefits, both in new jobs and helping homes and businesses to manage energy costs. This is a good start, but further investment is required in further years to ensure British buildings minimise the amount of heat and power they waste.
The additional support for wind and other renewable energy sources, leveraged from industry and the European Investment Bank, will help to unblock sources of financial backing that have been hit by the credit crunch. Along with the £405m in public spending on support for low-carbon energy and manufacturing industries, it will create immediate and long-term opportunities for low-carbon economic growth.
The government has taken its boldest "green" step on technology that allows the use of fossil fuels without releasing carbon dioxide into the atmosphere. Alistair Darling announced an increase in support for carbon capture and storage, with up to four demonstration projects. It was followed yesterday by Ed Miliband's pledge that no new coal-fired power stations would be built unless they can be fully equipped with carbon capture and storage technology within five years of it being proven on a commercial scale.
Globally over the next 10 years, we need to pilot about 30 full-scale power stations fitted with technology for carbon capture and storage, if we are going to explore properly the potential of this technology. If the UK initiates four full-scale demonstration plants for carbon capture and storage, it would represent more than 10% of the total we need worldwide to provide the evidence base for commercialisation. This could constitute genuine leadership by the UK. But consistency is required in both public policy commitments and implementation if the UK is to meet its emissions reduction targets.
An analysis published earlier this year by HSBC of economic stimulus packages concluded that 7% of the £20bn in recovery measures, including new tax incentives and new public expenditure, outlined in the pre-budget report could be considered "green". The budget promises a greater share of the discretionary measures designed to stimulate economic recovery will be devoted to tackling climate change and promoting low-carbon technologies.
But the proportion in the budget and PBR together is lower than the corresponding "green" portion of the stimulus packages initiated by countries such as China, France and South Korea. The UK should invest more in the future not only to tackle climate change domestically but also to slow deforestation and to boost aid, helping poorer nations with development in a more hostile climate.
The vehicle scrappage scheme, announced in the budget to stimulate sales of new cars, could lead to an increase in emissions, unless consumers choose substantially more fuel-efficient models. It does not directly encourage low-carbon vehicle technologies or switching to less carbon-intensive modes of transport. This shows, like the decision on Heathrow's third runway, how policies are not always joined up.
Ultimately, the success of green measures will be judged by whether the UK reaches its 2020 target and the longer-term ambition of a cut of at least 80% by 2050. We have a long way to go, but we have moved closer to that goal with this week's budget.
• Nicholas Stern, Alex Bowen and Sam Fankhauser and are at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics