Budget 2010: pale green measures that could bring 80m-tonne cut in CO2

Alistair Darling's low-carbon commitments were slim, but Treasury figures show plans for biomass and electric cars amount to big emissions savings

John Vidal, environment editor
guardian.co.uk, Wednesday 24 March 2010 17.42 GMT
It looked like the palest of green budgets but Treasury calculations suggested that the series of small but significant transport, tax and investment measures announced could cumulatively lead to the reduction of nearly 80m tonnes of CO2 - nearly 15% of all UK climate change emissions - by 2020.
The biggest benefits, said the Treasury, should come from the new green investment bank which the government hopes will encourage a £2bn kick-start for the low carbon economy. Together with initiatives - that the chancellor did not specify in his speech - to encourage biomass burning as opposed to fossil fuels, help for electric and other ultra-low carbon vehicles, this could lead to a saving of 51m tonnes of CO2 by 2020, it says. The new bank, it said, will have an exclusive low carbon focus, and will concentrate on green transport infrastructure and offshore wind.
Fuel duty increases between 2010 and 14 should reduce emissions by another 1.7m tonnes of CO2 and the chancellor should save 2m tonnes of CO2 by committing all government departments to cut their own emissions by 30%. A £60m grant to further develop an unnamed north-east port - believed to be Blythe - to serve the burgeoning offshore North Sea wind-power industry, as well as a business package to encourage investment in low carbon technologies, should save another 8m tonnes, said the Treasury.
Transport measures like fuel duty increases and car tax exemption for zero-carbon cars should encourage businesses to choose ultra-low and zero-carbon cars and vans, so saving 18m tonnes. Increasing the tax on landfill and aggregates should reduce emissions by 4m tonnes by 2020 and shift 600,000 extra tonnes of waste from holes in the ground.
The set-piece green measure of the budget was the heavily trailed green investment bank with £2bn of capital, half from the public purse. This drew praise from many quarters.
"A single government body responsible for evaluating, assessing and backing infrastructure investments can only be a good thing," said Nick Chism, head of KPMG's global infrastructure practice. "However, the proposed fund only covers a fraction of the estimated £400bn the UK needs in infrastructure investment over the next 10 years."
"The green investment bank, alongside the Committee on Climate Change and carbon budgets, forms a central plank of the UK's now very credible decarbonisation strategy. Over time it can grow to further support British industry through a diversified range of financial products focusing on energy efficiency, smart and super-grids, renewable energy and carbon capture and storage," said Nick Mabey, chief executive of sustainable development non-profit organisation E3G.
"We're disappointed there was no action to tax business jets, which currently pay no fuel tax and in many cases pay no air passenger duty either," said Campaign for Better Transport director Stephen Joseph. "The new infrastructure bank is welcome, but it must be used to fund green urban transport schemes such as trams, as well as electric cars."