Budget sets course for low carbon economy, introduces carbon budgets to 2022
Thu 23 April 2009
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The Government has announced that it will provide over £1.4 billion of extra targeted support to the low-carbon sector in an effort to stimulate economic recovery and promote greener, low carbon businesses for the future. In the Budget 2009 the Chancellor also proposed the UK's first legally binding carbon budget under requirements set out in the Climate Change Act.
The Budget includes the announcement of an additional £375 million to support energy and resource efficiency in businesses, public buildings and households over the next two years, and £70 million for decentralised small-scale and community low-carbon energy. It also includes £405 million to support low-carbon industries and advanced green manufacturing to help make the UK a leading player in low carbon technologies.
The Chancellor announced that duty on petrol and diesel will increase by 2 pence per litre on 1 September 2009 and by 1 penny per litre in real terms on 1 April each year from 2010 to 2013. The Chancellor said that this measure will save 2 MtCO2 per year by 2013-14.
The Budget also included the announcement of a scrappage scheme for vehicles over 10 years old. The Government hopes the scheme will stimulate the purchase of new, lower carbon cars. (See separate story.)
Announced alongside Budget 2009, the Chancellor announced that the government has adopted a target for reducing carbon emissions by 34% over the period 2018 to 2022. The new target will amend the targets previously set in the new Climate Change Act, requiring approval by Parliament.
Responding to the report from the Committee on Climate Change recommending levels for carbon budgets, the Budget laid out three carbon budget periods: a 22% reduction in CO2 from 2008 to 2012 below 1990 levels; a 28% reduction from 2013 to 2017; a 34% reduction by 2022.
In a report on the environmental aspects of Budget 2009, The Financial Times reported that critics said the chancellor had failed to ensure there was enough assistance for businesses to meet the carbon reduction targets.
Reported in the FT, Lord Turner, Chairman of the Climate Change Committee, said: “The carbon budgets provide the UK with the most ambitious climate change legislation in the world. We need to start reducing our emissions now, and we need tough policies and strong leadership from government.”
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