Plans set out in the budget make a mockery of promises to be 'the greenest government ever' while putting up fuel bills, environmental groups have complained.
George Osborne, the Chancellor, set the Carbon Floor Price at £16 per tonne from 2013, rising to £30 by 2020.
The levy is paid by energy companies to discourage carbon intensive power stations like coal or oil and encourage investment in wind and nuclear.
However it will ultimately be paid by the consumer, adding £120 to bills every year over the next eight years, according to analysts, in the latest green tax on fuel.
Dr Doug Parr, Policy director of Greenpeace, said the levy will benefit low carbon technology like nuclear instead of boosting renewables like wind and solar.
“The carbon floor price will put up bills, deliver a windfall profit for existing nuclear power stations and yet it won’t drive investment into clean energy and improved efficiency. It’s not so much a green tax as a stealth tax and it’s exactly the sort of measure that gives green levies a bad name,” he said.
Overall environmentalists were unhappy with Mr Osborne’s budget, although investors welcomed plans to boost funding for renewable projects.
The Green Investment Bank, which is key to providing money for big renewable energy projects, will get £3 billion in public funding. This will enable the bank to raise a further £15 billion of private sector investment during the life of this Parliament
However it will not be able to borrow until 2015, subject to overall targets on debt reduction being met.
Chris Huhne, the Energy and Climate Change Secretary, insisted both the Carbon Floor Price and the Green Investment Bank are significant signals that the Government is taking green growth seriously and will be providing funding in the long term.
But Andy Atkins, Executive Direct of Friends of the Earth, said the bank needs borrowing powers immediately in order to raise much more money for urgent projects.
"The Green Investment Bank should have been a vehicle to drive the UK's economic recovery, but by delaying the bank's borrowing powers the Treasury has sneaked round the back of the motor and siphoned off the fuel – just as the rest of Government is firing up the ignition," he said.
"In the global race to develop green industry, the Treasury seems determined to make the UK lose."
There was also disappointment at plans to water down plans to make all homes carbon neutral by 2016. In an effort to cut red tape “zero carbon” homes will not include the electricity used for plug-in appliances.
Green transport campaigners said the fall in fuel duty leaves motorists vulnerable to oil price rises in the long term because it fails to encourage investment in electric cars.
Wildlife groups are disappointed that the Government has refused to tax peat compost, which is blamed for destroying habitat and driving climate change.
Countryside campaigners are concerned that changes to the planning rules will make England “like Legoland” within 10 years by making development easier.
Thursday, 24 March 2011
Budget 2011: Carbon tax brings higher electricity bills – and nuclear windfalls
Nuclear and renewable energy companies will reap benefits as tax on coal and gas emissions is passed on to consumers
The carbon tax introduced in the 2011 budget will mean higher bills for electricity consumers and increased profits for nuclear companies. Photograph: Pa Photo/PA
Nuclear and renewable energy companies will scoop huge windfall profits after the government announced plans to raise £3.2bn by 2016 from a new carbon tax funded by higher electricity bills.
The chancellor announced a guaranteed minimum or "floor" price for carbon under Europe's emissions trading scheme of £16 a tonne in 2013, rising to £30 by 2020. If the market price of carbon slumps, the Treasury's tax will increase to make up the difference. The UK is the first country in the world to introduce such a mechanism to guarantee a price for carbon.
The level of the tax was higher than many energy experts expected. Charity National Energy Action called on the government to use some of the Treasury proceeds to fund the insulation of the poorest households' homes .
Critics said that the tax was geared more at raising revenue for the Treasury than achieving its stated aim of incentivising companies to build low-carbon forms of generation.
Coal and gas plants will start paying the tax in 2013, based on how much carbon they emit. They will be allowed to pass on the cost to consumers in higher bills. Existing nuclear reactors and renewable producers will pay next to nothing because their emissions are low, but they will still profit from higher electricity prices.
Ben Caldecott, head of UK and EU policy at specialist investment house Climate Change Capital, said that although the carbon floor price would benefit investors in low-carbon generation, it did not give certainty because the level could be changed in future budgets. To give investors real certainty, he said, the level of tax should be guaranteed by long-term contracts.
"To highlight why low carbon investors might find it hard to trust this new tax based mechanism, just look at what else was announced today – scrapping the planned rise under the fuel duty escalator. The same could happen to planned rises in the carbon tax that sets the carbon price floor."
The consultancy Redpoint had calculated that under the government's most likely carbon tax plan, electricity costs would rise by almost 10% by 2016, putting up to 110,000 more households in fuel poverty – defined as a household spending more than a tenth of its disposable income on utility bills. Redpoint had also calculated that this plan would result in an estimated £1.3bn of windfall profits for the UK's remaining reactors, mostly owned by EDF Energy, by 2020.But experts said the government's more aggressive tax will result in higher costs sooner, bigger windfall profits and more households in fuel poverty.
George Osborne also confirmed that the government would not introduce a new levy on electricity bills to fund coal and gas plants testing new carbon capture and storage (CCS) technology to prevent emissions going into the atmosphere. He said that they would be funded by taxation instead.
The carbon tax introduced in the 2011 budget will mean higher bills for electricity consumers and increased profits for nuclear companies. Photograph: Pa Photo/PA
Nuclear and renewable energy companies will scoop huge windfall profits after the government announced plans to raise £3.2bn by 2016 from a new carbon tax funded by higher electricity bills.
The chancellor announced a guaranteed minimum or "floor" price for carbon under Europe's emissions trading scheme of £16 a tonne in 2013, rising to £30 by 2020. If the market price of carbon slumps, the Treasury's tax will increase to make up the difference. The UK is the first country in the world to introduce such a mechanism to guarantee a price for carbon.
The level of the tax was higher than many energy experts expected. Charity National Energy Action called on the government to use some of the Treasury proceeds to fund the insulation of the poorest households' homes .
Critics said that the tax was geared more at raising revenue for the Treasury than achieving its stated aim of incentivising companies to build low-carbon forms of generation.
Coal and gas plants will start paying the tax in 2013, based on how much carbon they emit. They will be allowed to pass on the cost to consumers in higher bills. Existing nuclear reactors and renewable producers will pay next to nothing because their emissions are low, but they will still profit from higher electricity prices.
Ben Caldecott, head of UK and EU policy at specialist investment house Climate Change Capital, said that although the carbon floor price would benefit investors in low-carbon generation, it did not give certainty because the level could be changed in future budgets. To give investors real certainty, he said, the level of tax should be guaranteed by long-term contracts.
"To highlight why low carbon investors might find it hard to trust this new tax based mechanism, just look at what else was announced today – scrapping the planned rise under the fuel duty escalator. The same could happen to planned rises in the carbon tax that sets the carbon price floor."
The consultancy Redpoint had calculated that under the government's most likely carbon tax plan, electricity costs would rise by almost 10% by 2016, putting up to 110,000 more households in fuel poverty – defined as a household spending more than a tenth of its disposable income on utility bills. Redpoint had also calculated that this plan would result in an estimated £1.3bn of windfall profits for the UK's remaining reactors, mostly owned by EDF Energy, by 2020.But experts said the government's more aggressive tax will result in higher costs sooner, bigger windfall profits and more households in fuel poverty.
George Osborne also confirmed that the government would not introduce a new levy on electricity bills to fund coal and gas plants testing new carbon capture and storage (CCS) technology to prevent emissions going into the atmosphere. He said that they would be funded by taxation instead.
Budget 2011: George Osborne's plans are a disaster for the environment
An incentive to consume more petrol, relaxed planning rules and a weak green bank add up to a black budget for the environment
• Green bank is the government's biggest budget test
The "greenest government ever" has delivered the blackest budget in living memory. It provides a roaring incentive to use more oil, just as we might be heading towards an oil crisis. It has given the green light to the aviation industry to keep expanding, despite the government's promise to limit its impact. It has made a mockery of green investment. Perhaps most disturbingly, it has ripped up the social contract which has prevailed in this country since 1947, which ensured that developers, through the planning laws, were accountable to the people.
Let's begin with that last item, because everything about it is extraordinary. The first question is what on earth it is doing in a budget statement? The budget is supposed to concern the government's finances, where's the connection to planning legislation? The likely explanation is that the government has decided this is the best place to bury bad news; it is sneaking it through while we're distracted by the fiscal measures.
It describes the policy as "introduc[ing] a new presumption in favour of sustainable development, so that the default answer to development is 'yes'". Notice the slip up? It starts off as "sustainable development", creating the impression that Osborne is talking about solar panels and bird hides. Seven words later, you realise he means everything. It is, in other words, the opposite of sustainable. So much for the promise by the communities secretary, Eric Pickles, of more local control over development; this presents yet another barrier to communities trying to prevent Tesco from trashing their towns.
Osborne has abolished the fuel duty escalator, cut fuel tax for vehicles, frozen air passenger duty rates and dismissed – on the untested assumption that it would contravene international law – a tax on planes that would have discouraged airlines from running them half-empty. These measures send the clearest possible signal that he has no intention of reforming our planet-trashing, resource-guzzling transport systems, before they run into the wall of peak oil and climate change. This is populism of the crudest kind, which might delight the Mail and the Sun, but shows that, for all his talk of tough choices and difficult decisions, the chancellor is a chicken.
Talking of which, he has bumped the date when the Green Investment Bank will start borrowing to the start of financial year 2015-2016, which happens to be the end of this government's term in office (if it doesn't come sooner). In other words, Osborne will not, unless he remains chancellor beyond that point, take responsibility for a measure that will contribute to the national debt, but prefers to pass it on to his successors.
Decisive action on greening the economy is deferred yet again.
This budget is perverse, regressive, destructive, cowardly. It's a charter for corporations, which gives two fingers to the public interest. It demonstrates what many of us had suspected but had hoped was not true: that the government was lying when it promised to protect the environment.
www.monbiot.com
• Green bank is the government's biggest budget test
The "greenest government ever" has delivered the blackest budget in living memory. It provides a roaring incentive to use more oil, just as we might be heading towards an oil crisis. It has given the green light to the aviation industry to keep expanding, despite the government's promise to limit its impact. It has made a mockery of green investment. Perhaps most disturbingly, it has ripped up the social contract which has prevailed in this country since 1947, which ensured that developers, through the planning laws, were accountable to the people.
Let's begin with that last item, because everything about it is extraordinary. The first question is what on earth it is doing in a budget statement? The budget is supposed to concern the government's finances, where's the connection to planning legislation? The likely explanation is that the government has decided this is the best place to bury bad news; it is sneaking it through while we're distracted by the fiscal measures.
It describes the policy as "introduc[ing] a new presumption in favour of sustainable development, so that the default answer to development is 'yes'". Notice the slip up? It starts off as "sustainable development", creating the impression that Osborne is talking about solar panels and bird hides. Seven words later, you realise he means everything. It is, in other words, the opposite of sustainable. So much for the promise by the communities secretary, Eric Pickles, of more local control over development; this presents yet another barrier to communities trying to prevent Tesco from trashing their towns.
Osborne has abolished the fuel duty escalator, cut fuel tax for vehicles, frozen air passenger duty rates and dismissed – on the untested assumption that it would contravene international law – a tax on planes that would have discouraged airlines from running them half-empty. These measures send the clearest possible signal that he has no intention of reforming our planet-trashing, resource-guzzling transport systems, before they run into the wall of peak oil and climate change. This is populism of the crudest kind, which might delight the Mail and the Sun, but shows that, for all his talk of tough choices and difficult decisions, the chancellor is a chicken.
Talking of which, he has bumped the date when the Green Investment Bank will start borrowing to the start of financial year 2015-2016, which happens to be the end of this government's term in office (if it doesn't come sooner). In other words, Osborne will not, unless he remains chancellor beyond that point, take responsibility for a measure that will contribute to the national debt, but prefers to pass it on to his successors.
Decisive action on greening the economy is deferred yet again.
This budget is perverse, regressive, destructive, cowardly. It's a charter for corporations, which gives two fingers to the public interest. It demonstrates what many of us had suspected but had hoped was not true: that the government was lying when it promised to protect the environment.
www.monbiot.com
Subscribe to:
Posts (Atom)
Posts
