Green Budget for a Green Economy?
23 March 2012
“Environmentally sustainable must always be fiscally sustainable”, was the message from the Chancellor at Budget 2012. Providing a boost to North Sea oil, gas extraction and a £3billion new field allowance west of Shetland will certainly create jobs in the energy sector, but what about businesses and jobs which specifically reduce carbon emissions?
Let’s first of all look at the benefits of these jobs which are likely to be created. These jobs, which will probably be a mix of high and middle skill posts, should help boost research and assist with commercialising the field of Carbon capture and storage (CCS), which has been struggling financially. A number of SMEs and universities have been researching the novel concept of CCS, so the Chancellors £1bn investment should at least lead to breakthrough technologies which aim to reduce carbon emissions. Moreover, reforms to the Carbon reduction commitment (CRC) will clearly cut bureaucracy and alleviate green businesses from unnecessary taxes, and it is hoped that support for businesses through the Green Investment Bank should give the industry another boost.
The UK should also remember that it has been leading in curbing carbon emissions, as compared to its European counterparts. The long awaited Green Investment Bank will be the first of its kind in the world dedicated to making the economy greener. The bank, which rolls out next month, will provide a good platform for investment, creating more businesses in the green sector. Not only will it help to fund business, but the spill-over effects will be seen through the development of new ideas, products and services as we try to curb carbon emissions. On the down side, only time will tell if roping in other government departments such as the DECC, DEFRA, HMT, DfT, CLG and Infrastructure UK will just lead to more bureaucracy.
We have also seen some positive steps through key announcements by the Government to set up the 2014–15 carbon price support rates (which are the equivalent of £9.55 per tonne of carbon dioxide in line with the carbon price floor) set out at Budget 2011. This sort of financial boost can only be a good thing.
In my opinion, we are yet to see the full monetary successes of the Government’s green agenda - more can always be done. I just hope future successes will not be not be overshadowed by the governments focus on traditional industries such as oil and gas.
For a full list of hits and misses for the Energy Sector in Budget 2012– Click Here