Science & Environment

Harrabin's Notes: Not easy being green

In his regular column, BBC environment analyst Roger Harrabin looks at the impact of the latest UK budget on the Green Bank.


Image caption The next round of offshore wind farms will not be until 2015

The Government is committed to being the greenest ever, according to the label on the environmental section of the UK Budget.

Some measures may indeed signal a new direction towards a greener economy. But other policies are actually pulling in the opposite direction.

Thanks to this Budget, the UK will have funding for what is said to be the world's first Green Bank. But the nation also potentially faces a boom in car-borne, out-of-town development.

So, for greens this looks a budget of two cheers and a loud hiss.

Let's look at the positives first. The Department of Energy and Climate Change (DECC) has won a battle with the Treasury to create and fund a Green Bank to finance to the technologies needed to fuel the UK's low-carbon electricity future.

DECC estimates that more than £400bn may be needed by 2030. The Chancellor has already put in £1bn and now promises another £2bn. But he won't allow the bank to borrow to lend until 2015 because of rules on government borrowing.

Greens say this is a crucial flaw and fear that the Treasury is trying to find some way of shunting off this key issue until after the next election.

Borrowing delay

DECC maintains that the delay on borrowing will not make a great deal of difference because the next round of offshore wind farms does not start until 2015 - and the bank will be up and running, and able to arrange finance well in advance.

A more thorny issue might be the caveat precluding the bank from borrowing unless targets for overall government borrowing have been met. The Treasury will also control the borrowing limit. These could seriously delay the low carbon revolution.

There will be controversy too over the introduction of a carbon floor price - an idea that has been heavily promoted by the nuclear industry.

Ministers hope that by under-pinning the price of carbon they will create the conditions for new nuclear stations. But the policy doesn't guarantee new-build.

A worst-case scenario from the government's perspective would be for existing nuclear generators to milk windfall profits from the elevated floor price without committing new investment.

A DECC source told me they had recognised the problem and would need to devise ways of combating it.

The other announcement that will be broadly welcomed by greens is the Chancellor's commitment to continuing with four demonstrations of carbon capture and storage.

By scrapping the proposed levy on bills to fund these projects the Chancellor has removed a potential public flashpoint. I understand that new funding for the projects might be sought from the EU.

Now to the hissing section. Greens welcome the decision to take private jets of course, but the failure to increase general taxes on flying when aviation is the fast-growing source of emissions has exasperated them.

Likewise with cars. Some environmentalists will accept that it is politically sore for the government to be making extra profits from car tax just as fuel bills are soaring anyway.

But the Greenpeace line is that the Chancellor should have kept the tax and used the proceeds to offset the rising costs of greener forms of transport. Rail and bus fares have no support in the Budget.

Lastly the Chancellor has made some pretty fundamental changes to laws on development. First he's scrapped the UK's iconic requirement that new homes should be zero-carbon from 2016 by generating all the power they need.

This policy was a world-leader but it has been watered down so that homes will be able to buy about a third of their energy.

Ministers have been persuaded that the original rule was eye-catching but unnecessarily costly. Environmentalists say it stimulated massive innovation in homes, so scrapping it sends a very bad signal to the industry.

Mr Osborne has also scrapped the massively influential planning law which required 60% of new housing to be on previously-developed "brownfield" land. That rule led to massive renewal in many city centres as innovative uses have been found for old buildings.

CPRE says without the target the UK could have lost twice as much greenfield land to development over the last decade, equivalent to an area almost twice the size of Manchester.

The target is disliked by many property developers who complain that it adds too much expense. And they have got their way. The national targets will be replaced by local policies.

That mean that local councils may be able to allow widespread building on greenfield sites, against the wishes of their neighbouring authorities.

It will further infuriate greens that the Chancellor has appropriated their language over this policy.

The Budget document says it will "Introduce a new presumption in favour of sustainable development, so that the default answer to development is 'yes'." That is not what sustainable development means at all.