Budget 2011: Energy and Environment

---

We examine some key highlights affecting energy and environment policy.

• Carbon price floor of around £16 per tonne moving up to £30 per tonne by 2020.

• Government support to decrease water bills in the south west of England.

• An extra £2bn of funding for the Green Investment Bank to allow it to begin operating in 2012.

• Climate change levy discount on electricity for those signing up to climate change agreements will rise from 65 per cent to 80 per cent from April 2013.

Member Response: The Chartered Institution of Wastes Management

CIWM welcomes the extra funding for the Green Investment Bank and the power, albeit delayed, for the bank to borrow, but this still feels like a government tinkering around the edges of genuine green economic growth.

Supporting low carbon investment is essential and while a carbon price floor for energy generation sends out a positive signal, we are still a long way from having a robust and integrated framework for the future. We are keen to see more detailed thinking in the proposed Green Economy Roadmap due out later this year.

Member Response: British Retail Consortium director general, Stephen Robertson

Setting a minimum floor for the trading price of carbon will provide much-needed certainty for future green investment.

In the last Budget, the Government wrecked the Carbon Reduction Commitment energy efficiency scheme by turning it from incentive-based to a billion pound stealth tax. It should now be scrapped and retailers simply included in the Climate Change Levy.

Member Response: Michael Ankers, chief executive, Construction Products Association

The government has made a big play on its desire to make the UK an attractive place to do business and we welcome a number of the measures, including reduction in corporation tax, support for fiscal initiatives and improved R&D tax credits, but we were very disappointed to see the early introduction of a carbon floor price which could well drive business investment away from the UK.

What is equally disappointing is that despite the Chancellor re-iterating the claim that they want to be the greenest government ever, no measures were announced that would encourage increased investment in the energy efficiency of existing homes in advance of the Green Deal which is due to come in towards the end of 2012

Member Response: Nicky Morgan MP, on behalf of the Westminster Sustainable Business Forum, part of Policy Connect

We welcome the government's renewed commitment to the Green Investment Bank. There is a broad consensus across industry and investors that we need, desperately, to invest in infrastructure to ensure the UK can make the transition to a low carbon economy. As such, the increase in initial funding from £1 to £3 billion is both timely and necessary.

Member Response: National Federation of Builders

The creation of a Green Investment Bank (GIB) should clear the way for the Government to introduce a buy-out arrangement under Allowable Solutions, in the price ranges of £16-30 per tonne of carbon. The GIB can ensure that any contributions made by housebuilders building zero carbon homes, are spent on appropriate projects that meet additionality tests.

Member Response: Melanie Leech, director general, Food and Drink Federation

The Chancellor has made a number of important budget announcements that are positive for our industry and its potential for further growth to support economic recovery. In particular we strongly support the decision to extend Climate Change Agreements to 2023 on which we have been lobbying the Government in recent weeks, in view of the real incentive that they provide for our members to reduce carbon emissions. We also welcome the restoration of the Climate Change Levy discount on electricity to 80% from 2013.

Member Response: David Workman, director general, Confederation of Paper Industries

While the government appears to have responded positively to some of the concerns of Energy Intensive Industries, including the Paper Industry, we remain concerned that the UK is to go it alone in setting a Carbon Floor Price. This has the potential to inflict a huge increase in costs for the Energy Intensive Industries, as could the Carbon Reduction Commitment. We had expected an announcement in the Budget about its reform but we heard nothing on this issue.

This was generally a positive budget with the priority of making the UK the home of enterprise, growth and jobs – it needed to be as we have fallen from 4th to 12th in the competitiveness league.

Member Response: Brian Johnson, chief executive, Moat

The creation of a Green Investment Bank (GIB) should clear the way for the Government to introduce a buy-out arrangement under Allowable Solutions, in the price ranges of £16-30 per tonne of carbon. The GIB can ensure that any contributions made by housebuilders building zero carbon homes, are spent on appropriate projects that meet additionality tests.