Was this our greenest Budget ever?

Published by Jake Standing on 4 March 2021

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All eyes will be on the UK when we host the COP26 climate summit later this year, bringing together world leaders, climate experts, business leaders and citizens to agree ambitious action to tackle climate change.

The UK has some of the most ambitious climate targets in the world, but this was a Budget that was green ‘around the edges’, rather than a contender for world-leading policy in the battle against climate change.

What was announced?

The Prime Minister outlined his Ten Point Plan for a Green Industrial Revolution in November last year. The Budget confirmed most points already covered in this document, but some of the main points are as follows:

  • £12bn capitalisation of a new UK Infrastructure Bank – to finance public and private green projects.
  • £15bn green bonds scheme – to give the opportunity to investors to support green projects.
  • Nearly £100m in UK-wide competition grants, to accelerate low-carbon energy innovations such as long-term energy capture and storage, offshore wind demonstrators and a biomass feedstocks programme.
  • Fuel duty frozen for the 11th year in a row.

Does this go far enough?

The devil is in the detail, and currently there is not enough of it. Whilst there were a lot of great incentives for innovation in the green sector, there were some clear omissions and concerns raised.

  • The Green Homes Grant wasn’t even mentioned – a substantial proportion of UK emissions comes from heating homes, and yet this particular Grant scheme looks like it will be cut as millions of funding is left unspent.
  • The biggest short-term impact on emissions will come from holding fuel duty for the 11th year in a row, unfortunately in the wrong direction!
  • No disincentives to change business or consumer behaviour – for example, a potential carbon tax on high emitters.
  • How will funding from the new UK Infrastructure bank be allocated, and do our past experiences give us comfort that the money will be spent wisely?

Greenest budget ever?

It is clear that the net-zero transition is at the front and centre of government, and accompanied with potentially more R&D funding and a Super tax break for capital investment, this could be the greenest budget yet.

However, it is becoming increasingly stark that the speed of progress towards a net zero world is not fast enough. The opportunity to make drastic changes to the course we are on has presented itself in the form of a Black Swan event, but it feels that the newly announced policies fall short of the mark.

We’ll keep an eye on any developments and will be regularly updating the Budget pages of our website. If you would like to discuss the implications, please don’t hesitate to get in touch.

 

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