Budget 2009 is a step towards a low-carbon economy
WEDNESDAY 22 APRIL 2009
Lord Stern of Brentford and colleagues at the Grantham Research Institute on Climate Change and the Environment and the Centre for Climate Change Economics and Policy today (22 April 2009) welcomed the publication by HM Treasury of the 2009 Budget as a step towards a low-carbon economy.
Lord Stern, who chairs the Institute and the Centre, said: “The measures outlined in the Budget are a significant step towards building a clear and credible programme of practical policies that will allow the UK to meet its targets for reducing the greenhouse gas emissions.
“The Budget indicates that the Government has accepted the recommendations of the independent Committee on Climate Change that the UK should reduce its greenhouse gas emissions by 34 per cent by 2020, compared with 1990. This is a vital commitment and will be a crucial milestone towards our longer term target of reducing emissions by at least 80 per cent by 2050, compared with 1990. Our 2020 target should increase to 42 per cent when an international agreement on emissions reductions is reached at the United Nations climate change conference in Copenhagen in December.”
“The additional expenditure in 2009-10 and 2010-11 on renewables, energy efficiency, carbon capture and storage, and other low-carbon technologies, must be the initial step along the path towards a major structural shift in policy which we trust will follow over the coming decade. This is the start of a path that will involve many more steps over the next few years.
“The Government has recognized the importance of increasing research and development on technologies for capturing and storing the carbon dioxide that is produced by power stations using coal, gas and oil as fuel. The additional investment in carbon capture and storage will move the UK towards leadership in this field. The UK should not build any new coal-fired power stations unless they will be fully equipped with carbon capture and storage technology by the early 2020s at the latest.
“The transition to a low-carbon economy cannot be achieved overnight and it is important to acknowledge that it will continue to make demands on the public finances over the next 10 years, and that there will be areas in which consumers must pay more, for instance through an increase in fuel duty.”
Dr Alex Bowen, Principal Research Fellow at the Grantham Research Institute on Climate Change and the Environment, said: “The additional expenditure on ‘green’ measures announced in the Budget will provide a boost both to the economy and to our efforts to reduce greenhouse gas emissions. The Treasury has clearly attempted to include ‘green’ initiatives in its measures to simulate economic recovery, as we and others recommended. However, it is important to recognise that the UK’s current economic position means that it is spending less than many other countries on discretionary measures, including ‘green’ measures, to stimulate recovery.”
Dr Sam Fankhauser, a Principal Research Fellow at the Grantham Research Institute on Climate Change and the Environment and a member of the UK Committee on Climate Change, said: “The is a landmark Budget because its also includes the first ever carbon budget for the UK. The Government has now made the significant commitment to reduce the UK’s greenhouse gas emissions by 34 per cent by 2020, compared with 1990. That target should increase to 42 per cent when an international agreement on climate change is reached, hopefully in Copenhagen in December.”
NOTES FOR EDITORS
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The Grantham Research Institute on Climate Change and the Environment was launched at the London School of Economics and Political Science in October 2008. It is funded by The Grantham Foundation for the Protection of the Environment.
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The ESRC Centre for Climate Change Economics and Policy is hosted by the University of Leeds and the London School of Economics and Political Science. It was officially launched at the University of Leeds on 27 January 2009. The Centre is funded by the UK Economic and Social Research Council and Munich Re.