The dust is settling on the UK government’s 2020 Budget announcement, but what does it mean for the environment? We hear reaction and analysis from key figures in green politics, economics and industry
Newly minted Chancellor and sergeant general of the Yorkshire Tea culture wars, Rishi Sunak, opened the spending taps a little yesterday after a decade of austerity, but the reaction has been mixed.
While much of the chatter has centred around money carved out to help the UK to cope with Coronavirus, and the idea of Conservatives admitting that magic money trees are good, actually, there’s been talk about its climate impacts too. With the UK hosting the COP26 summit in Glasgow later this year, and the River Severn creating gnarly waves worthy of Byron Bay, many have asked: does this budget do enough to fight the climate and ecological emergency?
According to some, the answer is no. Rebecca Newsom, Head of Politics at Greenpeace UK, brands the budget a “missed opportunity”. “Ending the red diesel tax break and the Nature for Climate Fund announcements are important steps,” she says, but not enough. “The Chancellor will only redeem himself by rapidly increasing spending on climate and nature to at least 5%, making our buildings highly efficient and significantly boosting public transport in the National Infrastructure Strategy and Spending Review later this year.”
Green MP Caroline Lucas is similarly unfazed by the plans. “Over the next 10 years, we must transform our buildings, transport network, energy system and farming,” Lucas says. “If it’s done right, we could cut our greenhouse gas emissions, bring down people’s energy bills and create jobs in every constituency in the country. Based on this budget, we won’t.
“The £175bn proposed over the course of this Parliament will barely get us started. And there is no commitment that infrastructure projects will be carbon-tested and focussed on the central priorities of cutting emissions and preparing for new climate risks.”
This budget should have marked a decisive end to all government support for high carbon infrastructure
Lucas argues the government’s spending bonanza on constructing 4,000 miles of new roads and upgrading existing ones, amounting to £27bn of tarmac, undermines commitment to a cleaner and healthier environment. “This budget should have marked a decisive end to all government support for high carbon infrastructure and environmentally destructive projects,” she says.
Others have echoed Lucas in saying the budget does not do enough to shift economic thinking. “In the year that the UK is hosting COP26, we needed to see a climate budget—not a budget that locks in our dependence on environmentally damaging activities,” says Frank van Lerven, a senior economist at the New Economics Foundation (NEF). “While more capital investment was welcome, not enough was directed at the right infrastructure to get us to a zero-carbon economy.
“There were some good carrots like incentives for electric vehicles, and sticks like a tax on plastic, but virtually no change in subsidies to fossil fuels and fuel duty remains frozen… With the UK set to miss all of its existing nature targets much more investment is required in biodiversity like rewilding projects, land management schemes, regenerative farming and the restoration of peatlands.”
As for the government’s ‘levelling up’ agenda, van Lerven is unconvinced this thinking is being applied properly in a climate context. “There was a lack of a clear plan for how we would help communities across the country manage the transition to zero-carbon in a way that is fair,” he says. “Of the 4 million UK jobs in sectors that are most vulnerable to the transition, the highest densities are across councils in the north-west, Yorkshire and the Humber and the Midlands. The government needed to set out a plan for how it would direct resources and give powers to local areas to develop local industrial strategies. But there was no mention of this in the budget.”
He would like to see investment in retrofitting homes and buildings with insulation, suggesting a home insulation programme aimed at loft and cavity walls could help secure thousands of green jobs across the country, reduce carbon emissions by 5% and home energy bills by up to 30%.
Carbon capture can play an important role—but only up to a point
Some voices of industry have celebrated the budget’s impact on their business. Richard Kirkman, Chief Technology and Innovation Officer of recycling giant Veolia UK and Ireland says that the budget shows the government intends to create the right conditions for solutions to the climate emergency, the biodiversity crisis, and plastic pollution problems. He points to the ‘stick’ mentioned by van Lerven.
“The Plastics Packaging Tax will reduce unnecessary plastic, incentivise refill business model development and ensure investment is made into UK recycling capacity,” he says. “Based on this we are aiming to invest in a new innovative £50m facility which will ensure any plastic bottle or tray used to protect food can be reprocessed and used again, thats equivalent to some 500 million bottles a year.”
He is also keen to emphasise how this fits with a levelling up agenda of sorts. “Placing that facility in the Midlands will centralise our operations levelling up infrastructure in the heart of industrial Britain, minimising transport, and using low carbon energy.”
Others have welcomed the £800 million pot for investment in Carbon Capture Technologies which take carbon out of the air. But are such technologies a magic bullet? “In the absence of technological breakthroughs in energy storage, carbon capture can play an important role—but only up to a point,” says NEF’s van Lerven. "It might for example help deal with problems of intermittency in renewable energy sources i.e. solar panels and wind turbines won’t generate power because the wind isn’t blowing and sun isn't shining. But it should not be seen as a get out jail free card for the fossil fuel sector. There are arguably more important investments to be made at this stage, and a maximum 5% of emissions should be addressed through negative emission technologies like carbon capture.”
On investment in renewable energy, the Solar Trade Association has struck a cautious tone. The association’s Chief Executive Chris Hewett has welcomed some measures such as a review on business rates (the tax levied on the occupation of office buildings and the like) which can be a barrier to company’s forking out to install solar panels on the rooftops. But in other ways he is more critical. “Unfortunately this Budget is thin on measures to tackle climate change and support the transition to a low-carbon economy,” he says. “Renewables are vital to reaching net zero, and without good policies in place to support the uptake of solar we will fall well short of the 40 gigawatts needed by 2030 to keep on track. Time is running out to act.”
Indeed, that final statement is true of a lot more than solar.