Government Cuts throws up mixed bag for the Green IndustryOctober 25th, 2010 by Barry Potier
Last week’s spending review has thrown up changes for the renewable & environmental market but the question is will these things benefit or hinder the UK’s approach to becoming a greener country?
The Department for Energy & Climate Change will see their capital expenditure increasing 28% by 2015, but the central budget being cut by 20%. Commercially the focus will be on Nuclear de-commissioning and carbon capture and there will be a domestic approah to the incentive for green heating for the home.
The original plans were for the UK to build 4 demonstration plants for carbon capture, which has now been reduced to just 1 – the cost to run 4 would have run to approximately £10bn, so considerable saving has been made with this decision, but at what cost to our focus on sustainability?
There is a blow for medium & large businesses who will be required to pay a Carbon Tax – this will be done through owners buying permits to cover the greenhouse gas emissions from energy usage. The original plans were to offer a pay back scheme to businesses demonstrating good sustainabilitypractice and penalising those that didn’t meet these requirements. This surely would have incentivised businesses to take a different approach to their contribution to climate change, however the government will not be offering these kick backs and instead using them to support public finances – giving them £1bn per year until 2015.
Defra EnvironmentalDepartment have seen the 3rd biggest cut on its day to day spending and farming hasn’t fared too well either for the UK with farm payments possibly being cut, however European subsidies have been protected. For a country rich in resource and capabilities, it seems a shame that we cant support our farmers to deliver our produce instead of importing the things we could easily produce in this country?
The biodiveristy protection schemes & climate change adaptation’s resource spending has been cut by 29% to 2015 – this is reducing the pot from £2.9bn to £2.2bn by 2015.
Despite the doom and gloom, there have been some positives including a £2bn major improvement in coastal protection. The Prime Minister today has also announced during his first speech with the CBI since his appointment that they will be “investing £1 billion to create one of the world’s first Carbon Capture and Storage demonstration plants, with three more projects to follow and £200 million in low carbon technology, including offshore wind“. Additionally to this, he has also promised “to help secure private sector investment in this technology, we’re providing up to £60 million to meet the needs of offshore wind infrastructure at our ports and to help move things forward, the Crown Estate will also work with interested ports and manufacturers to realise the potential of their sites.”
David Cameron went on to say “It will help secure our energy supplies, protect our planet and the Carbon Trust says it could create 70,000 jobs.” which is great news for the general public, our commitment to sustainability and our economy.
Feed-in-Tariffs will be reviewed in 2013, which could affect the growth of Solar PV in the coming years. The Renewable Heat Incentive will still be going ahead in 2011 with public backing but will still be 20% less than originally discussed by Labour.
So, a mixed bag and certainly changes to our environmental direction over the next few years, it does beg the question – how will the new coalition government really step up and become “The Greenest Government Ever?”
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