CSR analysis: the government’s green boasts were vain and idle

by ffinlo Costain

Announcements leading up to the comprehensive spending review (CSR) and the review itself were the first opportunity to really test the Tory-Lib Dem government’s sincerity about tackling climate change. As the dust settles we can assess the result.

Labour’s warm front scheme, which provided grants for homeowners to insulate their lofts and cavity walls, is to be killed off. Thousands have benefited from reduced insulation costs, with grants worth around £300 delivered at council level. The result was widespread energy savings. The government’s green deal will replace this scheme. Instead of grants, homeowners will be offered loans to buy goods and services from businesses like B&Q and Tesco to make their homes more energy efficient.

But if many of those living in fuel poverty failed to take the opportunity to insulate their houses when most of the cost was paid for, it seems unlikely they’ll chose to insulate when they have to fund the full cost themselves. The measure also fails to help those living in un-insulated short-term rented accommodation.

The decision has also been taken to axe the Severn tidal barrage, which would have generated enough electricity for pretty much every home in Wales. This displays an astonishing lack of green-tech ambition. The ocean has an enormous potential to provide continuous renewable electricity and will be a huge source of power in the future.

In counterpoint to this decision, support was promised for eight new nuclear power stations. Some environmentalists accept that nuclear must be part of the new energy mix because of our late start in developing renewable power. But that support is only given where nuclear is an explicit bridge to a future renewable Britain. The cancellation of the Severn tidal project calls this commitment into question. That said, DECC did confirm that Britain would press ahead with the expansion of on and offshore wind power (though changes to planning rules may slow delivery on the ground).

The chancellor also hit public transport users. £300m will be cut from the bus service operators grant by 2014/15, meaning that the cost of bus travel will increase. Commuters have been thumped too: train prices will be allowed to rise by 3% above inflation instead of 1% under Labour.

In other areas the government has done better.  Feed-in tariffs (FITs) still exist – even while their future remains uncertain. Sadly, the threat of devaluation continues to cause widespread uncertainty across the micro-power industry, and market confidence has taken a hit. FITs allow people with home generating equipment to earn money selling excess electricity to the grid. Last April Labour increased the value of FITs to create demand for micro-generation and bring down equipment prices. The policy was successful, resulting in 10,000 micropower installations between April and September.

The scheme is self-financing from within the electricity industry, but the figures still appear in the treasury’s books, which is why FITs have been in the firing line. Rates are likely to be cut, but exactly when this will happen remains unclear. It is a personal credit to Chris Huhne that they continue to exist at all – but the market needs clarity, and needs it quickly.

The much-anticipated announcement of the green investment bank has been a big disappointment. While we are apparently going to get one, the GIB is currently just a new sign hung over £1m of existing funds. Even then the cash won’t be available until 2013-2014.

Ernst & Young believes that £4-6bn of new money is needed to make the GIB a success.  NGOs have pressed the case for a £6bn capitalisation, which they said would generate £100bn in investment in low-carbon industry from the private sector, to help ensure that Britain becomes a world leader in low carbon technologies. Without a properly functioning GIB, there is a real danger that Britain’s low-carbon competitive advantage will be lost.

Greenpeace executive director, John Sauven, said,

“Billions of pounds for a new green bank could provide thousands of new jobs and make Britain a world leader in cutting-edge low-carbon technologies.  But the green bank has to be a bank.  A poorly financed fund is not a green bank.  It doesn’t have the financial clout, or the independence to do the job”.

Finally, there’s some good news. Many had expected the renewable heat incentive to get the chop, but in fact it has survived with an anticipated £400m. Most household energy is used for space and water heating, so the RHI could make a big difference and incentivise the take-up of green heating schemes.

The port development fund also remains.  £200m has been allocated for the “development of low carbon technologies including off-shore wind technology and manufacturing at port sites”. The fund will pay for infrastructure adaptations, such as getting east coast ports up to spec so that they can handle the turbines blades needed to build offshore wind farms in the North Sea.

£1bn has also been allocated to “create one of the world’s first commercial scale carbon capture and storage (CCS) demonstration plants”.  While many environmentalists see CCS as a distraction from developing renewable technologies, there is little doubt that coal will continue to play a large role in providing the world’s energy needs. Without CCS technology, the CO2 emissions from coal will continue to be enormous, so any moves to develop reliable CCS should be welcomed. And if we can win intellectual property and manufacturing in this emerging green-tech market then so much the better for our economic recovery.

Overall, the impact of the CSR on climate change is mixed. There are new policies to support big green business interests, while many other measures to support small-scale investment and innovation have taken a hit.  Not only is that unfair, but the fuel poor are worse off too.

If Cameron is at all sincere about leading the “greenest-ever government”, he’s going to have to try an awful lot harder.

ffinlo Costain is a professional grassroots campaigner.

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