Chancellor George Osborne set out plans to increase taxes and enact huge public spending cuts in an attempt to address the country’s deficit. But the coalition may have missed a trick by letting environmental taxes fall by the wayside as a way to raise income and change behaviour.
Aside from continuing with the previous government’s plans to offset tax on purchases of zero-emission vehicles for businesses, the introduction of a green investment bank and to increase landfill duty, there has been no new environmental schemes or taxes introduced by the new government. This type of taxation could have contributed to economic recovery and decreased the country’s carbon footprint.
The introduction of a minimum value on carbon when trading, known as a carbon price floor, was promised in the coalition agreement yet went unmentioned in the emergency Budget – and there was no word on a carbon tax which, if brought in concurrently with the carbon tax introduced in Ireland, could have boosted government revenues by about £5.5bn according to PricewaterhouseCoopers (PwC).
Richard Gledhill, partner in sustainability and climate change at PwC said the Treasury had promised progress on several climate issues in the autumn, but said there was no details on whether there would be any news on the carbon price floor.
The biggest worry to come out of the Budget, according to Gledhill, is the lack of detail on the Green Investment Bank.
“It looks as though it will be autumn before we know how and where it plans to spend the £2bn that was promised,” he says.
He belives it will be 2011 at the earliest before any commitments are made to low-carbon infrastructure projects and several years before any new infrastructure projects are completed. “This will put even greater pressure on the UK’s ability to meet its renewable target of 15 percent [below recorded 1990 levels] by 2020,” he adds.
A recent report by PwC, Appetite for Change, noted that less than four in 10 UK companies felt the government was giving sufficient priority to addressing business issues in relation to climate change.