Chancellor George Osborne today delivered the 2011 Budget, which for the UK’s Green Economy included two key announcements:
1) Green Investment Bank (GIB) – the GIB will launch next year (2012) backed by £3b funding; £1b of Government funding and a further £2b raised from asset sales. The initial £3b capital will leverage a further £15b private sector investment. However, the GIB will not be allowed to borrow until 2015/16, which will mean it will fall short of the capital required to invest in a large range of projects and technologies; it is estimated that between £200b and £1t is needed over the next two decades to move the UK to a low carbon economy.
2) Carbon Floor Price – it is proposed that the UK becomes the first country to impose a carbon floor price, which will ensure the price of carbon imposed through the EU emissions trading scheme does not fall below a certain level. The carbon floor price will be set at £16 per tonne in 2013, rising to £30 per tonne in 2020.
Other green measures included changes to company car tax to help promote and increase the use of low carbon vehicles, as well as a major overhaul of planning regulations, which will be welcomed by renewable energy developers.
In summary, given the constraints on public spending, the budget provided some positive news for green businesses, however, there is still no real urgency; a lot of the benefits won’t be seen until the next parliament.
General business and economy headline figures:
* 2011 growth forecast downgraded from 2.1% to 1.7%
* Inflation set to remain between 4 and 5% in 2011
* Corporation tax to reduce by 2% in April
* Business rate relief holiday for small firms extended for another year
* £100m funding for science facilities
* 21 “enterprise zones” to be created in England
[mappress]
Source: envirobusiness, March 24, 2011