Autumn Statement gets frosty reception from green groups

by ClickGreen staff. Published Wed 05 Dec 2012 14:39, Last updated: 2012-12-05
Chancellor attacked over UK's gas strategy
Chancellor attacked over UK's gas strategy

Chancellor George Osborne has been accused of making a “mockery” of the Government's carbon reduction targets by spelling out a drive to power the nation on gas.

Campaign group Friends of the Earth labelled him “the anti-green Chancellor” after his Autumn Speech today laid out plans for a focus on gas-sourced energy.

And the UK Green Building Council accused the Treasury chief of being “obsessed” with gas and said he had missed an opportunity to provide much-needed support for the flagging Green Deal scheme.

Friend's of the Earth Executive Director Andy Atkins said: "Osborne's statement smacks of the crass short-term desperation that's fast becoming the hallmark of this Government - it will do nothing to build a strong, future-proofed economy or safeguard our planet.

"The anti-green Chancellor is making a mess of the economy - he mustn't be allowed to trample all over our environment too."

Reacting to details of the UK's gas strategy, Atkins added: "The big polluters must think Christmas has come early - but if bad Santa Osborne's gas-fired energy strategy gets the go-ahead it will leave cash-strapped households and the environment with a thumping hang-over for decades.

"While Energy Secretary Ed Davey attempts to show leadership at the Doha climate talks, the Chancellor is hard at work handing out tax breaks to the fossil fuel industry that threaten to make a mockery of UK commitments to slash emissions.

"MPs must stop this reckless, headlong dash for gas and insist on an energy strategy that puts the long-term interests of the nation first - by investing in energy efficiency and the huge potential of the wind, waves and sun.

And commenting of the Chancellor's plans to encourage a surge in shale gas, Andy Atkins said: "A green light for shale gas would be a costly mistake for our country and countryside. Unleashing fracking on communities across the nation would threaten their environment and keep the nation hooked on dirty fossil fuels for decades - and all for an energy source that's unlikely to lower fuel bills.

"People up and down the UK will be rightly alarmed about being guinea pigs in Osborne's fracking experiment - it's unnecessary, unwanted and unsafe.

Marion Seed from Central Lancashire Friends of the Earth, a local group campaigning against fracking in their Conservative-controlled area, said: "Local people are extremely alarmed by George Osborne's fracking plans - they could pollute our clean water and air, threaten house prices and destroy our vital farming and tourism sectors.

"We will fight any plans that could turn a beautiful part of the Lancashire countryside into a wasteland."

Labour’s Shadow Energy Secretary, Caroline Flint, commented on the publication of the Gas Generation Strategy: “When millions of families are struggling with huge energy bills, we must ensure we have an affordable, secure, low-carbon energy supply. Gas will have a role in our future energy mix, especially as we move away from coal-fired power stations.

"But there is a real risk that the Government’s dash for gas will blow a hole through our climate change targets, undermine investment in clean energy and leave households vulnerable to price shocks and rising energy bills.”

Paul King, CEO at the UK Green Building Council questioned how much of the investment for the construction industry will be aimed at energy efficient measures.

He said: “George Osborne has once and for all nailed his colours to the mast today, and none of those colours are green. His obsession with gas not only makes a mockery of our legally binding carbon targets, it makes for a stark comparison with his stubborn refusal to exploit the potential for energy savings in our homes and buildings.

“Yet another opportunity goes begging for the Treasury to provide much needed support to incentivise the Green Deal, to re-commit and clarify the zero carbon new build policy and to pave the way for a national energy audit of our commercial buildings. All no-brainers and all desperately wanted by industry.

“The construction industry will welcome the increased capital spending on infrastructure and schools, but how much of that will be green building? All schools, including free schools, should be green – with better daylighting, better air quality and lower running costs in the long-term. Sadly Michael Gove doesn’t seem to think the learning environment is that important.”

However, some industry leaders welcomed the Chancellor's decision to continue to require companies to report to a simplified version of the CRC Energy Efficiency Scheme.

Responding to the announcement, Mark Chadwick Chief Executive of Carbon Clear said: “We welcome the inclusion about the simplification of the CRC Energy Efficiency Scheme in today’s statement.

“The scheme is a useful measurement and reporting tool for businesses, encouraging organisations to make their operations more energy efficient and cost effective by using less energy. The announcement to abolish the CRC Performance League Table (PLT) is surprising in that despite its flaws, the PLT is the reputational driver for the CRC scheme.

“In addition to this, the commitment by the Government to make the tax element of the CRC a high priority for removal when the public finances allow raises questions about the future of the scheme. It’s essential that businesses treat managing their carbon impact seriously, and we look forward to seeing further details about the simplification from DECC.”

Liz Peace, chief executive of the British Property Federation, said: "There appears to be an acceptance that there are deep issues with the CRC, as industry has long-maintained – so the effective postponement of a full review is disappointing.

"The removal of the performance league table is to be welcomed as we believed its metrics were not effective to incentivise improvement. While the league table performed an important function in elevating energy efficiency decision making to board level, we think that mandatory emissions reporting could perform this function just as well. We also welcome the Government’s current approach to start with listed companies before extanding more widely.

"Linking the allowance price to the retail price index leaves some question marks around the carbon floor price mechanism HM Treasury intends to introduce."

The Scottish Greens claim that the Chancellor's dash for gas will now unstitch the Climate Act.

Patrick Harvie, MSP for Glasgow and Co-convener of the Scottish Greens, said: "Backing a new generation of gas is an utterly reckless action. The Tory wind-farm bashers are having too much fun to stop undermining climate change policy now, and the Government's top adviser on the climate has thrown up his hands in despair.

“Just four years after the UK Climate Act, the Coalition is doing its best to unstitch the deal."

And the WWF-UK backed up the argument against the Government’s gas strategy, set out alongside the Autumn Statement, claiming it risks being incompatible with the legally binding commitments in the Climate Change Act to cut greenhouse gas emissions by 80% by 2050.

The group also highlighted a report by Cambridge Econometrics, launched by WWF-UK and Greenpeace yesterday, which showed that investment in offshore wind would create more jobs and generate higher GDP than reliance on gas-fired power with only minimal impact on electricity prices.

The report shows that UK GDP is £20bn higher (0.8%) in a high wind scenario compared to a high gas scenario, with 70,000 more full-time equivalent jobs being created and savings of £8bn a year on gas imports by 2030.

Nick Molho, head of energy policy at WWF-UK, said: “The UK’s over-reliance on gas is, environmentally and economically, highly risky. Gas price rises have driven people’s bills up in recent years so committing the UK to more gas seems to show a reckless disregard for both billpayers and the environmental impact of burning yet more fossil fuels.

“The Government must not ignore the potential economic benefits of investing in renewable energy, with polls also showing the majority of the public want more renewable energy. Politically, economically and environmentally the Government’s strategy just doesn’t make sense.”

Recent polling by YouGov for WWF and the Fabian Society showed that 57% of public would feel more positive to political parties that commit to the majority of the UK’s electricity coming from renewable sources by 2030, compared to 10% who would feel more negative.

WWF also said that that the Committee on Climate Change (CCC) has made clear that the fourth carbon budget represented the "absolute minimum" level of ambition compatible with the UK's legally binding 80% emissions reduction target for 2050.

However, the Gas Strategy says that “gas could play a more extensive role, with higher load factors, should the 4th Carbon Budget be revised upwards after the Committee on Climate Change has provided advice on this in 2014”.

Andrew Raingold, Executive Director of the influential Aldersgate Group, said: “If the Chancellor’s Autumn statement is intended to heal the UK economy, the gas strategy is a route that will lead us straight back to economic decline. Investors who heaved a sigh of relief with the publication of the Energy Bill last week will now be thrown back into a state of confusion about the UK’s energy future.

“This undermines investment and jobs, and will raise the capital cost of renewing our energy infrastructure: a cost that will be passed straight onto the bills of businesses and consumers.

“Businesses have repeatedly warned the Chancellor about the economic cost of locking the UK into high imported fossil fuel dependency: rising and volatile energy prices, serious concerns about security of supply, and a missed opportunity to build up UK supply chains. Already households are paying £70 per year directly to Qatar for imported gas – money we could be keeping in the UK economy by investing in renewables on our soil.

“Today’s gas strategy is the product of short-run economic models that have nothing to say about long-term, sustainable growth.”

In October, the Aldersgate Group coordinated a letter to the Chancellor with the support of over 50 large companies stating that a 2030 carbon target for the power sector is essential for stimulating new growth in the economy. It argued that only greater clarity from Government can unleash the £110bn investment required to transform the UK’s electricity infrastructure and drive wider economic benefits.

Mark Kenber, CEO of The Climate Group, commented: “The only role gas should play in the UK’s energy policy is to facilitate a mid-term transition to a decarbonised energy sector. Instead of that, the Chancellor today placed gas at the very centre of our future energy-mix.

“It misses the central point, namely the urgent need to decarbonise our economy and does little to support the UK’s energy sector to be globally competitive in the fast-growing international clean energy market.”

Jayne Harrold, PwC environmental tax said: “There’s very little news from the Chancellor on environmental tax. With the redefinition of environmental tax earlier in the year there was an opportunity for the Government to look again at their environmental tax strategy and tweak the taxes to raise revenue and change behaviour.

“Energy cost and security is a critical issue for the country, but the messages from the Chancellor seem to be mixed: on the one hand we have support for renewable energy through the Energy Bill and the carbon price floor coming into effect from 1 April 2013. On the other hand we have a strategy for increased gas generation and consultation on tax incentives for shale gas production.

"The question is to what extent the different measures act in concert to achieve the Government’s target carbon reduction, or whether there will need to be a softening of the targets? The Autumn Statement does table the idea of softening the carbon targets in return for 37GW of new gas generation plant, rather than 26GW.”

Jonathan Main, partner, environmental tax, PwC added: “The interaction of the existing landscape of taxes and incentives is complex; it is difficult for businesses to understand and track the cost and opportunities. A clearer, more transparent system of taxes would produce the right levels of behaviour change.

“Landfill tax is a primary example of an environmental tax that has been effective in driving behaviour change. The tax is simple, easy to understand and has been increasing significantly in a planned and predictable way over a number of years, providing certainty to businesses that both operate landfill sites and are investing in alternative technology. In combination with targets for diversion of waste from landfill, the tax has had a significant effect in reducing waste to landfill, and has made alternative disposal or treatment routes more economically viable.

“There is no question that the world needs to act on climate change. Carbon taxes form an integral part of the package of measures necessary to drive the behaviour change. To maintain a position of strength in encouraging other countries to act, as well as funding climate change projects in developing countries, the UK needs to be seen to be putting its money where its mouth is.”

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