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What would make Jeremy Hunt’s budget a green success?

Six announcements to look out for in the Chancellor’s spring statement.

By India Bourke

America has the Inflation Reduction Act: a multibillion dollar package of tax breaks and state support for green technology and business that will attract investment from overseas. The EU has a Green Deal Industrial Plan. Labour has proposed an £8bn green energy revolution that would target the UK’s most deprived regions. But what of the Conservative government’s plans to meet the green future?

Last week the independent Climate Change Committee warned that the government’s goal of a reliable and secure decarbonised UK power system by 2035 was not possible at the current pace of action. Alongside stronger commitments to renewable and nuclear energy, the nation needs carbon capture and storage (CCS), a shift in consumer demand to help match grid capacity, and new storage solutions for renewable energy, such as green hydrogen (which is not currently viable).

In the Budget on Wednesday 15 March Jeremy Hunt, the Chancellor, is expected to go some way to closing the gap between what is needed and the present reality. A £20bn “reset” of the government’s clean energy plans has been trailed by the Treasury, including investment in CCS and small nuclear reactors.

Yet support for new technologies alone will not build a green Britain, with all the environmental and economic benefits that would bring. Experts and campaigners have highlighted six areas that require Hunt’s immediate attention:

1. £30bn a year in green investment

To truly tackle the scale of the green investment shortfall, the Institute for Public Policy Research estimates that at least £30bn a year will be needed between now and 2030. If met, the progressive think tank projects that up to 1.6 million jobs could be created under a “clean jobs guarantee”.

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Members of the Conservative Environment Network (CEN) told Spotlight that they would suggest amending the electricity generator levy to give clean energy firms an allowance for investing in British renewables – as generous as oil and gas firms’ investment allowance.

According to the think tank E3G, “the Treasury needs to announce that it will set out a Net Zero Investment Plan by the end of this year and give a duty to an independent body to track net-zero financial flows.”

[See also: What to expect from Jeremy Hunt’s Budget]

2. £6bn a year on energy efficiency

“The case for insulation has never really been arguable – it’s the most cost-efficient solution to more than one major problem – and it’s never really been argued against, just rigorously ignored,” Areeba Hamid, co-executive director of Greenpeace UK, said. To change this, the government needs to incorporate serious spending pledges into the budget: “£5.3bn in this parliament, and £6bn a year thereafter, would see our nation’s energy bills and carbon emissions both fall dramatically, and permanently.”

The National Trust adds that the restoration and retrofitting of historical buildings must also be given as much support as that of new ones, for example by equalising the zero-rate VAT that currently only applies to new buildings. Mobilising to meet this ambition would generate £35bn of output annually and 290,000 jobs, the charity argues.

According to members of the CEN, people selling their homes could also be incentivised to upgrade them if stamp duty was reformed to discount homes which have an EPC energy efficiency rating of C or higher. A rebate could also be offered for homes that are retrofitted within two years of purchase.

3. Training and education for a national retrofit strategy

As well as subsidising low-carbon equipment such as heat pumps, money needs to be spent on raising public awareness and training the workforce, says Esin Serin from the Grantham Research Institute on climate change.

Flexibility in the apprenticeship levy would also help, the National Trust adds. They would like to see unspent funds used to improve the reach and delivery of existing retrofit qualifications.

4. A review of the Retained EU Law Bill

A green Britain doesn’t only mean support for the energy transition. It requires protection and restoration of the country’s natural habitats. These are under threat from the Retained EU Law Bill, which aims to review more than 2,000 pieces of environmental legislation retained from EU law before the end of the year. The cost of this task, says Katie-Jo Luxton, RSPB director of conservation, is estimated to be £35.6m. “Governments are currently faced with an unworkable and unjustified deadline which puts at risk nature’s – and our own – health, failing to seize the opportunity to commit to protecting and restoring our natural world for the benefit of us all.”

5. An end to the fuel duty freeze

Sustaining the present freeze of fuel duty will cost the Chancellor £6bn, according to Chaitanya Kumar of the New Economics Foundation. Ending the subsidy would allow that extra money to be redirected elsewhere, and the freeze rewards the use of petrol and diesel even after international prices have come down considerably. “Fuel duty cuts also largely benefit the wealthiest households, who are more likely to drive fuel-guzzling SUVs.”

6. No new fossil fuels

Proposed new coal power capacity outside of China is down by 84 per cent since the 2015 Paris Agreement, and pre-construction capacity is at less than 100 gigawatts for the first time since data collection began, according to the think tank E3G.

To meet net zero by 2050, the International Energy Agency has advised that there must be no new oil, gas or coal development. The government should heed its warning.

[See also: What’s wrong with the British economy?]

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