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Bookmark and ShareAndrew Simms is nef‘s Policy Director and head of nef’s Climate Change programme.

The first 'green budget' is very balanced – every measure to stop climate change is balanced with one that makes it worse

Faced with worsening projections for global warming and energy security, learning that the wind turbine maker Vestas will be closing its factory on the Isle of Wight is a bit like hearing that pharmaceutical companies are closing down the production of flu vaccines just as the alert for swine flu goes from level five to full pandemic.

The comparison is useful in more ways than one. It reveals how governments can recognise and act to avert systemic risk in some areas like high finance and flu, but have blind spots or grossly inadequate responses in others, such as climate change. It’s also a useful reminder that when natural systems cross a critical threshold – for example, the number and distribution of people infected with a virulent flu virus, or the concentration of greenhouse gases in the atmosphere – humanity quickly finds that it is no longer in the driving seat and able to control the direction of travel.

Last month the budget demonstrated the continuing confusion of a political system still struggling to come to terms with the inescapable parameters set by natural systems. The budget was balanced, but only in the sense that anything positive done to promote a low-carbon economy was cancelled out by other measures that will lock in fossil fuel-intensive infrastructure. Both the car and oil industry were happy recipients of budget bungs.

Grasping at the few optimistic straws still blowing around the economy, the chancellor, Alastair Darling, pointed out that the global economy still stood to double in size over the next 20 years.

What he forgot to mention, or didn’t know, is that with each “doubling” of the economy, you use as many resources as with all the previous doublings combined.

Prof Roderick Smith of the Royal Academy of Engineering at Imperial College identified these resource implications of economic doubling. Engineers, it seems, are more adept at understanding material limits. He wrote that the physical view of the economy “is governed by the laws of thermodynamics and continuity” and so, “the question of how much natural resource we have to fuel the economy, and how much energy we have to extract, process and manufacture is central to our existence”.

This year, on a conservative analysis, the UK started to live beyond its environmental means – consuming more and producing more waste than the UK itself can handle – by Easter Sunday, 12 April. This was our “ecological debt day“.

Given that both the UK and the world as a whole already use more resources and produce more waste than collectively our forests, fields, oceans and atmosphere can safely provide and absorb, where, we must ask, will the resources come from to double the size of the global economy?

Darling’s speech was to introduce the first “green budget”, a package meant to put the country on a path to sustainability. It included the world’s first legally binding carbon budget. Yet its targets to reduce emissions are roughly half of what is necessary, according to the climate research work of Prof Kevin Anderson at the Tyndall Centre at Manchester University.

The budget also included roughly £1.4bn of apparently new money to reduce emissions across a range of measures for energy efficiency and renewables. That sum amounts to about 0.09% of the UK’s GDP, and compares sadly to the 20% of GDP that the International Monetary Fund estimates the UK set aside for bailing out its financial sector.

But even here the green hue is darkened by our continuing dependence on oil, coal and gas, and plans to build more runways, roads and new coal fired power stations that capture only a small proportion of their carbon emissions.

Support in the budget to extract an additional 2bn barrels of North Sea oil will produce extra greenhouse gas emissions equivalent to the UK’s entire emissions in 2006, including shipping and aviation. Funds for car scrappage schemes, lacking any meaningful environmental criteria, could also see emissions rise rather than fall.

Funds for car scrappage schemes, lacking any meaningful environmental criteria, could also see emissions rise rather than fall.

Plans for electric cars may sound attractive, but you still need the clean energy to power them. More than a low-carbon vehicle strategy, if the UK is to improve its own energy security and environment, and tackle climate change, we need a low-car vehicle strategy.

Ultimately, the message sent by the budget was confusion. Setting an emissions reduction target in these circumstances is like setting someone a deadline to give up smoking, and then pushing them into a smoke-filled bar where all the walls are lined with cigarette machines.

Nature may be beautiful, but it also has a mind of its own and can take or leave humanity. That’s why we have to respect it and work within its parameters. Both flu pandemics and global warming are lethal. One difference is that if we go through the next 91 months without changing course, the climate roulette of runaway warming will not blow over. It will endure.

91 months and counting…

This article was originally published at Comment is Free.

Bookmark and ShareAndrew Simms is nef‘s Policy Director and head of nef’s Climate Change programme.

This was touted as the ‘green budget’, but the commitments on energy efficiency and low-carbon industry are obscured by a cloud of greenhouse gases spewing from the prop-ups given to the car and oil industry. It’s as if the Chancellor wants to ‘have his planet and eat it.’ You could say this is a balanced budget in the sense that any positive environmental action is likely to be cancelled-out by the Government locking-in a fossil fuel intensive infrastructure for transport and energy. As a result the budget turns out to be more beige than green.

Any shoots of recovery will not be green unless they are part of a rapid transition to a low carbon economy. The budget should be solving two problems. First, we need a green economic defibrillator to kick-start the country out of recession, but the Government seem to be just sparking two rusty wires together. Second, if we get the patient on its feet, we still have to cure its chronic fossil-fuel smoking habit.

It’s good to now have a proper, legally binding target for reducing emissions. But, the UK’s continuing dependence on oil, coal and gas, and plans to build more runways and roads, means the target is like setting someone a deadline to give up smoking, and then pushing them into a smoke-filled bar where all the walls are lined with cigarette machines.

Plans for electric cars may sound attractive, but you still need the clean energy to power them. As things are, together with ‘scrappage’ schemes, the initiative could even see total emissions rise rather than fall. More than a low carbon vehicle strategy, if the UK is to improve its own energy security and environment, and tackle climate change we need a low car vehicle strategy.

Bookmark and Share Dr Stephen Spratt is Director of nef‘s Centre for the Future Economy.


Bail-outs have now boosted UK national debt to staggering levels but have done little to stop the rot in our financial sector. By refusing to acknowledge the deep structural failings in the banking system, the Government is storing up debts they’ll probably never have to deal with, and no future government will be able to meet without decimating core public services. Banks that really have become too-big-to-fail leave the UK very vulnerable and must now be broken up. Soon to-be-published plans for banking regulation must go much further than tinkering with corporate governance and transparency. We need to separate investment banking from retail banking. We also need local banks that are in touch with their customers and able to respond to the needs of the dynamic small businesses on the frontline of our economy that will lift us out of recession.

Bookmark and ShareJosh Ryan-Collins is a researcher in the Connected Economies team at nef.

Demanding efficiency savings from our public services now is like asking us to burn our lifeboats in the middle of a storm. The unintended consequence of efficiency savings is that they erode local public services. Ultimately this impacts most on the poorest in the UK who are least responsible for causing the crisis, exacerbating already untenable levels of inequality and storing up more problems for later.

Measures to rebalance the tax burden are welcome, but don’t go far enough. With the worst impacts of the recession still to play out in full, the Government should be using this opportunity to take a progressive approach to taxation so that the companies and individuals who have benefitted most pay their fair share, ensuring that we can invest in the public safety nets we need to protect us from the worst impacts of the recession, and against future shocks. In addition, measures to help local businesses win public procurement contracts would both help to shore up front line services when they are needed most, and keep more money circulating in our local economies for longer.

For more on the real costs of efficiency measures, see nef’s report A Better Return.

Bookmark and Sharelindsay-mackie2Lindsay Mackie is a consultant at nef. She is leading nef’s post office campaign and works on Clone Town and Ghost Town Britain.

The Chancellor rightly talked about his careful preparations for the future and about the need for increased regulation of our failed cowboy banks.

He should also have offered a tangible reform in both areas in the form of a Post Office Bank which would simultaneously help small local businesses- the underpinning of our economic future- and increase people’s trust in the banking system. It’s not too late. As a practical and popular measure, he can still announce the setting up of a Post Bank in the wake of the Budget.

Read more about our campaign to establish a Post Bank and sign the petition to make it a reality.

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