Spring Statement: there is to be a consultation about possible offsets for passengers for their CO2 emissions
Spring Statement 2019
The Budget 2018 set out how the government is accelerating the shift to a clean economy, building on the Industrial Strategy, Clean Growth Strategy, and 25 Year Environment Plan. The Spring Statement builds on this commitment:
- to help smaller businesses reduce their energy bills and carbon emissions, the government is launching a call for evidence on a Business energy efficiency scheme to explore how it can support investment in energy efficiency measures
- to ensure that wildlife isn’t compromised in delivering necessary infrastructure and housing, the government will Mandate net gains for biodiversity on new developments in England to deliver an overall increase in biodiversity
- to help meet climate targets, the government will advance the decarbonisation of gas supplies by increasing the proportion of green gas in the grid, helping to reduce dependence on burning natural gas in homes and businesses
- to help ensure consumer energy bills are low and homes are better for the environment, the government will introduce a Future Homes Standard by 2025, so that new build homes are future-proofed with low carbon heating and world-leading levels of energy efficiency
- to explore ways to enhance the natural environment and deliver prosperity, the government will launch a global review into the Economics of Biodiversity
to give people the option to travel ‘zero carbon’, the government will launch a call for evidence on Offsetting Transport Emissions to explore consumer understanding of the emissions from their journeys and their options to offset them. This will also look into whether travel providers should be required to offer carbon offsets to their customers
- to help protect critical habitats, the government will support the call from the Ascension Island Council to designate 443,000 square kilometres of its waters as a Marine Protected Area, with no fishing allowed
Spring Statement: Chancellor unveils policies to ‘build sustainability into the heart’ of UK economy
Chancellor Philip Hammond announced a raft of new green policies today
By Madeleine Cuff (Business Green)
13 March 2019
Philip Hammond argues UK must “apply the creativity of the marketplace” to solve climate change as he announces new energy efficiency, biodiversity, construction, and carbon offsetting policies
Environmental policies were at the centre of Philip Hammond’s attempts to woo younger voters in today’s Spring Statement, with the Chancellor unveiling a raft of new environmental initiatives covering housing, aviation, biodiversity, and energy efficiency.
“Our challenge is to demonstrate to the next generation that our market economy can fulfil their aspirations and speak to their values,” Hammond said, in a nod to waves of public protests in recent weeks, including strikes by UK schoolchildren, urging the government to take more radical action to battle climate change.
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But Hammond insisted the solution to the climate crisis lies in driving innovation in the private sector. “As with the challenge of adapting to the digital age, so with the challenge of shaping the carbon neutral economy of the future, we must apply the creativity of the marketplace to deliver solutions to one of the most complex problems of our time, climate change, and build sustainability into the heart of our economic model,” he said.
Much of the new action was focused on cutting carbon emissions from the UK’s housing stock, after the government’s climate advisors, the Committee on Climate Change (CCC), warned earlier this year that UK homes fall well short of standards needed to meet climate targets.
The Chancellor today said he would adopt the CCC’s advice to end the use of fossil fuel heating systems in new homes from 2025 under a ‘Future Homes Standard’, with green alternatives such as heat pumps instead being installed as standard in all new homes. The standard will also require “world-leading” levels energy efficiency, the Chancellor said, adding that it will “deliver lower carbon and lower fuel bills”.
Hammond also said the government will launch a consultation later this year on increasing the proportion of ‘green gas’ onto the grid, in a bid to reduce UK use of natural gas.
Meanwhile, the Chancellor confirmed plans to require developers to deliver a “biodiversity net gain” for new domestic and commercial buildings.
Under the programme potential development sites will be ranked according to their current environmental importance, with developers then required to demonstrate an improvement in biodiversity by planting more trees for example, or creating green corridors to protect wildlife habitats.
Where green improvements cannot be made, developers will be liable to fund habitat protection and restoration schemes elsewhere in the country.
“Following consultation the government will use the forthcoming Environment Bill to mandate biodiversity net gain for development in England, ensuring that the delivery of much-needed infrastructure and housing is not at the expense of vital biodiversity,” Hammond confirmed.
Hammond was keen to point out there is “an economic, as well as an environmental case for protecting the natural world”, adding that later this year the government will launch a global review into the link between biodiversity and economic growth, headed by Professor Sir Partha Dasgupt from the University of Cambridge.
During the statement the Chancellor repeatedly stressed the pressures Brexit uncertainty is wielding over the UK economy, describing last night’s vote on the Withdrawal Agreement as leaving a “cloud of uncertainty hanging over our economy”.
He raised pressure on MPs to vote for May’s deal by declaring a ‘deal dividend’ could boost the money available to departments under the upcoming Spending Review, namechecking environmental spending as a key area.
During his address Hammond also announced more support for small businesses to cut their energy bills – a move first mooted in the Autumn Budget last year.
The Call for Evidence, published today, reveals the government is considering three options for a new energy efficiency scheme for small business: an energy efficiency auction where suppliers could bid to deliver energy efficiency measures in smaller businesses; a business energy efficiency obligation (EEO) to require energy suppliers or network operators to deliver energy savings for small businesses; expanding access to green loans to help firms pay for retrofitting measures.
Hammond also said he would launch a call for evidence on Offsetting Transport Emissions, which will consider whether travel providers such as airlines should be forced to offer carbon offsets. Hammond promised any scheme would have to offer “genuinely additional offsets” to avoid double counting issues.
In response to the green announcements, Shadow Chancellor John McDonnell slammed the government’s past record on environmental policies.
“This from a government that removed the Climate Change Levy Exemption for renewables, that scrapped the Feed-in Tariffs for new small scale renewable generation, and cancelled the zero carbon homes policy,” he told the House of Commons. “Gordon Brown pledged a zero carbon homes policy. We endorsed it, we celebrated it, and the Tories scrapped it in 2015, one year before it was to come into force.”
He also questioned whether measures such as voluntary offset schemes would be robust enough to deliver real emissions savings: “A review of carbon offsets might reveal that they do not reduce emissions, and offsetting schemes like the Clean Development Mechanisms have been beset by gaming fraud,” he said.
McDonnell’s concern was echoed by environmental groups targeting the airline industry. “The government’s feeling the heat on aviation emissions,” said the Aviation Environment Federation’s deputy chief executive Cait Hewitt. “The courts are, as we speak, considering accusations that the decision to expand Heathrow failed to take proper account of its impact on climate change. The Chancellor’s announcement on encouraging voluntary carbon offsets seems a desperate attempt to suggest the government’s on top of the issue.”
“Offsetting involves estimating how much CO2 a passenger is responsible for, and then paying for an equivalent amount of CO2 to be removed (for example through tree planting) or avoided (for example through investment in renewable energy), usually elsewhere in the world,” she added. “But many offset programmes have been found not to have delivered the promised carbon reductions.”
Others said the Chancellor didn’t go nearly far enough in his promise to “build sustainability into the heart of our economic model”.
Friends of the Earth’s head of political affairs, Dave Timms, accused the Chancellor of “fiddling in the margins while the planet burns”. “The nation’s children are calling out for tough action to cut emissions, Mr Hammond must listen harder to the lesson they’re teaching him,” he said. “With the government enthusiastically backing more runways, more roads and fracking, it’s little wonder the UK is likely to miss future climate targets.”
However, others welcomed the Chancellor’s fresh focus on environmental issues.
“Our political weather may well be blowing a gale just now, but it is welcome to see the chancellor maintaining an eye on the long term investment climate we need to drive the economic transition to a low carbon world at the same time as finding innovative ways to ensure such development does not cost the environment,” said Bruce Davis, co-founder of Abundance Investment. “In particular we would welcome the research into the link between biodiversity and economic growth which is a good first step to moving away from the idea that costs in terms of our natural resources are ‘external’ to our economic balance sheet.”
Chris Stark of the CCC also welcomed the pledge to strengthen building standards. “Today’s commitment to phase out fossil-fuelled heating in new homes by 2025 is in line with the Committee’s recent recommendation,” he said. “It represents a genuine step forward in reducing UK emissions. Plans to consult on cleaning up the UK’s gas supply also get a thumbs up from the Committee – we have been calling for the government to consider the use of alternative, ‘greener’ gases for some time. Taken together, these are positive steps from Chancellor.”
Meanwhile, Nick Molho of the Aldersgate Group said the Chancellor’s comments on the importance of climate action sent a signal to businesses. “The Chancellor’s clear commitment to reaping the opportunities of our shift to a carbon neutral economy and improving our natural environment is very welcome,” he said. “For too long, Chancellor’s speeches have been at odds with government commitments in these areas and businesses will welcome the signal that this is a genuine cross-government mission.”