Environment Secretary, David Miliband, today welcomed the carbon-cutting measures in the Chancellor's Budget as the next steps towards a low-carbon economy.
The Budget contains measures for Government, business and individuals to further tackle climate change.
Last week Britain became the first country in the world to set out a long term legal framework for the transition to a low carbon economy in its draft Climate Change Bill.
Following the Budget statement, David Miliband said:
"Today's Budget builds on the landmark Climate Change Bill we announced last week, together helping to make Britain a low carbon economy. The new measures will encourage individuals, business and Government to reduce carbon emissions from homes, transport, energy use and waste.
"Climate change is a global issue and, as well as encouraging action at home, this Budget will help cut carbon emissions internationally. The new Defra/ DfID £800 million joint fund will help to deliver environmental benefits in developing countries, starting with protection against deforestation in the Congo Basin."
Deforestation accounts for nearly one fifth of global greenhouse gas emissions.
The green finance measures in the Budget include:
- Landfill Tax to rise to encourage the development of alternatives to landfill
- Inflation-only increase in climate change levy
- Further details of a Stamp duty exemption for zero carbon homes
- Further use of Vehicle Excise Duty to incentivise the purchase of low carbon cars
- No income tax or capital gains tax for income derived from micro-power generation in the home
- Phasing-out of high-energy light bulbs in the UK by 2011
- Incentives for biofuel development and use
- Competition for a carbon capture and storage demonstration
- An £800m window of the international Environmental Transformation Fund for environmental protection, including £50m for the Congo Basin.
The Government will also set out its policy in the coming months on carbon emissions from the energy and waste sectors in the Energy White Paper and Waste Strategy Review.
Notes to Editors
The Budget contains key announcements including:
- competition to develop the UK's first full-scale demonstration of carbon capture and storage, the result of which will be announced next year;
- an increase in fuel duty rates of 2 pence per litre (ppl) from 1 October 2007, and increases in the next two years of 2ppl and 1.84ppl respectively;
- announcing car vehicle excise duty rates for the next three years, including rates for the most polluting cars rising to £400 and rates for clean cars in band B falling to £35;
- a review to examine the vehicle and fuel technologies which over the next 25 years could help 'decarbonise' road transport;
- a package of measures to support biofuels including extending the 20 pence per litre biofuels duty differential to 2009-10;
- a rise in climate change levy rates from 1 April 2008 in line with current inflation;
- that from 1 October 2007 all new zero-carbon homes costing up to £500,000 will pay no stamp duty, with zero-carbon homes costing in excess of £500,000 receiving a reduction in their stamp duty bill of £15,000;
- an intention that, by the end of the next decade, all householders will have been offered help to introduce energy efficient measures with the aim that, where practicably possible, all homes will have achieved their cost-effective energy efficiency potential;
- increasing funds available through the Low Carbon Buildings Programme to a total of over £18 million to help meet the demand from households for microgeneration technologies; and
- a £800 million international window for the Environmental Transformation Fund to finance overseas development projects that deliver both poverty reduction and environmental benefits in developing countries. Deforestation accounts for 18% of global greenhouse gas emissions.
The Budget also reports on the Government's strategy for tackling other environmental challenges including:
- an increase from 1 April 2008 in the standard rate of the landfill tax by £8 a tonne per year, until at least 2010-11; and an increase in the lower rate of the landfill tax from £2 per tonne to £2.50 per tonne from 1 April 2008; and an increase in the aggregates levy rate to £1.95 per tonne from 1 April 2008.
The Government published the draft Climate Change Bill - the first of its kind in any country, and accompanying strategy on 13 March. The draft Bill sets out a framework for moving the UK to a low-carbon economy, demonstrating the UK's leadership as progress continues towards establishing a post-2012 global emissions agreement. Key points of the draft Climate Change Bill include:
- A series of clear targets for reducing carbon dioxide emissions - including making the UK's targets for a 60 per cent reduction by 2050 and a 26 to 32 per cent reduction by 2020 legally binding.
- A new system of legally binding five year "carbon budgets", set at least 15 years ahead, to provide clarity on the UK's pathway towards its key targets and increase the certainty that businesses and individuals need to invest in low-carbon technologies.
The draft bill sets out a vision for how the UK can move to a low carbon economy including:
- Investment in low-carbon fuels and technologies, such as carbon capture and storage, wind, wave and solar power.
- Significantly more efficient use of energy.
- A step change in the way energy suppliers operate so that they focus on reducing demand rather than just supplying as much energy as possible.
- Consumers becoming producers as well as consumers of energy.
The draft bill will be subject to a full public consultation alongside pre-legislative scrutiny in Parliament.
The UK is one of the few countries on target to meet its Kyoto commitment; by 2010, we predict we will have met it almost twice over.
The Budget document can be viewed at http://hm-treasury.gov.uk
Further information on the draft Climate Change Bill can be viewed at http://www.defra.gov.uk/news/2007/070313a.htm