Spring Statement: What can the green economy expect from Philip Hammond’s announcement?
Investment in a national net-zero target? New energy efficiency measures for homes? edie previews the green-related announcements likely to be included in the Spring Statement on Wednesday (13 March).
Chancellor Philip Hammond will deliver the UK’s last pre-Brexit Spring Statement on Wednesday evening, in a stock-take of the nation’s economic health. But after the Autumn Budget provided its fair share of rewards and disappointments for the green economy – and in the wake of the #SchoolStrike4Climate and #ThisIsACrisis movements – the UK’s environmental health is also likely to be high on the agenda.
Amid a turbulent economic and political climate, there are several key sustainability policy issues where the Chancellor is expected to deliver good news. But, as has been the norm since the public Brexit vote in 2016, “spreadsheet Phil” is likely to shelve a string of other green issues.
Below, we have provided a neat round-up of four areas where it is thought Autumn Budget 2018 will support the green economy – and the sector’s wishes which are likely to go ungranted this time around.
What the green economy expects…
A bumper biodiversity review
A major global review into the economic value of biodiversity, including the financial risks of its decline and rewards of its stewardship, has already been confirmed by several tabloids as one of Hammond’s key sustainability-related announcements.
The review is set to examine the economic benefits of biodiversity on a global, national and local level, and to determine the most cost-effective and environmentally sustainable interventions which could be taken to protect nature.
The move comes after a Government study into the value to crops of the UK’s 1,500 pollinator species was found to be at least £680m annually earlier this month, and after a separate scientific study found that insect populations are globally dwindling to the point that a sixth mass extinction is now set to be declared.
Support for conservation overseas
In tandem with the biodiversity review, Hammond is set to launch consultations into how the UK’s aid budget can best be used to help conserve and restore areas which either provide rich habitats for an array of plant and animal life or act as carbon sinks.
Areas of particular focus are set to include forests, coral reefs and ice fields in or near the UK’s overseas territories, which play host to around 90% of the UK’s biodiversity.
New rules for new builds
In the wake of the Committee on Climate Change’s (CCC) continued warnings that energy-inefficient and high-carbon housing is jeopardising the UK’s chances of meeting its carbon budgets, Hammond is set to use the Spring Statement to build on his pledge to halve the energy use of new-build homes by 2030.
The Chancellor is predicted to announce measures which will require all new-build homes to be fitted with low-carbon heating systems and energy-saving features such as insulation. Compulsory retrofits for the UK’s existing housing stock, however, are not being forecast.
While this move is likely to be welcomed by the green economy, experts will no doubt remember – and continue to criticise – the Government’s decision to scrap plans for a Zero Carbon Homes Standard last year.
Carbon offsets for aviation
Transport is currently the most emitting sector in the UK, with emissions having risen for two years in a row. Aviation plays no small part in this, accounting for 12% of transport sector carbon emissions and 2% of global greenhouse gas (GHG) emissions.
In a bid to tackle the issue as technologies such as low-carbon jet fuels and electric passenger planes are developed, Hammond is expected to launch a consultation on whether airlines should be required to offer carbon offsets to their customers.
Such a scheme would enable passengers to pay a fee for their airline to invest in carbon credits equivalent to the emissions accounted for by their place on any given flight. The Government will review what kind of projects carbon offsets purchased through the proposed scheme should fund and how their impact could be verified.
Earlier this month, a coalition of investors criticised 20 of the world’s largest airlines for failing to align with the Paris Agreement’s 2C trajectory by setting long-term carbon goals. They argued that continued inaction would likely result in divestment.
What the green economy needs…but is unlikely to get
A net-zero carbon target (and funding to achieve it)
After last year’s landmark report from the Intergovernmental Panel on Climate Change (IPCC) concluded that global carbon emissions will need to reach zero by 2050 if warming beyond 2C is to be avoided, the Government is currently asking the CCC how best to bolster its carbon reduction targets and create a net-zero economy.
The body is expected to publish its advice later in the spring, but with businesses such as BT and Arla Foods using the IPCC’s findings to implement carbon-neutral goals for their own organisations, the green economy is undeniably pushing for progress on this issue at a faster rate than policymakers – as are backbench MPs and peers.
Hammond is widely expected not to comment on how a net-zero goal could be set and financed until the CCC’s response is received. Labour has taken this expectation to use as a lobbying point, arguing that the party will set a UK-wide carbon-neutral goal for 2050 in its first term, if elected.
Assurances for a ‘just’ low-carbon transition
The phrase “just transition” has become something of a buzzword in recent months, with the likes of the Institute for Public Policy Research (IPRR), Department for Business, Energy and Industrial Strategy (BEIS) and Imperial College London (ICL) warning that the UK’s low-carbon transition must benefit all UK regions and people of all social classes if it is to be truly sustainable.
The risk of exclusion is particularly pronounced in the North, where around 28,000 job losses in the coal, oil and gas industries are being forecast by 2030 – and up to 46,000 clean energy jobs can only be created if sufficient investment is made in renewables projects.
Despite these findings – and continued lobbying from businesses and local authorities in the North – Hammond and predecessor George Osborne have both failed to include funding for renewable energy projects and other low-carbon industries across the region in their annual Budgets. This trend is widely predicted to continue into the Spring Statement.
Sector-wide support for low-carbon transport
Of the many facets covered by the transport sector, the Spring Statement is forecast to cover aviation in isolation, with no measures regarding road transport, rail, cycling, walking or the maritime sector having been disclosed ahead of Wednesday’s announcement.
Given that cars, vans and heavy goods vehicles (HGVs) collectively account for 87% of domestic transport emissions – largely due to the continuing issues of technology costs, range anxiety and a lack of infrastructure for low-carbon alternatives – those in the low-carbon mobility sector are likely to be left disappointed if such measures don’t make a surprise appearance.
Indeed, a report published this week by the Aldersgate Group has criticised the Government for failing to adopt a “holistic” approach to decarbonising transport, arguing that a “non-integrated” policy landscape is slowing down the low-carbon transition across the entire sector. This assertation has been backed by the likes of John Lewis and Partners, Ikea and Tesco.