Chancellor focuses on plastic bag and emissions crack down

In the budget issued today the chancellor, Alistair Darling, said that legislation will come into force in 2009 that could potentially result in about 12 billion fewer plastic bags in circulation.

The budget stated that the government is prepared to impose charges on the use of plastic carrier bags unless adequate progress is made by supermarkets on their own voluntary basis.

Darling pronounced a series of green measures of which the crack down on plastic bags was just one.

Another statement declared that from next year the government will be introducing a carbon budget in addition to the traditional fiscal budget. Other announcements included amongst others; modifications to the European Trading Scheme; green measures on vehicles (the “showroom tax”) and aviation; and a change in climate change targets for 2050 to increase the cut in emissions from a proposed 60% to an 80% cut.

Despite this improvement in the government’s green stance, environmentalists will no doubt be disappointed by the fact that Darling today has decided to delay the hike in fuel duty by six months. The chancellor told the House of Commons that rather than announcing the expected 2p rise in April this has now been postponed to October.

Yet Darling did soften the blow by stating that as a result of environmental reasons fuel duty will be increased by 0.5p per litre in real terms from 2010.

On aviation, Darling stated that the government proposed to increase revenue from taxes on planes by 10% in the second year of the operation scheme in 2010.

As for cars, the chancellor stated that from April 2009 the government proposed to reform vehicle excise duty so that manufacturers would be encouraged to produce cleaner cars. This would be undertaken by introducing new tax bands from April 2010 that would be based on CO2 emissions produced by each individual car, thus encouraging drivers to pick a car that is more environmentally friendly.

Darling announced that cars emitting less than the proposed 130 grammes per km European standard of CO2 emission will pay no car tax at all in the first year whilst the most polluting cars will face an increased first-year rate.

The chancellor also stated that from 2019 any new non-domestic buildings will become zero-carbon. Darling promised that the government is set to consult on achieving this target and its potential to save 75 million tonnes of CO2 over the next thirty years.

A promise was also made to increase the Climate Change levy in accordance to inflation from April of this year.

As for the European emissions trading scheme (ETS) the chancellor spoke of the fact that the amount of carbon produced by generators and sizeable industrial consumers in Europe has been limited.

However he recognised a need to change the ETS should further investment in low-carbon technology, nuclear power and energy renewables be set to occur. He proposed an auctioning of 100% of ETS’s allowances for energy generators, as opposed to ETS’s current 7% auction.