Archived press release

Budget 2009 - green bank needed to boost low carbon recovery

20 April 2009

The Government should establish a green investment bank and introduce Treasury- backed green bonds as part of Gordon Brown's pledge to introduce an environmentally friendly Budget later this week that will kick start a low- carbon recovery, Friends of the Earth said today.

The environmental campaigning group is urging the Chancellor to put tackling climate change at the heart of this week's Budget [Wednesday 22 April 2009] by investing in green energy schemes and preventing energy waste. The Government must ensure at least £30 billion more is invested each year to deliver a low carbon recovery.

Friends of the Earth believes Government-backed financial support for green energy infrastructure will create new green industries and hundreds of thousands of green jobs at home, and put the UK at the forefront of vital UN talks on a new climate deal in Copenhagen later this year.

It is also calling on the Government to commit to cuts in emissions by at least
42 per cent by 2020 when it announces the first ever series of 'greenhouse gas budgets' alongside the financial Budget, a requirement of the Climate Change Act which came into force last year following Friends of the Earth's Big Ask
campaign:
www.foe.co.uk/resource/press_releases/carbon_budget_advance_20042009.html

Friends of the Earth's Executive Director Andy Atkins said:

"The Chancellor must establish a Government-backed green bank and introduce green bonds to boost investment in renewable energy to tackle both the recession and the threat of catastrophic climate change in one 'double whammy'.

"This would slash greenhouse emissions and create booming new green industries and jobs in the UK - and show real leadership ahead of urgent UN climate change talks in Copenhagen later this year.

"The Government is also due to announce its legally-binding short term climate targets in the Budget - Ministers must listen to the latest scientific warnings that make it clear that the UK must cut emissions by at least 42 per cent by 2020 if we are to avoid runaway climate change."

Friends of the Earth is calling on the Chancellor to:

• Establish a green bank
A Government-backed financial institution could provide direct investment, loans and guarantees to drive forward renewable energy and energy saving schemes and ensure the UK is at the forefront of international efforts to efforts to tackle climate change. It could also encourage over £100 billion extra in private sector investment in a low carbon economy.

• Raise new funds through government-backed green bonds
This would raise additional funds that would be specifically aimed at low carbon infrastructure such as green energy investments and programmes to halt energy waste through poorly insulated buildings.

• Introduce a mass energy efficiency programme
Green Bonds could be used to provide investment of £7 billion a year which could ensure every home in the UK became a low carbon home by 2020. This scheme would provide full grants to make the homes of all those on low incomes super energy efficient for free, and provide zero-interest, long term loans to enable everyone else to take action. As a result the cost of energy bills would come down, the misery of fuel poverty would be eliminated and over 75,000 jobs would be created.

A briefing on Friends of the Earth's Budget demands is available at:
www.foe.co.uk/resource/briefings/budget_2009.pdf

Notes:

1. Friends of the Earth is also urging the Chancellor to introduce a number of
specific measures to make it cheaper and easier for householders and motorist to cut emissions, including:

• GREEN LOANS FOR ENERGY EFFICIENT HOMES
Householders should be able to apply for loans to make their homes more energy efficient. A Green Home Loan scheme should charge zero-interest for insulation and green energy technology measures up to £10,000 per home.

• FREE HOME ENERGY MAKEOVER FOR ALL HOMES IN FUEL POVERTY
All homes in fuel poverty should be given a free 'whole house' energy refurbishment to reach a minimum of Bands B (or Band C for 'hard to treat'
homes) on an Energy Performance Certificate - this is an average grant of £8500 per home.

• A VAT REDUCTION FOR GREEN HOME REFURBISHMENT
The Government should cut the rate of VAT to 5% for renovation and refurbishment of properties to a high environmental standard.

• A STAMP DUTY REBATE FOR MAKING NEWLY-PURCHASED HOMES ENERGY EFFICIENT
Homeowners should be encouraged to make their newly purchased homes energy efficient by offering them a Stamp Duty Rebate of £5,000 for fitting insulation and installing green energy technology at a cost of £5,000 or more within a year of purchase.

• CASH INCENTIVES FOR DOMESTIC GREEN ENERGY
Money should be made available through the Low Carbon Buildings Programme to enable householders to get grants of up to 50 per cent for the installation of renewable energy technologies such as solar PV panels, solar thermal and heat pumps.

• A LIMITED CAR SCRAPPAGE SCHEME AIMED AT REPLACING GAS-GUZZLERS WITH THE
GREENEST CARS
A car scrappage scheme could play a limited role in reducing carbon emissions from transport, by getting some of the worst gas-guzzlers off the road. The subsidy should only be given for the purchase of the most fuel-efficient cars, with a real carbon saving between the car scrapped and the car bought; and it should be available to allow people to buy second-hand green cars as well as new ones.

• SLASH ROAD TAX FOR THE GREENEST CARS - AND INCREASE IT FOR GAS-GUZZLERS
The government must increase the difference between the Vehicle Excise Duty
(VED) bands to make road tax cheaper for the most fuel efficient cars - and increase it for gas-guzzlers.

2. The Government will publish its legally-binding, short-term greenhouse gas budgets on the same day. Under the Climate Change Act, passed on 26 November
2008 following Friends of the Earth's hugely successful Big Ask campaign, the UK is legally obliged to cut its greenhouse gas emissions by 80 per cent by 2050 - with a series of five-year 'greenhouse gas budgets' to ensure that the target is kept on track. The Committee on Climate Change recommended in December 2008 that the Government opts for a target of cutting greenhouse gas emissions by 34 per cent by 2020 or 42 per cent in the context of an international deal. Friends of the Earth believes the science demands cuts in emissions of at least 42 per cent by 2020 if the UK is to play its part in avoiding runaway climate change. Last month the internationally respected Tyndall Centre for Climate Change Research said that the UK should set a 42 per cent target at the very least.
www.foe.co.uk/resource/press_releases/tyndall_research_17032009.html

3. Brown's electric dream for Britain, Independent, Wednesday 8 April 2009
www.independent.co.uk/news/uk/politics/browns-electric-dream-for-britain-1665349.html

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Published by Friends of the Earth Trust