Low-carbon cuts

The UK’s Department of Energy and Climate Change has announced details of cuts it will be making as part of broader cost-cutting, with low-carbon projects bearing the brunt of reductions.

With few areas being spared from the UK government’s “age of austerity”, the country’s Department of Energy and Climate Change (DECC) announced back in May that it would contribute £85m to departmental cuts in government. DECC has now revealed that a sizeable chunk of those savings – £35m, or 40% of the total – will come from cuts in expenditure on low-carbon technology.

In May, the department unveiled plans to save £3m through the early closure of the Low Carbon Buildings Fund, which gave grants to help the installation of small-scale renewables in homes, replacing it with a scheme where homeowners and businesses can receive money for renewable electricity which they generate. The latest announcement indicates that several other green funding schemes will be shut down or curtailed.

The Carbon Trust, which promotes the transition to a low-carbon economy, will lose £12.6m from its budget for promoting green technology and business. The offshore wind capital grant scheme is set to have its scope reduced, with an expected saving of £3m. And the government will cancel £4.7m worth of final funding rounds of schemes which support bio-energy.

DECC was keen to stress that the department would still spend over £150 million on low carbon technology this year, including the recently announced formation of a Green Investment Bank (GIB) – although there has been reported tension (FT, subscription required) between Chancellor George Osborne and Business Secretary Vince Cable over the scale of the institution.

Perhaps inevitably, the announcement got a poor reception on the opposition benches, with former climate change secretary and Labour leadership prospect Ed Miliband denouncing the plans, saying “On the one hand they call for tougher carbon emissions targets but with the other they take away the means to achieve these targets.”

On his well-subscribed Twitter account, Miliband later added “so much for greenest govt ever”, a reference to Prime Minister David Cameron’s pledge to the 10:10 campaign in May. The sentiment was echoed by John Sauven, executive director of Greenpeace, who said that Cameron’s green promises were “beginning to crumble”.

Given that almost half of cuts affected low-carbon schemes, it is inevitable that the government’s green promises would be called into question. The coalition has not abandoned its commitments as much as Labour would like to suggest. But it will need to ensure that its remaining commitments, including the GIB, are run effectively, or Cameron’s pledge may become a point of attack for Labour, and of tension between the coalition partners.

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