Monday, April 06, 2009

Green Stimulus or Simulus?


Report out a few days ago from Greenpeace and the New Economics Foundation. Pertinent statistics include:

  • New and additional green spending included in the green stimulus package of the government’s Pre-Budget Report (PBR) is astonishingly small compared to other recent spending commitments, at just 0.6% of the UK’s £20bn recovery plan. This key element makes up just 0.0083% of UK GDP, but in the wake of the banking crisis nearly 20% of UK GDP has been provided to support the financial sector.
  • New and additional green measures could save just 0.128 million tonnes of carbon dioxide (MtCO2) per year from the atmosphere and will only delay the accumulation of UK carbon emissions by six and a half hours by the end of 2011.
  • Just over £100m is being allocated to spending that is genuinely new and additional; this is a fraction – less than 13% – of the annual bonus package given to staff at the failed Royal Bank of Scotland (RBS) which is estimated at approximately £775m. £100m represents just 0.0083% of UK GDP. Estimates for necessary new annual spending on environmental economic stimulus and transformation range from £11bn to £50bn.
  • Figures from HSBC and the IMF indicate that among the major economies, the greater the proportion of GDP spent on bailing out banks coincides with a lower proportion spent on green stimuli.
  • Several of the government’s measures are, in fact, in conflict with the environmental stimulus. By comparison with the new and additional spending of the PBR’s green stimulus, £2.3bn – around 22 times – has been put aside to assist the car industry. If spent on energy efficiency measures this would save about 3 MtCO2 annually.
  • £27m has been put aside specifically for development of a new Land Rover vehicle, the Land Rover Group are one of the most climate-unfriendly manufacturers in Europe. The potential CO2 savings of the proposed vehicle have not been specified. This is not encouraging, particularly given that this financial support is likely to delay a shift to greater use of public transport and that historically much of the gain in efficiency in vehicles has been negatively counter-balanced through a gain in weight of the vehicle concerned.
  • There has been a further commitment to spend on building 520 lane miles of road expansion. Research indicates that the provision of new lanes leads to relative increases of between 30 and 50% in the number of vehicle miles travelled on that road – in other words, more car use. This happens due to the phenomenon known as induced traffic: building new roads merely encourages more traffic.
There's another report from Greenpeace detailing how investment in an energy-efficiency programme to insulate public buildings and private homes could generate 55,000 jobs, reduce expenditure on energy consumption and bills and reduce carbon emissions.

What's the betting the government fails utterly to address any of these points?

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