The pre-budget report was delivered by Chancellor Alastair Darling on 24 November 2008. Within the budget, a number of climate change and energy related measures were discussed, the report stating that "the Government is putting in place policies and investment to support a low-carbon recovery with new jobs and businesses created through green growth. Government policies are driving £50bn of investment in the low-carbon sector over the three years to 2011."


Climate change targets

Under the Climate Change Act, carbon budgets must be set to provide details of the emissions reductions required to meet the targets enshrined in the Act. The Government has announced that a final report setting out its policies and proposals to meet the budgets will be laid before Parliament in mid 2009. The report will:

  • provide an overview of the emissions reductions required; and
  • build on existing measures and include new proposals that will emerge from the Government's consultations on renewable energy and heat, and energy efficiency.

The UK's first three carbon budgets (which will cover the period 2008-2022) will be set alongside the Budget 2009.

Renewables Obligation

The Government has confirmed that it will extend the Renewables Obligation (RO) by an additional 10 years to at least 2037, to provide investors with increased confidence over long-term plans. The RO is currently the principal way in which the Government provides financial support for the large-scale generation of electricity using renewable sources.

Climate change agreements

The Government has announced that it will shortly consult on the form and content of new climate change agreements, including a proposal to split agreement targets where they overlap with the EU Emissions Trading Scheme.

Zero Carbon Buildings

The Government will shortly set out its proposals for new "zero carbon" homes and non-domestic buildings. It is the Government's aim that all new homes should be "zero carbon" by 2016 and that all new, non-domestic buildings should be "zero carbon" by 2019.

Home Energy Saving Programme

£110m of capital spending is to be provided for the Decent Homes and Warm Front programmes to assist low-income households with better heating and energy efficiency. This is part of the Government's Home Energy Saving Programme which was announced in September 2008 to help tackle fuel poverty. The Government has said it will also consider legislating in order to address concerns on unfair pricing between methods of payment for energy found earlier in the year by Ofgem.

Landlord's Energy Saving Allowance

The Government will continue awareness of the Landlord's Energy Saving Allowance, which is a tax relief available for certain categories of energy-saving items for property businesses. This tax relief became available to corporate landlords of residential property from 8 July 2008.

Green jobs

The Government wants to encourage an increase in jobs in this sector to assist with the rising rates of unemployment. At present, it is estimated that 350,000 people are employed in the UK's environmental industries and that this could rise to one million over the next 20 years.


The environmental campaign group, Friends of the Earth, welcomed aspects of the 'green' investment programme but said the Government proposals only scratch the surface of what is required to simultaneously tackle the enormous economic and environmental challenges that Britain faces, claiming that it is no 'Green New Deal'. Director Andy Aitkins said that "Ministers should have gone much further to slash energy waste and develop the UK's massive renewable energy potential."

Welcoming the extension of the Renewables Obligation, Maria McCaffery, chief executive of the British Wind Energy Association, commented: "if we have Round 3 projects coming on line from 2015, under the previous regime they would have been covered by the RO for only the first half of their projected life cycle. This extension to the RO will bring long term stability and encourage developers to continue with the building programme."

Philip Wolfe, director general at the Renewable Energy Association, also welcomed the extension to the renewable obligation saying "this signals the Government's commitment to the Obligation as the long-term measure to boost bulk renewable energy generation in the UK. Energy projects are significant undertakings and companies require 15 to 20 years of a stable policy framework stretching ahead of them to give them the confidence to invest."

The main environmental announcements in the report can be accessed by clicking here.