Coalition's Spending Review Reveals Environmental Impacts

Chancellor of the Exchequer George Osborne revealed the outcome of the governmental Spending Review to Parliament this afternoon (Wednesday 20th October). Click to find out some topline outcomes for the environment.

Chancellor of the Exchequer George Osborne revealed the outcome of the governmental Spending Review to Parliament this afternoon (Wednesday 20th October).

In what are being described as the most drastic cuts since World War II, the environment appears at first glance to have escaped any severe reduction in funding.

However, despite a �1 billion investment in a Green Investment Bank and a dedication to "simplifying" the CRC Energy Efficiency scheme, the Department of Environment, Food and Rural Affairs (Defra) must make overall savings of almost 30% over the next five years, over 10% over the average departmental budget cuts.

Key outcomes

• Defra is expected to deliver efficiency savings of 15% leading to overall resource savings of 29% by 2014-15, through reducing the number of Arms Length Bodies from 92 to 39.
• The review declares that it invests in the low carbon economy, including through �1 billion of DEL funding and additional significant proceeds from asset sales for a UK-wide Green Investment Bank, and up to �1 billion for one of the world's first commercial scale carbon capture and storage demonstrations on an electricity generation plant.
• The CRC Energy Efficiency scheme will be simplified to reduce the burden on businesses, with the first allowance sales for 2011-12 emissions now taking place in 2012 rather than 2011. Revenues from allowance sales totaling �1 billion a year by 2014-15 will be used to support the public finances, including spending on the environment, rather than recycled to participants.
• The Spending Review ensures that the UK can meet environmental goals, including a 34 per cent reduction in greenhouse gas emissions by 2020 compared to 1990 levels, while cutting the costs of doing so. It moves away from a top down approach, instead freeing individuals, communities and businesses to make choices which protect the environment.
• UK greenhouse gas emissions are driven by factors such as energy prices and growth, as well as environment policy. Effective monitoring of both emissions and policy implementation is therefore essential to manage uncertainty and allow the Government to reduce costs while delivering environmental objectives.
• While the Spending Review sets spending totals, the exact environmental impact will depend on the decisions of individual departments. The Government will set out in full how each department's policies will contribute to meeting emission reduction targets in a government wide carbon plan in 2011.

IEMA will be monitoring the cuts and examining what they may mean for the environmental profession over the coming weeks. Further news and analysis will feature online and in 'the environmentalist'.

To download the full report visit the HM Treasury website