Introduction
1. Since its inception in 1997, the Environmental
Audit Committee has carried out annual inquiries into the environmental
content of the Treasury's Pre-Budget Reports; this is the eleventh
in the series. In these reports, we review the Treasury's approach
to the environment, looking in particular at the extent to which
it is following the policy it announced in 1997 of shifting the
burden of taxation from 'goods' (such as employment) to 'bads'
(such as pollution).
2. This year's Pre-Budget Report (PBR) was published
on 9 October 2007, together with the latest Comprehensive Spending
Review (CSR).[1] The PBR
highlighted four key announcements on the environment: an increase
in funding for Defra, details of a new Environmental Transformation
Fund (to fund low carbon investments in the UK and the developing
world), a reform of aviation tax, and publication of an interim
report on the future development of low carbon vehicles. One of
the main environmental features of the Comprehensive Spending
Review was its setting of two new Public Service Agreements (PSAs)
for Government departments: "to lead the global effort to
avoid dangerous climate change", and "to secure a healthy
natural environment for today and the future". Alongside
the PBR, the Government announced details of a competition to
design and build a demonstration Carbon Capture and Storage project.
3. In addition to our core focus on green taxation,
in our reports on the PBR we usually choose a number of other
areas to concentrate on. This year we focus on:
- Government support for Carbon
Capture and Storage;
- the Shadow Price of Carbon (used by the Government
to put a cost on the potential impacts on climate change of different
policy options);
- the new Environmental Transformation Fund;
- the transparency of emissions trading; and
- the new set of Public Service Agreements.
1 HM Treasury, 2007 Pre-Budget Report and Comprehensive
Spending Review: Meeting the aspirations of the British people,
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