Conclusion
59. The Government must continue with a programme
of environmental regulations, taxes, and investments, in order
to show businesses and individuals that its environmental objectives
will not be blown off course by the recession. The backtracking
on reforms to Air Passenger Duty and Vehicle Excise Duty are moves
in the wrong direction. They suggest that the Government might
respond to the recession by unpicking other elements of its environmental
tax and regulation programme. This could increase uncertainty
for business, leading to higher risk premiums for taking action,
and a resulting lack of investment in the technologies that contribute
to the transition to a low carbon economy. If the Treasury shows
such weakness, then businesses and individuals will be much less
inclined to play their part.
60. This year, for the first time, the Government
will alongside the Budget publish its response to the Committee
on Climate Change, and the UK's first carbon budget. This places
even greater emphasis on the environmental content of the Budget
Report. The purpose of the Climate Change Act was to put UK climate
change policy on a long-term basis, in which short-term policy
options would be assessed against their ability to reduce damage
to the climate. The 2009
Budget is a test of the Government's commitment, in difficult
economic times, to its climate change policy. It requires consistency
and boldness of purpose; the Pre-Budget Report 2008 does not reassure
us that this is in place. We hope the Budget itself will.
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