Green Jobs: Strict limits on carbon will be a key tool

Significant measures include cash for energy efficiency and technology

As a programme for a green recovery, Alistair Darling's Budget left a lot to be desired, environmental campaigners chorused yesterday – but it still contained measures that were undeniably significant in environmental terms.

Foremost among them was the world's first carbon budget, a key climate change measure the Chancellor put in place alongside his financial changes. This was a series of strict, steadily-tightening limits on Britain's emissions of carbon dioxide between now and 2022, which, unlike measures elsewhere, are legally binding on the Government.

Laid down in five-year tranches, the national carbon budgets are the key tool for bringing down our greenhouse gas emissions towards an eventual goal of an 80 per cent reduction by 2050.

They are designed to help Britain meet the interim 2020 target of a 34 per cent reduction recommended by the Independent Committee on Climate Change last December, which the Government yesterday formally accepted. If world governments agree a new global climate deal at Copenhagen in December, this target is likely to be made even tighter, probably of the order of 42 per cent.

The carbon budget was part of last year's Climate Change Act and so its formal implementation yesterday did not prompt any dancing in the streets, yet it has the potential to become a significant moment in Britain's fight against global warming – a fight which could be boosted by a further set of projects announced by Mr Darling.

They included £525m of new support over the next two years for offshore wind projects, which have languished in the recession; £435m of support to deliver energy efficiency measures to homes and other buildings; and £405m to encourage low-carbon energy and advanced green manufacturing in Britain.

Furthermore, the proven energy-saving technology of combined heat and power (CHP) was given a shot in the arm with the announcement that plants using CHP will be exempt from the Climate Change Levy from 2013, while the still-to-be proven technology of carbon capture and storage (CCS) was given new impetus with the announcement that the CCS demonstration plant the Government has been planning will now become two plants, and possibly even four.

Some environmentalists oppose CCS, which captures the CO2 that a coal-fired power station emits and eventually buries it underground. They claim it takes money and effort away from renewables such as wind and wave power, but for countries which are going to continue to burn large amounts of coal, such as China, CCS will be essential to keep emissions under control.

It will also be essential if Britain proceeds with a new generation of coal-fired power stations, led by the proposed plant at Kingsnorth in Kent, which awaits approval from the Energy and Climate Change Secretary, Ed Miliband. Mr Miliband will give an indication of his thinking on Kingsnorth today when he outlines a new coal strategy for Britain.

While Mr Darling's headline green measures were welcomed, environmentalists complained that they did not go nearly far enough nor amount to the radical green stimulus to the economy which had been hoped for. They muttered about President Obama and his $150bn (£104bn). Other announcements were seen as specifically anti-environmental, such as the new boost for the exploitation of North Sea oil.

"Ministers tell us climate change is the great challenge of our time, but the money found for renewables and energy efficiency is only marginally more than Mr Darling found earlier this year for RBS bonuses," said John Sauven, the executive director of Greenpeace. "The Obama administration says it won't let the economic crisis go to waste and is promising to reshape the US economy in response to global warming, while here Gordon Brown says the same thing then holds out a fistful of pennies.

"This budget was a mixed bag, with a few positive announcements that were more than outweighed by a striking paucity of ambition."

Case Study: 'The £525m for offshore wind is smoke and mirrors'

David Murray, 45, Owner of green business

Mr Murray set up Coriolis Energy Ltd in May 2007, developing wind farms across the United Kingdom. He employs nine staff and turnover is around £750,000.

"Overall, this Budget is a disappointment. The interim emissions target could have been stiffer and we wait to see how it will be enforced. Will the Government fine itself if it fails? The £525m for offshore wind is just smoke and mirrors. This is explicitly not new money: it is a reallocation of funds, and by prioritising offshore wind we, as a company who develop onshore wind, could lose out. The £405m on green manufacturing is welcome but, like most of the Chancellor's green pledges, will pay dividends in the medium- and long-term rather than soon, which is when it is needed."