Package of measures to combat climate change

A package of measures aimed at helping to combat the global threat of climate change caused by an imbalance of greenhouse gases mostly from industry and transport were unveiled by the Chancellor Gordon Brown.

He announced:

* For 2007, the climate change levy is to be indexed in line with inflation;

* A new energy and environmental research institute is to be created in partnership with energy companies;

* Britain is to propose a World Bank 20 billion US dollars (£11.5 billion) fund to help developing economies invest in alternative energy;

* An initial sum of £20 million seed-corn finance for the first enterprise capital fund for the environment;

* 250,000 more homes to be given help with insulation;

* A new £50 million fund for micro-generation technologies making it possible for homes and firms to generate renewable energy.

Guy Thompson, director of the environmental think tank Green Alliance, said in response: "This is the greenest Budget since the Chancellor introduced the Climate Change Levy.

"Gordon Brown has set the right direction of travel on climate change and these measures signal intent to start changing behaviour at a household level.

"He now needs to take the next logical step and champion the supply-side measures that the Government needs to take to reduce carbon in the energy review.

"The gaps in this Budget are waste and water efficiency.

"Now that the Chancellor has restored his green credentials, we hope he will use the waste strategy review to introduce variable charging for local authorities and raise the landfill tax escalator at the Pre Budget Report.

"With a drought looming this summer, the Treasury also needs to urgently address the issue of who pays for the introduction of universal water metering.

"Without determined action, today's measures on household energy efficiency will be quickly swallowed up by increases in carbon emissions from industry and transport.

"Gordon Brown should now look to establish a leadership role for himself. he has the capacity to deliver global changes if he is prepared to nudge the UK in front on the EU emissions trading scheme and make us a world leaders in low carbon technologies."

Greenpeace executive director Stephen Tindale said: "This budget may be the first sign that we're about to get a Prime Minister who acts on climate change instead of just talking about it.

"Many of these measures will make a difference if properly implemented, though the real test for Brown comes next month when the Government has to decide how much carbon British industry is allowed to emit.

"The measures on energy efficiency and microgeneration are very positive and will help bring forward low-carbon buildings and a decentralised energy system.

"The key decisions on this, however, will be made in the energy review, where the Prime Minister's obsession with all things nuclear still threatens to derail progress towards safer, cleaner and cheaper energy.

"The creation of a new top rate of road tax is the right way to go, but the Chancellor must know that £210 is far too little money to stop anyone buying a gas guzzler.

"The country would have been behind him if he'd slapped punitive taxes on these vehicles, some of which pump out three times their own weight in carbon every year, but the Chancellor stalled.

"We will continue to press him increase the top rate to £1,800, which even the Government's own advisers say is necessary.

"Greenpeace welcomes the Chancellor's commitment to strengthen the European emissions trading system. We'll see whether Brown, unlike Blair, follows rhetoric with action when the Government publishes its plans for the next stage of emissions trading before Easter."