On the environment, Osborne’s plans just don’t add up

Plans for a tidal energy project in Swansea Bay sit uncomfortably alongside tax breaks for offshore oil


In the final Budget announcement of this parliament, which will take place this afternoon, George Osborne is expected to reveal a plan to build the world’s first tidal lagoon to generate green energy.

Tidal lagoon power can generate indigenous, low-carbon energy on a large scale, and a project is being planned in Swansea Bay, south Wales. The Tidal Lagoon Power company say that this area has an average tidal range during spring tides of 8.5m, and that harnessing this resource would help the UK transition to a low carbon future. They estimate that the lagoon could provide clean, renewable power for over 155,000 homes for 120 years.

Climate secretary Ed Davey was incremental in pushing the plan forward, and he may say that Osborne’s announcement indicates that the coalition is finally taking renewable energy seriously. But unfortunately, the tidal lagoon project is contradicted by the chancellor’s other plans.

Today Osborne is expected to reduce taxes for North Sea oil companies, in an attempt to boost jobs and exploration prospects. The industry has been badly affected by the falling price of oil, and leaders have called on the chancellor to make urgent fiscal changes. On Monday Malcolm Webb, the chief executive of Oil and Gas UK, said:

“A double-digit reduction in the Supplementary Corporation Tax charge, plus a single simplified Investment Allowance, is urgently needed in order to help re-establish the competitiveness of the UK oil and gas industry.”

Making the oil and gas industry more competitive cannot be the actions of a government committed to renewable energy. The UK has a commitment, enforced by the EU, to get 15 per cent of its energy from renewable sources by 2020. While the tidal lagoon project is a welcome step towards the decarbonisation of the sector, it sits uncomfortably alongside tax breaks for offshore exploration.

In 2013 the Guardian estimated that then-first minister Alex Salmond’s plans to sell 12-24bn barrels of oil and gas from North Sea exploration over the next 40 years would mean the release of 5.2-10.4bn tonnes of CO2 into the atmosphere. Any commitment by the UK government to boost this sector is a clear contradiction of the claim to be building a greener future.

There are about 380,000 jobs in North Sea oil at the moment, and there are warnings that without changes to the tax regime, 15- 20 per cent of these jobs could be lost over the next few years. But renewable energy will also create huge numbers of jobs.

A 2014 report by the UK Energy Research Centre found that green sectors account for 3.4 million jobs within the EU. In the short term, it found, the green sector creates more jobs than fossil fuels at a rate of about one job per gigawatt hour of electricity saved or generated by a clean energy source. The long term picture is more difficult to estimate, because of government and economic factors that are hard to predict.

A single wind farm can support about 1,000 jobs, but a report by the Fabian Society this year found that 57 per cent of onshore wind farm applications are rejected.

If the UK is to meet its emissions targets, job creation and competition should be focused on the renewable sector, and not on funding more fossil fuels. Osborne’s energy policies simply do not add up.

Ruby Stockham is a staff writer at Left Foot Forward. Follow her on Twitter

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