Chancellor’s missed opportunity

The budget was a missed opportunity to attract investment according to risk analyst, Andrew Horstead. Like other critics of yesterday’s budget, he said not enough had been done to encourage […]

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By Tom Gibson

The budget was a missed opportunity to attract investment according to risk analyst, Andrew Horstead. Like other critics of yesterday’s budget, he said not enough had been done to encourage the right sort of growth in low carbon technologies.

Mr Horstead, at energy and carbon management specialists Utilyx said: “While it’s encouraging to see the UK become the first country in the world to introduce a carbon floor price, £16 per tonne from 2013 is too low if real investment in green energy is to be encouraged.”

“We calculate that based on the current price of carbon in the EU emissions trading scheme, the carbon floor price would not actually kick in until 2014. This is not soon enough to stimulate the sort of investment that is required if we are serious about decarbonising the electricity sector.”

The energy specialist warned that power sources would simply become more expensive, rather than cleaner.

He said: “This will lift power prices but is unlikely to discourage coal burn during this period. This seems to be more a case of the government dipping their toe in the water rather than the ‘bold’ moves promised, and raises the question of whether enough is being done to drive green investment.”