Budget 2014: investors say shelving low-carbon policies would be ‘reckless’

The trade body for the sustainable investment industry has called on George Osborne to deliver a budget statement on Wednesday that supports long-term investment and keeps in place economic measures to boost the low-carbon economy.

The UK Sustainable Investment and Finance Association (UKSIF) said the chancellor must avoid bowing to pressure from groups that were calling for social and environmental policies to be shelved. It described such demands as “short-termist, shortsighted and reckless”.

This follows similar comments from the renewables and nuclear industries, which on Monday urged Osborne not to freeze the tax on fossil fuels known as the carbon price floor. They said that doing so would adversely impact investment low-carbon sectors.

UKSIF’s head of government relations Caroline Escott said, “Investors in the UK want to see a budget which promotes a stable, coherent policy framework on climate change, resource security and other environmental issues as called for not only by UKSIF and its members but also by the environmental audit committee in its recent report on green finance.”

The report in question, released at the beginning of March, focuses on the so-called carbon bubble. It warns that stock markets are at risk of serious instability because fossil fuel assets can become overvalued when the need to tackle climate change is factored in.

Escott added, “George Osborne needs to provide a budget for the long-term which introduces a range of policies including boosting the Green Investment Bank’s borrowing powers and setting a 2030 decarbonisation target. Otherwise the value of the public’s pensions and savings may be put at risk.”

UKSIF’s bold warnings to the chancellor come ahead of its second annual Ownership Day on March 25, which encourages pension funds and other asset managers to engage with investee companies on issues like climate change.

In his budget statement in 2013, Osborne offered tax breaks for shale gas developments, scrapped a rise in fuel duty and gave backing to more new roads. His proposals handed little in the way of support for the sustainability sector

Further reading:

Budget 2014: freezing carbon price floor will impact investment, warns renewables industry

The 2014 budget we want to see

Government poll: 77% of Britons support renewable energy

Green economy ‘fragmented’ despite rising support

George Osborne: UK should tackle climate change in ‘cheapest’ way possible