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HM Treasury spending review

On 20 October 2010, Chancellor George Osborne delivered the Coalition Government’s Spending Review. We consider its implications, focusing particularly on environmental sustainability.

Looking at last month’s HM Treasury Spending Review, you have to ask yourself, “What would Conservative or Labour have done if they were the government of today?” We are not a political magazine, but we believe it’s highly likely that the Coalition has produced a better review than any of the parties would have done were they acting alone.

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On 20 October 2010, Chancellor George Osborne delivered the Coalition Government’s Spending Review. We consider its implications, focusing particularly on environmental sustainability.

Looking at last month’s HM Treasury Spending Review, you have to ask yourself, “What would Conservative or Labour have done if they were the government of today?” We are not a political magazine, but we believe it’s highly likely that the Coalition has produced a better review than any of the parties would have done were they acting alone.

So, just how good is it? Our interest is in the planet generally and the small part we live on specifically. As Britons, we can affect the first by inventing stuff, exporting it and providing supporting services. The second, the domestic bit, is the primary subject of the Spending Review. In terms of the bottom line for environmental and sustainable issues, our verdict is: “Not bad, but sneaky in parts”.

Green-leaning activists are outraged that the Department for Environment, Food and Rural Affairs (DEFRA) is taking such a big hit, but they seem not to notice that the Department of Energy and Climate Change (DECC) is being treated altogether more kindly, especially where expenditure limits are concerned. DEFRA’s will shrink 34% cumulatively over four years, while DECC’s will grow 41%.

These two numbers alone give a sense of the Spending Review’s intent in environmental terms. While DEFRA has to encourage the building of flood defences and environmental stewardship schemes, DECC’s role is to encourage low carbon energy and heat generation. Crudely stated, one has to protect and adapt; the other has to attack. The review is somewhat mute on other environmental essentials, such as water and waste, apart from ditching seven waste processing initiatives.

It has to be said that, politically, Chancellor Osborne played his hand well. In his earlier budget, he warned of cuts up to 25% and sought consultation. After thanking the Labour Party for its suggestions that the average cut should be 20% across unprotected departments, he brought his recommendations in at 19% and then sought the approval of the House. Olé.

Dirty Tricks

Regarding the environment, the dirtiest trick Osborne played was with the Carbon Reduction Commitment (now renamed the CRC Energy Efficiency Scheme) in which heavy users of energy are expected to buy allowances to cover their tonnage of carbon dioxide emissions. In the original scheme, those who most improved their performance were rewarded with a share of this revenue. Now the revenue goes straight to the Exchequer. With the “reward” side of the equation removed, the carrot has become the stick. It’s nothing short of £1 billion stealth tax, which could become a gold mine if (or should we say when?) the rate per tonne is increased or the catchment for the scheme is widened. At the moment, it applies only to the top 5,000 companies in terms of energy consumption. You can say two good things about this: 1) the start date has been deferred by a year to 2012; and 2) it will push companies to reduce their carbon emissions where to do so would cost less than the levy.

At a personal level, you’ll likely have very mixed feelings about the Spending Review. On the one hand, you see slivers of money taken away here and there that, which, when added together, could equate to an exotic holiday or something similar. On the other hand, you may be thinking, “Well, something had to be done”. Some of you will consider the measures unfair; others will be happy to “do their bit”.

Let’s take a closer look at the sustainability-related measures. Take transport, for example. It’s true that the new infrastructure has to be built and existing systems have to be maintained. But why encourage train fare increases when the aim is to get people out of the air and off the roads? Why cut bus subsidies to operators by 20%? These plans do not send the right message. No doubt with an eye on the grey vote, pensioners will still get their travel passes. And presumably the many road building plans will reduce emissions. If not, what are they for, exactly?

Perhaps the Government expects no change in our behaviour and is building in the hope of a flood of electric and hydrogen fuel-cell vehicles. If that’s the case, we’re going to need to upgrade our energy and service station infrastructures way beyond anything we can imagine at the moment. Starting in January 2011, the Government is going to start dishing out up to £5,000 towards the cost of ultra-low emissions vehicles. Rather like the scrappage scheme that preceded it, little thought seems to have been given to the lifecycle environmental costs of such measures. Cars have to be made (raw materials, carbon emissions, water, waste), run (electricity is only as clean as the power station that creates it), and disposed of eventually (its parts reused or upcycled, ideally).

Green Innovation

As a nation, we need new relevant inventions that can improve our quality of life and bring us foreign revenues. With developing countries churning out science graduates by the million, it’s vital that we sustain some kind of advantage. The relatively good news is that the Science Budget is being retained in cash terms, although this means that this year’s £4.6 billion will be worth less. As in so many aspects of this Spending Review, we really are expected to get more and more out of less and less. Those of us in business will be very familiar with the concept. It can always be done, but it requires change–something that strikes fear into many hearts.

The Government is to invest £1 billion into an independent “UK-wide” Green Investment Bank. Many economists consider this amount laughably inadequate and have been pitching £2 billion to £6 billion as an absolute minimum. However, the proposed figure has its advantages. It sends a signal that this is not a “free for all”; nor is it open to every wacky idea. It is intended to lend to projects with a reasonable chance of success; projects that will contribute to the UK’s green infrastructure. “Offshore wind farms” is an example given in the Spending Review. The clear aim is to get things moving or at least started. The bank’s capital reserves will be boosted by sales of government-owned assets. There is an intention to attract private capital as well, but the details of the structure of the bank still need to be hammered out. But if the bank truly is “UK-wide” in a traditional sense, the billion pounds is going to burn off like morning mist on a summer’s day. The bank has to be slim, central but accessible to all.

The Feed-in Tariff for microgeneration of electricity, which seems very generous at the moment, will be reviewed in four years’ time. You can bet it won’t be good news, though. The present tariff will hopefully have done its job in introducing people to the realities of home-grown electricity generation. The focus will probably turn towards giving good tariffs to people installing the most effective technologies. However, industry insiders are certain that existing recipients will not see their tariff reduced. Well, that’s good news. Along with this comes the promise of a Renewable Heat Incentive in 2011-12, which will reward green heating installation – typically ground source or solar thermal.

On a grander scale, the Government has earmarked £200 million to help ports accommodate offshore wind farm equipment and set up local manufacturing facilities.

The Review contains a lot of sustainability-related initiatives, but they are primarily aimed at increasing our clean energy capacity and reducing our carbon emissions. Two things scarcely mentioned are water and waste. Actually, water isn’t mentioned at all, except to say that the Water Services Regulatory Authority (or Ofwat) was not part of the Spending Review Process. Perhaps this is because water is largely privatised and, apart from Ofwat and the Consumer Council for Water, the Government doesn’t have much to do with what’s going on. These organisations are currently being reviewed with an eye to their fitness for purpose. Water, it seems, is on the political radar; just not to the extent that it impacts this Spending Review.

However, on waste recycling the Government has decided that it can withdraw from seven proposed PFI-funded projects but stick with a further eleven. According to DEFRA, “This will reduce estimated central government PFI expenditure by £3 million per annum in 2014-15 rising to £26 million per annum from 2017/18 onwards”. With further justification that “these projects will no longer be needed in order to meet the 2020 landfill diversion targets set by the European Union”. The targets come with heavy fines attached to failure, meaning that the motivation for treating our waste seems more about avoiding fines than ensuring any environment benefits.

In an ideal world, we’d reuse most of what we currently send to landfill, we’d make things easier to recycle in the first place and we’d minimise unnecessary packaging. We wouldn’t just accept landfill as a necessity. Increasing numbers of companies are seeing the opportunities in waste, the so-called “trash to cash” organisations. They separate and make use of what they can, even if it sometimes means burning it for energy.

And, finally…

Hopefully it’s clear why we rate the review, “Not bad, but sneaky in parts”. And, of course, we’re restricting ourselves to sustainability aspects. For a broader look, let’s take some clippings from better qualified commentators.

In late September, the IMF visited the UK and was broadly positive about the Chancellor’s intentions. It hasn’t commented since the Review Announcement, but after the visit it said: “The UK economy is on the mend. Economic recovery is underway, unemployment has stabilized, and financial sector health has improved. The government’s strong and credible multi-year fiscal deficit reduction plan is essential to ensure debt sustainability. The plan greatly reduces the risk of a costly loss of confidence in public finances and supports a balanced recovery”.

Angel Gurría, Secretary General of the OECD (Organisation for Economic Co-operations and Development), says: “The measures are tough, necessary and courageous. Acting decisively now is the best way to secure better public finances and bolster future growth”. In a separate statement, the OECD confirms that “Mr Gurría supports the UK’s continuing willingness to back its commitment to a greener economy with further budgetary resources”.

The Economist’s report (headlined “Ouch!”) states, “the government’s bet that the private sector will generate growth as the public sector retrenches remains just that: a gamble”. It also says that “Mr Osborne was also right to protect capital spending as far as possible; despite its economic value, such investment is often the first thing that myopic cost-cutting governments sacrifice”.

The course has been set for the good ship UK. Some passengers won’t be looking forward to the voyage, and big question marks hang over the ability of the captain and crew to navigate the stormy seas ahead. A select few even doubt the seaworthiness of the vessel itself. But if intentions equate to actions, the UK should emerge into calmer waters in time for the next election.

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Economy

How Going Green Can Save A Company Money

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going green can save company money
Shutterstock Licensed Photot - By GOLFX

What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

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Energy

5 Easy Things You Can Do to Make Your Home More Sustainable

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sustainable homes
Shutterstock Licensed Photot - By Diyana Dimitrova

Increasing your home’s energy efficiency is one of the smartest moves you can make as a homeowner. It will lower your bills, increase the resale value of your property, and help minimize our planet’s fast-approaching climate crisis. While major home retrofits can seem daunting, there are plenty of quick and cost-effective ways to start reducing your carbon footprint today. Here are five easy projects to make your home more sustainable.

1. Weather stripping

If you’re looking to make your home more energy efficient, an energy audit is a highly recommended first step. This will reveal where your home is lacking in regards to sustainability suggests the best plan of attack.

Some form of weather stripping is nearly always advised because it is so easy and inexpensive yet can yield such transformative results. The audit will provide information about air leaks which you can couple with your own knowledge of your home’s ventilation needs to develop a strategic plan.

Make sure you choose the appropriate type of weather stripping for each location in your home. Areas that receive a lot of wear and tear, like popular doorways, are best served by slightly more expensive vinyl or metal options. Immobile cracks or infrequently opened windows can be treated with inexpensive foams or caulking. Depending on the age and quality of your home, the resulting energy savings can be as much as 20 percent.

2. Programmable thermostats

Programmable thermostats

Shutterstock Licensed Photo – By Olivier Le Moal

Programmable thermostats have tremendous potential to save money and minimize unnecessary energy usage. About 45 percent of a home’s energy is earmarked for heating and cooling needs with a large fraction of that wasted on unoccupied spaces. Programmable thermostats can automatically lower the heat overnight or shut off the air conditioning when you go to work.

Every degree Fahrenheit you lower the thermostat equates to 1 percent less energy use, which amounts to considerable savings over the course of a year. When used correctly, programmable thermostats reduce heating and cooling bills by 10 to 30 percent. Of course, the same result can be achieved by manually adjusting your thermostats to coincide with your activities, just make sure you remember to do it!

3. Low-flow water hardware

With the current focus on carbon emissions and climate change, we typically equate environmental stability to lower energy use, but fresh water shortage is an equal threat. Installing low-flow hardware for toilets and showers, particularly in drought prone areas, is an inexpensive and easy way to cut water consumption by 50 percent and save as much as $145 per year.

Older toilets use up to 6 gallons of water per flush, the equivalent of an astounding 20.1 gallons per person each day. This makes them the biggest consumer of indoor water. New low-flow toilets are standardized at 1.6 gallons per flush and can save more than 20,000 gallons a year in a 4-member household.

Similarly, low-flow shower heads can decrease water consumption by 40 percent or more while also lowering water heating bills and reducing CO2 emissions. Unlike early versions, new low-flow models are equipped with excellent pressure technology so your shower will be no less satisfying.

4. Energy efficient light bulbs

An average household dedicates about 5 percent of its energy use to lighting, but this value is dropping thanks to new lighting technology. Incandescent bulbs are quickly becoming a thing of the past. These inefficient light sources give off 90 percent of their energy as heat which is not only impractical from a lighting standpoint, but also raises energy bills even further during hot weather.

New LED and compact fluorescent options are far more efficient and longer lasting. Though the upfront costs are higher, the long term environmental and financial benefits are well worth it. Energy efficient light bulbs use as much as 80 percent less energy than traditional incandescent and last 3 to 25 times longer producing savings of about $6 per year per bulb.

5. Installing solar panels

Adding solar panels may not be the easiest, or least expensive, sustainability upgrade for your home, but it will certainly have the greatest impact on both your energy bills and your environmental footprint. Installing solar panels can run about $15,000 – $20,000 upfront, though a number of government incentives are bringing these numbers down. Alternatively, panels can also be leased for a much lower initial investment.

Once operational, a solar system saves about $600 per year over the course of its 25 to 30-year lifespan, and this figure will grow as energy prices rise. Solar installations require little to no maintenance and increase the value of your home.

From an environmental standpoint, the average five-kilowatt residential system can reduce household CO2 emissions by 15,000 pounds every year. Using your solar system to power an electric vehicle is the ultimate sustainable solution serving to reduce total CO2 emissions by as much as 70%!

These days, being environmentally responsible is the hallmark of a good global citizen and it need not require major sacrifices in regards to your lifestyle or your wallet. In fact, increasing your home’s sustainability is apt to make your residence more livable and save you money in the long run. The five projects listed here are just a few of the easy ways to reduce both your environmental footprint and your energy bills. So, give one or more of them a try; with a small budget and a little know-how, there is no reason you can’t start today.

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