Posted on December 2, 2011 by Phillip Lee

Welcome to this latest newsletter which features the speech to the Group’s annual lunch in the summer from Justine Greening, the then Economic Secretary to the Treasury, discussing the Government’s Policies on Green Taxation.

In the speech, the Minister highlighted the fact that the Government inherited an environmental deficit as well as a fiscal deficit, and that to deliver its ambition to be the greenest government ever it needs to act at every level from the global arena right down to families and individuals. She drew attention to four key principles that characterise their approach:

• supporting action that works, not just action that grabs headlines

• focussing on the most cost-effective approaches

• casting the net wide to gather the full range of creative thinking towards cutting emissions

• leading global change by showcasing successes that are both attractive and affordable to our international partners.

The idea of using environmental taxes to influence behaviours in a green way to become more energy efficient presents huge economic opportunities. While more taxes are never popular at any time, increased costs paid in the short term by consumers and businesses must be weighed against the long-term benefits of increased security of supply, mitigation against climate change and improved air quality. The Government is on the right path with its energy policies to ensure secure low-carbon energy supplies at the least cost; nevertheless, to be successful we need to ensure they are implemented effectively and efficiently.

I recognize that the creation of a new environmental tax framework is challenging. Given that green taxation is a relatively new area, policymakers have to balance options which can be difficult. However, if we want to achieve a more sustainable world for us in the future it is indispensable that environmental objectives are weighed up against economic and social considerations. However, a significant number of businesses are still largely unaware of how they are affected by environmental taxes – but as the impact of these taxes continues to grow we expect that more and more businesses will consider taxes as a reason to ‘think green’.

Environmental taxes are incentives to invest in green technologies. Business would benefit from energy saving equipment through lower power costs and consumers from “smarter” networks that provide real-time information to consumers and suppliers.  This will help each household to understand when and how most electricity is spent, so that every household can find ways to reduce it and play their part in a greener future. Additionally, on a national scale, there is no doubt that our focus will now have to turn towards building a competitive advantage for this industry to become a global leader.

This Government is committed to becoming the greenest Government ever and Justine Greening’s speech outlines a key milestone to get there. I am pleased that we are able to include her speech in its entirety and I hope you will enjoy reading it.