HM TREASURY: Pre- Budget Report 2000

Table 6.1: The Government's Budget measures and policy objectives

Policy objective	Corresponding Budget measure	Other relevant policy initiatives affected	Sustainability development indicator¹
Tackling climate change and improving air quality	Climate change levy and related measures Emission trading Reforms to company car tax VED reforms Green travel plans Authorised mileage rates Reduced rate of VAT on the installation of energy saving materials Fuel duty differentials	Draft climate change programme² Emissions Trading Consultation Document³ Ten Year Plan for transport⁴ Air Quality Strategy⁵	CO₂ emissions Days of air pollution Electricity from renewable sources Energy efficiency of vehicles
Regenerating Britain's cities	Capital allowances for flats over shops Tax relief for cleaning up contaminated land Stamp duty exemption for disadvantaged communities Reforms to the VAT treatment of conversion activity	Urban White Paper⁶	New homes built on previously developed land Homes judged unfit to live in
Protecting Britain's countryside	Aggregates levy Aggregates Sustainability Fund Landfill tax increases Reforms to landfill tax credit scheme Possible pesticides voluntary package/tax	Waste Strategy⁷ A Better Quality of Life⁸ Rural White Paper⁹	Household waste and recycling Construction and demolition waste going to landfill Waste arisings and management

¹The full set of indicators is published in Quality of Life Counts, DETR 1999.

²Draft Climate Change Programme, DETR March 2000. The Final programme will be published shortly.

³Emissions Trading Consultation Document, DETR, October 2000.

⁴Ten Year Plan for transport, DETR July 2000.

⁵Consultation document Report on the Air Quality Strategy, DETR, October 2000.

⁶Urban White Paper, DETR to be published shortly.

⁷Waste Strategy, DETR May 2000.

⁸A Better Quality of Life, DETR May 2000.

⁹Rural White Paper, DETR (to be published shortly).

Table 6.2: The environmental impact of the Government's Budget measures

Measure	Environmental impact¹
Climate change levy package²	Levy and exemptions³	Savings of at least 2.0 MtC
	Negotiated agreements⁴	Savings of at least 2.5 MtC
	Energy efficiency measures	Savings of at least 0.5 MtC
Emissions Trading Scheme	A successful scheme is estimated to deliver emission savings of at least 2MtC by 2010⁵
Company car tax reform⁶	Estimated to produce savings of around 0.5 to 1 MtC in the medium to long run
Green travel plans Authorised mileage allowances	Reductions in CO₂ and air particulates
Reform to car and lorry VED	Reduction in emissions of CO₂, NO_X and particulates
Road fuel duty differentials⁷	The ULSP differential is estimated to reduce NO_X by 1 per cent, reduce CO by 4 per centy and reduce VOCs by 1 per cent in 2004. The ULSD differential is estimated to result in a reduction of 8 per cent of particulates and up to 1 per cent of NO_X. The road fuel gas differential will result in a reduction in emissions of particulates and NO_X.
Road fuel duty escalator	The road fuel duty escalator over the period 1996 to 1999 is estimated to produce carbon savings of 1 to 2.5 MtC by 2010 and small reductions in emissions of local air pollutants
Reduced rate of VAT on the installation of energy saving materials	Reduction in 0.1 MtC
Reduced rate of VAT on domestic fuel and power	Estimated to increase carbon emissions by 0.2 million tonnes by 2010.
Capital allowances for flats over shops Tax relief for cleaning contaminated land Stamp duty relief for disadvantaged areas Reforms to the VAT treatment on conversion activity	Reduce pressure on the countryside due to increase in the number of empty and derelict properties Increases in clean up of contaminated land Regeneration and improved functioning of property markets in Britain's most disadvantaged communities
Aggregates levy and Sustainability Fund	Reductions in noise, dust, visual intrusion, damage to wildlife habitats and other environmental impacts
Landfill tax and LTCS	Encourages waste producers and the waste management industry to switch away from landfill towards waste minimisation, re-use and recycling

¹These estimates are subject to a wide margin of error.

²There are a number of difficulties involved in estimating the emission savings from the individual components of the climate change levy, including the need to avoid double counting. The figures are calculated using cautious assumptions and are shown for illustrative purposes only.

³Based on the DTI energy model.

⁴Estimates still to be finalised.

⁵Based on independent modelling commissioned by DETR.

⁶This measure is part of a package of measures, including the changes to VED and the ACEA voluntary agreements.

⁷Using the NETCEN emissions model further detail on the methodology used in the model is provided in NETCEN's January 2000 report UK Road Transport Emissions Projections.

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