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Reacting to the Chancellor's Budget speech, Richard Lambert, director-general of the CBI, said: "For business, although there may have been no further big shocks in today's speech, we mustn't lose sight of the whole raft of tax rises announced in the previous Budget and the Pre-Budget Report. These are scheduled to kick in from April, putting a further squeeze on firms at this already turbulent economic time.

"Air Passenger Duty is a very blunt instrument and is ineffective as a green tax - that is the reason government gave for its decision to consult on an alternative ‘per flight’ tax. Yet today’s announcement that tax revenue from the new duty will increase by 10% in the second full year of operation seems to confirm fears the government sees this as a revenue-raising exercise, rather than as a genuine attempt to change behaviour.

"While we welcome the broad approach, the pace and scale of the proposed new car taxes will present a sting in the tale for some manufacturers. The fact that this move will raise г735m will not build confidence in the government's green measures - we need carrots as well as sticks to change behaviour.

"The target that all new non-domestic buildings should be zero carbon by 2019 is the right sort of ambition - the CBI's climate change task force highlighted buildings as major area of potential. Defining what constitutes zero carbon, and how we get there poses major challenges which need to be properly addressed in the consultation."

Parliamentary climate newsletter

The CBI is publishing regular briefs every other month on key topics for Parliamentarians. This issue looks at what is next for the CBI’s climate change task force; EU plans for emissions trading; the climate change bill; and the CBI giving evidence to the EFRA select committee on waste. Download the newsletter (PDF 200kb).

CO2 emissions comment

Commenting on the government announcement that UK CO2 emissions fell in 2006, CBI Head of Environment Matthew Farrow said: “This fall is welcome and proves that a strong, growing economy can be combined with falling emissions. However, we are still off course to meet the government’s 2020 target."

Nuclear announcement 'the right decision'

Commenting on the government announcements on nuclear power and the Energy White Paper, Richard Lambert, CBI director-general, said: “Today’s announcement is the right decision for the UK. After much consultation, the government has reached the right conclusion about nuclear’s role in meeting the twin challenges of climate change and energy security.

CBI lobbies on Climate Change Bill amends

With the Climate Change Bill being debated in the House of Lords committee, the CBI’s brief to peers expressed concern regarding many of the proposed amendments. Though we strongly support the overall Climate Change Bill, there is a risk that some amendments would overturn the Bill’s balance of certainty and flexibility. Our concerns include that Bill amendments attempt to move away from rolling five year targets, tighten the 2020 target, increase the 2050 target, place limits on the use of international emission credits, include aviation and shipping in carbon budgets, reduce flexibility provisions, limit future schemes that may be created under the Bill’s enabling powers, mandate emission reporting and attempt to increase the Climate Change Committee’s powers. Partway through committee stage, the CBI brief has been cited by peers and several of the amendments of concern have been withdrawn. The CBI is actively tracking and working on this Bill. Read our House of Lords briefing (PDF 108kb).

'Bali communique' shares CCTF concerns

In response to the call by the Prince of Wales' Corporate Leaders' Group on Climate Change for a legally binding and comprehensive international deal to tackle the issue, Richard Lambert said: "The statement by over 150 global companies, many of them CBI members, shows how widely shared the conclusions of the CBI Climate Change Task Force (CCTF) are."

Major new CBI climate change report

British businesses are committed to doing what it takes to tackle climate change but the UK effort will only succeed if it becomes an urgent, shared national priority for companies, consumers and the government, a groundbreaking new report from the CBI shows. Eighteen chairmen and chief executives from every area of British business, led by BT chief executive Ben Verwaayen, have spent 10 months assessing the challenge of climate change and how to tackle it. The UK's carbon reduction targets for 2020 are likely to be missed but its 2050 goals are achievable if a greater sense of urgency is now adopted. In Climate Change: Everyone's Business, Task Force members pledge to adapt their businesses for the new low carbon world, including a promise to develop new products and services to empower households to halve their emissions by 2020; and a commitment to work with their 2m employees to achieve major cuts in their emissions both at work and at home. See www.cbi.org.uk/climatereport.

Reaction to the Queens' Speech

The CBI has given its reaction to legislative proposals for this Parliamentary session, announced in the Queen's Speech. The CBI’s deputy director-general John Cridland said: "The Queen's Speech contained a number of measures of material interest to business which we welcome. The Energy Bill is urgently needed to respond to the joint challenge of energy security and climate change. By implementing the recent energy white paper the bill will help put in place the regulatory framework for renewables, nuclear and carbon capture and storage, all of which are likely to be important in meeting the UK's future energy needs." As for the Climate Change bill – "combating climate change is a challenge for us all, and business urgently needs a credible framework to work towards a low carbon economy. We believe the Climate Change Bill can provide that. The use of an interim target and rolling ‘carbon budgets’ should help to provide the right balance of certainty and flexibility."

CBI continues to lobby on EU/ETS phase 3

As the Commission prepares its draft directive to extend the EU emissions Trading Scheme beyond 2012, the CBI is lobbying both UK government and the EU for an approach which will deliver environmental benefits without undermining competitiveness. We are emphasising the need for allocation methodologies to differentiate between sectors, with free allocation based on benchmarking a possible option for sectors exposed to international competition. We are also seeking a balance between the Commission acting as a robust ‘policemen’ to ensure a rigorous overall carbon cap, while still allowing an element of discretion at Member State level when there are legitimate national factors to take into account.

CBI submits three key responses

Our response to the government’s nuclear consultation reiterated the CBI view that nuclear should be free to compete on its low carbon merits in the energy markets with other technologies such as renewables, gas and clean coal. Our response to the Defra’s revised proposals for the Carbon Reduction Commitment (a UK-only carbon trading scheme for the commercial and public sectors), emphasised the need for a workable, pragmatic approach to what could be a highly complex scheme. Our submission to the Parliamentary Environmental Audit Committee’s inquiry into the future of Climate Change Agrreements (CCAs) and the Climate Change Levy (CCL), emphasised the carbon reductions which CCAs have delivered, and the need to address overlaps and duplication between policy measures (in the Pre-Budget Report the Chancellor announced that CCAs will continue through to 2017). Read the responses.

Extension to industrial pollution control sought

Text circulated for consultation within the European Commission on the revision of the Integrated Pollution Prevention and Control (IPPC) Directive shows that the Commission intends to make some significant changes to the current system. It is proposing to extend the scope of the directive to cover a range of waste treatment processes not already covered, and more significantly, to reduce the threshold for combustion plants from 50MW to 20MW. The proposal also establishes the ability to use emissions trading for NOx and SOx, provided that European level rules are established. There are also proposals to streamline the interaction of the IPPC with other sector regulations. The Commission is expected to release its formal proposal at the end of the year.

Environment Committee votes on air and soil

The European Parliament’s Environment Committee voted for a second time on the Ambient Air Quality Directive (AAQD) and had its first vote on the Soil Framework Directive (SFD). On the AAQD the Parliament’s tighter targets for particulate emissions were supported, but with greater flexibility about when they are to be achieved. Proposals to restrict where air quality is measured to areas where there is a risk of exposure were also adopted. On the SFD proposal, MEPs did adopt a number of amendments to make the proposal less prescriptive and to give more flexibility to Member States, but they stopped short of the major revision that business was seeking. The plenary votes will be in the 12-14 November session for the Soil Framework Directive and 11-12 December session for the Ambient Air Quality Directive.

Environment news round-up

CBI reaction to the Budget