SERA Briefing on the 2004 Spending Review

Energy Spending Proposal

• £150m - £200m a year could be saved by replacing nuclear reprocessing with dry storage and invested in renewable energy

Funding of renewables needs to be increased to meet the target of 10% by 2010. It will also be required to help deal with climate change and meet the government's target of a 60% reduction in carbon dioxide emissions (CO2) from current levels by 2050.

£100m a year, into off-shore wind power - Wind power is the front-runner in renewable energy industries and its expansion offers the best chance of reaching the government's Energy White Paper target.

The national grid will need to be adapted to take power from renewable energy sources. Some of this cost can be financed by an increase in electricity prices but private companies are unlikely to provide all the funding. The government must take the lead and contribute to the capital investment.

£5m a year to on-shore wind power - This would provide grants for local community investments in wind farms. For example, a 3 MW wind farm could receive a £15, 000 grant.

£7.5m a year to solar power - Solar Century has said the government needs to increase its capital grant programme to reach its target of a 100,000 roofs by 2012. One of the aims of reaching this target is to reduce the cost of photovoltaic systems, which is a major barrier to expanding their use.

£10m a year to marine renewables - This funding would provide more grants for the development of wave and tidal energy. These technologies require more investment to bring them on line more quickly.

£10m a year to energy crops - Biofuels are already competitive with fossil fuels. Extra capital grants are needed to fund the collection and distribution infrastructure for biomass energy.

SERA welcomes the government's recent decision to increase the Renewables Obligation from 10% by 2010 to 15% by 2015, which will help give renewables a more secure, long-term market.

The government should now set a clear target of providing 20% of electricity from renewable energy by 2020.

Waste Spending Proposal

• £6/tonne increase in landfill tax will provide an additional £200m a year to fund doorstep recycling.

An additional £200m a year would initially fund the recycling of two extra waste streams on the doorstep, bringing the number up to four. The Household Waste Recycling Act, introduced by Joan Ruddock MP with the backing of Friends of the Earth, already requires councils to collect and recycle two waste streams from homes.

Once all homes have kerbside recycling, the government will be able to introduce variable charging to encourage waste recycling and reduction. The government will decide in early 2004 whether to introduce variable charging pilots. SERA would welcome the introduction of these. Blaby council, referred to in the Strategy Unit report on waste, already successfully operates variable charging.

DEFRA's changes to the waste PFI criteria will provide more finance for recycling and SERA welcomes this move by the government. SERA would also like to see the government introduce an incineration tax so it is economic for councils to choose recycling over incineration.

Further increases in the landfill tax should also be used to fund:

• Additional £450m per year by 2010 for doorstep recycling - to finance good collection systems
• £100m, three year Waste Minimisation Challenge Fund - This fund will help achieve waste reduction. Waste minimisation is fundamental to the government achieving its aim of decoupling the growth in waste from the increase in GDP. SERA would like to see a waste minimisation target being set and a public service agreement (PSA) covering waste minimisation in the 2004 Spending Review.

Waste minimisation and recycling are central to the government's Waste Strategy 2000 and are the government's preferred method of dealing with the Landfill Directive's requirement to send less waste to landfill.

Transport Spending Proposal

• Switch £4bn from motorway widening projects to buses, local rail, cycling and walking.

Investment in public transport, cycling and walking will help deliver the government's aim of integrated transport and meet the government's targets for reducing carbon emissions. Road traffic is a major source of UK CO2 emissions and could prevent the government reaching its 2010 emissions target¹.

Road pricing will also be crucial to cutting pollution and congestion. Revenue from congestion charges or tolls should be used to increase funding in public transport, for example bus spending, as has happened in London. Targeted bus spending can also help tackle social exclusion.

The Department for Transport should sign a joint PSA target with DEFRA and the DTI to reduce CO2 emissions by 20% (from 1990 levels) by 2010 so progress in reducing transport CO2 emissions can be measured.

Improving public transport and creating a safe environment for cycling and walking will help improve people's health, which is a government priority in this Spending Round. Road traffic pollution contributes to asthma and lack of exercise is a cause of the increasing problem of obesity. The government's action plan to encourage children to walk and cycle to school or use public transport reflects the importance of finding alternatives to the car.