R 311128Z MAR 09
FM AMEMBASSY LONDON
TO SECSTATE WASHDC 1885
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USEU BRUSSELS

UNCLAS LONDON 000785 
 
 
E.O. 12958: N/A 
TAGS: EFIN SENV ENRG KGHG UK
SUBJECT: UK: INFO ON GREEN INVESTMENTS 
 
REF: STATE 26022 
 
¶1. SUMMARY: The UK has announced it will spend $760 million (535 
million BPS) over two fiscal years (2008/9, 2009/10) on 
environmental aspects of a financial stimulus package.  This is 18% 
of their complete fiscal stimulus package. Additional UK green 
stimulus measures will not be known until the budget is announced on 
April 22.  The UK already has in place a wide variety of financial 
and policy tools to stimulate renewable energy, low-carbon energy, 
and to reduce greenhouse gas emissions.  The one "no-go" area for 
fiscal stimulus is new nuclear energy plants, which the Government 
has unambiguously stated must be entirely paid for by private 
industry.  END SUMMARY. 
 
UK Green Stimulus Program 
------------------------- 
 
¶2.  PM Brown said on March 6 that he expects 5% growth in 
environmental employment, with 1.3 million people employed in the 
sector by 2017.  The $760 million (535 million BPS) "green stimulus" 
package announced at the Pre-Budget Report on November 24, 2008 
contains the following programs: 
 
** $213 million (100 million BPS of new funding and 50 million BPS 
of spending brought forward) for "Warm Front," a program for 
improvements to insulation and heating systems in low-income 
households. 
 
** $85 million (60 million BPS) for energy efficiency under the 
"Decent Homes" program 
 
** $425 million (300 million BPS) for new railway cars 
 
** $28 million (20 million BPS) for flood defense 
 
** $7 million (5 million BPS) for waterways infrastructure 
 
Ongoing Programs in Climate and Energy Efficiency 
--------------------------------------------- ---- 
 
¶3.  The UK's ongoing programs in clean energy and climate change 
include: 
 
** Participation in the EU Emissions Trading Scheme (EU-ETS) 
 
** Passage in 2008 of a Climate Change Act requiring 80% reductions 
in greenhouse gas (GHG) emissions by 2050 and five-year carbon 
budgets setting a path to that goal 
 
** Participation in the EU's "20/20/20" Climate and Energy Package 
requiring an EU-wide 20% reduction in GHG emissions, 20% of all 
energy from renewables (15% for the UK), and a 20% increase in 
energy efficiency. 
 
** Domestic legislation for "Renewables Obligations," a requirement 
that electricity generators produce a certain percent of their 
output (9.1% in 2009 and rising) from renewable sources and which 
provides tradeable "Renewables Obligation Certificates" for each 
megawatt/hour of generation. 
 
** (in development) Feed-in tariffs for small-scale renewable 
electricity supply 
 
** Energy efficiency standards for appliances 
 
** New homes built in 2016 or later must be zero-carbon 
 
** New car emissions at 95 grams per kilometer by 2020 
 
** (in development) Smart electricity meters by 2020 
 
** A Renewable Transport Fuel Obligation (RTFO) biofuel target 
currently at 2.75% of transportation fuel by volume, and ramping up 
to 5% by 2013 
 
** Starting in 2010 - "Carbon Reduction Commitment" - a 
cap-and-trade system for large electricity consumers like hospitals 
 
and industry 
 
** (in development) $350 million (250 million BPS) for ultra 
low-carbon vehicles, including battery vehicles 
 
** A wide range of other government programs in technology 
development (e.g. Technology Strategy Board), energy efficiency 
(Carbon Trust, Energy Savings Trust), public transport, and grid 
infrastructure 
 
¶4.  Comment: At $760 million over two years, the green stimulus is a 
tiny fraction of the UK's annual $810 billion annual government 
expenditures and their $1.8 trillion annual GDP. 
 
 
LeBaron