Skip to main content
Article thumbnail
Location of Repository

Fiscal costs of climate mitigation programmes in the UK: a challenge for social policy?

By Ian Gough and Sam Marden

Abstract

This paper asks whether the policies and programmes enacted to reduce greenhouse gas emissions in the UK will compete with other goals of public policy, in particular social policy goals. The Climate Change Act 2008 has set the UK some of the most demanding targets in the world: to reduce GHG emissions (compared with 1990) by at least 80% by 2050 and by at least 34% by 2020 – just nine years away. A wide array of climate change mitigation policies (CCMPs) have been put in place to bring this about. Will these compete fiscally with the large public expenditures on the welfare state? We address this question by surveying and costing all UK government policies that have a climate change mitigation objective and which are expressed through taxation, government expenditures and government-mandated expenditures by energy suppliers and other businesses and which are directed toward the household sector. Our conclusion is that expenditures on CCMPs are tiny – around one quarter of one per cent of GDP - and will not rise significantly. Within this the share of direct spending by government will fall and that obligated on utility companies will rise. Green taxes are also planned to fall as a share of GDP. There is no evidence here of fiscal competition between the welfare state and the environmental state. However, the use of mandated electricity and gas markets will impose rising costs on the household sector, which will bear more heavily on lower income households and will increase ‘fuel poverty’. Thus demands on traditional social policies are likely to rise. More radical policy reforms will be needed to integrate climate change and social policy goals

Topics: GE Environmental Sciences
Publisher: Centre for Analysis of Social Exclusion, London School of Economics and Political Science
Year: 2011
OAI identifier: oai:eprints.lse.ac.uk:36560
Provided by: LSE Research Online

Suggested articles

Citations

  1. (2009). Green‟ ways of financing the welfare state? Paper presented at Espanet conference on The Future of the Welfare State,
  2. (2008). Committee on Climate Change doi
  3. (2009). Meeting Carbon Budgets: the need for a step change.
  4. Committee on Climate Change (2010). The Fourth Carbon Budget
  5. of Energy and Climate Change) (2009a). The Low Carbon Transition Plan.
  6. The Low Carbon Transition Plan: Analytical Annex.
  7. (2011). Decarbonising the welfare state‟, in Oxford Handbook of Climate Change and Society, edited by
  8. (2011). The distribution of total embodied greenhouse gas emissions by households in the UK, and some implications for social policy. LSE:
  9. Foundation (2010). Climate change mitigation and social justice in Europe: striking the right balance.
  10. (2005). Fuel taxation. doi
  11. Office (2009). European Union Emissions Trading Scheme: A Review. London: National Audit Office.
  12. New economics foundation (2008). Tackling climate change, reducing poverty.
  13. (2010). Distributional impacts of UK climate change policies. Final report to eaga Charitable Trust. Bristol: Centre for Sustainable Energy. 30 Snell C
  14. (2007). Review Report doi

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.