"If I become Chancellor, the Treasury will become a green ally, not a foe" and "we need to recognise the fierce urgency ... to see the whole of the government pulling in the same direction to cut emissions and green our economy." This vision of the Treasury was set out by George Osborne on 24 November 2009, when he was Shadow Chancellor. The reality since then has been some way adrift from his vision, but now is his chance to put the Treasury back on track to fulfil his aspirations.
With mounting evidence that the economic risks and costs from environmental degradation, resource scarcity and climate change will continue to intensify - and tough international targets to hit - next week's mini Budget would be the ideal opportunity for the Chancellor to revisit his early ambition and to put Britain's economy on a more sustainable path. Indeed, if Britain is to meet the challenge of phasing out fossil fuel use by the end of the century set by the G7 a few weeks ago - warmly endorsed by the Prime Minister and the refreshingly engaged new conservative climate secretary, Amber Rudd - something in Horse Guards Road will need to change, and soon.
Turning the red box green wouldn't be out of keeping with the Conservatives' oft-trumpeted love of sound economics, with the conservationist interests of middle England, or with Osborne's personal enthusiasm for science and technology. Green growth is the best growth because it will enhance economic resilience, reduce risks and costs to businesses and the public sector, generate hundreds of thousands of secure jobs, and enhance our quality of life.
The Conservative manifesto as a starting point
And to be fair, the Conservative manifesto contained some welcome ideas - though alongside less helpful commitments, such as halting support for onshore wind (currently the cheapest form of renewable energy) while boosting them for the north sea oil and gas industry. These included investing £500m over the next five years to ensure that most vehicles are zero emission by 2050, introducing smart meters for every home and business by 2020, and supporting energy efficiency measures in a million more homes in the next five years.
The Conservatives also pledged to continue the Natural Capital Committee over the current parliament, to develop a 25 Year Plan to restore the UK's biodiversity, and gave a renewed commitment to the creation of a 'blue belt' of marine protected areas around the UK coast and international territories. This is not just good news for nature - it is good news for the economy. Our natural assets, after all, ultimately underpin all economic activity, and protecting and investing in our asset base should be a core part of any credible, long-term economic plan.
Many ways to green the upcoming Budget
However, as WWF set out in its 'Greener Budget' report in spring this year, there is much more that the Chancellor can do to capture the opportunities from a green transition - starting with this summer's Budget. For example, to help embed environmental literacy in economic thinking, he could commit to incorporating information on the state of our natural capital assets in future Budgets, highlighting the economic benefits we derive from them, the risks and costs of their depletion, and the need to invest in their long-term maintenance.
Given our dependence on nature's services, this should be seen as a national infrastructure priority and invested in accordingly. It doesn't mean another hit on the public purse either. With the right long-term policy incentives in place, much of this investment could be secured from the private sector. This, in turn, would generate business opportunities, jobs and growth, particularly in rural and coastal areas. Indeed businesses are increasingly interested in investments in natural capital as both a source of revenue and risk mitigation, as evidenced by the rapid growth of the green bonds market.
Likewise the Chancellor should cut subsidies that are eroding our natural capital, which would help contribute towards the spending cuts he is looking for in this Budget. The generous fuel subsidies given to fishing fleets are directly undermining the long-term productivity of our seas by promoting damaging fishing practices. Accompanied by the right measures to mitigate and manage the short-term impacts on fishing communities, replacing these kinds of subsidies (as part of a package of measures to restore UK fish stocks) would both save money and improve the long-term economic prospects of our fishing industry.
The UK Natural Capital Committee estimated that restoring UK fish stocks to pre-1970 levels would generate £1.4 billion extra in revenues per year. It is also high-time the UK kept pace with many other EU countries and published regular reports on public subsidies, including information on their environmental and social impacts and costs.
There's also no excuse not to make energy efficiency a national infrastructure priority. Scotland has made the pledge; its time Westminster caught up. Despite progress, the UK is not yet on course to meet its 4th carbon budget. There should therefore be an ambitious plan to retrofit homes, and adjustments to stamp duty and council tax to encourage uptake of the Green Deal, which helps finance energy efficiency measures for homes and businesses. All of this could generate over 100,000 net jobs per year and generate enormous consumer savings - eliminating fuel poverty for most of the several million households affected by it.
Financing a new economy
There are other easy opportunities to reduce spending and increase tax revenues while stimulating demand for goods and services that promote resource efficiency and long-term growth. The business community, including the EEF (the Manufacturers Association), has called for increases in the lower rate of landfill tax and a tax on incineration to promote a more resource-efficient, circular economy, with the potential to generate around half a million new jobs by 2030. Increasing taxes on environmental 'bads' through measures such as these could raise some £8 billion by 2020 while boosting investment in 'good' sectors such as recycling and remanufacturing.
And vitally, ministers should end uncertainty around government support for renewables by putting in place a clear, long-term policy framework that gives business the confidence to invest in low-carbon projects.
The ball is in the Chancellor's court
This Budget may be likely to reduce the growth in the size of the state. But the Government will still wield huge power to create the conditions in which clean, green enterprise can flourish. This month, 80 businesses including John Lewis Partnership, BT and Willmott Dixon wrote to the Prime Minister urging him to do just that. If the Chancellor is as shrewd as his reputation suggests, he won't want to be remembered as the guy who failed to fix the roof while the sun was shining.