Downturn Drives Fall in Greenhouse Gas Emissions

New figures show UK greenhouse gas emissions fell 8.7 per cent in 2009, as ministers seek to secure future of green investment bank.

UK greenhouse gas (GHG) emissions fell nearly nine per cent in 2009, according to official government figures that suggest the cuts were primarily the result of increased reliance on nuclear power plants and reduced demand for energy due to the recession.

The figures from the Department of Energy and Climate Change (DECC) confirmed GHG emissions fell 8.7 per cent between 2008 and 2009 - a slightly more modest fall than the nine per cent figure predicted in preliminary figures released last March.

Emissions fell across all sectors, including a 36.5 per cent drop from industry, an 11 per cent fall in emissions related to energy supplies, an 11.8 per cent cut from the business sector and a 4.2 per cent drop in transport emissions.

The deep cuts for 2009 contrast sharply with government data showing UK GHG emissions fell 1.9 per cent during 2008.

DECC credited "a significant reduction in emissions from power stations" as the main cause for the cuts in emissions, noting that demand for energy fell as a result of the recession at the same time as the proportion of energy generated by nuclear power plants increased.

Despite the fall in emissions, energy and climate change secretary Chris Huhne warned that deep cuts were unlikely to be sustained as the economy recovers without the rapid rollout of new green policies.

"Yes, emissions were down in 2009 but so was the economy so this is no time for back-slapping," he said in a statement. "A low-carbon approach has to be a vital part of kick-starting and future-proofing our economy, getting us off the oil hook and on to long-term green growth."

In related news, the Guardian reported today that Cabinet Office minister Oliver Letwin is attempting to broker a deal between the Treasury and DECC that would allow the government's proposed green investment bank (GIB) to operate as a private entity.

Huhne has been pushing for the proposed bank to operate as a genuine bank and be given the power to issue bonds and provide loans to green businesses. However, the proposals are being blocked by the Treasury, which fears issuing green bonds would add to the government's debt.

The Department of Business, Innovation and Skills is said to be close to brokering a compromise deal that would allow the GIB to operate as a bank while being subject to strict lending limits.

However, according to reports in the Guardian, Letwin has tabled an alternative proposal that would see the bank operate as a private enterprise, ensuring that any debt carried by the institution does not appear on the government's books.

The proposals are likely to prove controversial as they could reduce the accountability of the bank, remove government-backed loan guarantees for low-carbon projects and force the institution to respond to private shareholders.

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