Comprehensive Spending Review: low carbon economy

As promised, the government is to create a Green Investment Bank in an effort to boost the UK's low carbon economy.

The Bank will have an initial capital of £1 billion and its aim will be to catalyse business investment in green technologies and green infrastructure.

The Department of Energy and Climate Change will find that its resource spending is to be reduced by 18 per cent in real terms over the next four years.

However, its capital spending will rise by 41 per cent during the same period.

The spending review, the government insists, will enable the UK to meet its environmental targets, including a 34 per cent reduction in greenhouse gas emissions by 2020.

One of the key elements in such a reduction is the recently introduced Carbon Reduction Commitment (CRC) scheme, which imposes a levy for particularly heavy users of energy and rewards those firms that reduce the level of their emissions. The money raised from the CRC scheme will be used to support the public finances and environmental projects, the government said, rather than be recycled to participating companies.