Budget 2006: a small step in the right direction?

Gordon Brown's 10th - and possibly last - budget as chancellor is a good start for the environment, but it doesn't go far enough.

While Brown announced welcome new funding for microgeneration and energy efficiency, his measures on transport fell far short of what's needed to tackle climate change.

Greenpeace's calls for a new top band of Vehicle Excise Duty (VED) were heeded  but substantially watered down. Instead of increasing duty to £1800 for the worst offending carbon emitters, Brown increased it to a mere £210. Only 1% of all cars will be affected.

"The creation of a new top rate of road tax is the right way to go," said Stephen Tindale, Executive Director of Greenpeace, "but the Chancellor must know that £210 is far too little money to stop anyone buying a gas guzzler.

"The country would have been behind him if he'd slapped punitive taxes on these vehicles, some of which pump out three times their own weight in carbon every year, but the Chancellor stalled. We will continue to press him to increase the top rate to £1,800, which even the government's own advisers say is necessary."

Air passenger tax will not increase at all - meaning that the UK's fastest growing emissions sector will be allowed to continue contributing to climate change unchecked.

But Brown did better on microgeneration and efficiency, announcing a £50 million investment in the development of microgeneration technologies, and subsidies for insulation in a quarter of a million British homes.

"The measures on energy efficiency and microgeneration are very positive and will help bring forward low-carbon buildings and a decentralised energy system," said Stephen Tindale. "The key decisions on this, however, will be made in the energy review, where the Prime Minister's obsession with all things nuclear still threatens to derail progress towards safer, cleaner and cheaper energy."

Greenpeace also welcomed the Chancellor's commitment to strengthen the European emissions trading system and the setting up of a new National Institute of Energy Technologies.

"This budget may be the first sign that we're about to get a Prime Minister who acts on climate change instead of just talking about it," said Stephen Tindale.

"Many of these measures will make a difference if properly implemented, though the real test for Brown comes next month when the government has to decide how much carbon British industry is allowed to emit."