Monday, March 21, 2011

Make the Environment Pay

It's interesting that the leaks about this week's budget suggest that Osborne is planning to offer a few small treats to voters which will be environmentally damaging: freezing duty on fuel, and dropping a rise in passenger duty for air travel. Nice to know how far Cameron's greening of the Tory Party will get.

Instead, environmentally friendly policies actually offer a real chance of spurring growth in a fiscally beneficial fashion, as Robert Skidelsky and Felix Martin argue in today's FT. The idea is to create a green investment bank, which would leverage government borrowing to invest in the kinds of activities a more balanced economy needs (green building projects for example), as well as stimulating demand in the short run.

Any chance of this happening? Obviously not. Despite the apparent malleability of British politics, with its frequent and total alternations in government and the unfettered powers given to parliamentary majorities, British politics is as bogged down and static as the US, with its well known restraints on executive power. The right to drive your car anywhere you want, enjoy rents from land ownership, make money at the risk of economic stability through 'free' capital markets are sacred. The need to improve our infrastructure and make the country a greener and more pleasant place to live is dismissed as radical, unaffordable or impossible.

I blame the voting system.