After years of chancellors talking about going green, Gordon Brown has begun to do it.

Accepting that the prospect of climate change is a serious threat to the national (and the global) economy, he has announced an industrial energy tax.

This will act to reduce emissions of carbon dioxide (CO2), the main human contribution to global warming, by making it more expensive for companies to use the most polluting fuels.

The principle was spelt out in a 1998 report from a task force chaired by Lord Marshall, Chairman of British Airways.

High mileage discouraged

He concluded such a tax need not be a burden on business or harm competitiveness.

Mr Brown has said the new tax, to start in two years' time, will be revenue-neutral.

There will be no overall tax increase, because employers' national insurance contributions will be reduced.

The chancellor also announced an end to tax breaks for high mileage by drivers of company cars.

Gain for some road users, pain for others

There will also be steps to encourage the use of more fuel-efficient company cars, with the driver of a typical company vehicle paying about a pound a week more.

The World Wide Fund for Nature welcomed Gordon Brown's announcements on company cars and business energy use.

It said he was "challenging entrenched constitutencies and putting the welfare of the whole country - and of the planet - before sectional interests".

"But they will in any case not suffer economically - they will simply be encouraged to change their environmental behaviour."

Start of a strategy

The Global Environmental Change Programme at the University of Sussex gave evidence to Lord Marshall's task force.

Welcoming the announcement of the business energy tax, Assistant Director of the programme, Alister Scott, said it could be part of "the beginnings of a serious climate strategy".

Filling up is harder to do

He said research had shown that a tax of this sort gave not only an economic incentive to cut energy use, but also a message about the government's seriousness in tackling climate change.

But Mr Scott said it was essential to recycle the revenue raised back into the economy.

In other measures, the chancellor announced a �55 cut in road tax on small cars from 1 June, and increases in the cost of petrol and diesel, in line with earlier commitments to raise fuel prices annually.

The RAC said the increases were "a green smokescreen, which would cost the average motorist about �60 a year.

Mr Brown also said the landfill tax, designed to encourage the recycling and minimisation of waste, would rise by �1 a year.

Altering behaviour

What he is trying to do is to penalise behaviour that harms the environment and to reward ecological good conduct - without penalising those affected.

And he has gone further than any of his predecessors in doing that.

The Royal Society for the Protection of Birds called the business energy tax "a real breakthrough - Labour's first green tax".

But it said the tax should start a year earlier, in 2000, and it regretted the failure to introduce a tax on pesticides.

Friends of the Earth acknowledged that Labour had taken its "first halting steps towards green economics".

But it said the business energy tax, while welcome, marked a retreat from Labour's manifesto pledge to cut CO2 emissions by 20% over 1990 levels by 2010.

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