The first full budget from a government claiming to be the "greenest ever" is a betrayal of our environment and our future. In his determination to balance the nation's finances, George Osborne has forgotten that living within our means is also about natural resources. This budget is an attempt to return us to the failed policies of the past – unsustainable growth based on dwindling and ever-more expensive resources. The chance to turn environmental necessity to our economic and social advantage has once again gone begging.

Overall, Wednesday's budget continues the course charted last June. Repaying debt remains Osborne's prime objective – despite growing evidence that this is draining the life-blood from the economy and risking rises in both unemployment and prices. His methods, too, come straight from the 1920s – across the board cuts in public spending.

This is not only bad economics – it is also a huge missed opportunity. Between the extremes of Tory kill-to-be-kind austerity and a return to Labour's debt-fuelled spend-a-thon lies a more subtle alternative: avoiding savage cuts in public spending that could trigger a new recession, but also concentrating that spending where it has the maximum economic, social and environmental benefit.

The environment provides the clearest example of how this would work in practice. Even before the current economic crisis had fully developed, the "green deal" was showing how money invested in energy-saving measures could sustain far more jobs than other forms of government spending, and also contribute to reducing fuel poverty, improving health and tackling climate change. Today, the arguments in favour are stronger, particularly with hikes in regressive taxes such as VAT and cuts in benefits and services leaving the poorest even more vulnerable.

The chancellor had five opportunities to deliver a budget for the future, that could have turned the growing crisis over energy resources and climate change into a catalyst for creating much-needed jobs and wealth in new energy efficiency and renewable industries. They are:

• The green investment bank: This should have been the key to unlocking the £450bn in finance for renewable energy needed in the next 15 years. Instead, by creating a bank that cannot borrow, its impact will be limited to the original £3bn funding.

• Transport: Taxing the excess profits of North Sea oil companies is welcome; but the revenue should have been used to protect rural bus services, which are even more crucial to isolated communities and the poorest in society than the cost of fuel.

• Environmental taxes: Despite pledging more "green taxes", scrapping the planned rise in air passenger duty will reduce revenue from environmental taxes by £145m. It will also encourage more people to holiday abroad, hitting UK resorts.

• Carbon floor prices: At £30 a tonne, the new levy on carbon will not promote much low-carbon energy, but it will give nuclear power companies a windfall subsidy of between £1.3bn and £3bn – paid for by the "hard-pressed families" that Osborne claims he wants to help.

• Zero-carbon homes: The chancellor has changed the rules so that supposedly "zero-carbon" homes would in fact create carbon emissions for years to come. It will also undermine many community energy schemes.

If this wasn't enough bad news for the environment, the chancellor announced changes to the planning system that are likely to weaken the protection for the countryside, putting precious landscapes and habitats at even greater risk.

This budget contains nothing to shift us away from our dependency on oil and gas, nothing to take advantage of the potential of new technologies such as wind, wave and tide, and precious little to encourage investment in renewable industries.

Instead, he has gone for the populist gesture of 1p off fuel duty. It gives drivers the false comfort that as fuel prices rise, the government will cut fuel duty. The reality is that petrol is a dwindling resource and we need to help people with alternatives, such as public transport. While Osborne could find £2bn for petrol, there was not a penny today for buses or trains.

The depressing truth is that, rather than being the greenest government ever, this Conservative-Liberal Democrat coalition is less green than John Major's government, which introduced the fuel duty escalator, boosted energy efficiency and protection for threatened habitats. Even Margaret Thatcher accepted the need for action on climate change.

Osborne wanted to put fuel in the tank of the British economy. No doubt he will get the headlines he wants. But the reality is that he, like Mr Toad, is speeding down a dead-end road. Oil will not last for ever. The sooner we can reduce our dependence, the better for us all.