Supplementary memorandum from the Royal
Society for the Protection of Birds|
The RSPB presented written evidence to the inquiry
of the Environmental Audit Committee on the 1999 Pre-Budget Report
in September 1999. In November, we were invited to present oral
evidence to the Committee on the subject of a pesticides tax.
The memorandum below presents further information on three issues,
to provide more details on points we raised in oral evidence and
to follow-up the publication of the Pre-Budget Report:
the Climate Change Levy;
environmental appraisal of the Pre-Budget
1.1 Scope for Cost Savings Through Reduced
In providing oral evidence, the RSPB made specific
mention of two studies estimating the potential for farmers to
reduce pesticide use profitably. The first of these was a study
by RPA and Entec for DETR, and the second a critique of this by
Morley Agricultural Consultants for the British Agrochemicals
Association. We believe that there is broad scope for cost-effective
pesticide reduction and that it is therefore a crucial issue when
considering a possible pesticides tax. In this context we feel
that it is useful to give further details of the findings of the
The first report "Private Costs and Benefits
of Pesticide Minimisation" was prepared for the Department
of the Environment by Risk & Policy Analysts Ltd and Entec
UK Ltd, and completed in March 1997. It estimated the financial
costs and benefits to farmers associated with the adoption of
techniques to minimise pesticide risks. These estimates were made
at three levels: for specific crops, using farm case studies,
and at a national level.
The study identified cost savings through adoption
of pest and disease thresholds, improved application techniques,
more appropriate rates of use, and the use of independent advisers.
National estimates were made of both the overall net cost or benefit
of different pesticide reduction techniques, and the potential
savings in pesticides themselves.
A critique of this report was undertaken by
Morley Agricultural Consultants for the British Agrochemicals
Association, and completed in January 1998. This concluded that
the RPA/Entec report had overestimated the potential benefits
and pesticide savings from the pesticide minimisation techniques
advocated, but also that:
"the report correctly identifies many pesticide
minimisation techniques where improvements and further adoption
can be achieved".
The Morley report gave its own estimates of
the overall net benefits and savings in pesticide costs of fully
adopting pesticide minimisation techniques in the UK. It estimated
total net benefits from pesticide
reduction techniques amount to £182.75 million per year in
the UK, compared to the RPA/Entec estimate of £605 million;
the actual savings in pesticides
from these techniques totals £100.25 million, compared to
the RPA/Entec estimate of £274 million (see Table 1).
In response to this report, the British Agrochemicals
"BAA in broad terms agrees with the conclusions
of Morley that the original report seriously overestimates the
potential cost savings to farmers of pesticide minimisation techniques.
Morley's conclusion that future savings of £100.25 million
are available to farmers with the full integration of integrated
farming systems and new application technology are in line with
current industry estimates of 20-30 per cent market decline over
the next 10 years. (The agrochemical market at farm gate prices
is approximately £500 million)".
(A BAA perspective to the Morley Analysis of
"The Private Costs of Pesticide Minimisation", February
Table 1: Estimated National Benefits and
Pesticide Savings for Pesticide Minimisation Techniques
||Net Benefit (£m)*
||Pesticide Saving (£m)*
|Wheat||Use of independent advisers
||81 (23)||44 (13)
|Improved spray application
||120 (21)||59 (12)
|Use of disease/pest thresholds
||61 (7)||5 (3)
||35 (15)||26 (10)
|2m buffer zones||34 (16)
|6m buffer zones||36 (36)
|Spring cereals||Independent advisers
||21 (5)||7 (1)
|Use of appropriate rates
||9 (3)||6 (3)
|2m buffer zones||10 (5)
|6m buffer zones||15 (15)
|Winter oilseed rape||Improved application
||11 (3)||6 (1)
||18 (5)||7 (2)
|6m buffer zone||6 (6)
|Sugar beet||Improved application
||17 (3)||6 (1.5)
||7 (3)||4 (2)
|Appropriate rates||1 (0.5)
||28 (7)||18 (4)
||37 (7)||4 (1)
|Crop rotation||25 (0)
*The first figure in each column is the RPA/Entec estimate,
and the figure in brackets the Morley estimate
Source: Morley Agricultural Consultants (1998): An analysis
of "Private costs and benefits of pesticide minimisation".
1.2 Impact of Pesticides on Farmland Birds
In the last 10-20 years concern about the impact of pesticides
on birds has mostly shifted away from direct toxic effects to
"indirect" or food-chain effects.
Pesticides are known to affect bird populations by reducing
the abundance of food items such as weed seeds and insects and
consequently the survival of both adults and chicks. Concerns
about these effects have been heightened by well-publicised data
showing major and widespread declines in the breeding populations
of a variety of characteristic farmland bird species. Government
have made commitments to conserve these species through the UK's
Biodiversity Action Plan (BAP).
1.2.1 Studies on the indirect effects of pesticides
A report entitled A review of the indirect effects of
pesticides on birds (Campbell et al, 1997) for the then Department
of the Environment, the Joint Nature Conservation Committee and
English Nature examined the relationship between birds, their
food and pesticides. Although scientific knowledge on the subject
is incomplete, the review concluded that:
there is convincing evidence that a range of both
scarce and more widespread farmland breeding birds are in decline;
there is good evidence of both long-term and short-term
declines in many of the types of invertebrates and plants on which
these birds feed;
there is evidence to suggest that the declines
in bird food are, in part, attributable to the effects of pesticides;
there are temporal associations between trends
in pesticide use (measured by percentage of cropped area sprayed)
and the periods of rapid decline in many of the declining bird
The clearest, and completely convincing, evidence of food-chain
effects of pesticides is the work on grey partridge done by The
Game Conservancy Trust. This study has been running continuously
for the past 30 years and has considered aspects such as cropping
patterns, predation and pesticides in the decline of this game
bird. This study provides convincing evidence that grey partridge
chick survival has been reduced by the removal of its key food
source (sawfly larvae) thereby leading to a decline in breeding
bird population density. Insecticides kill the sawfly larvae and
herbicides remove the habitat (weeds) on which sawfly larvae depend.
Manipulation of pesticide use alone has been shown to result in
significant improvements in chick survival (Potts & Aebischer
1995; Potts 1986).
Recent shorter-term research has yielded further evidence
of the effects of pesticides on another species of bird, the corn
bunting. The research found that the survival of corn bunting
chicks in the nest depends on food availability, and that corn
bunting chick food (such as harvestmen, sawflies, spiders and
ground beetlessimilar to the requirements of grey partridge
chicks) is more abundant in fields where fewer pesticides have
been applied (Brickle 1998).
Where cereal fields receive more pesticide applications they
hold a lower abundance of chick food, and the chicks weigh less
and have a poorer chance of survival. The UK population of the
corn bunting has declined in numbers by 74 per cent in the past
25 years (data from the BTO).
The similarities in the ecology and in the pattern of population
declines of a further 18 species of birds of lowland farmland
suggest that food-chain effects of pesticides cannot be ruled
out as a significant cause of population decline. The likely role
of pesticides is noted in the numerous Species Action Plans for
birds published by Government as part of the work under the Biodiversity
Action Plan (see Appendix).
1.2.2 Effects of pesticides on other species
Whilst invertebrates and plants may be regarded as important
in the food chain, they are also important in themselves and many
appear on the UK BAP. Aebischer (1991) recorded a 4.2 per cent
decline per annum between 1972 and 1989, in arthropods occurring
in cereal fields on the South Downs. Many plants of arable land
have also dramatically declined in the past 40 years, indeed a
few species are on the verge of extinction or have already become
extinct in the UK, for example corncockle and thorow-wax. This
is particularly disturbing since less than 30 years ago such species
would have been considered as very common weeds. Whilst research
into the causes of these losses has not widely taken place, the
increased use of insecticides and herbicides on farmland is likely
to be among the most significant factors as is recognised in numerous
Species Action Plans published by government (see Appendix).
1.2.3 The UK regulatory system
The current regulatory system for pesticides in the UK does
not take into account the full environmental effects that pesticides
have on wildlife. Currently pesticides are tested for their toxic
effects on a small selection of species, for example quail, earthworms
and honey bees. Other valuable insects and plants (valuable either
as part of the food chain or as part of the UK BAP) are not tested,
and the effects on farmland birds and other species higher up
the food chain of removal of certain invertebrate and weed species
are not tested.
2. CLIMATE CHANGE
The RSPB welcomed the confirmation of the levy in the Pre-Budget
Report. It gives a clear signal to businesses to use energy more
efficiently and will significantly reduce carbon emissions. However,
we have some concerns about the details, as outlined below.
2.1 Treatment of renewables and CHP
We welcome the announcement that renewables will be exempt.
This seems to mean all renewable energy, old and new, except large-scale
hydro. This does not make environmental sense, as hydro is carbon-free,
but does make economic sense, because large-scale hydro is already
cost-competitive with conventional generation. For Combined Heat
and Power, it appears that primary fuel will be exempt, as will
any electricity/heat used on site. However surplus electricity
exported to the grid may not be exempt. It would be perverse if
efficient, large-scale CHP was not fully exempt.
2.2 The level of the levy
The reduction in the rate for the levy will mean that smaller
commercial and retail officesfor which energy costs are
a relatively small proportion of overall costs, but which collectively
account for a high proportion of energy use and for whom many
cost-effective savings existwill have even less incentive
to reduce use than before.
2.3 An energy levy
The fact that the levy remains directed primarily towards
reducing energy, rather than carbon use, is perverse for a policy
designed to mitigate climate change. The rates continue to be
applied equally to coal and gas on a per kilowatt hour basis even
though it should be possible to differentiate the rates between
fuels based on carbon content.
2.4 Carbon savings
The Government's assertions that the new levy package will
result in carbon savings above 2 million tonnes per annum, and
that the negotiated agreements will double these savings, are
welcome, but require analytic verification.They would equate to
about 14 per cent of the Government's 20 per cent reduction target
by 2010 (29 MtC). However, we have seen no analysis supporting
2.5 Negotiated agreements
Of greatest concern is the leniency and flexibility apparently
being granted in the negotiated agreements. In return for a large
tax reduction of 80 per cent, energy intensive sectors (already
subject to the Integrated Pollution Prevention and Control [IPPC]
Directive) will seemingly only need to agree to achieve "cost
effective" energy efficiency improvements. We have two concerns
If "cost-effective" is defined as action
yielding a two-year pay back, this is likely to include action
the company would have taken anyway as part of its ordinary business
IPPC requires companies to adopt Best Available
Techniques, which take into account energy efficiency, so the
energy reductions under the negotiated agreements may require
little beyond what IPPC could have been interpreted to require
We have additional concerns with the negotiated agreements:
The apparent option to trade efficiency obligations
entered into under the agreements provides companies with even
greater flexibility in meeting them. While trading is an efficient
means of meeting obligations, the flexibility provided by trading
argues for the negotiation of stronger agreements in the first
By linking levy reductions to energy efficiency
targets rather than carbon reduction targets, it will be much
more difficult to facilitate trading, since carbon emissions (and
therefore credit prices) will fluctuate with productivity. It
will also be more difficult to guarantee that absolute carbon
emission reductions will be delivered; if output growth is greater
than forecast, emissions may rise even though efficiency has increased.
The nature of negotiated agreements means that
they will provide little information about the cost of reducing
emissions, information which would be extremely useful for the
successful design or modification of future policy.
It is our understanding that, in addition to the
ten energy intensive sectors originally considered for agreements,
more than thirty additional sectors have also requested consideration.
It is important not to cast the net so wide as to dilute the effect
of the levy or to make it bureaucratically top heavy.
Recommendation 1: In order to be effective, the negotiated
agreements must be limited to energy-intensive sectors, set out
ambitious improvement targets with strict penalties for failure
and should be based on carbon emissions, rather than energy efficiency.
2.6 The Way Forward
Negotiated agreements may have a role to play within the
short-term policy agenda but, given the problems identified above,
too much reliance on them over the longer term could be bureaucratic,
lack legitimacy and render the policy ineffective in achieving
its primary goal: reducing carbon emissions cost-effectively and
without compromising competitiveness. A preferable longer-term
alternative, therefore, and one in which industry itself has shown
a good deal of interest, may be a carbon emissions cap and trade
system. This could operate alongside the climate levy, which is
and should remain the primary instrument for achieving carbon
reductions cost-effectively. In return for an exemption from the
climate levy itself, companies could be given the option of entering
a firm commitment to an agreed absolute carbon emissions ceiling,
which they could then trade with other companies in the scheme.
2.6.1 How would a cap and trading scheme operate?
The cap would be set and allocated at a level to ensure real
cuts in greenhouse gases, so it would need to balance what is
environmentally necessary (eg the Government's 20 per cent carbon
emissions reduction target by 2010) with what is economically
possible. Companies would then be able to trade their reduced
CO2 emissions allowance with other companies in the scheme.
Such a scheme, operating in parallel with the levy, would
overcome most of the problems identified above with respect to
negotiated agreements: it would deliver a fixed, known carbon
reduction cost-effectively and would make transparent the cost
of achieving those reductions. It would also be relatively simple
to implement and avoid the bureaucracy involved in negotiating
and monitoring individual agreements. To overcome the objection
that meeting the emissions reduction target might prove too costly,
it would be possible simply to fine non-compliance at the full
rate of the levy; in other words, every company would have the
option of paying the levy like anyone else if it could not meet
its target more cheaply through trading.
2.6.2 Encouraging companies to switch from negotiated agreements
The main difficulty with introducing a cap and trade alternative
to negotiated agreements at this point would be that of enticing
companies which have already negotiated flexible agreements into
a scheme which required firm commitments. There is also the possibility
that some energy-intensive sectors may contract in future, meaning
that a fixed cap on their emissions could create a surplus of
tradeable "hot air".
Recommendation 2: in terms of effectiveness, transparency
and ability to stimulate innovation, the RSPB suggests consideration
be give to establishing a carbon cap and trade system alongside
the climate levy, as an alternative to negotiated agreements.
3. ENVIRONMENTAL APPRAISAL
The report reiterates the Government's commitment to "conducting
a full evaluation of all impacts on the environment when considering
alternative policy options. This applies to all Government measures
regardless of whether their aim is environmental". Unfortunately
the report failed to meet this commitment.
3.1 Failure to undertake a full environmental appraisal
Table 6.1 of the report outlines the Government's environmental
assessment of those measures whose primary aim is environmental.
It does not address the environmental impact of "non-green"
measures that might have a significant environmental impact. In
some cases the environmental impact of non-green measures is as
or more significant than those of green measures themselves. Moreover,
those impacts are often negative.
For example, the environmental impact of the following non-green
measures should have been addressed:
Utilities reform bill: an environmental
appraisal of the proposed measures was published by the DTI. The
results of this appraisal should have been summarised here as
it shows that the measures contained in the bill would lead to
a modest increase in carbon emissions.
Review of water industry competition: these
proposals should be subject to appraisal as the introduction of
competition could have significant environmental impacts.
Electronic commerce: this could have environmental
Modernising the planning system and promotion
of clusters of firms: the promotion of clusters in certain
locations, eg in Cambridge, could have a significant impact on
the Government's policy of minimising the use of greenfield sites.
The report states that sustainability appraisal of regional plans
will be carried out.
R&D tax credit: this could have a positive
environmental effect, through greater innovation in environmental
technologies, as well as a negative effect.
Air passenger duty: changes in this duty
will have environmental impacts, such as on carbon emissions.
This measure is, in effect, a green tax and should have been included
in Table 6.1.
Recommendation 3: The RSPB considers that the report should
have summarised the environmental impact of non-green measures
as well as green measures. Furthermore, it should have summarised
the environmental impact of the proposals as a whole, including
the main economic forecasts, as previously recommended by the
Environmental Audit Committee.
3.2 Comments on Table 6.1 of the Pre-Budget Report
To improve the transparency of Table 6.1 we believe that
the estimated impacts should have referred to specific published
documents, using footnotes. In this way the reader would know
where to obtain further details on the environmental appraisal
of a specific measure. This was another recommendation of the
Environmental Audit Committee's report on the 1999 Budget.
On fuel duty increases, the table only assesses the impact
of the previously announced increases. If fails to assess the
impact of removing the escalator earlier than previously indicated.
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