87.There are two aspects to long-term climate change
policy: the need to adapt to the changes in climate which are
projected to take place in the next few decades and the likely
scale of further emissions reductions requirements. We examine
both in this final section of the report.
88.We recognise that whatever actions we take now
to reduce emissions, there is likely to be significant climate
change in the future and this will have big impacts upon all of
us. Some industries or activities will be particularly susceptible
to changes in climate: water, agriculture and insurance will be
very much at the front line.[218]
The Government has a Climate Impacts Programme which has published
details of the impacts upon the UK under different scenarios of
climate change. However, there is evidence that climate change
concerns have not been fully incorporated into current planning
practices. For example, David Crichton from the insurance industry
noted that:
We were encouraged to hear from the Confederation
of British Industry that they are helping to disseminate information
on adaptation to their member companies.[223]
We urge the Government to continue researching the impacts
of climate change and to use this to develop a strategy for adaptation.
We note the start made on this in the Draft Programme. If future
costs are to be minimised, it is critical that changes are made
in some policy areas, for example land-use planning in coastal
areas and flood plains.
89.Requirements to reduce emissions will be on a
much larger scale as we go beyond the Kyoto timescale into the
next round of international agreements and we should be considering
this now, as we develop the climate change strategy.[225]
Indeed the Government notes in the introduction to the consultation
paper that Kyoto is a "first step" and that "further
cuts in emissions will need to be made over time if dangerous
levels of climate change are to be prevented."[226]
However, many witnesses told us of their disappointment that this
sentiment was not reflected in the body of the document.[227]
The Worldwide Fund for Nature noted that "the Climate Change
Strategy lacks a longer term outlook to ensure that the reductions
achieved by 2010-12 will be permanent and lead towards greater
reductions in subsequent years."[228]
90.As background to this concern over future policy,
it should be remembered that it is a fortuitous co-incidence rather
than the result of any strategy that the UK will have reduced
emissions of carbon dioxide to 1990 levels by 2000. Such a description
may apply to the Kyoto target also. The Electricity Association
told us that:
After 2010, targets may prove more difficult to meet,
since the 'dash for gas' will be largely over and the contribution
of nuclear generation will fall off as plants are decommissioned.[230]
There will be very few 'one hit' projects left and we must, therefore,
set in train policies now to start delivering reduced emissions
in the period following 2010.
91.There are two key aspects to framing a long-term
climate change policy: enabling industry to invest with confidence
and starting to educate and persuade individuals to change their
behaviour. However, by equivocating about its commitment to the
20% target, the Government is failing to offer a credible signal
that major emissions reductions will be needed in the longer-term
and individuals and businesses are unlikely to address their behaviour
to reduce emissions. Given the relative ease of meeting the Kyoto
commitment, the need for fundamental changes towards a more sustainable
society will be lost.
92.To remedy this, we have recommended more ambitious
long-term targets for renewables, combined heat and power and
a number of other initiatives which should provide a clear signal
to business. We have already considered the specifics of the need
to convince the public of the need for individual action earlier
in the report. More broadly, the Environment Agency told us of
the need to "stimulate a behavioural transformation in the
way our citizens and society operate."[231]
Other witnesses echoed this statement and noted that the public
still had to be convinced of the need to change their behaviour.[232]
In their evidence to us the Department of the Environment, Transport
and the Regions acknowledged that only around 10 per cent of total
carbon savings in the consultation paper derived from behavioural
change.[233]
93.We must not allow the UK to stumble towards
the year 2010 commitments without a clear idea of how emissions
will continue to be reduced beyond that date. We believe
that the climate change strategy must set in train policies which
will start to put all sectors onto a radically more sustainable
course. This means giving clear signals to industry so that it
can invest with confidence and working towards achieving a 'behavioural
transformation' in the way individuals and society operate.
| a. | Alongside the right and proper use of the 'precautionary principle' in taking action to reduce emissions, it is also important to ensure that policies to reduce emissions do not have an excessive cost to the economy and to industry. (Paragraph 4)
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| b. | We wish to commend this and the previous Government for the prominent and positive role they have played within the European Union and in negotiations from Rio to Buenos Aires. We hope that the Government will continue to demonstrate leadership in future negotiations, particularly those to set targets for emissions reductions beyond 2012. (Paragraph 6)
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| c. | We urge the Government to continue pressing for the ratification of the Kyoto Protocol by all Annex I countries. Further, the details of the Protocol must be resolved as soon as possible. In particular, if 'flexible mechanisms' are to be supplemental to domestic action, we believe that a cap must be placed on the contribution they can make to meeting a country's target. However, such a cap must neither be too high, which would permit 'trading in hot air', nor too low, which would act as a disincentive to signatory countries from making use of the mechanism altogether. The level of the cap must be set with sensitivity, and by mutual agreement of all signatory countries wishing to take part in the trading mechanism. (Paragraph 7)
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| d. | We urge the UK to press for improved clarity of the status of the 'burden sharing' agreement within the EU. We also believe that a system of penalties for non-compliance should be sought so that all Member States are clear what the consequences would be of failing to meet their targets. An effective and credible system for monitoring emissions throughout the EU must be established to complement any non-compliance mechanisms. We urge the Government to press the European Commission to ensure that every possible action is taken against Member States which fail to meet their targets. (Paragraph 8)
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| e. | Government Ministers and Departments have shown a lack of clarity in respect of the target of reducing carbon dioxide emissions to 20% below 1990 levels by 2010. This must be remedied as it risks undermining the Climate Change Programme. If the Government is to reach its 20% target, there must be a commitment from all Government Departments and Ministers to its achievement. (Paragraph 14)
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| f. | We recommend that the Government develop a set of emissions reduction targets for the different sectors to deliver the national targets. The targets should be consulted on as soon as possible and reviewed every five years to take account of changing circumstances and new developments. (Paragraph 15)
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| g. | We believe that much greater detail of emissions projections, methodologies and the assumptions used should have been provided alongside the consultation paper. The lack of transparency in the projections and some aspects of their presentation have diminished the quality of responses. We therefore welcome the greater level of detail provided alongside the Draft Programme. We encourage the Government to abandon entirely the double-counting approach in order to identify better the targets of carbon saving measures. (Paragraph 18)
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| h. | We believe that if the climate change strategy is to permanently reverse the trend of increasing emissions of carbon dioxide, it must provide a clear signal to individuals and industry alike of the need fundamentally to change practices and behaviour. (Paragraph 22)
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| i. | We were not able to come to a clear conclusion about the relative position of the UK hauliers against foreign operators but look forward to the publication of analysis from the Road Haulage Forum on this matter. The Transport Sub-committee is now undertaking an inquiry into The Road Haulage Industry and will examine this and other issues in detail. (Paragraph 26)
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| j. | We agree with the Government that the public and political acceptability of fuel duty increases will be assured only if some of the revenues are recycled to give direct benefits to transport users. We urge the Government to make use of the link which it has created between fuel duty increases and transport spending at the earliest possible opportunity. (Paragraph 29)
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| k. | We strongly support the environmental reform of vehicle taxation and recommend that the Vehicle Excise Duty system be further modified to offer much larger incentives to select more fuel-efficient cars. (Paragraph 30)
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| l. | We recommend that the Government consider methods of providing greater incentives for the purchase of fuel-efficient cars and a system for removing old, inefficient cars from the fleet. (Paragraph 30)
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| m. | We are concerned that the Government is being over-optimistic about the emissions reductions which the ACEA/European Commission agreement will realise by 2010. This could have significant implications for the meeting of national targets. (Paragraph 31)
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| n. | We welcome the Government's commitment to examine the case for taxes on aviation fuel or other climate-related charging measures but believe it is essential that any measures are introduced at a global level. (Paragraph 32)
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| o. | We are concerned that policies to ensure the development of combined heat and power are not yet implemented. However, we do welcome the Government's commitment to a target of 10,000 MW capacity by 2010. Given the lead time and the length of investment cycles involved, we urge that the Government work to remove the remaining barriers to CHP as quickly as possible. (Paragraph 38)
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| p. | We note that the Government is suggesting a renewables percentage obligation on all electricity suppliers in its draft Utilities Bill. We welcome this, but suggest the Government takes into account the call for clear market signals for the industry and makes this proposal clear and enforceable. (Paragraph 40)
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| q. | We urge the Government to commit itself to achieving a 20% renewables target by 2010 and to set out a clear strategy as soon as is practicable as to how the target will be achieved. Further, to give a clear signal to industry, a target of 50% for the proportion of electricity supplied by renewables by 2030 should be established. This target will require more support for long-term renewable options along with greater funding to bring viable options to the market. (Paragraph 42)
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| r. | We believe that energy-efficiency in the domestic sector should be made more of a focus in the climate change strategy. Domestic energy-efficiency measures bring secondary benefits of warmer homes and improved living conditions for some of the poorest in society. New regulatory arrangements are predicted to lead to lower fuel prices for domestic users and consumers should be encouraged to use the money saved to improve the energy-efficiency of their homes. (Paragraph 43)
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| s. | Given the size of the fuel poverty problem and the large potential for energy-efficiency in the domestic sector, we believe that the overall scale of measures to improve energy-efficiency should be expanded by a factor of at least two. Without a more ambitious programme, the Government risks merely tinkering with a serious social and environmental problem. (Paragraph 45)
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| t. | We are pleased that the Energy Efficiency Standards of Performance scheme is to be extended to include gas and look forward to further expansions of this scheme in future years. (Paragraph 47)
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| u. | We look forward to the results of the review of Building Regulations but believe that the process is taking far too long. We recommend that the final stages of the review be accelerated, with changes made to the Regulations as soon as is practicable. We believe that the Regulations should be made more stringent in respect of energy-efficiency for new buildings. We further recommend that the Department should examine the possibility of introducing regulations which cover existing buildings whenever renovation or conversion takes place. (Paragraph 48)
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| v. | We recommend that the Government explore the need for minimum standards of competency for those contractors involved in improving the energy-efficiency of houses. The Government should also consider carefully the need for better dissemination of information and training to ensure that there is a growing force of well-trained people capable of undertaking energy-efficiency work. (Paragraph 49)
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| w. | We are disappointed that the financial institutions have so far failed to offer 'green' mortgages which would enable energy-efficiency improvements to be made to a property when it is sold. We urge the Government to work with the Council of Mortgage Lenders to develop suitable loan schemes. (Paragraph 51)
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| x. | We regret that the Government has not given more consideration to the opportunities offered within EC legislation to secure a reduced rate of VAT for the installation of energy saving materials amongst other services. We urge the Government to make a genuine effort both to ensure the start of the promised review of reduced rates in the 6th VAT Directive and to achieve real progress with respect to energy saving materials. (Paragraph 53)
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| y. | We encourage the Government to explore further options to increase the share of emissions reductions in the public sector. (Paragraph 54)
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| z. | To ensure that the public can be persuaded of the need to take action to reduce their own emissions, we believe that the Government must make greater efforts to reduce emissions from the public sector. Green procurement practices and transport plans should be established as quickly as possible and widely publicised. Ministers must also try and demonstrate environmentally-responsible behaviour whenever possible. (Paragraph 56)
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| aa. | The consultation document fails to recognise that the public remains uninformed and unconvinced of the need for personal action on climate change. We do notbelieve that the existing publicity campaigns will be effective in changing people's behaviour. In many cases, their profiles are low and their messages ineffective, largely as a result of inadequate funding. A sophisticated and targeted approach is required to change people's behaviour along with a much greater commitment from Government to 'doing its bit'. (Paragraph 57)
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| bb. | We recommend that the Government negotiate with the largest landlords of commercial property to improve the energy-efficiency of their properties. Negotiated agreements should be sought to reduce energy use by at least 25% by 2010. (Paragraph 59)
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| cc. | We conclude that the Integrated Pollution Prevention and Control Directive will play a significant but partial role in reducing emissions from the business sector.
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| We are not convinced that Government thinking is well advanced on the details of implementing IPPC to deliver energy-efficiency savings and urge it to ensure that the savings approach the 'maximum' suggested in the consultation of 3 MtC. (Paragraph 61)
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| dd. | We do not believe that the Climate Change Levy meets the tests of good taxation. The system of exemptions, negotiated agreements and reduced rates has produced an extremely complex and cumbersome market instrument which will result in a relatively modest emissions reduction. (Paragraph 63)
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| ee. | We welcome the protection which the system of Climate Change Levy rebates and negotiated agreements will offer to energy-intensive industries. (Paragraph 64)
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| ff. | We concur with the Trade and Industry Select Committee that the use of Integrated Pollution Prevention and Control to define which industries are eligible to enter into negotiated agreements and receive rebates from the Climate Change Levy is "likely to create anomalies and inequities which will serve only to discredit the levy." We urge the Government to adopt a simple, rigorous and equitable approach to define energy-intensive industries eligible for agreements and rebates. (Paragraph 65)
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| gg. | We are concerned that the Climate Change Levy will have a negative impact upon small and medium-sized businesses and urge the Government to pursue schemes which alleviate this problem by targeting information and resources at these businesses. (Paragraph 66)
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| hh. | We believe an upstream carbon tax would have been simpler than the proposed Climate Change Levy but we are concerned about the implications this would have for fuel poverty. We also believe that there remains an opportunity for the rates of the levy to better reflect the different carbon content of fuels and urge the Government to bring forward proposals to do this. (Paragraph 67)
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| ii. | We welcome the Government's decision to exempt renewable sources from the Climate Change Levy. (Paragraph 68)
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| jj. | We welcome the Government's decision to exempt 'good quality' combined heat and power from the Climate Change Levy. (Paragraph 68)
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| kk. | We welcome the Government's plans to put £150 million from the total Climate Change Levy revenue towards energy-efficiency measures. However, we recommend that this amount be increased substantially in future years, with a sizeable fraction put towards helping small and medium-sized businesses overcome the various barriers to improving their efficiency. (Paragraph 70)
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| ll. | We are concerned that the negotiated agreements are not open to public scrutiny and recommend that the details of draft negotiated agreements between Government and energy-intensive industries be made publicly available. (Paragraph 71)
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| mm. | Some sectors will face difficulties and short-term concerns over competitiveness, but this should not prevent the development of a climate change strategy. We believe that a well-designed strategy should deliver 'gain not pain' for the economy as a whole. An ambitious set of climate change policies should offer employment benefits and give the UK significant 'first mover' advantages in a number of industries. It is also important to recognise that there are significant costs associated with not doing anything about climate change. (Paragraph 82)
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| nn. | We recognise the need to consult about climate change strategy but are disappointed that the final Climate Change Programme is taking so long to finalise. Nevertheless, policy is developing and we encourage the Government to build rapidly upon the progress made to date and maintain the momentum already established in some sectors. (Paragraph 86)
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| oo. | We urge the Government to continue researching the impacts of climate change and to use this to develop a strategy for adaptation. We note the start made on this in the Draft Programme. If future costs are to be minimised, it is critical that changes are made in some policy areas, for example land-use planning in coastal areas and flood plains. (Paragraph 88)
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| pp. | We must not allow the UK to stumble towards the year 2010 commitments without a clear idea of how emissions will continue to be reduced beyond that date. We believe that the climate change strategy must set in train policies which will start to put all sectors onto a radically more sustainable course. This means giving clear signals to industry so that it can invest with confidence and working towards achieving a 'behavioural transformation' in the way individuals and society operate. (Paragraph 93)
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