Memorandum submitted by Friends of the
Earth
INTRODUCTION
We welcome the opportunity to give evidence
to this inquiry.
The first part of our evidence covers the Government's
decision to abandon the Operating and Financial Review.
The rest of our evidence focuses on the other
two questions set by the Committee, with a focus on climate change.
In our view it is crucial that the Government sets strong economic
frameworks to tackle climate change. Scientific evidence suggests
that we must limit global average temperature increases to a maximum
of 2C above pre-industrial levels. [1]Beyond
that the risks of further catastrophic damage are too high. As
a result, major cuts in carbon emissions are needed, fast. However,
despite increasingly strong rhetoric from the current Labour Government
on the urgency of the situation, emissions are higher now than
when they came to power in 1997.
This failure is in large part due to economic
frameworks which continue to make it comparatively:
— cheap and easy to use fossil fuels;
— easy to promote and get approval
for carbon intensive developments; and
— difficult and expensive to invest
in greener alternatives.
Leadership is urgently needed to change these
frameworks. But this agenda is not one of austerity or pain—it
is a massive economic opportunity for the UK. Reducing our dependence
on fossil fuels can:
— Reduce the UK's vulnerability to
the global volatility of oil markets and supplies;
— Reduce the UK's balance of payments
deficit;
— Reduce dependence on energy supplies
from unstable parts of the world;
— Boost UK resource productivity;
— Stimulate UK innovation in new high-growth
sustainable technologies; and
— Reduce the massive economic and social
costs of climate change, which will hit the UK as well as developing
countries, and hit the poorest hardest.
This submission suggests how current economic
frameworks could change, framed around the Committee's questions.
Part 1 Operating and Financial Review
BACKGROUND
The requirement for approximately 1,300 listed
UK companies to publish an Operating and Financial Review (OFR)
was introduced in March 2005 through a Statutory Instrument amending
the 1985 Companies Act. [2]The
purpose of the OFR was to complement a company's annual financial
report with a second report containing non-financial forward-looking
information on company performance. The first batch of OFRs covering
financial years beginning on or after April 2005 were due to be
published by companies from April 2006.
Why was the OFR important?
NGOs, trade unions and other civil society organisations
have for a long time been calling for the introduction of mandatory
reporting by companies on social and environmental issues (ie
mandatory sustainability reporting). While the OFR requirements
were significantly watered-down during the seven year consultation
that led to their introduction, and fell short of requiring full
disclose of social and environmental impacts, the OFR was an important
step in the right direction and would have brought about a significant
improvement in the quality and transparency of company reporting
in this area.
Under the OFR, companies were required to provide
information on their employees, on social and community issues,
and on the impact of the business of the company on the environment,
where this information was necessary for understanding the company's
performance. As set out in the open letter to Gordon Brown signed
by the directors of 30 ethical investors, campaigning organisations
and academic institutions published on 14 December 2005, [3]in
spite of its weaknesses the OFR was still a vital tool for assessing
a company's social and environmental performance. Although the
primary purpose of the OFR was deemed to be the provision of better
information to the investment community, the reports would have
allowed employees, consumers, regulators and civil society groups
to gain a more informed view of a company's performance and, importantly,
its future strategy and direction.
The OFR would thus have been a major step
forward in terms of corporate accountability, helping to make
a company's board and its stakeholders more aware of any negative
environmental and social impacts associated with its activities,
and thereby increasing the likelihood that companies would take
steps to improve their environmental and social performance.
What happened to the OFR?
Speaking at the Annual Conference of the Confederation
of British Industry (CBI), on Monday 28 November 2005—just
eight months after the introduction of the OFR requirement—the
Chancellor announced that the Government had identified the OFR
as an example of unnecessary "gold-plating" of European
regulation and that it was abolishing the OFR. According to the
Chancellor, the move was part of a wider drive to reduce the regulatory
burdens on British business. [4]Mr
Brown's announcement came after the CBI President John Sunderland
had told the conference that the Government was approaching a
seminal moment in its relationship with business after several
controversial decisions on key issues. [5]
Regulations requiring the repeal of the requirement
for quoted companies to produce a statutory OFR were made by Minister
for Industry Alun Michael on 14 December 2005 and came into force
on 12 January 2006. [6]The
requirement for companies to produce a Business Review in the
Director's Report—the minimum requirement of the EU Accounts
Modernisation Directive—still remains. The Directive, adopted
in 2003, requires that companies disclose information that "should
not be restricted" to the financial aspects of a company's
business. The requirements came into force on 1 January 2005 and
are effective from April 2006.
IMPLICATIONS OF
THE WITHDRAWAL
OF THE
OFR
The Department of Trade & Industry maintains
that the key improvements in narrative reporting from the OFR
are in the Business Review. [7]However,
the reporting requirements of the Business Review are significantly
weaker than those of the OFR in a number of key areas, including
in terms of auditing and the provision of information on environmental
and social issues.
Some key differences between the Business Review
and the OFR include the following:
1. Weakened Environmental Reporting Requirements
The Business Review requires the provision of
information on environmental matters to the extent necessary for
understanding a company's development, performance, and position.
However, in addition to this, the OFR required the provision of
information on the impact of the business of the company on the
environment, to the extent necessary to allow for such an understanding.
Hence whilst the Business Review focuses on how the company is
being affected by environmental issues, the OFR looked more specifically
at the company's own environmental impacts.
2. Removal of requirement to report on social
and community issues
The OFR also required the provision of information
on social and community issues to the extent necessary for understanding
a company's development, position, and performance. There is no
such requirement in the Business Review. Hence companies will
not be required to report on any human rights and labour issues
associated with their activities.
3. Absence of mandatory reporting standard
The OFR would have been subject to a statutory
reporting standard prepared by the Accounting Standards Board.
This standard would have set out detailed provisions on its content.
In contrast, the Business Review is governed by no such reporting
standard. Hence there is greater scope for directors to determine
what information to include and what to disregard, including on
environmental matters.
4. Auditing Requirements
The auditing requirements for the OFR were more
stringent than those for the Business Review. Like the OFR, the
Business Review requires a "consistency check", ie a
check by the auditor that the information provided corresponds
with available evidence. However, the OFR Regulations also required
that the auditor consider whether any other matters had come to
their attention during the audit process which were inconsistent
with the information provided. The necessity for this additional
audit check was highlighted by the Government itself in its response
to the public consultation on the OFR Regulations as necessary
to provide the level of assurance required to satisfy investors
and other users that the information was complete and trustworthy".[8]
5. Removal of requirement to report on policies
The OFR also required the provision of information
on a company's policies in relation to environmental, social and
community issues and the extent to which such policies were successful.
This important requirement would have allowed stakeholders to
assess the extent to which a company was actually addressing key
relevant issues and whether its policies for doing so were being
successful. That important requirement is not contained in the
Business Review.
LEGAL ACTION
TAKEN BY
FRIENDS OF
THE EARTH
Friends of the Earth has applied for a judicial
review of the decision to abolish the OFR. Friends of the Earth
contends that the decision to abolish the OFR was unlawful because,
in summary, (a) there was no adequate consultation (in particular,
such consultation as was carried out was one sided and secret);
(b) the decision was irrational in that no legitimate (evidence
based) grounds existed for reversing the Government's recent (and
well considered and evaluated) policy justification for introducing
the OFR.
The policy process leading to the adoption of
the OFR was lengthy, consultative and fair. It led to a policy
which had broad support of all groups (in large part because of
the process by which the policy was arrived at). The decision
to abolish the OFR was peremptory, ill-informed and unfair. It
was made by a Government department (Treasury) with limited understanding
of the policy impetus behind the original OFR. The decision was
widely criticised by all sides (other than the CBI). It has, most
recently, also been the subject of critical comment by the House
of Lords Select Committee on Statutory Instruments. [9]
Friends of the Earth's application for judicial
review is supported by witness statements from a number of investment
bodies, civil society groups and others.
CONCLUSION
The decision to abolish the OFR (if allowed
to stand) is regarded by Friends of the Earth as a major step
backwards for corporate transparency and accountability in the
UK. Under the scaled-down Business Review, companies will be required
to provide less information on the environmental impacts of their
operations and associated social issues, ie human rights, than
would have been the case under the OFR. This in turn will increase
the likelihood that bad corporate governance and damaging activities,
including environmental abuses, will go unnoticed and companies
will face less pressure from shareholders and other stakeholders
to improve their performance in these areas.
Part 2a Economic analysis and the Stern Review
"In the context of the Stern Review, [What
is] the adequacy of conventional economic analysis (including
the role of monetarisation, and the use of discounting) as a means
of evaluating the long-term environmental impacts of climate change."
We believe that conventional economic analysis,
while useful, has many flaws and has too prominent a role in climate
change decision-making. Here we set out why and suggest changes
which could be made.
The central role of conventional economic analysis
is set out in the Treasury's Green Book:
"Calculating the present value of the differences
between the streams of costs and benefits provides the net present
value (NPV) of an option. The NPV is the primary criterion for
deciding whether government action can be justified."
Although this may well be appropriate for simple
issues, for example, in determining which of two IT systems should
be installed, it is far more problematic for issues involving
large amounts of non-monetised costs and benefits, and issues
involving costs and benefits to many different groups of people.
Climate change is one of the most complex examples of these problems,
and the difficulties involved make the use of NPVs and conventional
cost-benefit analyses (CBAs) highly inappropriate. There are three
main reasons for this:
— Estimates are subject to extreme
uncertainties—it is not possible to calculate accurate figures;
ranges rather than precise numbers are the best that can be used;
— The use of CBA institutionalises
trade-offs, contrary to the Government's position on and the principles
of sustainable development; and
— The precise figure used by Government
is too low.
In more detail:
(i) Uncertainties
First, there are wild uncertainties as to what
figures should be used. For example:
— Scientists do not know accurately
what the damages from climate change will be. Some damages also
have potential large-scale discontinuities, for example melting
of continental ice sheets and the disruption of ocean currents;
— Assigning a monetary amount to these
often wildly differing types of damages is very difficult and
itself subject to further large uncertainties;
— The treatment of equity within generations
is another major cause of uncertainty . . .
— . . . As is equity between generations—the
appropriate discount rate is heavily disputed, and even small
changes have large differences on the outcome.
The Treasury's 2002 study into the social cost
of carbon (SCC) [10]noted
these major methodological difficulties, and concluded that a
central value of £70t/C should be used, with lower and upper
bounds of £35 and £140 t/C. In 2005 DEFRA published
a follow-up paper by the Stockholm Environment Institute[11]—which
states that, while it is possible for them to say a lower bound
is £35 t/C, uncertainty over impacts "precludes establishing
a central estimate of the social cost of carbon with any confidence",
and that establishing an upper limit was "more difficult".
They also acknowledge that this situation is not likely to change
in the short or medium term, even with a major increase in research
effort. Because the uncertainties are so large, it is not possible
to calculate the SCC or NPVs adequately, and therefore a different
policy approach is required.
(ii) Trade-offs
Second, the act of totting up all costs and
benefits to create a NPV in itself assumes that trade-offs are
justified. This is contrary to principles of sustainable development
and indeed the Government's own policy, which states that the
economic, social and environmental pillars of sustainable development
must be met at the same time, not traded-off. [12]As
an example, the Aviation White Paper (AWP) assesses the environmental
and other costs of aviation expansion against the (mainly economic)
benefits of airport expansion. The net positive values that result
lead directly to Alistair Darling's statement in the Regulatory
Impact Assessment that "I have read the Regulatory Impact
Assessment and I am satisfied that the benefits justify the costs".[13]
As a result the White Paper proceeds, allowing a massive expansion
in carbon emissions—trading-off environmental objectives
for economic ones. A Sustainable Aviation White Paper would implement
policies which meet all the principles, not some at the expense
of others.
(iii) Values too low
Third, although we believe that the use of SCC
for policy making is inappropriate, it is also too low. We are
aware that this may seem like Woody Allen's joke: "The food
in this place is really terrible. Yes, and such small portions".
But too small a value will lead to even worse decisions. We believe
that the current value is based on only a proportion of climate
impacts, needs updating to cover the most recent scientific evidence,
give greater consideration to catastrophic and irreversible effects,
and to give greater weight that is given to people in poorer countries
and future generations. These issues are covered in more detail
in many academic papers—for example Dr Ackerman's recent
submission to the Stern inquiry. [14]Set
in context, a £70 t/C price for carbon translates to a global
cost of carbon being around £440 billion a year. One storm
in one country in 2005(Hurricane Katrina) cost £150 billion
in economic damage to property alone. Climate change will make
these sorts of events more likely and more severe. It is difficult
to see how £70t/C is a realistic price for the social cost
of carbon.
For the above reasons, cost-benefit analysis
is not appropriate for determining climate policy.
Policy in practice
We are also concerned about two particular aspects
of the role of monetarisation.
First, in the RIAs, non-monetised aspects continue
to be downplayed. Attempts have been made at determining the Social
Cost of Carbon, but there are many other non-carbon environmental
impacts of policy. These usually non-monetised impacts are often
routinely ignored in the final analysis. This is inefficient policy
making. The Green Book states that they must be considered, but
in practice if they are not monetised they cannot make it into
the NPV, and the NPV is—as the Treasury states very clearly—"the
primary criterion for deciding whether Government action is justified".
The Aviation White Paper Regulatory Impact Assessment is a clear
example of economic benefits set out in detail, but with many
environmental and social costs either non-monetised or downplayed.
Second if the Government believes in the monetarisation
and internalisation of external costs, then it should do so. The
calculation of the SCC gives the Government a figure to the external
costs which it believes should be internalised. In practice however,
the SCC is not used for this purpose. Despite the Treasury knowing
and stating that non-internalised costs are examples of inefficient
markets, and committing to removing these market failures, [15]it
does not do this for carbon. For example, despite a clear commitment
in the Aviation White Paper "we will . . . ensure that, over
time, aviation meets its external costs", the tax rate on
aviation has fallen in real terms for each of the last four budgets.
Although, for the reasons set out above, we do not believe that
internalising costs is the most effective way of meeting policy
goals, it is a step in the right general direction and better
than doing nothing.
ALTERNATIVE APPROACHES
Two alternative approaches are needed, one for
overall climate policy, the other for specific development proposals
and policy assessments:
(1) Overall Climate policy
Stabilising the climate is a fundamental non-negotiable
requirement for humanity and its economies. Scientific evidence
suggests that we must limit global average temperature increases
to a maximum of 2C above pre-industrial levels. Beyond that
the risks and extent of further catastrophic damage are too high.
Action to reduce emissions needs to begin soon or deeper cuts
will be needed in the longer term.
With this ecological boundary in mind, the economic
analysis to be carried out by the Stern review team should avoid
a traditional cost-benefit analysis and instead analyse the most
cost-effective options for achieving emission reductions that
are likely to achieve a 2C goal.
(2) Individual policy and project assessment
In addition, a different approach is needed
in determining whether developments should be given the go-ahead—CBA
is simply too ineffective, has too large an inherent bias against
environmental and social concerns, and institutionalises the inefficient
policy approach of trading-off different policy goals.
We advocate instead that the requirement to
integrate the principles of sustainable development[16]
means assessing packages of development options against all these
objectives, rather than assume that if it delivers on one then
this is acceptable.
We propose that all policy packages (like regional
economic strategies), and larger individual policies (like regional
energy strategies or major infrastructure proposals) be assessed
against each of the elements of the main economic, social and
environmental principles of sustainable development. [17]
A first assessment of this sort has been done
by Roger Tym and Partnership in a report for the South East England
Development Agency (SEEDA),[18]
where they analyse the Aviation White Paper against 13 main criteria
under these three principles, summarised in the following grid:
| Major negative impact
| Negative impact | Neutral/no significant impact
| Positive impact | Major positive impact
|
Environmental theme—Proposals reflect the fact that:
| | | |
| |
We live within environmental limits?
| <tick> | |
| | |
| Resources are limited | |
<tick> | |
| |
| Biodiversity is limited | |
<tick> | |
| |
Social theme—Proposals' effects on:
| | | |
| |
Health | | <tick>
| | | |
| Wellbeing | | <tick>
| | | |
| Social Cohesion | | <tick>
| | | |
| Social inclusion | |
| <tick> | |
|
| Justice (effects on other, poorer societies)
| <tick> | |
| | |
Economic theme—Proposals ensure that:
| | | |
| |
A strong economy is encouraged |
| | | <tick>
| |
| Environmental and social costs fall on those who impose them
| <tick> | |
| | |
| Efficient resource use is incentivised | <tick>
| | | |
|
| |
| | | |
Friends of the Earth advocate that:
— This type of assessment should be used to determine
whether policies or developments meet and integrate sustainable
development principles, rather than CBA.
— There is a strong presumption against any development,
proposal or policy package which scores a "major negative
impact" rating on any of the 13 economic, social or environmental
criteria, to prevent damaging trade-offs.
— Policy should proactively help to bring forward
more development proposals with multiple "major positive
impact" ratings.
— This suggested assessment approach above should
be fully integrated into the SEA/SA process.
We advocate this type of qualitative approach for three reasons:
— It is not possible to do an adequate direct comparison
of many of the different types of impact. Current approaches to
doing so—for example cost benefit analysis which compares
all costs and benefits using the common metric of £xxx—have
an inherent inbuilt bias against costs or benefits which are hard
to quantify in financial terms. These impacts are often routinely
ignored in the final analysis, effectively meaning that "if
it can't be valued, value it as worthless".
— With a qualitative approach it is possible to
escape from the "technocratic trap" where decision-making
processes are opaque and understandable only to those who have
access to the complex spreadsheets. Qualitative approaches are
more easily aligned with and useful to the democratic decision
processes now required by both the Sustainable Development principles
and by formal government policies such as PPS1.
— Attempting to equate impacts by coming up with
one final figure of "net present value" of £x million
for or against a proposal increases the likelihood of one set
of principles being traded off against another. Of course, numbers
and values of impacts should be used where possible, but to inform
the process, rather than dominate the outcome. For example, the
UK National Sustainable Development Indicator Set could be used
to assess how a proposal would affect each of these 13 criteria.
Part 2b Environmental and Fiscal Strategy
"How the Treasury's environmental fiscal strategy could
be improved (including the adequacy and effectiveness with which
all new budgetary measures are appraised and existing economic
instruments are monitored."
The Committee has noted that the Government is not meeting
its 1997 commitment to "shift the burden of taxation from
`goods' to `bads'". The Government responded that this is
not a good indicator of the success of its policies, saying for
example that tax is only one policy instrument and that "the
success of environmental taxes should be judged on how well they
deliver the environmental outcomes".[19]
The Government has a point here, we should be looking at the overall
package of measures. And on climate change, this overall package
is not delivering—carbon emissions are up since 1997. Because
of this overall failure to deliver, the whole package needs substantial
revision:
(1) Overall policy on climate change
There is little overall control over climate change emissions—if
emissions are going up in one area, there is inadequate review
to ensure that either emissions are tackled, or instead if extra
effort is needed in another area. First, the period review period
is too long (at every five years) to be effective. Second, the
wrong department is in charge. DEFRA is only in charge of some
emissions (and indeed the PSA is now shared with DfT and DTI).
Main policy instruments affecting climate change are taxation
and spending which are in the hands of Treasury. The damage from
climate change, and moving the UK to a low-carbon path, both have
potentially massive negative and positive economic implications—it
should be Treasury who take charge of climate change.
Target setting approach for climate change is useful, but
not sufficient. These targets are amongst hundreds of targets
across Government. Climate change targets need to be "first
among equals", alongside similar targets on health and education.
We suggest that the main ways to do this are to have Treasury:
— be responsible for overall progress on climate
change,
— set annual budgets for carbon, which fall year-on-year,
driving emissions down,
— set up national carbon accounts, as a central
part of the national accounts,
— use its range of policy instruments as part of
a strategy to affect emissions in all sectors of the economy,
and
— have an annual review of policies to ensure this
budget is kept to, and adapts policies accordingly.
(2) Fiscal policy on climate change
Even though taxation is just one policy instrument, it is
a critical one. For example, in recent years, taxation on fossil
fuels, particularly transport fuels, has fallen relative to overall
taxation. This is a large contributory factor in the UK's failure
to cut its carbon emissions.
The Chancellor has claimed that volatility in global oil
prices has been a good reason to freeze fuel duties in recent
years. However, in this period the overall cost of motoring has
continued to fall relative to household disposable income. In
contrast, bus and rail alternatives are getting more expensive.
We believe that the Chancellor must use taxes and other measures
such as spending to reducing the gap in costs of motoring and
public transport. We also note that the UK's higher percentage
tax rates on fuels are an advantage in that the UK is less economically
vulnerable to oil price instability.
We appreciate that the real reason to keep fuel duties frozen
is likely to be political expediency, in particular the perceived
need to placate the motoring lobby. With this in mind, it is even
more important that rises in fuel duties are accompanied with
measures which improve the quality and cost of alternatives to
motoring—public transport, walking and cycling need to become
more attractive alternatives, and a stronger and more explicit
link needs to be made between tax and spending measures.
Finally, aviation is the fastest growing source of carbon
emissions, emissions which are also more damaging per tonne to
the climate because they are churned out at altitude. Aviation's
growth in emissions is largely due to increased demand, which
in turn is largely caused by a fall in the cost of flying, as
is explicitly acknowledged in the DfT's aviation models. Flying
is cheap because its fuel is largely untaxed. Yet the one tool
currently available to increase taxes—Air Passenger Duty
(APD)—has been frozen in recent years, and is hence falling
in real terms. We stress that we are not talking necessarily about
increasing the overall cost of flying, but even keeping it constant
rather than seeing it fall would see a dramatic fall in aviation
growth and hence emissions growth. We note the Government's belief
that emissions trading will solve aviation's carbon emission problem,
but aviation will not come into the trading system for many years
yet and, even if it is environmentally effective, taxation will
still be needed as well (otherwise aviation will have a major
competitive advantage over other sectors within the ETS). APD
needs to be increased now.
CONCLUSION
The economic frameworks and appraisal methodologies do need
to be changed. However, to get these changes and to meet our climate
challenges requires most of all greater political will. The Government
talks a good game on climate change, but its actual record on
emissions is dismal. We believe a major block to action is that
while many politicians believe that tackling climate change is
necessary, they believe it is also something which will damage
the economy or be politically unpopular, and hence is something
to get round to doing sometime, but not now. This is entirely
the wrong mind-set.
The correct economic frameworks can guide the UK towards
a zero-carbon economy—not only staving off the colossal
costs of run-away climate change, but driving a new wave of innovation
in new businesses and technologies. Strong environmental policies
are entirely compatible with a strong economy. The misguided belief
that they are not is one of the largest barriers to action on
climate change in all developed economies. We hope that the Committee
will look at ways to change this mind-set—this will be crucial
if we are to avoid catastrophic climate change.
January 2006
http://www.defra.gov.uk/environment/climatechange/carboncost/sei-scc.htm
http://www.southeast-ra.gov.uk/our_work/planning/transport/airports/future_air_transport/final_aviation_report.pdf
1
Tirpak D, Ashton J, Dadi Z, Fillho L et al 2005 "Avoiding
dangerous climate change: international symposium on the stabilisation
of greenhouse gas concentrations" Report of the International
Scientific Steering Committee The Hadley Centre http://www.stabilisation2005.com/ Back
2
Operating and Financial Review and Directors' Report Regulations
2005. Back
3
Ethical investors, charities, academic institutions and faith
groups write to Gordon Brown criticising his decision to abolish
the OFR (14 December 2005): <au0,2.5>http://www.corporate-responsibility.org/C2B/PressOffice/display.asp?ID=16&Type=2<xu Back
4
Speech by the Rt. Hon. Gordon Brown MP, Chancellor of the Exchequer,
at the CBI Annual Conference in London (28 November 2005): http://www.hm-treasury.gov.uk/newsroom_and_speeches/press/2005/press_99_05.cfm<xu Back
5
5 CBI Press Release: "Government approaching seminal moment
in relationship with business, warns the CBI" (28 November
2005): http://www.cbi.org.uk/ndbs/press.nsf/0/3c50a111a1b8b281802570c0005bce46?OpenDocument<xu Back
6
6 The Companies Act 1985 (Operating and Financial Review) (Repeal)
Regulations 2005. Back
7
7 DTI Draft Simplification Plan for Better Regulation (30 November
2005): http://www.dti.gov.uk/ewt/cutting_red_tape_plan.doc<xu Back
8
8 DTI: Operating and Financial Review and Directors' Report Regulations-Government
response to public consultation (December 2004): http://www.dti.gov.uk/cld/21_12_gov_response.pdf<xu Back
9
9 http://www.publications.parliament.uk/pa/ld200506/ldselect/ldmerit/99/9903.htm<xu Back
10
10 Clarkson, R and Deyes, K, 2002. Estimating the Social Cost
of Carbon Emissions. London, DEFRA. Back
11
11 Stockholm Environment Institute, 2005. Social Cost of Carbon:
a closer look at uncertainty. Back
12
12 HM Government, 2005. Securing the Future-the Government's sustainable
development strategy. http://www.sustainable-development.gov.uk/publications/uk-strategy/uk-strategy-2005.htm<xu Back
13
13 DfT, 2003. Regulatory Impact Assessment. The Government's White
Paper: The Future of Air Transport. Back
14
Ackerman, F, 2005. Monetized impacts of carbon, why are the numbers
so small? Evidence to the Stern Review. Tufts University. Back
15
HM Treasury, 2002. Pre-budget 2002. Tax and the environment,
using economic instruments. "Correcting the market failures
will help to make the market work better and deliver more efficient
outcomes. In order to determine the most effective form of intervention,
it is therefore necessary to understand the nature of the relevant
market failures. Market failures can exist where the costs of
environmental damage are not reflected in prices of goods and
services; where environmental improvements can only be achieved
by society acting collectively rather than individually; or where
decision makers do not have clear information about how best to
reduce their costs. If the Government intervenes to correct these
market failures efficiently it will achieve better environmental
outcomes as well as greater overall economic efficiency." Back
16
Set out in the 2005 Government Sustainable Development Strategy. Back
17
"Good governance and effective participation", (principle
4) and "sound science" (principle 5) must underpin all
decisions]. Back
18
Roger Tym and Partners, 2005. South East of England Regional
Assembly: the implications of the aviation white paper for south-east
England: understanding the evidence base. Back
19
Environmental Audit Committee, 2005. 2nd special report. Back
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