Memorandum submitted by the Environment
Agency (CCB 07)
INTRODUCTION
Background and Environment Agency role in climate
change
The Environment Agency is the leading public
body for protecting and improving the environment in England and
Wales. It is our job to make sure that air, land, and water is
looked after by everyone in today's society, so that tomorrow's
generations inherit a cleaner, healthier world. Climate change
is one of the nine priority themes in our Corporate Strategy.
We play a major role in managing climate change, and regulate
around 45% of greenhouse gas emissions in England and Wales. We
are the main competent authority for the EU Emissions Trading
Scheme and have roles promoting the use of renewable energy. On
adaptation, we are in the frontline with statutory responsibilities
for the protection of air, land, water resources and quality,
and biodiversity. Climate change has the capacity to undermine
improvements that have been made in environmental protection,
for example in water quality, fisheries and air quality. One of
the major impacts of climate change is flooding, and we manage
flood risk.
Overall response to the draft Bill
The Environment Agency has warmly welcomed the
Bill and supports the four main pillars, including the targets
and carbon budgeting, establishment of the Committee on Climate
Change, independent carbon reporting and enabling powers for trading
schemes.
We are currently developing a detailed response
to the Government's consultation, which will focus on two areas
where the Agency has greatest expertise: compliance and adaptation.
Given the timing of this inquiry, this evidence seeks to highlight
areas where we feel Parliamentary scrutiny of the Bill would be
most valuable, rather than setting out detailed policy positions.
Compliance with carbon budgets and targets
The Government is proposing two legally binding
CO2 reduction targets in the Bill itself, accompanied
by a commitment to adopt a five-year carbon budget, based on the
recommendations of the Committee on Climate Change. This Committee
would recommend the next three sets of carbon budgets, every five
years, so future Governments would have carbon budgets to meet
in 2008-12, 2013-17, 2018-22 etc. We support this approach, including
the targets suggested.
Most other statutory environmental targets in
the UK are based on Directives agreed with other European Union
Member States. If the UK misses these targets then the Government
can be taken to the European Court and ultimately an infraction
fine can be imposed. This is a sanction all EU Member States face
and have agreed. It is well established and understood. We know
that it does act as an effective tool to ensure implementation
of targets. As the Climate Change Bill targets are unilateral,
such a sanction cannot be applied in the same way. The question
that should be addressed by Parliament is whether an equivalent
enforcement mechanism is defined at a national level, so that
the statutory carbon targets have at least the same legal weight
as other EU agreed statutory environmental targets.
The consultation paper states that if the Government
fails to meet either its statutory target in 2020 or its five-year
carbon budget, then it will be open to Judicial Review. However,
it is not yet clear what action any Government might face as a
result of such a Review, and it would be useful for the Committee
to explore what the options may be. At what point could a court
declare that any given Secretary of State had not complied with
their legal duty? There is also a very important role for Parliament
itself to play in holding the Government to account on carbon
targets.
It is clear in the consultation that the Government
would have the ability to deliver part of its targets through
the use of international carbon credits, such as Clean Development
Mechanism (CDM), joint Implementation (JI), or other international
emissions trading schemes. If the Government were likely to miss
a carbon budget, one option would be to simply meet the shortfall
by purchasing more international carbon credits. Such a decision
would have to be taken only after the Committee on Climate Change
had been consulted. This is a legitimate way of reducing carbon
emissions, but relying too heavily on this mechanism, could undermine
any international leadership created by setting unilateral targets
in the first place. Again, a detailed debate on this issue would
be a valuable piece of parliamentary scrutiny.
Flexibility in reviewing carbon budgets
The Government has proposed a number of flexibilities
to be built into the carbon budgeting system. We support the idea
of limited banking and borrowing, as Government could only use
these facilities after seeking, and taking into account, the advice
of the Committee on Climate Change.
Carbon budgets could also be reviewed if there
were significant changes in circumstances. The consultation provides
two examples of changes that might trigger a review, if aviation
were included in the EU ETS, or a significant shift in fuel prices
that changed the basis for emissions forecasts that were initially
set. Such changes could only be made on the advice of the Committee
on Climate Change and approval of Parliament by the affirmative
resolution procedure.
The issue for Parliament to scrutinise is exactly
what type of changes would be regarded as significant. There is
a proposal, backed by the UK, for aviation to come into the EU
ETS in 2011, so in the timescale of the first carbon budget. What
constitutes a significant change in energy prices? Would, for
example, the recent increases in gas price, have been regarded
as a trigger to review a carbon budget? Could the Judicial Review
mechanism be used by interest groups, either large emitters or
campaigning NGOs, go to the courts to argue that the carbon budget
should be reviewed?
Adaptation
The Bill pledges a five yearly review of adaptation
policy with a statutory report to Parliament. This will strengthen
the developing Adaptation Policy Framework and we have warmly
welcomed the inclusion of adaptation into the Bill.
Our response to the Government consultation
will go into some of the detail of how this review should be conducted
and how it links to the current governance of the Adaptation Policy
Framework. We do not believe further powers are required, but
some thought should be given to the timing of the review publication
in relation to Committee on Climate Change recommendations for
future five-year carbon budgets. Having a major Government report
on the impacts and adaptation to climate change coming out in
advance of a public debate and Government decision on future carbon
budgets, should help focus minds on the urgency of carbon reduction.
Enabling powers for trading
The Bill proposes allowing the Government to
take enabling powers to set up carbon trading schemes, which have
so far been established using primary legislation. This would
speed up the establishment of future trading schemes, such as
the Energy Performance Commitment, whilst making no presumption
that such an instrument would actually be introduced. The powers
would allow most functions of a trading scheme to be established
through secondary legislation, with the exception of revenue raising
allocations, like auctioning, which are traditionally provided
through the annual Finance Bill. We welcome all of these powers
as they will make implementation simpler.
The consultation states that the role of devolved
administrations in the proposed new powers would need further
consideration. This is a good area for further Parliamentary scrutiny.
Environment Agency
May 2007
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