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Orders and regulations
Clause 82: Orders and regulations
384. This clause makes general provision in respect of any statutory instruments (orders or regulations) to be made under the Bill. Subsection (3) allows orders or regulations to include supplementary, incidental and consequential provision and to make transitional provision and savings. Subsections (4) and (5) provide that any provision that may be made by order may instead be made by regulations, and vice versa; this is a matter of administrative convenience - the precise form of the instrument has no legal significance.
Clause 83: Affirmative and negative resolution procedure
385. This clause defines the terms "affirmative resolution procedure" and "negative resolution procedure" as they apply to instruments made by the Secretary of State. Subsection (3) provides that the affirmative resolution procedure may be used wherever the negative resolution procedure is stipulated; this will allow provisions which would otherwise have to be made using different procedures to be made in the same instrument. Subsection (4) provides that this clause does not apply to instruments making trading schemes, as to which see clause 48 and Schedule 3.
Interpretation
Clause 84: Meaning of "greenhouse gas"
386. This clause defines the term "greenhouse gas" to include:
- hydrofluorocarbons (HFCs);
- perfluorocarbons (PFCs); and
- sulphur hexafluoride (SF6).
387. The definition of greenhouse gases follows that used in the Kyoto Protocol. Note that the term "targeted greenhouse gas", used in relation to the targets and budgets in Part 1 of the Bill, is defined separately in clause 23.
388. Subsections (2) to (4) give the Secretary of State a power to amend the definition of "greenhouse gas" by negative resolution order. But the power can only be exercised to add gases to the list, and can only be exercised if the Secretary of State considers that an international agreement has been reached that the gas contributes to climate change.
Clause 85: Measurement of emissions etc by reference to carbon dioxide equivalent
389. This clause provides that emissions of greenhouse gases are to be measured or calculated in "tonnes of carbon dioxide equivalent" (defined in subsection (2)); this is to allow for the differing relative forcing effects and atmospheric lifetimes of differing greenhouse gases - for example, over 100 years, a tonne of methane has 23 times the global warming effect of carbon dioxide. These factors are known as "global warming potentials", and are to be calculated consistently with international carbon reporting practice (defined in clause 86).
Clause 86: Meaning of "international carbon reporting practice"
390. This clause defines the term "international carbon reporting practice" as accepted practice under the United Nations Framework Convention on Climate Change (UNFCCC) or other international agreements which the Secretary of State may specify using a negative resolution statutory instrument. For example, a post-2012 agreement may be specified for the purposes of this clause. An order may supplement or replace the requirement to follow UNFCCC practices.
Clause 87: Meaning of "national authority"
391. This clause defines the term "national authority" to mean the Secretary of State, the Scottish Ministers, the Welsh Ministers and the relevant Northern Ireland department (see clause 88). Subsection (2) provides that functions conferred on "the national authorities" are to be exercised jointly: they must agree on the way the function should be exercised and act together.
Clause 88: Meaning of "relevant Northern Ireland department"
392. This clause defines the term "relevant Northern Ireland department". Different Northern Ireland departments deal with different administrative matters in Northern Ireland; this clause provides that any given function is to be performed by the department which is responsible for the relevant matter. Where two or more departments are responsible, then the term refers to both of them (subsection (2)). Subsection (3) explains the process for answering a question as to which department is responsible for a matter.
Clause 89: Minor definitions
393. This clause defines the other terms used in the Bill.
394. In particular, this clause defines "emissions" as meaning emissions of a given greenhouse gas into the atmosphere that are attributable to human activity; non-anthropogenic emissions are excluded.
Clause 90: Index of defined expressions
395. This clause contains an index of the expressions which are defined in the Bill and refers the reader to where the definition can be found.
Final Provisions
Clause 91: Extent
396. Apart from clauses 69 to 73, 76 and 79, the Bill extends to the whole of the UK: for more information see the sections on territorial extent above and territorial application below. Clauses 69 to 73, 76 and 79 extend to England and Wales only.
Clause 92: Commencement
397. This Bill has been drafted so that the provisions will come into force as follows:
- Part 1 (carbon target and budgeting) and Part 6 (general supplementary provisions) come into force on Royal Assent;
- Part 2 (the Committee on Climate Change) comes into force on a day to be appointed by the Secretary of State (this allows the Secretary of State to choose a "vesting day" for the Committee's creation, to simplify administrative arrangements);
- clause 69(1) and Schedule 5 (waste reduction schemes) come into force in accordance with clauses 70 to 73 (which make provision about piloting such schemes);
- clause 76 (climate change measures reports in Wales) comes into force on a day to be appointed by the Welsh Ministers;
- clause 77 (repeal of previous reporting provision) comes into force on 1st January 2009 (so that the reporting requirements under section 2 of the Climate Change and Sustainable Energy Act 2006 (c.19) apply in 2008);
- the rest of the Bill comes into force two months after Royal Assent.
FINANCIAL EFFECTS AND EFFECTS ON THE NUMBER OF PEOPLE WORKING IN PUBLIC SERVICE
398. The final Impact Assessment accompanying this Bill has identified only very small direct changes in public service manpower, with the new Committee on Climate Change creating roughly 20 new posts. Similarly, the direct effect of the Bill on public expenditure is small, with the Committee on Climate Change requiring approximately £2.73m in its first year as a statutory body. This is expected to fall to around £2.6m in later years.
399. The Bill sets the framework for managing down greenhouse gas emissions from the UK. As such the Bill will also have indirect impacts associated with policy interventions associated with managing emissions and adapting to the impact of climate change, each of which will be subject to assessments of expenditure, staffing and regulatory impact, but which are set out at high level in the Impact Assessment that accompanies the Bill.
SUMMARY OF THE IMPACT ASSESSMENT
400. The final Impact Assessment accompanying this Bill builds on a partial Regulatory Impact Assessment carried out for the draft Bill. It contains a high level discussion of the costs and benefits of action to mitigate climate change to realise statutory reductions in CO2 emissions of at least 60% by 2050 and at least 26% by 2020 (compared to 1990 levels), together with an analysis of the key drivers and uncertainties surrounding these assessments to inform the development of detailed policies in the Bill. It also examines the Bill's provisions on adapting to the impact of climate change in the UK.
401. The analysis suggests that there is a strong case for the Bill arising from the potential for domestic commitments to help foster the conditions for broader and deeper international cooperation, create greater predictability for UK households and firms, and improve the capacity of the Government to manage uncertainty when establishing mitigation objectives. Policies to reduce domestic emissions are also likely to have positive ancillary effects in the form of increased energy security, improved air quality and reduced fuel poverty.
Carbon impacts
402. Using the shadow price of carbon it is possible to place an indicative monetary value on the emissions reductions that would occur under a 60% emissions reduction target. Depending on assumptions made regarding the level of technological change and the price of fossil fuels, the benefits of this level of emissions reduction is estimated to be in the order of £82 billion to £110 billion. It should be noted that his figure does not capture the full benefits from the measures proposed in the Bill and does not consider the range of potential ancillary effects of domestic mitigation policy, such as improved public health, increased energy security and reduced fuel poverty. Rather, it is an indicative estimate of the benefits to the UK of emissions reductions using the Government's established methods for valuing changing greenhouse gas emissions.
403. It is likely that there will be long and short-run costs associated with a transition to a low carbon economy. Analysis conducted for the 2007 Energy White Paper suggests that the costs of achieving our 60% goal would mean a reduction in GDP of 0.3% to 1.5% by 2050. The analysis also suggests that the short run GDP costs of a 30% reduction in CO2 in 2020 could be around 1.6%. However, the package of policies announced in the Energy White Paper identified significant energy efficiency savings that may mitigate these short-run costs.
404. Overall, the distribution of impacts from implementing the proposed carbon management framework is likely to be uneven, with a small number of energy-intensive industries affected substantially more than other areas of the economy, such as the commercial and residential sectors. In addition, sectors of the economy such as environmental consultancy and financial services may benefit from more robust mitigation frameworks, especially if these are replicated internationally. The distributional effects are likely to be strongly influenced by the choice of policy instrument to meet the targets and budgets: regulation, market mechanisms and fiscal incentives will have divergent distributional impacts.
405. Renewable Transport Fuel Obligations: The Impact Assessment for the Renewable Transport Fuel Obligations provisions in the Bill has assessed them as reducing the administrative burden on business and Government. In particular, the provision to create an information gateway from Her Majesty's Revenue and Customs should reduce the requirement to audit fuel suppliers' records of fuel sales, leading to a reduced administrative cost to business of around £135,000 per year. The impact on small businesses is assessed as positive.
406. If the power in the Bill to remove "recycling" of monies received from companies buying out of the obligation were used at some future point, it would have a financial impact on business, as this money would then accrue to the Consolidated Fund, rather than being returned to transport fuel suppliers. These are policy costs rather than administrative burdens. It is unlikely that the buy-out fund will contain a significant amount of money, at least in the early years.
EUROPEAN CONVENTION ON HUMAN RIGHTS
407. Section 19 of the Human Rights Act 1998 requires the Minister in charge of a Bill in either House of Parliament to make a statement about the compatibility of the Bill with the Convention rights (as defined by section 1 of that Act). The statement has to be made before Second Reading. The Secretary of State for Environment, Food and Rural Affairs has made the following statement: "In my view the provisions of the Climate Change Bill are compatible with the Convention rights".
408. Part 1 of the Bill creates a framework of powers and duties setting a framework for the reduction of greenhouse gas emissions. Nothing in Part 1 of the Bill directly affects the rights or obligations of any person in such a way as to engage their Convention rights.
409. Part 2 of the Bill creates a new, independent, non-departmental public body and confers functions on it. It also confers related functions on the Secretary of State, the Welsh Ministers, the Scottish Ministers and the relevant Northern Ireland department. Neither the creation of a public body nor the creation of any of the functions in Part 2 has any direct effect on the rights or obligations of any person in such a way as to engage their Convention rights.
410. Part 3 of the Bill creates a power to make trading schemes in regulations. The creation of a power does not, in itself, affect any person's convention rights; it is only in the exercise of the power that a person's rights may be engaged. The power to make trading schemes is conferred on public authorities (the Secretary of State, the Welsh Ministers, the Scottish Ministers and the relevant Northern Ireland department), and they are required by section 6 of the 1998 Act to act in a way that is compatible with the Convention rights, including when they are making regulations using the power in Part 3 of the Bill. Nevertheless, there are issues in Part 3 that may have human rights implications.
411. There may be concern, in principle, that the creation of a trading scheme might engage Article 1 of the First Protocol, the right to the peaceful enjoyment of one's possessions. The Government does not consider that the carrying out of activities that emit, or which lead to the emission of, greenhouse gases amounts to an "existing possession" for the purposes of Article 1 of the First Protocol: while there may be an economic benefit in carrying out those activities, there is no legal entitlement to do so and there is no legitimate expectation that such activities will remain lawful.
412. A trading scheme may fall into the category of a control over the use of property, but this does not amount to an "interference" for the purposes of Article 1 of the First Protocol. A limit on the use of the property (to the extent that a trading scheme does limit use) is very unlikely to amount to a deprivation of the right to carry on the activity. Even if there were an interference with a person's right under Article 1 of the First Protocol, the Government considers that the introduction of a trading scheme would strike a fair balance between the interests of the community and the protection of an affected person's rights.
413. The introduction of the powers in Part 3 also gives rise to the possibility of an interference with the rights under Article 8. This could arise in relation to the collection, retention and disclosure of information under paragraphs 22, 23 and 24 of Schedule 2, and the entry into and inspection of premises under paragraph 28 of Schedule 2. Similar issues arise in relation to the collection and sharing of information using the powers in Schedule 4.
414. The powers in Part 3 are likely to be used only in relation to businesses, but it is possible that an individual operating a business using his ordinary name or from his home might be affected by regulations made using the power. To the extent that such persons are likely to be participants in a trading scheme, the authority making the scheme will be required to take their particular circumstances into account. The Data Protection Act 1998 provides safeguards in relation to personal data, and any entry into or inspection of premises may only be carried out under a warrant.
415. Interferences with Article 8 rights are permitted where they are "in accordance with the law and necessary in a democratic society .. for the prevention of crime and disorder". It is well-established that entry into property is justified by this exception where investigations are being carried out to ensure that legal obligations are being met.
416. Permitting the seizure of documents under paragraph 28 of Schedule 2 (enforcement of trading schemes) may also engage Article 1 of the First Protocol. The Government believes that such a power, if exercised proportionately, would be justified by reference to the public or general interest; the examination and taking of documents, information and records are proportionate to the general interest in the maintenance of public order and the control of crime.
417. The imposition of civil penalties and the creation of criminal offences under paragraphs 29 and 30 of Schedule 2 give rise to issues relating to the right to a fair trial under Article 6. If such provisions are included in regulations, then the person making the scheme will be under a duty to ensure that there is no interference with the convention rights. Paragraph 31 of Schedule 2 gives the person making the scheme a power to put in place appeals mechanisms relating to civil penalties and enforcement action; the requirement to act compatibly with the Convention rights under section 6 of the 1998 Act effectively makes this a duty wherever such appeals are appropriate. Such appeals, together with the opportunity for judicial review, ensure compatibility with the convention rights.
418. Where a criminal penalty is created, the criminal justice system's procedures ensure compatibility with Article 6. This also ensures that a person's rights are protected in relation to the criminal penalty created in paragraph 5 of Schedule 4.
419. Part 4 of the Bill creates reporting duties on public bodies, which contains no provision which could interfere with any person's Convention rights. It also gives power to the Secretary of State and Welsh Ministers to direct public authorities and statutory undertakers to report on how they are adapting to climate change and to give guidance to them on how to do this.
420. The power to direct does not, in itself, affect any person's Convention rights; it is only in the exercise of the power that a person's rights may be engaged. It is very unlikely that any power to require an authority to report could affect any person's human rights, but even if it could, both the Secretary of State and the Welsh Ministers are required by section 6 of the 1998 Act to act in a way that is compatible with the Convention rights, including when they are directing a reporting authority using this power. Therefore no interference in the Convention rights can result from the use of these powers.
421. Part 5 of the Bill contains provisions on waste reduction schemes and Renewable Transport Fuel Obligations ("RTFO") which may give rise to human rights issues.
422. The provisions on waste reduction schemes may raise human rights issues. But the Government does not consider that the exercise of the powers should unlawfully interfere with any person's Convention rights.
423. Waste reduction schemes will be made by waste collection authorities in exercise of a power conferred on them by the Bill. The conferral of a power does not, in itself, affect any person's Convention rights. Waste collection authorities are "public authorities" for the purposes of section 6 of the Human Rights Act 1998. That means that they are not allowed to act in a way which is incompatible with the Convention rights, including when they are putting a waste reduction scheme in place. Nevertheless, the powers do raise questions in relation to Article 8, Article 1 of the First Protocol and Article 6.
424. An authority's actions in establishing a scheme might engage the Article 8 right to respect for a person's private and family life by the inspection, recording and monitoring of the type and amount of waste generated by a household, and the use that is made of information gathered in the process. However, the authority will be required to act proportionately and will be bound by the Data Protection Act 1998 to prevent the disclosure of personal information. Authorities are also required to put in place measures to protect people who might be unduly disadvantaged by the introduction of a scheme.
425. The Article 8 right is a qualified right, and interferences with it must be proportionate, in accordance with the law and in the interests of legitimate objectives including public safety, the protection of health and the economic wellbeing of the country. To the extent that there may be any interference with the Article 8 right, the Government considers that the introduction of waste reduction schemes is in the interest of the legitimate objective of reducing the amount of waste going to landfill and thereby reducing methane emissions and their effects on the environment.
426. By requiring payments (even in a revenue-neutral system), a waste reduction scheme may engage Article 1 of the First Protocol, the right to the peaceful enjoyment of possessions. However, the right under Article 1 of the First Protocol is a qualified right, and an individual may be deprived of his possessions in the interests of the community. The Government has a wide margin of discretion over what is in the interests of the community and it is well-established that the protection of the environment can meet the test. The Government considers that requirement to make payments in a scheme intended to improve the environment strikes the right balance.
427. The right to a fair hearing under Article 6 is engaged by the civil rights and obligations created by the provisions and by the creation of a criminal offence. But the provisions require an authority to include an appeal mechanism in a waste reduction scheme; the Government considers that this appeal mechanism, combined with judicial review, will ensure compliance with Article 6. The criminal offence will be subject to the procedures of the criminal justice system, which will ensure that a person's rights under Article 6 are protected.
428. In relation to RTFO, while Article 1 of the First Protocol to the Convention might be engaged by the provision in Schedule 6 for buy-out payments made under the RTFO scheme not to be recycled to transport fuel suppliers, it is not so engaged because no rights to the buy-out payments have vested. The amount of any such payments and who might be entitled to them is presently unascertained and unascertainable.
429. The information gateway in Schedule 6 potentially engages Articles 6 and 8 of the Convention. In relation to the rights of privacy under Article 8, the information gateway can be justified as necessary in the interests of the economic well-being of the country because it will reduce the opportunity for fraud which could otherwise jeopardise the policy objective of the RTFO scheme (to increase the proportion of renewable transport fuel supplied). It will also produce cost savings and efficiencies for the Administrator and for suppliers because figures provided by suppliers will not need to be independently verified.
430. Article 6 is potentially engaged because new section 131C provides a defence to the criminal offence of wrongful disclosure of information provided through the information gateway which reverses the normal burden of proof. The clause uses wording which has been used in other recent primary legislation and similar reversals of the burden of proof have been found by the courts to be compatible with the presumption of innocence and the right to a fair trial. The reversed burden of proof relates to matters of the defendant's reasonable belief which it is more appropriate for the defendant to prove than the prosecution. It can be justified under Article 6 as a proportionate means of achieving the legitimate objective of protecting government-held financial information, and protecting the privacy of the persons to whom the information relates.
431. The Government does not consider that any of the other provisions in Part 5, or any of the provisions in Part 6, give rise to any concerns as to their compatibility with the Convention rights.
COMMENCEMENT DATE
432. See clause 92 of the Bill and the commentary above. The majority of provisions come into force on Royal Assent or two months later. Two clauses come into force on days to be appointed and one clause comes into force on 1st January 2009.
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