Conclusion
59. The Pre-Budget Report and Comprehensive Spending
Review were published a year after the Stern Review. Alongside
them, the Treasury published a report on how it was implementing
Stern, but Friends of the Earth described it as "mainly a
rehash of their existing policies",[85]
and certainly we found little sign in the PBR and CSR that the
Treasury was responding on the scale and with the urgency Stern
recommended. This was very disappointing given the particular
emphasis which Stern had placed on the need to make early cuts
in carbon emissions, and the argument that these are disproportionately
beneficial both to the environment and to the economy. It was
also somewhat curious given the conclusions of the Commission
on Environmental Markets and Economic Performance,[86]
and the report by the CBI's climate change taskforce, both published
in November 2007. Both reports highlighted the economic opportunities
of accelerated investment in low carbon industries, and suggested
that business attitudes towards climate change policy have shifted
considerably—perhaps further than the Treasury has realised.
To Friends of the Earth, the Treasury was behind the times: "It
feels to us almost as if the Government is refusing to push at
an open door".[87]
Certainly, in giving evidence to us on PBR 2006, Green Alliance
had commented on the Treasury's attitude hitherto: the Treasury
would "often block proposals on the environment from other
parts of Whitehall", one reason for which being its "perception
that the business community would not support a more ambitious
approach".[88]
60. In its defence, the Exchequer Secretary argued
forcefully not only that the Treasury was aware of the change
in the attitudes of business, but that:
The interesting thing is how the Treasury is now
seized of this. I do not believe that that is necessarily the
case yet in many other countries. The Treasury is very much engaged
in doing the analytical work to try to bring about the change
we need to make in the most cost-effective and economically efficient
way. That will help to demonstrate that there is a practical and
efficient road map to de-carbonising our economy and we hope to
be able to keep with us the population which naturally aspires
to improved living standards and greater opportunities. When visiting
other countries I do not discern that their finance ministries
are as yet quite as engaged in this process. […][89]
61. We are not in a position to judge the record
of other finance ministries. But we have been publishing annual
reports on the Treasury's environmental policies for a decade
now, and for a number of years until the Stern Review came out
in late 2006, what we saw essentially were small announcements
and dwindling momentum. Publication of the Stern Review was a
momentous event; but we have yet to see whether it has had a profound
effect on Treasury thinking. In any case, whether or not the Treasury
is now intellectually seized by climate change, it needs to provide
real action. This is not least because in the 12 months between
the publication of the Stern Review and that of the PBR, the science
on climate change continued to harden, with global emissions rising
faster than projected. For instance, while the Stern Review drew
on more recent work, it was partly based on the Third Assessment
Report of the Intergovernmental Panel on Climate Change (IPCC),
published in 2001; in 2007 the IPCC published its Fourth Assessment
Report, which considerably strengthened the certainty with which
it assessed the causes and projected the development of climate
change.[90] Also, in
October 2007 a study by the Global Carbon Project warned that
rising emissions suggested "a carbon cycle that is generating
stronger-than-expected climate forcing sooner than expected".
This was the result of the authors' analysis of a recent acceleration
in the rise in global CO2 emissions: these have been
rising at an average of 2.9% per year since 2000 as opposed to
0.7% per year in the 1990s.[91]
In this context, the Treasury's lack of urgency stands out as
even more remiss.
62. The next Pre-Budget Report will
be published within a new policy landscape, following the scheduled
passing of Bills on climate change, energy, and planning, as well
as the EU carbon reduction and renewable energy targets for 2020.
Pre-Budget Report 2008 must establish a coherent set of measures
to help deliver the UK's 2020 domestic and European targets on
emissions and renewable energy, and show explicitly what their
planned contribution to this delivery will be.
85 Q35 Back
86
"Commission on Environmental Markets and Economic Performance",
Defra, http://www.defra.gov.uk/environment/business/commission/index.htm Back
87
Q31 Back
88
Environmental Audit Committee, Pre-Budget 2006 and the Stern Review,
Q82 Back
89
Q151 Back
90
Intergovernmental Panel on Climate Change (IPCC), Climate Change
2007: Summary for Policy Makers, November 2007, www.ipcc.ch/pdf/assessment-report/ar4/syr/ar4_syr_spm.pdf Back
91
Canadell et al, "Contributions to accelerating atmospheric
CO2 growth from economic activity, carbon intensity,
and efficiency of natural sinks", Proceedings of the National
Academy of Sciences (PNAS), 25 October 2007, p 4 Back
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