Supplementary Memorandum submitted by
Friends of the Earth
At your 4 December 2007 oral evidence session
on the Pre-Budget Report and Comprehensive Spending Review, I
said I would send further information on a couple of points.
Firstly, Defra has issued new guidance on the
use of a "shadow price" for carbon, to be used in policy
appraisal. In our view this is flawed on a number of levels, not
least because it assumes that strong climate policies will be
implemented, leading to low climate damage, leading to a low shadow
price. Use of a low shadow price actively prevents strong policies
being passed. This is an entirely circular situation which will
prevent the Government meeting its climate commitments.
In the enclosed briefing, * we set out the implications
of the use of the new shadow price for Heathrow expansion—its
use means the proposal has an alleged net economic benefit, and
so gets through the Impact Assessment, and as a result hundreds
of millions of extra tonnes of carbon dioxide will be emitted.
With a more reasonable shadow price, the opposite outcome would
result.
* Not printed.
You also asked how policy appraisal might be
done differently, without reliance on cost-benefit analysis. I
have pleasure in enclosing an interesting new piece of work commissioned
from Tufts University, USA, which argues that cost-benefit analysis
leads to inherently ineffective decision-making, and proposes
more effective alternatives. This research also critiques the
Government's new shadow price of carbon on pages 22-23.
Finally, you asked about domestic production
of biofuels. I have included overleaf a short answer on this point
from our Biofuels Campaigner.
I hope you find these documents of interest,
and thank you for the invitation to speak at your inquiry.
NOTE ON
BIOFUELS
Q. In terms of the domestic element of the
fund, would Friends of the Earth support further research and
development on biofuels or do you think that is a dead-end?
Friends of the Earth would support further research
and development of some biofuels but not of all. It can be very
difficult to distinguish between good biofuels and bad, but as
a rule of thumb we would support research into technologies that
enable us to turn our waste products into fuel. We would not support
research into further developing biofuels made from large monoculture
crop plantations specifically planted for the purpose. This is
because there are too many risks associated with these systems,
including:
— difficulties of ensuring land
of high biodiversity value or important carbon sinks have not
been cleared;
— questions around displacement—ie
biofuels plantations are not themselves established on cleared
land, but push other agricultural activities into new land; and
— difficulties of monitoring and
verifying compliance with sustainability standards or certification
systems and their inability to address key issues (including those
above).
We also believe that there are far easier ways
to reduce our emissions from the transport and energy sectors.
Friends of the Earth would support research
and development of second generation biofuels, under the same
conditions. It is important, however, that the need for research
in this area is not used as a reason to develop markets for current
generation biofuels, we believe that this is a skewed logic.
1 February 2008
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