Environment, Food and Rural Affairs CommitteeWritten evidence submitted by EDF Energy

1. EDF Energy is one of the UK’s largest energy companies with activities throughout the energy chain. Our interests include nuclear, coal and gas-fired electricity generation, renewables, combined heat and power plants, and energy supply to end users. We have over five million electricity and gas customer accounts in the UK, including both residential and business users.

2. EDF Energy supports the proposals in the Natural Environment White Paper. However, we believe that the initiatives arising from White Paper proposals need to be clearer in specifying future objectives and in explaining how the proposed actions will deliver the objectives.

EDF Energy’s Response to your Questions

What actions are required across Government Departments, from local government and by civil society to deliver the White Paper’s proposals to grow a green economy and reconnect people with nature?

3. EDF Energy considers the Natural Environment White Paper to provide a sufficiently high level framework for future policy and legislative developments to protect the natural environment. However, more information on the overarching goals and the proposed measures for implementation of new initiatives, including government funding, is required in order to develop future policy and guidance.

4. As policy is developed, we urge prioritisation of the key challenges addressed by the White Paper, such that activity is focused on those sectors responsible for the greatest impact on ecosystem services such as controls on housing development, agriculture, fisheries and transport policy, rather than those in industrial sectors where there are already extensive direct controls.

5. Actions to improve the environment need not, and should not, hamper sustainable economic growth. We do not believe that it is a coincidence that the improvements in environmental quality over the last 20 years occurred during a period of sustained economic growth and prosperity. EDF Energy feels that the issue is therefore how to react to, and address, the overarching challenges identified in a way that does not hamper a recovery of sustainable economic growth.

6. For sustainable development to occur, industry needs a clear sense of policy direction over time and an understanding of when policies will be implemented in legislation and regulation. The introduction of new legislation should take account of industrial investment cycles by providing a long-term framework of priorities and targets to minimise the risks of stranded investments. Full implementation of existing and currently drafted legislation is the most appropriate way to continue to reduce power sector impacts on ecosystems. In particular, legislation and regulation such as that arising from the Habitats Directive, Water Framework Directive, Ambient Air Quality Directive, Industrial Emissions Directive and National Emissions Ceilings Directive set challenging emission reduction targets and permit conditions on operators. As a sector, we are on a trajectory to low carbon electricity generation which will help to mitigate one of the pressures driving future changes in ecosystems.

7. EDF Energy understands that the White Paper aims to establish voluntary biodiversity offsetting change in a number of pilot areas. For this to be successful, the limits of what can be offset and the metrics used to assess the goal of “no net loss of biodiversity” need to be clearly defined. EDF Energy supports the approach of a voluntary trial in pilot areas to determine the feasibility of the approach and we would welcome stakeholder consultation on the future development, if any, of this approach.

8. We would also welcome the promotion of environmental education within schools.

Will the institutional framework outlined for delivering the proposals (in particular Nature Improvement Areas and Local Nature Partnerships) be effective? Does the proposed Natural Capital Committee have sufficient powers?

9. EDF Energy considers the proposed new initiatives to have the potential to make a valuable contribution towards protecting and enhancing ecosystems. However, the White Paper does not contain sufficient detail on how the Nature Improvement Areas and Local Nature Partnerships will be established and function to enable assessment of how effective they may be. The reliance on a voluntary local approach further adds to the uncertainty.

10. To ensure that the initiatives are as effective as possible in delivering national targets, a national strategic framework is necessary to provide guidance on environmental priorities and ensure consistency with the National Planning Policy Framework and forthcoming Water White Paper. Such a framework would also ensure consistent decision-making across the country and would, therefore, ensure a “level playing-field” for industrial development.

11. EDF Energy believes that there is very little information available in the public domain public domain about the proposed Natural Capital Committee. In our view, at this early stage in the process, this should be an expert advisory committee to Government tasked to provide an evidence base to inform future policy decisions. The Natural Capital Committee should not have powers.

What further research and/or evidence is required to develop practical programmes sufficiently detailed to deliver the White Paper’s ambition to fully embed the value of nature into policy delivery?

12. The UK National Ecosystem Assessment sets out a conceptual framework for an ecosystem services valuation approach to nature protection. The science base and economic methodologies to value nature are not yet adequate for regulatory or business decision-making. A robust process for the valuation of ecosystem services should be developed that:

is founded on peer-reviewed and credible science;

is accepted as credible by all parties;

is open and transparent; and

enables prioritisation, so that control measures are proportionate and cost-effective.

13. EDF Energy believes that economic efficiency should be at the heart of any green economy roadmap. It is essential to recognise that the investments needed must be economically efficient, and therefore economically rational, for those investing the very significant sums that will be needed.

14. In Section 4 of the White Paper, the statement is made that “the effects from particulate pollution alone are estimated to contribute to the equivalent of 29,000 deaths per year”. It should be noted that significant scientific and medical uncertainties remain about the relative toxicities to humans of different components of atmospheric particulate matter, and in particular in linking this to emissions of NOx. There is little evidence that secondary nitrate aerosols formed from NOx emissions are associated with human health effects. Effective policy needs to be more subtle in identifying the key pollutants responsible for human health effects and in correct targeting of policies.

What evidence is there from other countries that the approaches proposed in the White Paper can be successfully applied in practice?

15. There is no evidence from other countries that the ecosystems approach encouraged by the National Ecosystem Assessment and Natural Environment White Paper (with systematic valuation of all ecosystem services) is currently a viable basis for general regulatory or business decision-making. However, other more specific initiatives proposed in the White Paper, such as payments for ecosystem services (PES) and biodiversity offsetting, have been successfully applied in other countries, eg payments for watershed services and wetland mitigation banking in the US.

What resources will be needed to fully deliver the White Paper’s ambitions and how can these best be provided? How might the value of “services” provided by ecosystems to beneficiaries be translated into spending that will enhance the natural environment?

16. Specific national goals for ecosystem protection will have to be developed before resource requirements and suitable mechanisms for raising and delivering funds can be determined.

17. At the current time we believe that neither the science base nor the economic methodologies are robust enough to fully embed the value of nature into policy delivery. However, as part of any programme of investigation into ecosystem services valuation, we feel there is potential advantage in exploring the role, benefits and options for market mechanisms for the protection of valued ecosystem services.

Does the White Paper set out an accurate assessment of the barriers to public engagement with the natural environment and make the most effective proposals for re-engagement?

18. EDF Energy believes that there are a number of factors common to the recent success of consumer-driven campaigns:

a simple and compelling aim/objective;

they do not harm the economic prosperity of the individual;

clear and transparent communications and appropriate feedback, ie it is made clear how individual actions of consumers produce tangible, and valuable, results; and

the campaign objective is at a scale that is commensurate with the actions of (multiple) individuals.

19. This suggests the need for all initiatives arising from White Paper proposals to be absolutely clear on both what the objective is and how the actions that are prompted deliver the objective.

Related Matters

20. Where certain products can potentially have a large footprint on the natural environment abroad, the Government should encourage suppliers to provide information on the sustainability of their sources. Where this information is made publicly available, it can act as an incentive to improve sourcing policies without the need for regulation. In the electricity industry, the use of imported biomass for renewable generation has the potential to impact biodiversity abroad, if not sourced sustainably. The requirement to report sustainability information under the Renewables Obligation has prompted many electricity companies to adopt voluntary sustainability policies for the procurement of biomass and has demonstrated that generators are already acting responsibly. The provision of such information for large footprint products would enable the Government to monitor the extent of unsustainable practices and the impact on natural resources abroad. If an impact was shown to be large, regulatory instruments which targeted the specific products could be used to prevent such impacts.

26 September 2011

Prepared 16th July 2012