Recommendations
12. The Government
needs to play a central role in agreeing ambitious and binding
international commitments on tackling climate change, both in
the EU and in the lead up to the UNFCCC conference in Paris in
2015. Domestically, the Government should announce immediately
that following the advice from the Committee on Climate Change
there is no rationale for any review of the Fourth Carbon Budget.
(Paragraph 5)
13. The Government
should vote in favour of binding national renewables targets at
the EU Council. (Paragraph 8)
14. The Government
should make the changes recommended by the Committee on Climate
Change to bring greater longer-term certainty for investment—an
early energy-intensity target for electricity generation and an
extension of the Levy Control Framework and indicative funding
levels to 2030. The Government should reiterate its commitment
to the already planned escalation of the carbon price floor and
use the implementation of the Electricity Market Reform to make
a clear commitment to avoiding further unplanned regulatory and
subsidy changes for low-carbon energy. (Paragraph 25)
15. The Financial
Policy Committee of the Bank of England should regularly consult
with the Committee on Climate Change to help it monitor the risks
to financial stability associated with a carbon bubble. (Paragraph
31)
16. The Government should work with companies
to ensure that reporting requirements provide investors with all
of the information they require to assess carbon risk, and develop
the standard reporting requirements further. (Paragraph 35)
17. The Government must make an early and
clear statement about the Green Investment Bank's long-term future,
beyond the 2015-16 horizon of its Spending Review funding settlement.
The Government should declare in Budget 2014, on the basis of
the flat projections for Government debt in the last Autumn Statement
remaining valid, that the Bank will be permitted to borrow in
2015-16. (Paragraph 50)
18. The Government should make the Green Deal
simpler and more attractive to households in order to achieve
the level of scale-up required. Steps could include significantly
reducing the assessment fee and the interest rate on the Green
Deal loan, to be more in line with the terms of the Help to Buy
scheme equity loans which start at 1.75%. (Paragraph 54)
19. The Government has spent a long time talking
about extending the remit of the Green Investment Bank to community
energy without being able to show any progress. The Government
should prepare and submit the relevant information to the Commission
to secure State Aid approval for these additional areas of activity
for the Green Investment Bank as quickly as possible and should
work with the Green Investment Bank to develop effective aggregation
methods to facilitate smaller scale lending. (Paragraph 56)
20. The Government should work with the European
Commission to ensure its proposals to reduce the threshold for
small-scale feed-in tariffs are not carried through. The first
priorities of the new Community Energy Unit in DECC should be
to seek early State Aid approval for the Green Investment Bank
to invest in community energy, and to actively engage with other
departments—including DCLG and the Treasury—to ensure
that all local authorities have the tools and resources to play
a full part in making such schemes a widespread and successful
part of the UK energy mix. It should prioritise initiatives to
allow community energy producers to directly supply energy at
lower prices to local communities, and work with Ofgem to make
it mandatory for District Network Operators to work with License
lite and set fixed fees for this. (Paragraph 62)
21. We urge the Government to look positively
at ways of overcoming the problems relating [to redirecting
Quantitative Easing and securing the international support needed
to introduce a financial transaction tax].
(Paragraph 69)
22. The Government should publish a single
overall strategy to refocus and direct all relevant policies towards
this essential task of mobilising action on reducing carbon emissions,
as it started to do in Enabling the Transition to a Green Economy.
It should re-visit that document to evaluate progress and identify
areas for improvement, as well as extending it further. It should
monitor and report on overall progress across the full range of
green energy and infrastructure investment, in the same way as
it reports annually on the National Infrastructure Plan. Working
to a single strategy would create greater certainty and a more
favourable investment outlook by bringing together and aligning:
· The UK's position
in international negotiations on emissions reduction and climate
change;
· Action needed to
deliver our carbon budget commitments and Climate Change Act obligations;
· Industrial Strategies;
· The National Infrastructure
Plan;
· The Infrastructure
Guarantee .programme;
· The Green Investment
Bank's role and the scope of the projects it supports;
· Opportunities to
take advantage of and direct EU funding towards green infrastructure;
· Green-proofing
Government grants, including the Regional Growth Fund and LEPs;
· Community energy;
· Funding for adaption
to climate change. (Paragraph 73)
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