House of Commons - An environmental scorecard - Environmental Audit Committee

An environmental scorecard - Environmental Audit Committee Contents

2 Policy levers

27. In this Part we examine the principal policy levers available to tackle the inadequate and slow pace of progress on environmental protection:

· embedding the consideration of the environment in Government policy-making;

· fiscal measures;

· regulation;

· public engagement; and

· monitoring and reporting.

Embedding the environment in policy making

28. We discuss later the need for an Environmental Strategy (paragraph 48), but policies that are directed at or aligned with specific environmental areas are not enough on their own. Environmental protection across the board requires that mainstream policies—in transport, infrastructure, education, employment and so on—take the environment into account as much as their economic considerations. We discussed in our report on Well-being how natural capital was more likely to be protected if it is attributed a value and routinely considered in Government policy-making. We noted a concern in that inquiry that putting a value on natural capital potentially made it available as a factor to be traded off against other sustainable development 'capitals' (including economic capital). But we shared the Natural Capital Committee's assessment that not to do so presented a greater risk that, as the NCC put it, "what is not measured is usually ignored".[61] Our report on Biodiversity Offsetting highlighted an ancillary risk when the natural environment is measured: that the Government's proposals might weaken the operation of the 'mitigation hierarchy' intended to avoid environmental damage before mitigation or offsetting are considered (we raised a similar concern in our subsequent report on HS2 and the Environment).[62] The Government's decision on biodiversity offsetting is still awaited.

29. The Natural Capital Committee was established in 2012 with a three-year remit to "provide expert, independent advice to Government on the state of England's natural capital"[63] and to propose "a framework that will help natural capital to be hard-wired into economic decision making".[64] Its latest report, published in March 2014, concluded that:

Despite its importance, the value of natural capital is routinely taken for granted. Although there have been some notable policy successes, such as improvements in air and water quality, natural assets continue to be degraded in aggregate and their capacity to deliver essential benefits to current and future generations is being reduced. This has an adverse impact on the economy.

It recommended the establishment of a long term plan to maintain and improve natural capital.

30. There is other evidence that natural capital is insufficiently incorporated into Government decision-making. Our 2011 report on Embedding sustainable development across Government examined the need for environmental issues to be fully embedded in policies in all departments following the abolition of the Sustainable Development Commission.[66] The Government gave the Cabinet Office and Defra a central role in scrutinising and challenging the sustainability of departments' Business Plans. In our 2013 Update report we criticised that review system because it did not seek to address the scope for new (rather than existing) policy opportunities to tackle sustainability issues.[67] In other inquiries we have identified where a more integrated approach to policy-making was needed. On sustainable food, we noted how the Government needed approaches which took account not just of the needs of agriculture and the environment but also of the role of schools and education and community initiatives.[68] On HS2 the Government had not undertaken the full environmental assessment that would have been expected on infrastructure projects of such a size.[69] Transport policy, we also noted, has failed to address the needs of people to access a range of public services and employment.[70] This raised issues about inequality and its link to well-being, which we reported on earlier this year.[71] We will continue to monitor this area with assistance from the Sustainability Knowledge Alliance.[72]

31. In our 2013 Update review of sustainable development in Government, we found that policy appraisal and impact assessments had improved but that many were still not adequately addressing sustainability and environmental aspects.[73] Subsequently, as we noted in our recent Well-being report,[74] Defra's review of sustainability in impact assessments (commissioned in response to our earlier Embedding sustainable development inquiry)[75] concluded that while "the majority of impact assessments [across Government] consider sustainable development issues in an appropriate and proportionate manner", there were "some areas where impact assessments could be improved, for example in better identification of ecosystems impacts".[76] In our recent report on Sustainability in the Home Office we emphasised that departments need to ensure that sufficient time and resources, including high quality internal challenge and review, are provided on more complex cases to ensure the full range of environmental, social and economic impacts are assessed and incorporated into the design of policies.[77]

32. In a similar vein, Dr Duncan Russel of Exeter University and other academics told us in our current inquiry that their own recent review of appraisals had shown that practices do "not seem to live up to the ambitions of the 2011 Natural Environment White Paper".[78] They found the "key determinant of how environmental knowledge is used [is] dependent on institutional cultures and behaviours, rather than solely on [an environmental] knowledge deficit".[79] Dr Russel and his colleagues concluded that "sustained high-level leadership from ministers and executives is needed if the environment is to be recognised as an enduring priority" and recommended further integration of institutions and mechanisms to allow "more integrated analysis and solutions".[80] In our own inquiries on sustainability in BIS and the Home Office we have identified the value of 'sustainability champions' in those departments in encouraging officials to apply environmental considerations in policy-making, and the need for increased effort to extend training on sustainable development skills.[81]

33. In our reports on sustainable development we also examined progress on sustainability reporting by Government departments and in the private sector. Such reporting obligations can provide an important spur to organisations to follow sustainable and environmental policies. In our 2013 report on Embedding sustainable development we noted:

This recommendation was not however accepted by the Government, which considered reporting compliance to be the responsibility of individual departments.[83] We intend to further review progress on embedding sustainable development before the end of this Parliament.

Fiscal incentives and penalties

34. The Government has a target of increasing the proportion of 'environmental taxes'.[84] As we noted in our recent Circular economy report, one environmental tax—landfill tax—has been "one of the most effective policy measures in increasing 'circularity' in the past decade".[85] We recommended that "as pressure on resources will continue to increase, taxation policy should incentivise products that are designed to have a lower environmental impact and support greater repair and re-use".[86]

35. The Government however has changed the definition it applies to environmental taxes. In our report on Budget 2011 we highlighted how the Treasury intended to apply a narrow definition, based on the primary intention of a tax rather than its effect, and that as a result it would exclude some taxes counted as environmental taxes by the Office for National Statistics.[87] The Treasury only confirmed its definition in July 2012, a year after our earlier report.[88] Its subsequent analysis in March 2014 was that, on the basis of its own definition, the proportion of environmental taxes would rise over the duration of the Parliament.[89] In contrast, the proportion of environmental taxes on the ONS definition has fallen, from 8.3% in 2010 to 7.5% in 2013.[90]

36. Subsidies—effectively negative taxation—also have a role in influencing environmentally responsible behaviours. In our December 2013 report on Energy subsidies we identified the role of renewable energy subsidies in helping to reduce carbon emissions, and criticised subsidies for fossil fuels which "are inconsistent with the global effort to tackle climate change, providing incentives for greater use of such fuels and disincentives for energy efficiency".[91] We concluded that

37. WWF told is in our current inquiry that fiscal levers could be effective, but that they had been hampered by "uncertainty, inconsistency and little substantial incentive".[93] They shared our earlier views on the classification of aviation and fuel taxes (which are included by the ONS, but excluded by the Treasury), and raised concerns about the use of fiscal incentives to promote fracking, given the Government's G20 pledge to phase out subsidies for fossil fuels.[94] In our current inquiry, Andrew Raingold of the Aldersgate Group told us:

Regulation

38. Regulation is at the heart of environmental protection, with regulations covering the quality of air, rivers and emissions, and safeguards on habitats and species. Environmental protection is regulated by measures at all levels, from UN and European to national. National regulation has been a focus of Government attention during this Parliament. The Prime Minister has stated that this Government "will be the first government in modern history to have reduced—rather than increased—domestic business regulation during [its] time in office".[96] Defra has been responsible for streamlining environmental regulations as part of the Government's Red Tape Challenge initiative. It identified 336 proposals for reform, which Defra expects to reduce compliance costs for businesses by £300 million annually from April 2015. 20% of these commitments were implemented by April 2014, and Defra has committed to implement 75% by April 2015.[97]

39. Wildlife and Countryside Link highlighted "the unrelenting focus on deregulation" as a particular environmental concern.[98] WWF believed that "the Government seems to have an allergic reaction to regulation".[99] Many of our witnesses favoured strong and consistent regulation. Dan Rogerson MP told us that the Red Tape Challenge was about "getting rid of regulation that now does not serve a purpose" and "bring[ing] pieces of regulation together so that they work in a better and more simplified way".[100] The Wildlife Trusts told us that:

101

40. In 2012 the Government launched a 'Balance of Competencies' review, to examine the division of responsibilities between the UK and the European Union. The review's report on Environment and climate change noted that "the majority of respondents believed that EU competence has increased environmental standards in the UK and across the EU, and that this has led to improved performance in addressing several environmental issues", although concerns were raised about the cost of regulations to businesses.[102] Defra told us:

The Government's work on environmental protection is heavily influenced by the European Union (EU) which holds significant competence in the area to ensure a level environmental playing field for the single market and to protect Europe's environmental heritage. However the Government thinks it is right to examine where national responsibilities should end and European ones begin. The Government therefore recently undertook a balance of competences review which sought views on where responsibilities should lie between member and states and the EU and how EU responsibilities should be exercised. This showed there are a wide range of opinions and Government is considering those carefully. In the meantime the Government is:

· Continuing to defend the UK's competence to decide policy. The Government believes some policies are best-decided at a national level and its starting position is to consider the most appropriate level of competence unless there is a clear case for coordinated, Europe-wide action.

· Seeking reform at the EU level. Much of current EU environmental regulation is historic and has built up in an uncoordinated way. The Government is working through initiatives such as the European Commission's REFIT regulatory fitness check programme to review the entire acquis to improve the coherence of the EU regulation and ensure it is necessary, efficient and effective.[103]

41. Dan Rogerson MP considered that "a number of the discussions at the European level have been beneficial".[104] He could not identify any competencies that should be brought back from European control.[105] Wildlife and Countryside Link presented a positive view of the EU's impact on environmental protection in the UK:

106

WWF were worried that the Balance of Competencies review might be superseded by the Red Tape Challenge which, they believed, could implement changes that were "faster and less scrutinised".[107]

Public engagement and nudge

42. An important element of environmental protection is garnering belief in its importance so that it engages public support. Sometimes that engagement comes through regulation and fiscal incentives (we argued in our report on Budget 2011 for hypothecating green taxes for environmental expenditure purposes in order to secure public acceptance, not just for the taxes but also for the desired behaviour change).[108] Important public messages on the environment are also delivered by the penalties imposed on environmentally damaging activity. Our call for more consistently applied penalties in our 2012 report on Wildlife crime was as much about sending a signal about the importance of preserving biodiversity as about applying appropriate sanctions against individuals.[109]

43. A particular policy lever on biodiversity has been the use of 48 Local Nature Partnerships, which bring together environmental groups as well as planners and developers,[110] and the development of 12 Nature Improvement Areas.[111] These were intended to introduce the 'landscape scale' perspective envisaged in the Natural Environment White Paper.[112] Wildlife and Countryside Link's Nature Check report flagged this commitment as 'red' in its 2013 review.[113] Martin Harper of RSPB told us that "[Local Nature Partnerships] have not had the same level of attention as the [Local Enterprise partnerships]. … We have not had the level of support that we would have liked for the Local Nature Partnerships compared with the LEPs."[114] Steve Trotter of the Wildlife Trusts told us:

115

The Government did not allocate any funding to Local Nature Partnerships in 2013-14, noting that "on going funding was not part of the envisaged model for LNPs".[116]

44. The CLA favoured incentives for farmers and land managers, but also believed that there was "significant scope to increase education and awareness amongst farmers about improving their soil structure and quality".[117] They highlighted the advice of the Farming Advice Service.[118] In our report on Marine protected areas, we emphasised the need for "engaging with all those with an interest in marine matters" in implementing Marine Conservation Zones.[119]

45. As we noted in our Well-being report, the Commission on Well-being and Policy concluded in March 2014 that given the UK's culture of "libertarian paternalism", policy-making should involve 'nudge' techniques "to shape the inevitable choice architecture to favour outcomes that are positive for busy consumers and citizens".[120] 'Nudge' can alter perspectives in a way that ensures people make environmentally conscious decisions. In our report on Plastic bags, we welcomed the Government's proposal for a charge on them (though not on the proposed exemptions for biodegradable bags or for small & medium sized retailers) as a way of changing customers' behaviour.[121] Similarly, as we noted in our report on the draft National Pollinator Strategy, Defra's approach included a public 'call to action', which we welcomed.[122] In our current inquiry, RSPB believed that "we need to join up the NHS and education with environmental providers in a way that really delivers benefits to people and society".[123] They recommended that section 78 of the Education Act be amended to include contact with and appreciation of nature in schooling.[124]

46. While 'nudge' and public education can be useful in helping to change behaviours, some of our witnesses highlighted the need also for a regulatory underpinning. Martin Harper of the RSPB told us that a former Defra Chief Scientist had told him that "no environmental issue has ever been solved by voluntary means alone."[125] The Aldersgate Group believed that "the voluntary approach in a number of areas is not delivering".[126] The Natural Environment Research Council noted that nudge techniques were initially successful when used to educate the public regarding closure of Lyme Bay to scallop fishing, but in the long term they failed as market forces came into play, requiring legislation.[127] In a similar vein, in our report on Marine protected areas we highlighted the value of voluntary agreements in managing Marine Conservation Zones, but also that a facility for statutory enforcement was needed to guarantee environmental protections.[128] And in our National Pollinator Strategy report we urged the Government to justify its "predominantly voluntary approach … and identify the tests for judging if a mandatory or incentivised approach would be required".[129]

47. Another nudge technique is the use of benchmarking and league-tables, to provide incentives for companies to improve their environmental protection record. WWF endorsed that approach, as part of a "the full range of taxation, incentives and regulation".[130] The Government told us that it is "working with partners to explore the potential of a range of 'nudge' based approaches to improve local environmental quality", for example by avoiding bans, fines and taxes for failure to recycle, and instead offering a comprehensive service and financial incentives.[131]

Monitoring, reporting and accountability

48. Environmental policy levers, including those we have discussed above, may have limited traction unless there are systems in place to monitor and report their use and to hold Government to account for the results. Such systems could provide the impetus for developing a strategy for addressing all aspects of the environment. Developing environmental strategies would allow the Government to bring together a wider range of stakeholders—from health, planning, faith and industry backgrounds, as well as environmental NGOs and Government—to help identify areas of concern and priorities for action.

49. The need for such strategies has been recognised by various bodies. The Cambridge Institute for Sustainable Leadership's Natural Capital Leaders Platform, representing a range of large businesses, recently highlighted the absence of a "single overarching land-use vision or decision-making framework" to address a supply/demand imbalance for land in the face of a growing UK population and pressures to grow more food sustainably as well as for energy security, homes, forests and habitats. Like the Natural Capital Committee (paragraph 23), it noted the difficulty in resolving such an imbalance from "the lack of market prices for many [land-use] goods and services".[132] We also examined the implications of the call for 'sustainable intensification' in food production in our 2012 report on Sustainable food, highlighting not just the need to safeguard environmental sustainability of food production and consumption but also the important well-being implications for public health and education.[133] In the face of increasing pressure to use land for development, we recommended in our 2011 review of the Government's National Planning Policy Framework a continued focus on building on brownfield rather than greenfield sites. We highlighted more generally the need for the Framework to continue to ensure development planning fully addresses the need for environmental protections.[134]

50. In our Well-being report we noted the Natural Capital Committee's view that current policies on environmental protection and approaches were "often piecemeal and focused narrowly on individual issues."[135] The NCC called for a 25 year plan to maintain and improve England's natural capital "within this generation" and for the Government to work with it and others to shape such a plan. In our Well-being report we recommended a permanent status for the Natural Capital Committee:

It is important that the momentum behind the NCC's work is kept up. There is a risk that with its current remit finishing in 2015, only weeks before a general election, its future will not get sufficient consideration. The Government should signal is continuing commitment to the NCC, and thereby to the importance of measuring natural capital and using it in policy-making, by (i) initiating measures now to put that body on a long-term statutory footing and (ii) responding formally to the NCC's annual reports, starting with its March 2014 report as soon as possible.

136

Dan Rogerson MP told us that discussions were taking place in Defra about the NCC's remit. His officials stated that the Government had "made a commitment to review the [NCC] later this year".[137] Subsequently, the Government's response to our Well-being report was similarly non-committal, but suggested a decision would be made on the NCC next year—after the NCC's third report.[138]

51. Government agencies have a role in monitoring compliance with environmental regulations. As the NAO reported:

139

There are a wide range of government agencies with environmental remits. Other examples include the Centre for Environment, Fisheries and Aquaculture Science, the Food and Environment Research Agency and the Consumer Council for Water. Various government agencies were funded by Defra to the tune of £1.4 billion.[140] In our report on Marine protected areas we emphasised how important it was that the Marine Management Organisation had the resources needed to monitor and enforce Marine Conservation Zones.[141] In our Circular economy report we heard that budget cuts for the Waste and Resources Action Programme had stopped its work on the construction sector and the built environment, and reduced its work on food waste.[142] Friends of the Earth raised a concern that statutory agencies such as Natural England and the Environment Agency were under significant pressure from loss of resources and the addition of new duties which diluted their effectiveness.[143] Wildlife and Countryside Link told us

144

52. The RSPB and Wildlife Trusts shared with us their proposal for a Nature and Wellbeing Act and the establishment of a powerful office to assess, monitor, report on and advise on environmental sustainability across Government. They echoed our previously reported recommendation for a time extension of the mandate of the Natural Capital Committee, which reports to the Treasury on departments' performance in applying natural capital in decision-making. WWF also favoured a separate office for environmental responsibility, suggesting it could have a remit for policy advice and policy scrutiny.[145] Such a body could facilitate co-operation between departments, an area which Wildlife and Countryside Link[146] and WWF[147] felt was insufficiently effective. Dan Rogerson MP told us that a single oversight body was "not a proposal that [the Government] have directly considered", but thought that "someone to hold us to account would be helpful". Given the range of agencies already with environmental responsibilities, however, he believed that the creation of a new office would not necessarily "create a huge leap forward in what we are doing".[148]

53. The legislation proposed by the RSPB and Wildlife Trusts would introduce statutory commitments to environmental improvements, including the establishment of binding environmental recovery targets (for example an increase in the species watch-list indicator by 10% by 2040 and improvements in SSSIs), formal reporting of progress and a duty on the Secretary of State to monitor and report to Parliament on threatened species.[149] They drew comparisons with the Climate Change Act 2008. Defra told us that targets "can have a value" and "do focus the mind", but warned that they can result in the consideration of changes in wider circumstances being avoided.[150] Dan Rogerson MP pointed out that any legislation would be beyond the lifetime of the current Parliament, but told us that he could "understand the aspiration … of getting things on a more statutory footing".[151]

54. A statutory requirement for a body to report on the state of the environment would also provide an impetus for a long overdue assessment of the resources needed to scrutinise such matters across Government. Following the abolition of the Sustainable Development Commission we have monitored progress in embedding sustainable development in Government departments, and have during this Parliament examined the situation specifically in BIS and the Home Office, but this was never intended to replicate the work previously done by the Commission.

Conclusions: the need for a strategy and accountability

55. Following the abolition of the Sustainable Development Commission (paragraph 30), the Government introduced new processes and structures, but there is more still to do to embed sustainable development across Government. Further efforts still need to be made to ensure environmental considerations are also integrated into policy-making, not least because of the commitment and leadership that will be required to engage with the development of the UN global Sustainable Development Goals by 2015 (paragraph 2). Environmental protection requires natural capital—the ecosystem benefits we get from the environment—to be fully taken into account in Government policy-making, both for existing and future policy programmes. That requires the environment to be measured and valued, and for decision-making to be founded on a clear understanding of how policies may help or harm all aspects of the environment. The Government should strengthen systems currently focussed on embedding sustainable development and extend them to explicitly address environmental and natural capital risks. Specifically, it should renew its programme for auditing and improving departments' compliance with impact assessment and policy evaluation guidelines, and include in the review of departments' business plans an explicit scrutiny of potential environmental harms.

56. Regulation is the essential underpinning of environmental protection. Many of those affected welcome regulation that is strong and consistent because it produces a level playing field and greater certainty for business. The Balance of Competencies review has, in the Government's own words, "increased environmental standards". Regulation has in some areas been supplemented to good effect by public engagement and voluntary approaches. Fiscal measures however have so far been little used as an environmental policy lever. Overall, the range of policy levers has been piecemeal, without any overarching system for identifying how different approaches might best be used to protect different areas of the environment. And there is no system for holding the Government to account for its overall long-term performance across the 10 environmental areas we have examined in this report, nor for reporting progress on such a broad front.

57. To help bring the required leadership to environmental protection across Government and beyond, the Government should establish an overarching Environment Strategy to:

· set out strategic principles to guide the action needed to improve the quality of protection over the next 5, 10 and 25 years;

· include the actions and good practices required in local government (for example in formulating new Local Plans), as well as the actions needed in central Government to help bring those changes about;

· facilitate a more informed discussion between central and local government about environment resource funding requirements for local authorities;

· encompass a clear assessment of the state of the environment including in each of the 10 environmental areas covered in our report;

· identify the research and analysis work that needs to be done and coordinated to fill gaps in the data that that such assessment requires;

· map appropriate policy levers to each environmental area and set out a clear statement on the place of regulation, public engagement and fiscal incentives as complementary measures. Such a Strategy should involve, for example, a reconsideration of the scope for greater hypothecation of environmental taxes to support expenditure on environmental protection programmes;

· identify how Government, local authorities and the wider community could co-operate to develop consensus on the actions needed; and

· set out how environmental and equality considerations will be addressed and reconciled in infrastructure and other policy areas across all Government departments.

58. As we have previously recommended, the Government should extend the remit of the Natural Capital Committee beyond 2015 to allow it to reach its full potential, and the Government should implement the NCC's proposal for a 25 year plan. But this will not on its own be sufficient to drive environmentally protective Government action. The Government should set up an independent body—an 'office for environmental responsibility'—whether by adjusting the NCC's remit or creating a new organisation, to:

· review the Environment Strategy we advocate;

· advise Government on appropriate targets, including in each of the 10 environmental areas we have examined;

· advise Government on policies, both those in Government programmes and new ones that could be brought forward to support the environment;

· advise Government about the adequacy of the resources (in both central and local government) made available for delivering the Strategy, and

· monitor performance against such targets and regularly publish the results (or publish its audit of such an assessment produced by the Government itself).

The proposals for legislation from the RSPB and the Wildlife Trusts (paragraph 52) would address much of this necessary agenda, which we therefore commend to the Government in this Parliament or, given the proximity to the Election, the next.

61 Environmental Audit Committee, Fifteenth Report of Session 2013-14, Well-being, HC 59, para 20 Back

62 Environmental Audit Committee, Thirteenth Report of Session 2013-14, HS2 and the environment, HC 1076 Back

63 Natural Capital Committee website Back

64 Environmental Audit Committee, Fifteenth Report of Session 2013-14, Well-being, HC 59, para 11 Back

65 NCC, The state of natural capital: restoring our natural assets (March 2014), p 8 Back

66 Environmental Audit Committee, First Report of Session 2010-11, Embedding sustainable development across Government, HC 504 Back

67 Environmental Audit Committee, First Report of Session 2013-14, Embedding sustainable development: an update, HC 202, page 3 Back

68 Environmental Audit Committee, Eleventh Report of Session 2010-12, Sustainable food, HC 879 Back

69 Environmental Audit Committee, Thirteenth Report of Session 2013-14, HS2 and the environment, HC 1076 Back

70 Environmental Audit Committee, Third Report of Session 2013-14, Transport and accessibility to public services,
HC 201 Back

71 Environmental Audit Committee, Fifteenth Report of Session 2013-14, Well-being, HC 59 Back

72 See Sustainability Knowledge Alliance website Back