Last month, the government’s green champions won an interdepartmental struggle – and set a challenging carbon budget that departments are obliged to meet. Matt Ross reports on the implications for Whitehall leaders.
Across the civil service, this is a busy time for policymakers. While staff numbers decline, civil servants are rapidly amending or introducing policies to meet the coalition’s ambitious agendas on – to name a few – localism, transparency, efficiency, the Big Society and public service reform. Unfortunately for those officials already feeling a little overwhelmed by this tide of change, the government has just put some backbone into yet another big, cross-cutting agenda: the drive to push down UK greenhouse gas emissions.
On 17 May, energy secretary Chris Huhne announced to Parliament that the government has set its ‘fourth carbon budget’ under the 2008 Climate Change Act: the UK is now legally bound to reduce its CO2 emissions to half of their 1990 levels by 2025. This is important, and not just because the target is a stretching one: the decision shows that the coalition intends to follow through on Labour’s plans for radical cuts in British greenhouse gas emissions, and sets a clear direction for both Whitehall and the country beyond.
“The commitment to the fourth budget was a very important statement of UK government determination,” says Lord Turner, chair of the Committee on Climate Change (CCC) – the watchdog established to advise and scrutinise the government. “This was a test of credibility. Parliament had made very aggressive statements about achieving an 80 per cent emissions cut by 2050; and if you’re serious about that, you need to get somewhere by 2025. So this was crucial: a very important step forward that sends out a clear signal that departments will have to follow.”
The first three carbon budgets were set by Labour, culminating in a 34 per cent cut by 2020. And on the face of it, the fourth budget – which has been set at the level recommended by Turner’s CCC – only maintains their trajectory. The reality is, though, that any less ambitious decision would have sent civil servants a clear message that emissions policies championed by the last government could be sacrificed to more pressing concerns.
“Clearly, the culture in government is one where departments understand targets and are used to setting and achieving them,” comments Peter Madden, chief executive of Forum for the Future – the environmental consultancy set up by former Sustainable Development Commission (SDC) chair Jonathon Porritt. “This clear guidance as to departments’ role will be hugely important.” The decision, he adds, also sends a crucial message to investors and businesses weighing up the potential of the markets around energy efficiency and low-carbon technologies. “Without a clear steer from government about cutting carbon, it would be very difficult to get businesses to invest or individuals to change behaviour,” says Madden. “So the target is hugely important in setting a direction and demonstrating that the government is showing leadership.”
Struggles along the way
As most readers will know, the government did not come to this point easily. With some support from the Treasury, the business and transport departments fought a strong campaign to water down the fourth budget, taking on Huhne’s Department for Energy and Climate Change (DECC) and the foreign office – which wanted Britain to have the legitimacy to argue for tough emissions cuts on the international stage.
Environmentalists are concerned to see this much dissent among departments crucial to cutting UK emissions. “The amount of background noise suggests that not all parts of government are as happy or as committed as they should be,” says Madden. And Rebecca Willis, a former vice-chair of the SDC and an associate of lobby group the Green Alliance, points out that “although BIS [the business department] are quite happy to say good things about the low-carbon economy, when the chips were down they reverted to a traditional industry approach.”
In the end, though, the prime minister stepped in and ruled in favour of DECC – giving hope to Margaret Ounsley, the head of public affairs at green group the WWF. “He did seem to come in like a cavalry charge when he was needed and bang heads together, so we should be grateful for that,” she comments. While David Cameron awarded the reluctant departments a couple of sweeteners – in the form of a 2014 review of the policy, and some as-yet-unspecified exemptions for energy-hungry industries – many green campaigners are satisfied.
Madden accepts that “when policy changes deeply affect a small minority, that suffering minority tends to shout more loudly than the big majority who’ll benefit – and that means government acts to support them”. Industries such as steel have real concerns; Madden does, however, warn that “that support should be designed to help them to go through structural change and adjustment to a low-carbon world – because that’s the world of the future, and fossil fuels will become more expensive. In the long run, those industries that don’t adapt will be shooting themselves in the foot.”
Greg Barker, the DECC minister of state, argues that pursuing the fourth budget target could actually boost British manufacturing. “Everyone understands that different departments have different perspectives and different interests to defend, and it’s absolutely right that any policies as ambitious and transformational as these should be robustly stress-tested – and that’s what happened,” he tells CSW. “But we’ve ended up in a good place, and we’re absolutely clear at DECC that decarbonisation must not mean deindustrialisation. On the contrary, we’ll need more high-technology manufacturing to support the new economy. It would be a travesty if our policies were to lead to a haemorrhaging of high-carbon industries to less environmentally-friendly countries.”
Thinking caps on
So the task now facing the government is clear: to reduce the UK’s greenhouse gas emissions to half of their 1990 levels over the next 14 years – and to be fair, a good deal of progress was made in recent years. Barker admits, though, that coincidental changes in the British economy – most obviously the shift from coal to gas, the flight of heavy manufacturing and the recession – have helped to cut emissions. “The dash for gas under the Major government was a very important contributor to meeting our targets, particularly in the early years of the 21st century,” he says.
Looking ahead, carbon emission reductions are likely to come less easily. Indeed, the consultancy Cambridge Econometrics recently produced a report warning that the government is on course to miss each of its first three carbon budget targets. “On the basis of the current policies, the first [2008-2012] target might be narrowly missed,” says the consultancy’s associate director Sudhir Junankar. “And that’s interesting, because until recently it was thought that – thanks to the drop in emissions during the recession – that first target would be easily met.”
However, Barker argues that “we’re on track to deliver a 34 per cent reduction in carbon emissions by 2020” – hitting the third budget target. “We’re now driving transformational programmes that will take us to not only a low-carbon economy, but one which is far more resource-efficient – and that will help us to become more globally competitive, and less dependent on imported fossil fuels,” he adds.
Who’s watching?
To ensure that departments are on course to hit emissions targets – both in their own operations, and in the sectors of the economy and society that they watch over – the government has produced a Carbon Plan that sets out the work required of each department. This work, the plan says, will be overseen through “a framework of regular monitoring and reporting against [departments’] actions and indicators of progress”. And the Climate Change Act also established a watchdog in the shape of the CCC, which produces annual reports tracking emissions in various fields of activity.
“We don’t get involved in the debates between DECC and the other departments as to how departments will be held to account,” its chair Lord Turner tells CSW. “But at the end of June each year we produce a report on progress against the budget, and at the end of each five-year period we report to Parliament on whether the whole budget was met: the first will be in 2013.”
These annual reports, Turner explains, examine the prospects for future emissions cuts as well as setting out progress to date: “So for example, in energy generation, we don’t just set out the level of renewable energy produced last year. We also say how many wind farms have entered the planning process, giving a set of forward-looking indicators.” While emissions measurement can be tricky in some fields – he cites agriculture and waste disposal – Turner believes that “across 90 per cent of the economy, we have pretty definitive figures”.
And who else?
However, the CCC’s reports are infrequent, and its findings don’t examine the detail of departmental work. Although Turner says his organisation’s 25-strong workforce is “the right size for the job we want”, it can’t possibly carry out the kind of detailed auditing work performed by the now-abolished SDC. For the WWF’s Ounsley, this leaves a gap: “The environmental audit committee aren’t resourced to do this, and don’t really have the remit,” she says. “I’d like to see a role for a central body like the National Audit Office, feeding into a big central lever like the cabinet secretary’s office or Number 10.” Madden adds that the Commons’ energy and climate change committee has a role here, and calls for the public accounts committee to examine the government’s work on topics such as energy efficiency.
Outside Westminster, says Barker, “a whole range of stakeholders and NGOs will be able to hold the government to account”; much of the relevant data will be published, in line with the transparency agenda. He makes it clear, however, that the government does not intend to create a rigid internal structure of oversight and reporting: “The key is transparency and accountability without imposing unnecessary bureaucratic obstacles on central government,” he says. “Departments are stretched delivering the coalition programme. Our intention is that the Carbon Plan should help bring focus to a whole range of policies, rather than be an additional burden.”
There are already signs that environmentalists are organising to provide just the sort of public scrutiny suggested by Barker, with some working on a ‘Green Watchdog’ to fill the gap left by the SDC. Former SDC vice-chair Willis warns that “it’s very much at the drawing board stage: we’ve got masses of enthusiasm and no resources” – but if it took off, she says, “the point of its approach would be to crowd-source analysis. So if someone became concerned, for example, that planning policies were going in the wrong direction, they could flag that and experts could contribute their own ideas. It would be a social media tool rather than an organisation; the aim would be to harness networks which already exist.”
Clashes ahead
Looking at the policies in place across government, it’s easy to spot some which could significantly undermine work to cut emissions. The Treasury’s 2011 Budget announcement on relaxing planning laws is an obvious example, says Willis: “The Department for Communities and Local Government has a vital role to play in making sure that settlements are built sustainably and avoiding the kind of suburban sprawl that afflicts the US,” she says. “So there’s a clash with laissez faire planning policy, because carbon budgets require concerted action at a national level and planning policy is going towards individual action at a local level.”
Environmentalists are also concerned about the Treasury’s attitude, worrying that its single-minded focus on short-term spending cuts may prevent departments from investing in energy efficiency measures with a longer payback. And even the government’s green policies have been attacked as half-hearted: the forthcoming green bank won’t be able to lend until 2015, critics complain, and the electricity feed-in tariff was closed to bigger players when commercial operators began setting up renewables installations. However, Barker defends the changes to the feed-in tariff: the government inherited a system “without any proper checks and controls”, he says. “It could have blown the whole four-year budget for all renewable technologies within the first 12 months.” The government’s review, he says, will lead to “a far more robust system for supporting exciting new technologies, which will involve far greater collaboration with industry and a much more predictable rate of progression on feed-in tariffs.”
All in all, Barker says, “The main planks of our programme for meeting our carbon targets are already in place: what we need to do now is deliver on them.” He cites the transport department’s work on electric cars and the Treasury’s setting of a carbon floor price, before pointing to a host of DECC initiatives.
Asked whether the government is indeed on track to realise its aims, Turner is more cautious. In fields with reliable metrics and a small number of big players, he says, it’s easier to judge policies’ likely outcomes: in electricity generation, for example, DECC has “put in place policies that are heading in the right direction. It’s do-able and we think it’s on track.” However, other areas of policy depend on behaviour changes at the micro level, or on complex markets, supply trains and skills bases. So when judging whether the government’s policies will get the right results on, for example, domestic energy efficiency, he says it’s “simply more difficult to know in advance whether the things that have been planned will result in that change”.
Sharpening up policymaking
So, how will policymaking have to change for the government to hit the carbon budgets? Margaret Ounsley argues that policies’ predicted carbon impacts should be treated as seriously as their implications for public spending. “It’s like going through a budget process,” she says. “Number 10 doesn’t wait to see whether departments will hit their budget cuts; departments have to provide plans for how they’re going to achieve them.” So metrics must be consistent across government, she argues, and “you need somebody to ‘okay’ the plans and say: ‘Yes, we believe this is a feasible way of delivering those emissions cuts’.”
Asked whether carbon impact assessments should be built into policymaking in the same way that, for example, disability and regulatory impacts are currently, Turner is sympathetic. “The only reason I’d be wary of that is where you know in advance that the policy won’t have a big impact either way,” he comments. “If it’s likely to have a carbon impact it would be useful to have a discipline in place to make sure that they’re measured – but the system could be devalued if it had to be applied to policies with no real carbon impact.”
To make these kind of assessments, suggests Willis, departments will need new skills: in terms of “strategic analysis of the carbon impacts of different policy directions, there’s a big leap that needs to be made from assessing management of departments’ own operations to proper policy analysis and appraisal”. Most commentators, however, believe that skills are not the issue here. “I have immense faith in the capability of the civil service when it believes that what it’s being told will be there for the duration,” says Ounsley. “I also have immense faith in their ability to discriminate between a minister’s passing fad and something they’ll really have to work on.”
“We have a very high-class civil service that is good at weighing up options and analysing policies,” agrees Madden. “The problem in the past has been in the brutal politics that have stopped low-carbon policies from winning through.” As Willis says: “At the end of the day, you need a minister banging the table and saying: ‘Why does this policy run counter to carbon budgets?’ And you need him to be saying it because the PM is leaning on him. If the political pressure is there, this is eminently achievable.”
Going to the law
There is one other potential point of leverage on departments: the Climate Change Act embeds the fourth budget in law. Could green groups launch a judicial review if they believed that the government’s policies weren’t strong enough to enable it to hit that 50 per cent cut? Rebecca Willis thinks they might: “You can be sure that Friends of the Earth or someone will try it,” she says. “There’s definitely a possibility of judicial review.”
Turner doubts that a review could be brought before the CCC’s five-yearly decision on whether a budget had been hit – but if it was missed, he suggests, “There could be a judicial review to say: ‘the government hasn’t met its targets.’ And I’m sure the green NGOs would think about it.” What the outcome would be, he adds, is not clear: there’s no point in government fining itself, “and nor are we going to take the energy secretary off to the Tower.”
The most important enforcement mechanism of the Climate Change Act, Turner argues, is not the budgets’ statutory status but “the very strong commitment of Parliament to doing this, and the creation of a strong independent body – the CCC – that has the power and duty to comment on whether we’re on track.” Ultimately, what will galvanise work on reducing emissions is the danger of political embarrassment to one man who’s made a clear commitment to pursuing this agenda.
That man is not energy secretary Chris Huhne – green campaigners praise his work, but agree that even if the controversies surrounding his personal life kill his career, the carbon agenda will survive. It is instead the only man with the power to commit the government to the fourth budget; a man whose continuing and active support will be essential to further progress as the government works to realise its commitments. “The lead will come from the very top; from the PM,” says Barker. “This isn’t a DECC agenda; this is a whole-government agenda. The commitment of the prime minister – and of the deputy prime minister – to our ambition to be the greenest government ever is critical to the delivery of these programmes.”