Wednesday, March 21, 2007

UK Environmental Audit Comittee: Pre–Budget 2006 and Stern Review

The Environmental Audit Committee is a cross-party group of MP's setup to ensure government policy on issues 'environmental' are held to account. In this particular case the arbitrary nature of 'environmental' as a label is particularly evident as testimony is taken from amongst other Sir Nicholas Stern, indicating environmental policies are inextricably linked to economic policies.

The latest report is available here, note, these reports based on parliamentary accountability may sound dull but they can be utterly scathing; i usually enjoy them, particularly when government policy (or lack thereof) on aviation is brought up!

Background to the Environmental Audit Committee:

1. Since its inception in 1997 the Environmental Audit Committee (EAC) has held annual inquiries into the Treasury’s Pre-Budget Reports. In these inquiries our core objective is to review the annual progress made by the Treasury in placing environmental protection at the heart of its tax and spending policies. In addition, we usually choose one or more topical developments or more specific areas of Treasury policy to focus on.
As is usually the case the EAC move straight past government rhetoric and look to where it's greatest failures are...worth a read if you aren't British and you would like to see how green or otherwise Blair and the labour government are.

2. In reviewing the Treasury’s overall momentum in building environmental objectives into the heart of its policies, in recent years we (and, in the last Parliament, our predecessor Committee) have expressed a mounting frustration with what has appeared to be a dwindling of action. Last year we concluded: “PBR 2005 signifies a continued slowing down of the Treasury’s momentum in turning its rhetoric on the environment into action.” Reflecting this growing frustration, we took the unusual step in October of writing to the Chancellor prior to publication of Pre-Budget Report 2006 (PBR 2006), to highlight a number of our more recent findings and recommendations, and to urge him to make this PBR more ambitious than those of recent years. Following the main themes pursued in this letter to the Chancellor, and reflecting the memos we received for this inquiry, in this report we focus in particular on the ambition of the PBR’s fiscal policy announcements in four areas—aviation, motoring, waste, and energy.
Stern was groundbreaking, of monumental importance etc...well in fact this is the case if only because of how seriously it has been taken by the business community internationally, but is the exchequer paying attention?

3. Our major additional—indeed, owing to its importance, our primary—focus in this year’s report is the Stern Review,3 the much anticipated report on the economics of climate change published last autumn. Its importance was underlined by the remarks made at its launch on 30 October, the Chancellor describing it as “the most comprehensive analysis yet done of not just the challenges, but the opportunities from climate change”,4 while the Prime Minister remarking that it had “demolished the last remaining argument for inaction in the face of climate change.” In our report last year, we looked forward to the Stern Review’s publication, voicing some of our hopes and concerns as to its findings. Notably, one concern was that it should focus primarily on achieving safe limits to greenhouse gases and only secondarily on the cost of these reductions, while another related to its possible use of cost-benefit analysis, given the intrinsic difficulties in placing monetary values on the effects of climate change. We concluded by suggesting: “We may review the Stern Review’s final report once this is published, to examine the extent to which it takes these […] points on board, […] in our inquiry into Pre-Budget 2006.” We do that here in the next chapter. Beyond this, throughout the report we focus on the extent to which Stern’s conclusions are reflected in Pre-Budget 2006, and make recommendations as to how they ought to be reflected in future PBRs.
Reporting of environmental impacts is one of the basic building blocks of a more sustainable green growth. How have the government done on this essential foundation legislation?

4. We also return to a theme we examined last year, statutory reporting by listed
companies of their environmental impacts. Our report last year dealt with the abolition at short notice of proposals to require listed companies to publish annual Operation and Financial Reviews, which would have included requirements to publish audited information on environmental factors affecting companies’ businesses. In that report we noted that the Government had at the time issued renewed consultation on the form in which business reporting on environmental factors should take; and concluded that: “We may return to these Business Reviews, and the form they finally take, in our inquiry into next year’s Pre-Budget Report”. The outcome of that consultation was seen in the Companies Act 2006, receiving Royal Assent on 8 November 2006. In this report we review the reporting requirements as finally established and contained in the Act.
Evidence was taken from:
5. In our inquiry we received memoranda from 21 organisations, and took evidence from Sir Nick Stern, Friends of the Earth, Greenpeace, Green Alliance, the National Industrial Symbiosis Programme (NISP), Biffa Waste Services, and the Financial Secretary to the Treasury, John Healey MP. We thank them all for their assistance.

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