This report examines how well new processes and systems for embedding sustainable development are working in the Department for Business, Innovation and Skills. This is the first report of its kind - examining an individual department in this way - by the Committee. It examines BIS performance against sustainable operations targets, the role of a 'Sustainability Champion' and a Sustainability Committee in BIS, and how well sustainability considerations are taken into account in policy-making case studies. These case studies included the Regional Growth Fund and the Industrial Strategies initiative. They found that overall the Department was delivering on their sustainable operations targets, although that was in part the result of reductions in staffing and the size of the BIS estate. On policy-making, however, analysis of specific case studies indicates that environmental and social aspects of sustainability are not getting the same attention as economic factors. The assessment process needs to be reformed to do so. Defra and the Cabinet Office should challenge other government departments which have similar grant schemes to do the same. They are also disconnected from the BIS Business Plan process, weakening the main vehicle by which Defra and the Cabinet Office challenge the sustainability-proofing of BIS policy-making. BIS, including its agencies and NDPBs, should produce sustainable development strategies, to provide a reference point for sustainability initiatives by senior management and the sustainability champion, and to allow all staff to readily understand the wider sustainable development imperatives
The Government is shifting the goal-posts on fuel poverty so that official statistics record far fewer households as fuel-poor. The changes to the fuel poverty definition and target, in part being made through amendments to the Energy Bill, should be stopped unless the Government is prepared to make a public commitment to end fuel poverty altogether. A short-term bid to cut bills must not throw energy and climate change policy off-course. In the longer term green levies could actually keep bills down if they drive energy efficiency improvements that cut the cost of heating our homes. Insulating homes and supporting green technologies is vital to help the fuel poor and cut the emissions causing climate change. At the Rio+20 Summit and the G20, the Government committed itself to phasing out fossil fuel subsidies that encourage wasteful consumption and contribute to greenhouse gas emissions. The Government must set a target to reduce subsidies to harmful fossil fuels. The Government should also use the Autumn Statement as an opportunity to provide a clear and comprehensive analysis of energy subsidies in the UK. The report also looks at whether Government support for the new nuclear power station at Hinkley Point constitutes a subsidy and concludes that it does, despite the Government's assurance otherwise. The Government's policy of 'no public subsidy for new nuclear' requires it to provide only 'similar' support to that provided to other types of energy, but even on that basis the deal for Hinkley Point C is 'dissimilar', notably on support for decommissioning and waste.
In this report the Department for Communities and Local Government (DCLG) is urged to reconsider plans to axe a policy that has driven up home building standards and helped to create a thriving sustainable building industry in the UK. The Environmental Audit Committee criticises the Department for its decision to remove local authorities' discretion to set high standards on energy and water saving-using the Code for Sustainable Homes (CSH)-in favour of a lowest-common-denominator national standard. DCLG's proposed needs test on the application of sustainability standards by local authorities also risks becoming a lawyers' charter, could curtail local choice, delay the construction of new homes and compel local authorities to incur unnecessary legal fees. DCLG also failed to take into account the latest evidence on the declining capital costs of fitting clean energy technology to homes in its Housing Standards Review, and the 2016 zero carbon homes standard has been successively watered down. The CSH is a proven policy mechanism for driving incremental improvements in sustainable home building. Lower-level CSH standards on energy use have been successfully embedded in Building Regulations over the six years since the policy was introduced. DCLG has not set out a replacement mechanism to drive sustainability in the future. The Committee recommends that DCLG: examines the latest research on the decreasing cost of clean energy technologies; maintains and refreshes the CSH as a tool for local authorities to lever in sustainability; retains CSH standards on sustainable construction materials to support green exports and green growth.
The Environmental Audit Committee reports that Government plans to introduce a system of 'biodiversity offsetting' for new building developments could enhance the way the planning system accounts for the damage done to valuable natural habitats, but the proposals must be improved to properly protect Britain's wildlife and woodlands. The Green Paper does not provide an evidence based analysis of how offsetting would deliver "biodiversity gain". The twenty minute assessment for calculating biodiversity losses at a site, proposed by Ministers, is also overly simplistic. It should include particular species, local habitat significance, ecosystem services provided - such as pollination and flood prevention - and 'ecosystem network' connectivity to reflect the full complexity of habitats. Sites of special scientific interest and ancient woodlands should be even more rigorously protected. A mandatory, rather than voluntary, offsetting system would allow more environmentally and economically viable offset projects to be brought forward. The report also warns of a danger that an offsetting market could produce many offsets of a similar, lowest-cost, type rather than a mixed range of habitats. Natural England should monitor schemes to ensure a balance of habitat types are covered in the offsets. It is also important to consider the implications of biodiversity offsetting for people's access to nature and well-being. A decision on the Government's offsetting proposals should not be made at this time. Offsetting pilots, set up in 2011, should be allowed to run their course and then be subjected to the independent evaluation previously promised by ministers.
The Environmental Audit Committee points out that there is a large green finance gap. Investments are currently running at less than half of the £200 billion needed in energy infrastructure alone by 2020 to deliver national and international emissions reduction targets. And stock markets could be inflating a 'carbon bubble' by over-valuing companies with fossil fuel assets that will have to be left unburned in order to limit climate change. The Bank of England's Financial Policy Committee should seek advice from the independent Committee on Climate Change to help it monitor the systemic risk to financial stability associated with a carbon bubble. To address the green finance gap, the Government must provide a joined-up, stable and certain policy framework that maintains investor confidence and helps markets price in the cost of carbon. The Green Investment Bank has made a good start but does not currently have the power to borrow in order to leverage and enlarge its investments - limiting its potential to fill the green finance gap. Take up of the Green Deal has been poor and the Government must make it simpler and more attractive to households. The European Commission's (EC) proposed new rules for State Aid in the energy sector could limit the finance available to support community owned energy schemes. The Government must play a central role in agreeing ambitious and binding international commitments on climate change, both in the EU and in the run up to the UN climate talks in Paris 2015.
The UK's existing carbon budgets represent the minimum level of emissions reduction required to avoid a global 2 degrees temperature rise - regarded as a dangerous threshold - and the UK's leading climate scientists do not believe loosening the budgets is warranted. The current (2008-2012) and second (2013-2017) carbon budgets will be easily met because of the recession. But the UK is not on track to meet the third (2018-22) and fourth budgets (2023-2027), because not enough progress is being made in decarbonising transport, buildings and heat production. The Government's Carbon Plan - which set milestones for five key Government Departments to cut carbon - is out of date without any quarterly progress reports published yet. The Green Deal has also had low take-up rates so far. The Government should set a 2030 decarbonisation target for the power sector now, rather than in 2016 as the Energy Bill sets out. The Government should also reconsider placing a statutory duty on local authorities to produce low-carbon plans for their area. The current low-carbon price in the EU ETS - the result of the economic downturn of recent years and over-allocation of emissions permits - also means that that scheme will not deliver the emissions reductions envisaged when the fourth carbon budget was set. Without any tightening of the EU ETS increased pressure will therefore be placed on the non-traded sector, which will have to produce further emissions reductions to cover the emerging gap left by the traded sector
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