Living up to expectations?

13th May 2013


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Three years into its five-year period in office, some of the UK's greenest MPs assess the performance of the coalition government. Paul Suff reports

Controversial changes to the planning system; the failure to include a decarbonisation target in the Energy Bill; a lack of support for a ban on pesticides containing neonicotinoids; the green light for shale gas exploration in the UK, coupled with support for a second dash-for-gas; rising greenhouse-gas (GHG) emissions; and the continuing deregulation agenda are all putting the coalition’s commitment to be the greenest-ever government under severe strain.

The past 12 months have also seen the prime minister install a less than environmentally friendly secretary at Defra and replace a well-respected energy minister with an opponent of onshore wind farms – though he has subsequently moved to No.10. These appointments have further undermined David Cameron’s pledge to lead an environmentally friendly administration. Sniping at the green agenda by the chancellor continues, undermining investment in low-carbon technologies and services.

There have been some positive developments, however. Mandatory GHG reporting for FTSE-listed companies begins this year, while the environment department has developed new biodiversity indicators in line with the Aichi targets and is pursuing plans to properly value natural capital.

Also, two carbon capture and storage (CCS) demonstration plants have been selected for the next phase of the CCS commercialisation competition, but only after Decc failed to support any UK projects for the first phase of NER300 funding from the European Commission. Meanwhile, the green deal, the government’s initiative to improve the energy efficiency of buildings, came into operation at the turn of the year and the green investment bank has made its first investments.

So, as in our previous assessments of the government’s performance, the last year has produced a mixed bag on the environment front. For our 2013 review, the environmentalist brought together a group of MPs with an extensive background of working on environmental issues, both inside and outside parliament, to give their opinion on how the government is faring.

Energy supply …

How the UK generates and consumes energy is crucial to meeting the carbon budgets. The Energy Bill, which is currently in parliament and is designed to encourage low-carbon generation through the introduction of contracts for difference and a capacity mechanism, is the coalition’s flagship energy policy. Our panel of MPs (see below) are very critical of government performance in this area, particularly the absence in the Bill of a 2030 decarbonisation target.

Despite one-half of the coalition embracing the need for a target limiting the amount of carbon that can be emitted from power stations over the next 20 years, the Energy Bill includes only the possibility that one will be introduced in 2016, after the next general election. Caroline Lucas says there is no justification for its omission. “A decarbonisation target makes good economic sense as well as good environmental sense,” she claims, adding that most industry bodies, including the CBI, back a target.

Provisions in the Bill will see the Renewables Obligation replaced by a complex system of contracts for difference from 2017. Coupled with the absence of a decarbonisation target, setting the long-term trajectory for energy policy and providing certainty for investors, this could have dire consequences for renewable energy technologies, warns Barry Gardiner. “Incentives for renewables simply fall off a cliff at the end of the decade,” he says.

Government support for unconventional sources of gas is another cause for concern, according to the panel. “Shale gas now seems to have taken over the energy agenda without any regard to the implications,” says Joan Walley. “It has diverted attention away from what the government should be focused on: energy efficiency and support for renewable forms of generation.”

Zac Goldsmith describes the growing support across government for shale gas exploration as depressing. “A very large number of people in parliament, including senior government ministers, are pinning all their hopes on shale gas to provide abundant future energy supplies without any evidence,” he says. “Putting aside the potential environment issues, like possible water contamination, the capacity for shale gas to deliver any kind of energy cost savings in the UK has got a huge question mark against it.”

Lucas agrees. “Organisations like Deutsche Bank and the IEA [International Energy Association] have examined the economics of shale gas extraction in the UK and concluded that it is just not viable,” she reports.

Shale gas is just one strand of a wider gas strategy. Last year, the government declared that gas would provide a significant contribution to electricity generation into the 2030s, and the energy secretary confirmed support for the construction of up to 20 new gas-fired power stations. Alan Whitehead, Labour MP for Southampton Test, says the strategy is a mistake and believes this second dash-for-gas will mean the UK will renege on its carbon budgets and targets.

“The most disturbing development in energy policy is not that some people think shale gas will ride to the rescue of the UK’s diminishing domestic energy supplies, but that it is part of a strategy that in future will see us rely on using very large amounts of gas to generate electricity,” warns Whitehead. “As a result of the strategy, the UK will be emitting around 200gCO2/kWh,” he says. “And if that’s the case, it completely busts the carbon targets.”

… and demand

Despite the high-profile absence in the Energy Bill of a decarbonisation target – all five of the panel are backing an amendment to impose such a target – the MPs believe that the lack of measures addressing energy demand is equally unjustifiable.

“That energy efficiency is not a key element of the Bill is quite extraordinary,” exclaims Gardiner, Labour MP for Brent North. “Rather than putting in place energy reduction and demand side measures, which are absolutely vital to reducing emissions, the government has instead focused on incentivising the market towards gas and nuclear power.”

“Energy efficiency was the one thing in the Bill that would make it truly valuable,” agrees Goldsmith. “There is no excuse for its omission.”

Promised amendments to the Bill promoting energy efficiency have yet to appear to the consternation of the panel, some of whom sat on the committee to scrutinise its contents. “It’s been through the committee stage and the energy-efficiency proposals have not materialised. That is unacceptable,” says Gardiner.

Goldsmith acknowledges that it would have been preferable for MPs to have had the opportunity to scrutinise the government’s energy-efficiency plans, but remains hopeful they will eventually emerge. “We have to push for the inclusion of a clear, crisp amendment on energy efficiency,” says the Conservative MP for Richmond Park and North Kingston.

The MPs are incredulous about the suggestion that the green deal and the ECO – the energy companies’ obligation, which has replaced the CERT (carbon emissions reduction target) and CESP (community energy-saving programme) schemes – might provide the necessary fillip for the widespread installation of energy-efficiency measures in UK buildings.

“The green deal is badly constructed,” argues Lucas. She points out that energy firms are already struggling to give away free insulation because people do not want the associated disruption to their homes and are sceptical about the benefits.

“If you stick a 7% interest rate on green deal finance packages, why would people bother?” she asks. “The lack of demand for energy-efficiency measures is a market failure that the government is trying to solve through a market mechanism. The green deal is a misguided way of improving efficiency.”

Whitehead believes the green deal is at least moving in the right direction, but says the government needs to lift its aspirations for the scheme.

“The main problem is that the resources and arrangements underpinning the green deal and ECO are laughingly short of what is required,” claims Whitehead.

He asserts that the fault lies with the Treasury. “It seems to be saying that introducing such measures is fine, but we’re imposing a cap on funding,” says Whitehead. He claims the Treasury’s stance, and that of some other departments, notably the department for communities and local government (Dclg), effectively undermine some of the good work being done by Decc.

“Greg Barker and others in the energy department often talk a very good case, but the Treasury and its levy cap, and Dclg’s shelving of proposals requiring property owners to install measures to improve their building’s energy efficiency when carrying out other renovations, are examples of other parts of the government undermining that ambition.

“Some departments take shots at the green policy agenda and there is no attempt to rein them in. There’s a failure by No.10 to get the whole administration to pull together to address long-term tasks around the environment, ” says Whitehead.

Goldsmith concedes that the Treasury often casts an unwanted shadow over green policy. He describes the government’s decision to establish the natural capital taskforce in the Treasury as a bold move, but acknowledges that the chancellor and his team are not yet ready to embrace a way of thinking that values the natural environment.

“Greg Barker recently said that governments come and go, but the Treasury always stays the same,” he recalls.

“I get the sense that green aspirations in the coalition government are being easily sidetracked by short-term ambition or a lack of joined-up thinking across Whitehall,” says Whitehead.

Economic growth

Lucas says the government’s failure to embrace either a decarbonisation target or an effective energy-efficiency strategy risks securing its primary objective: economic growth. “It is conceivable that the government fears environment policies will impact negatively on the economy,” she says. “But whether or not you support such a notion, installing energy-efficiency measures and developing renewable technologies will provide jobs. This is a missed opportunity in terms of getting people back to work and dealing with the budget deficit.”

Walley agrees and notes that the government rarely uses the same economic argument to galvanise support for renewables as it does for nuclear power. “One of the main arguments used to justify the construction of new nuclear power plants is that it will create lots of jobs, but there is no similar understanding of the employment that would come from renewables or energy efficiency,” says the Labour MP for Stoke-on-Trent North.

“Yes, improving the energy efficiency of UK buildings is something that looks suspiciously like a ‘win-win’, in that it will create jobs and help tackle GHG emissions, and it’s a tragedy that the government is failing to recognise that,” says Lucas.

Referring to figures from the business department showing that sales of low-carbon environmental goods and services (LCEGS) grew 4.7% between 2009/10 and 2010/11, far outstripping the overall performance of the UK economy, which only increased by 0.7% in 2011, Gardiner wonders why the government is not doing more to support the LCEGS sector.

Indeed, he believes the policies of the coalition are hindering the development of green technologies and wants the government to do more to create the supply chains and skills necessary to establish a robust manufacturing industry in the UK for green-energy products.

“It needs to be part of a wider industrial strategy but isn’t. That’s because the government has failed to understand how green technology can transform the economy,” he says. “That failure is just as damning as not setting a decarbonisation target.”

The panel is more upbeat about the green investment bank (GIB). “£3 billion [the amount of seed funding provided by the government] is not a vast sum of money, but the GIB is a new bank and investing in a responsible way,” acknowledges Goldsmith. “I think there is a good chance the GIB could emerge as a really significant player in funding green technologies.”

“We need such institutions to promote the green agenda. And if the bank is successful it will help spread the currency about environmental ideas,” states Walley.

The natural environment

In January 2013, the government officially confirmed its decision to row back on plans to sell 15% of England’s public forest estate, but Gardiner says the emergence of ash dieback disease demonstrates that heavy budget cuts to the Forestry Commission, which were not rescinded at the same time, are misguided and place UK woodlands at risk.

“Thirty-nine vectors of disease and pests have been identified as serious threats to our forests,” he says. “Rather than cutting 60 scientists, we need to improve research by the commission.”

“We are losing expertise rather than gathering it, which is wrong,” agrees Goldsmith, though he believes that the government was genuinely shocked at the reaction to its initial plans for publically-owned forests and is now seeking a more consensual approach to how it manages such woodlands.

“There are signs of an improvement,” he says. “David Heath [Defra minister for agriculture and food] has developed a plan that is generally acceptable to stakeholders and which I think is an example that the government has learned a lesson.”

Other members of the panel are not convinced that the coalition is taking the natural environment sufficiently seriously. “

There’s a complete lack of understanding in the government about the role that forests and woodlands play in our environment, biodiversity and ecosystems services,” claims Gardiner.

“For me, this is the litmus test for the government’s green credentials – they just don’t get ecosystems; they don’t understand biodiversity; and they don’t even comprehend that the only reason a change in climate matters is because biodiversity can’t keep pace with the rate of change and therefore ecosystem

s services suffer.”

Gardiner believes that one reason the government has failed sufficiently to acknowledge the significance of ecosystems services is because it has placed climate change in a “compartment” without understanding its impact on the environment. “And nothing reveals that more clearly than its approach to forests,” he says.

“Humans are very good at adapting, but ecosystems are not. Reducing every discussion on the environment to climate change is a mistake in terms of policymaking,” agrees Goldsmith.

Lucas, Green MP for Brighton Pavilion, raises the issue of marine conservation zones (MCZs) and says she is concerned that the government’s recent selection of only 31 out of a promise to designate 127 such areas appears to be shrouded in mystery.

According to Gardiner, the government has moved the goalposts in how it selects MCZs. “Selection was originally going to be based on the best available science,” he explains, adding that the government then excluded any information that was more than six years old.

But, he points out, the UK initiated the whole taxonomy movement and, during colonialism, went out across the world collecting information about species and biodiversity. He describes the decision by the government to ignore such data as “insane”.

Two more years

The next general election is due in May 2015, but there is much the government needs to achieve during its five years in office to set the country on a path to a greener economy, say the MPs.

“Meeting our carbon budgets, decarbonising the economy and improving protection for the natural environment all need to happen on this government’s watch. We need the coalition to seriously get to grips with these issues,” says Whitehead.

“This is a one-off opportunity; we won’t get a second go. So, this government has to be the greenest government ever.”

the environmentalist would like to thank our panel of MPs and Richard Green in Alan Whitehead’s parliamentary office for organising the event.


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