Government's deregulation agenda stalls green economy plan according to Environmental Audit Committee

21 May 2012

Government plans to 'rationalise' the UK's environmental regulations must not be a smokescreen for relaxing rules protecting our health, countryside or wildlife in a short-term pursuit of growth, the Environmental Audit Committee has cautioned. The Government has pledged to reduce over 10,000 pages of regulatory guidance, following its 'Red Tape Challenge', to help businesses comply with environmental laws. But the MPs point out that regulations have an important role in safeguarding our health and the environment.

Joan Walley MP, Chair of the Environmental Audit Committee, said:

"The Treasury seems to see environmental regulations as nothing more than costly red-tape, but what we are talking about here are vital laws to give us clean air, safe food, and a thriving countryside. If this process reduces bureaucracy and improves outcomes, as the Government claims, then we will support it. But it would be irresponsible to get rid of sensible regulations in a desperate dash for growth and we will be watching Ministers very carefully on this."

Green investment should play a key role in the UK's economic recovery the MPs believe, but the Treasury still appears to see environmental measures as a cost or block to economic development. The Government's strategy to create a green economy - 'Enabling the Transition to a Green Economy' - is too focused on voluntary action and fails to set a clear trajectory or any time-bound milestones for businesses to achieve. The Committee is concerned that the Government has delayed introducing mandatory emissions reporting for big business and urges Ministers not to go back on their promise to do so. 

Joan Walley MP, Chair of the Environmental Audit Committee, said:

"The Government promised a roadmap to a green economy, but two years in it seems to have stalled and we risk slipping back to business-as-usual.

Rising global demand for commodities and fossil fuels mean that prices will continue to rise in future, so it is incredibly short-sighted of the Treasury not to give businesses clear incentives to use resources in a smarter way.

Making businesses report their carbon emissions is one of the first steps we need to take on the road to a green economy, so it will be a key test of this Government's green credentials."

'Enabling the Transition' does not set out a new, comprehensive or strategic approach for a green economy with targets to assess progress, but rather lists existing policies. It lacks a long-term vision of a green economy, according to the report, and it is not the ‘roadmap’ to get us there that was earlier promised. The MPs warn that the recent financial crisis has demonstrated the clear risks from such a market-led approach, particularly when markets do not reflect the value of the services provided by nature - such as clean fresh water, pollination of crops, etc. The reliance on consumer demand to stimulate the green economy is unlikely to work.

The report urges the Government to:

  • develop minimum sustainability standards with stakeholders and businesses
  • set out how data on natural capital in the National Accounts will be used
  • develop targets for improving the state of the environment, similar to the 'fiscal mandate' for the public finances, and establish transparent reporting against such targets
  • use the Natural Capital Committee's work on a 'natural asset stock check' as one of the basket of indicators used to measure the green economy

The Government needs to take a longer-term view driven by a clear definition of a green economy, according to the Environmental Audit Committee. The current definition adopted by the Government crucially does not address all three interdependent pillars of sustainable development, including the social pillar, well-being and environmental limits.

The Government should fully incorporate the principles of 'Enabling the Transition' into future revisions of the 'Plan for Growth'. What is needed is a green economy strategy, which is Treasury-led and addresses the economy as a whole. In future Budgets, there should be a greater consideration given to support for the green economy. Expenditure involved in making the transition to a green economy should be seen as an investment, not simply a cost. Investing in renewable sources of energy would increase our energy security by reducing our reliance on imported fossil fuels. Investment in a green economy could deliver jobs.

Joan Walley MP, Chair of the Environmental Audit Committee, concluded:

"Out of the ashes of the financial crisis we need to rebuild an economy that enhances human well-being, protects the natural world and delivers food and energy security for the future.

The Prime Minister should show leadership in the run up to the Rio Earth Summit and put the green economy at the heart of the Government's plans to revive the economy."

Further Information

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