Environmental Audit Committee

22 July 2003 THE ENERGY WHITE PAPER - EMPOWERING CHANGE?


22 July 2003 THE ENERGY WHITE PAPER - EMPOWERING CHANGE?

REPORT PUBLICATION

The Environmental Audit Committee has today published its Eighth Report of Session 2002-03,   The Energy White Paper - Empowering Change?, HC 618.  

The report examines the extent to which the Energy White Paper provides an adequate response to the recommendations of key previous reports - including those of the Royal Commission on Environmental Pollution, the Performance and Innovation Unit, and the Environmental Audit Committee itself.  

John Horam MP, Chairman of the cross-party Committee at the time the Report was agreed, said:

"It is extraordinary that, after three years of intense public debate and consultations, the Government came up with so vacuous a document.  While we welcome the vision it contains and the inclusion of the 60% carbon reduction target for 2050, it is disturbing that the Government has not been able to publish an implementation plan setting out in detail how it intends to achieve its aims.

There are also inherent contradictions in the Government's strategy.   It hopes for increases in electricity prices to help CHP and renewables, but wants to keep prices down to help those in fuel poverty.   We remain convinced that a transition to an environmentally benign energy system cannot be achieved on the basis of unsustainably 'cheap' energy, as the Prime Minister's foreword to the PIU report indicated was a priority."

He added that:

"We are particularly concerned at the proliferation of ad hoc bodies in the energy sector - with the creation of a Sustainable Energy Policy Network, a Sustainable Energy Policy Advisory Board, and an ad hoc Cabinet Committee.   This is no way to address the Strategy Unit's criticism that the present allocation of departmental responsibilities in the energy sector is incoherent."

John Horam will be available for interviews.   Journalists should telephone the EAC.

Key conclusions from the Committee's report

• The Energy White Paper represents a major shift in the approach to UK energy strategy.   We welcome the priority which it gives to environmental objectives and the extent to which it endorses the role of renewables and energy efficiency in a future energy strategy.

• By including in the White Paper a specific commitment to a 60% reduction in carbon emissions by 2050, the UK Government has set a clear goal for domestic policy.  It has also led the way internationally by emphasising to other nations the need to address the challenge of global warming.

• We believe that, just as the UK is setting a precedent in terms of adopting a long-term target, it could also exert greater influence over other nations by setting out and promoting more clearly what approach it favours in terms of an international framework for reducing carbon emissions.

• Departments are already required to screen new policy proposals for environmental impacts and conduct appraisals where necessary.  We recommend that they should include within this screening process specific consideration of any implications arising from the adoption of the 60% carbon reduction target.

• Our fears about implementation have proved largely justified.  The Energy White Paper is weak on specific measures and contains little that is new.

• We find it incomprehensible that the Government was unable to publish an implementation plan as a supporting document to the White Paper.  We recommend that the Government does so as soon as possible, and includes within it not only an implementation plan for energy efficiency but a similar plan for renewables.

• The existing target in the Public Service Agreements of both the DTI and DEFRA for carbon reductions is very weak.  The Government should strengthen it and accord it far higher priority, particularly with regard to the DTI.  It should also incorporate the 20% renewables aspiration as a target in both Public Service Agreements.

• We note that the Government plans to review the operation of the Renewables Obligation in 2005-06. It should do so earlier.  It should also clarify at the earliest opportunity how the Obligation will relate to other policy instruments.

• The Government does not have a strategy for other renewables, including biomass and solar PV, which adequately reflects the massive challenge posed by the objectives set out in the White Paper.

• Ofgem's next distribution price review, to be completed in 2005, will be of enormous importance. The Government should set out clearly, as a fundamental objective for the price review, that positive and substantial incentives must be provided for all forms of renewable and distributed generation.

• The creation of yet more ad hoc groups, such as the Sustainable Energy Policy Network and the Sustainable Energy Policy Advisory Board, does not provide an effective response to the Performance and Innovation Unit's criticism that the present allocation of departmental responsibilities is incoherent. These new groups are likely simply to add to the confusing plethora of bodies and organisations already involved in the energy sector.

• The Government should alter the objectives of the Department of Trade and Industry so as to place a higher importance on environmental objectives in any trade-off with economic or social objectives, in line with the recommendation made by the Performance and Innovation Unit. This change must also be fully reflected in the Department of Trade and Industry's Public Service Agreement.

• We highlighted last year our conviction that a transition to an environmentally benign energy system could not be achieved on the basis of unsustainably 'cheap' energy, as the Prime Minister's foreword to the PIU report indicated was a priority. The Government's approach remains inconsistent, and the price of energy is likely to rise.