Treasury Committee press notice no.22

EMBARGOED UNTIL 00:01 Tuesday 5th February

Treasury Committee calls for creation of new ministerial post to champion co-ordinated approach to climate change.

The Treasury Committee today (5 February) publishes its fourth report of Session 2007–08, Climate change and the Stern Review: the implications for Treasury policy (HC 231). The Committee welcomes the Stern Review’s contribution to the debate, in particular its focus on the use of economic tools such as environmental taxes and permit trading schemes as cost-effective ways to cut emissions, which it sees as essential to combating climate change.

Champion of Climate Change:

Many Government departments are involved in climate change programmes and while the Report welcomes the establishment of the Office for Climate Change (OCC), which seeks to promote cross-departmental cooperation, it concludes that there is a need for ministerial accountability in this important area.

Committee chairman, John McFall MP said:

“A coordinated approach to climate change across Government departments is vital to ensure joined-up policy-making. The Office of Climate Change goes some way towards this, but not far enough. It needs to be headed up by a Minister—someone who can become an effective Champion of Climate Change across Government.”

EU Emissions Trading Scheme:

Whilst welcoming the concept of the use of economic tools for environmental aims, the Report criticises the way they have been applied in certain cases. For example, it considers that Phase I of the European Union Emissions Trading Scheme over-allocated permits and stresses the need for the Government to strive for a much tighter  allocation in Phase II.

John McFall said:

“For environmental economic tools to have impact in changing behaviour they must have bite. The potential impact of the EU ETS has been hugely diminished by the over-allocation of permits in Phase I. The Government must do all it can to encourage our European partners towards tighter constraints.”

Environmental Taxation:

This report concludes that, despite its 1997 pledge to discourage environmental damage via the tax system, the Government’s commitment to environmental taxation has faltered.

John McFall said:

“We are very disappointed by the Government’s timid use of environmental taxes. True, they have introduced the climate change levy, and aggregates levy, but these are miniscule in the grand scheme of things. Overall, the Government has failed to match its 1997 commitment to increase the use of green taxes.”


The Report welcomes the Government’s proposal that Air Passenger Duty (APD) be replaced by ‘Per Plane Duty,’ but regrets that the Government has taken so long to do so. APD does not currently differentiate between full and half-empty planes, between flights to Morocco and flights to Australia, or between clean planes and relatively dirty planes. The Report urges the Government to ensure that cargo flights and private planes are included in the new regime and that tax differentials be introduced to encourage investment in cleaner technologies.

John McFall said:

“Air Passenger Duty is a very poorly-targeted tax, as it offers almost no incentive to airlines to improve their environmental record. Taxing flights rather than passengers makes a lot of sense from an environmental point of view, and the Government needs to ensure that a replacement for APD offers the right incentives for investing in cleaner planes.”

The Report also expresses concern that airlines are dragging their feet in cooperating on environmental schemes, and recommends that airlines adopt a system of eco-labelling, so that consumers can compare the environmental footprint of each airline when purchasing their tickets.

John McFall said:

“Aircraft emissions are a fast-growing component of the UK’s emissions, yet the aviation industry seems to be doing little about the problem. Our proposals for an industry-wide eco-labelling scheme would at least provide customers with the environmental information they need to make a choice between providers.”

Adaptation versus Mitigation:

The Report rejects the argument that the UK should focus its attention solely on the monitoring of climate change and adaptation to its effects, at the expense of the mitigation of emissions. It also recognises that many of the world’s least-developed countries face more urgent and profound threats than the UK from climate change and calls on the Treasury to specify, and ring-fence, part of the Department for International Development’s budget for overseas climate change adaptation.

John McFall said:

“Mitigation of the UK’s carbon emissions is extremely important, but we must not forget that climate change is affecting us now. Of course, some of the developing world is at a much greater climate change risk than the UK, and generally much less prepared. The Government should identify a budget for expenditure on overseas climate change.”

Mr McFall is available for comments on the report today on 020 7219 3521 (Westminster office), 07730987802 (mobile) or 07644 004586 (pager). For all other media inquiries, please contact Laura Humble, Media Officer, on 020 7219 2003/07917 488489/

Further information:

Committee Membership is as follows: Rt Hon John McFall (Chairman), Nick Ainger, Mr Graham Brady, Mr Colin Breed, Mr Jim Cousins, Mr Philip Dunne, Mr Michael Fallon (Sub-Committee Chairman), Ms Sally Keeble, Mr Andrew Love, Mr George Mudie, Mr Siôn Simon, John Thurso, Mr Mark Todd, Peter Viggers.