MPs have stepped up the pressure on government Ministers to take responsibility for the UK’s outsourced carbon emissions, in a series of developments today.

This morning, the parliamentary Environmental Audit Committee (EAC) published its report on carbon budgets, calling on government to review its current method of reporting emissions, and instead report on the total emissions resulting from our consumption. The EAC state:

“We do not share the Secretary of State’s reluctance for monitoring consumption emissions. Monitoring UK emissions on a consumption basis would facilitate a more rigorous approach to controlling our contribution to climate change. The Government should request the Committee on Climate Change to review the scope for measuring emissions on such a basis and how that might be worked into the carbon budgets regime, if necessary to complement the continuing production-based reporting needed internationally.”

The EAC’s demands follow a long period of stonewalling by the Government, who have refused to date to request the Committee on Climate Change conduct a formal investigation into outsourced emissions.

Their recommendations raise the pressure on the Government to act, and coincide with a separate enquiry by their sister committee, the Energy and Climate Change Committee (ECC) – chaired by Conservative MP Tim Yeo – which is looking specifically at outsourced emissions and consumption-based emissions accounting. The ECC enquiry’s call for evidence closes on the 25th October.

DECC Minister Greg Barker also appeared to shift ground slightly in an answer he gave yesterday to a Parliamentary Question tabled by Conservative MP Peter Aldous, in which he stated:

“We recognise the importance of tackling outsourced emissions if we are successfully to deliver our climate change objectives…”

But he remained resolutely committed to his stock solution – rely on an international climate agreement to emerge that will tackle emissions wherever they are produced – despite the strong likelihood that the Kyoto Protocol will expire in 2012 with no immediate successor. This in itself necessitates the Government to seriously consider alternative measures in the meantime to reduce the UK’s growing contribution to global emissions.

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Between 1990 and 2009, total greenhouse gas (GHG) emissions from UK agriculture are estimated to have fallen by 21%.

So far, so good: it looks like British farmers have been doing their bit with cutting carbon. And assuredly many have – whether that’s meant cutting excessive fertiliser use, using biofuels to run farm machinery or planting more trees.

But then take a look at this chart. It shows UK agricultural self-sufficiency – the extent to which we grow our own food compared to relying on imports – and is plotted using official data available on the Defra website prepared for another publication.

Notice anything similar between the two graphs?

Could it possibly be that a continuous decline in UK agricultural production over the past two decades helps explain the resultant drop in agricultural emissions?

I’ll leave readers to speculate.

But whilst there is no statistical analysis of this in the report released yesterday, it does at least acknowledge the strong possibility that it is happening – and warns against it being confused for real emissions savings.

As the report states in its introduction: “A decline in agricultural activity in the UK may well lead to a decline in domestic GHG emissions (and vice versa), but …  As in other sectors, it would not make sense to drive down emissions from UK agriculture by relying more on the import of products that are at least as GHG intensive: this would effectively export the emission effect of food consumption, causing ‘carbon leakage’.”

But until we start to measure the emissions we’re outsourcing, and work to either plug the leaks or alter consumption patterns, official statistics will continue to tell only half the story.

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We were founded in 1971 by campaigner Charles Medawar and veteran social entrepreneur Michael Young, who also set up, amongst many other organisations, the Open University. PIRC’s creation was inspired by the work of legendary US civic activist Ralph Nader, and it was his brand of activism – using careful research and cogent advocacy to empower citizens and hold governments and companies to account – that Medawar and Young sought to bring to British shores.

PIRC in its 1970s incarnation, replete with cool hair.

In its early years, PIRC’s remit was broad, taking in issues of industrial pollution, workplace safety, consumer protection, and government secrecy – all bound together by a commitment to operating in the public interest. PIRC’s ‘social audits’ of unaccountable companies laid the foundations for corporate social responsibility reporting; whilst our concern for breaking down the walls of secrecy that kept citizens from scrutinising their government led to the formation of the Campaign for Freedom of Information. Maurice Frankel, a founding member and current Director of CFOI and former PIRC staff member, remains one of our trustees to this day. We’ve been making use of the FOI Act that he helped bring into law in our recent investigation of outsourced carbon emissions.

In more recent years, PIRC came to concentrate on critiquing the pharmaceutical industry – our work earning the praise of many, including John Le Carré, author of The Constant Gardener. But the rise of climate change as an issue of overwhelming concern precipitated a shift in our focus to environmental matters, and press for a transition towards a sustainable society.

Our fortieth birthday coincides with the fortieth anniversary of the modern environmental movement. PIRC was set up in the same year as Friends of the Earth in the UK and Greenpeace in the US. Over the past four decades, environmentalism has gone from being a fringe concern to part of mainstream politics, achieving some notable successes along the way – such as tackling acid rain (the subject of one of PIRC’s first reports), and taking renewable energy into the mainstream (the subject of two of PIRC’s more recent projects, Zero Carbon Britain and the Offshore Valuation).

But the environmental agenda has also seen its fortunes wax and wane. 2010 was a difficult year for environmentalists, following the failure of Copenhagen to reach a global climate deal, attacks by climate sceptics and a falling-away of media interest. Some commentators even seek to proclaim the death of environmentalism. Yet it would be far more constructive to debate its future – a future that may see environmentalism becoming very different, with new priorities and different ways of working, but still a vital social movement. Life, as they say, begins at forty. As the movement looks back on its first forty years, it’s crucial also to be considering the next forty, and the great transformations needed to make the world of 2050 a sustainable, healthy and happy one to live in.

As we celebrate our 40^th, we’d also like to take this opportunity to wish our Chair of Trustees, Chris Zealley, a very happy birthday. He turns 80 today and has worked for PIRC since its foundation. Very best wishes from all of us, Chris!

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Whilst on paper, Britain’s carbon emissions have declined, in reality they have grown – once emissions from imported goods are factored in. From a consumption perspective, the UK’s emissions have risen by 19% since 1990. New data from the Carbon Trust shows that by 2025 the UK’s total carbon footprint could actually be bigger than it is today, despite legally-binding targets to cut it by a third. Whilst domestic emissions will look smaller, almost half of the country’s footprint will be unseen, as the emissions will originate overseas.

The graph above, put together by the Carbon Trust, shows how the gulf between counted emissions and reality is projected to grow, as ‘outsourced emissions’ rise inexorably.

The Carbon Trust’s findings can be downloaded here. Today, PIRC also releases previously unpublished government documents it has obtained under the Freedom of Information Act following a 3-month investigation into outsourced emissions.

The full set of documents are available to download as a zip file here. Over the coming weeks, we will be analysing their content in detail. For now, to summarise some key findings:

• The government has long been aware of the issue of outsourced emissions and has repeatedly briefed Ministers about it – yet has failed to take meaningful action. One briefing states: “We have long known about embedded emissions as an issue and, given known trends in the UK’s trade balance and economic growth over the relevant period, the results are not surprising.” Another states: “increased emissions from UK consumption could cancel out the progress that we have made in reducing domestic carbon emissions.” Documents show civil servants have been investigating the matter since at least 2004.

• The government accepts the UK bears some responsibility for outsourced emissions, though it is reluctant to admit this publicly. Whilst one briefing claims that “Government policy has much less leverage over emissions that occur abroad”, it also states: “Nevertheless, we recognise that we do have a certain amount of control over emissions from abroad, as this is where many of our products come from. Consumer demand can be a powerful influence on manufacturers. The energy that goes into making many consumer goods might be used in another country, but by purchasing these products, we are contributing to that energy consumption.”

• The government also knows that energy efficiency improvements are not enough to offset growth in consumption. Newly-uncovered documents state: “While technological efficiency has improved the CO2 impacts of our products since 1992, the rise in UK consumption has outstripped the improvements achieved”; and “the Government needs to be cautious about over-claiming on its achievements in decoupling economic growth from environmental degradation”.

• The great majority of the UK’s outsourced emissions are created in China and other developing countries without any form of binding emissions targets. In 2004, UK consumption resulted in a net balance of 125Mt CO2 being emitted in China and other non-Annex 1 countries. Had the emissions occurred in the UK, we would have had to pay a price for the carbon emitted in their manufacture. Instead, no-one anywhere bore the full ecological costs of this consumption – except the planet itself.

• A Defra-commissioned report on outsourced emissions in 2008 was dogged by controversy and delays in its release. As BBC journalist Roger Harrabin reported at the time, “The government sat on the Defra SEI report since February, tested its calculations, then published it in an obscure press release on 2 July.” A Defra briefing from May 2008 obtained under FOI states: “It is well known, at least in the research community, that Defra has recently completed this project. There is no good reason to delay publication and doing so may attract unwarranted negative attention.” Why was the government so reluctant to publish this evidence?

• The government has repeatedly refused to ask the Committee on Climate Change (CCC) to investigate the matter properly. Yet the Committee has shown repeated interest in examining the problem, and government has suggested that ordering such an investigation is merely a mattering of timing, not principle. A DECC briefing from October 2009 states: “Any decision to commission work from the CCC on embedded emissions should… await the outcome of Copenhagen”; whilst a briefing from January 2010 suggests that, “While it would be possible to ask the Committee to look at embedded emissions, they have more than enough work to do in the next year to keep them very busy.” However, in December 2010, the CCC themselves told Ministers that “The Government should commission the CCC to look into the implications of considering UK emissions on a consumption rather than a production basis.” When asked in a Parliamentary Question in February 2011 whether he would request the CCC to look into the matter, DECC Minister Greg Barker stated, “I have not made a request”. Why is the government ignoring the advice of its own advisors?

We’ll be offering further analysis later this week.

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Just before Christmas, buried amidst the snow and news about Wikileaks, the Environmental Audit Committee released a report into the future of sustainable development across government, now that the SDC has been scheduled for the chop. Its key recommendation – which could turn the demise of the SDC into a triumph for good governance – is for responsibility for sustainable development to be handed over to the Cabinet Office.

Could the Cabinet Office help green Whitehall?

There is a delicious irony to the idea that the department that ultimately sanctioned the SDC’s abolition, under Francis Maude’s much-criticised ‘bonfire of the quangos‘, should be compelled to take over its duties. But it also makes perfect political sense. The SDC, as the committee’s report notes, has always been out on a limb, whilst its sponsoring department, Defra, “is not in a position to be able to make departments act more sustainably”. (It is even less so now, with its budget cut by 29%.) Defra Minister Caroline Spelman has declared, rather regally, that she will “take a personal lead” in subsuming the SDC’s role, “with an enhanced departmental capability and presence”. But her proposal is both implausible and unworkable. Sustainable development is something that needs to be integrated right the way across government; thus, it makes sense for that task to pass to a department with an overarching mandate, rather than a ‘single-issue’ ministry. The Treasury, perhaps? The EAC consider this option, noting (with some relish at the possibilities) that HMT has the power to

… ensure compliance simply by subtracting the required negotiated savings from department’s budgets at the outset. Defra officials told us that they  have not considered the possibility of applying sanctions on departments for poor performance on sustainable development. The Treasury, however, unlike Defra, is in a position  to apply real sanctions, if it so chose, including financial sanctions.

But a green Treasury? Really? Surely not, given its age-old opposition to ringfencing green taxes, reluctance to hand out much cash to the environment departments, and recent stonewalling of a Green Investment Bank. No, the EAC are right to pass over this option (voicing concern along the way that they wish “to make sure that the whole process isn’t captured by the existing Treasury view [...] of the world”) and instead alight upon the Cabinet Office as the best new home for sustainable development. They recommend a new post be created – for a Minister of Sustainable Development – replete with staff moved across from Defra and new powers to exert pressure over Whitehall. The committee demand the Treasury be “ready to play a more committed supporting role” and note that “the Cabinet Office’s proximity to the Prime Minister would further suit it to the task”.

I would go one further, and involve the PM himself formally. When David Cameron made his first visit to DECC back in May, he stated boldly, “There is a fourth Minister in this department that cares passionately about this agenda, and that is me.” Great rhetoric, but what has this amounted to so far? Perhaps, though, Cameron’s words should be interpreted literally, and a new title added to his job alongside First Lord of the Treasury . That would certainly be a way to make good on the abolition of the SDC, add substance to the oft-repeated claim of his being ‘the greenest government ever’, and finally embed sustainability at the top of Government agendas.

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A new report released yesterday, Tradable Energy Quotas (TEQs): a policy framework for peak oil and climate change, makes a valuable contribution to the debate about how policies affect public values.

We usually think of policies as only influencing surface-level behaviour, such as the taxes we pay. But, as two political scientists point out,

Policies can [also] set political agendas and shape identities and interests. They can influence beliefs about what is possible, desirable, and normal. They can alter conceptions of citizenship and status. (Soss and Schram, 2007, p113).

That’s been understood instinctively by many politicians on both the left and the right for some time. Cognitive linguist George Lakoff has repeatedly pointed out how American neo-conservatives have assiduously set about establishing “their deepest values into the brains of tens of millions of Americans”, through the use of framing and policies that promote their politics. But it’s not just been done on the right: the creation of the welfare state by the postwar Labour government in the UK was also an exercise in promoting socialist values – encouraging popular buy-in to the state provision of a public good through the principle of universal welfare.

Environmentalists, too, are beginning to wake up to the importance of such ‘policy feedback’. The recent report Common Cause, for example – published by a coalition of NGOs including Oxfam, FoE and WWF – discusses how different green policies can unwittingly help or hinder environmental protection through the values they promote. UK planning law, for instance – which was developed, like the welfare state, under the Attlee administration – has the effect of “further embedding the common-interest frame” in public consciousness, and may therefore help to promote respect for common goods like the environment. Policies that foster individualistic ‘green consumerism’, on the other hand, are likely to help promote ‘extrinsic’ or ‘materialistic’ values, which tend to oppose concern for the common good.

This is where the TEQs report comes in. Written by Shaun Chamberlin and David Fleming (who sadly passed away at the end of last year), and commissioned by the All-Party Parliamentary Group on Peak Oil, the paper is first and foremost an account of the TEQs system of personal carbon allowances which David Fleming invented in 1996. But its third chapter incorporates an exploration of the values that a personal carbon allowance system embodies, and the impact this might have on behavioural motivation. “The incentives that motivate people to get results need to be no less well understood than the relevant science and technologies”, they write. “At the heart of this is common purpose, where there is an alignment of individual and collective purpose, so that actions and aims which the individual recognises as in his or her own interests are the same as those of the community as a whole.”

The common purpose pursued by a personal carbon allowance system is, of course, the reduction of carbon emissions on an equitable basis over time. Fleming and Chamberlin argue that existing carbon reduction policies offer inducement through artifical ‘extrinsic’ rewards – financial payments in return for action – whereas, they assert, “To be effective, incentives need to be intrinsic to the task… the motivation needs to be based on the actual benefits of doing the task, rather than on a set of rewards for doing it.” TEQs, the authors propose, offer such an intrinsic set of motivations, by binding citizens into the collective task of emissions reduction, promoting cooperation to achieve this, and offering rewards of reciprocity and energy entitlements rather than money.

I’d make some additions to the authors’ analysis. Whilst clearly familiar with Common Cause and similar recent work on values within policy, their application of the terms ‘intrinsic’ and ‘extrinsic’ seems to be drawn more from the work of Dan Pink looking at self-determination theory. But the authors could have done more to apply the insights of Common Cause in terms of how a TEQs system would impact on ‘intrinsic values’, such as concern for one’s community, a belief in equality and care for nature. It is clear that TEQs would help promote all such values, but this isn’t quite spelled out. And whilst Fleming and Chamberlin are right to point out that financial carrots can be a poor tool to encourage better performance, this has only been demonstrated in the case of intellectual tasks – whereas bonuses work fine on simple, mechanical tasks. Making the transition to a low-carbon world will certainly require creativity, but it will also require the adoption of (mechanical and non-creative) habits, like simple energy-saving measures, for which financial inducements could play an important role.

But a system of personal carbon allowances, were one ever introduced, would clearly have major implications for public values in the UK. If framed in the manner of the TEQs proposal, such a policy would promote collective values and the ‘common good’ in a far stronger way than the current mish-mash of disparate green taxes and climate policies. It could have similar effects to the creation of the universal welfare state – bringing all British citizens into a collective system of carbon reduction, with everyone entitled to a quota of carbon and holding a shared stake in the ‘safety net’ of a stable climate. Personal carbon allowances, therefore, could generate positive ‘policy feedback’ in reinforcing public values that underpin care for common goods like the environment.

Whether or not you agree with TEQs or personal carbon trading more generally, the debate about the interplay between policies and values is a vital one. It’s good to see that policy papers – like the one released today – are starting to take values into account, and it’s to be hoped this example will be the first of many. Scrutinising how policies affect public values is vital for ensuring transparency in governance, and for designing policies that will be both consistent and effective.

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The Government has pledged just £1bn of direct public funds for the GIB – despite a previously anticipated figure of £2bn – and falling far short of the £4-6bn that analysts and campaigners had been calling for.

The Spending Review states that the GIB “will catalyse further private sector investment… so that the impact on the finance gap for low carbon investment is many times the scale of the public contribution.” But a recent report by Ernst & Young recommended the GIB receive minimum public funding of £4-6bn, or else fail to leverage necessary quantities of private sector money.

The Spending Review pledges that “additional significant proceeds from asset sales” will help supplement the £1bn figure, but gives no indication on what these asset sales might be, or the amount of money they will free up.

Also worrying is the timescale under discussion. The Spending Review document fixes a date of 2013-14 for the Green Investment Bank to receive its £1bn capital injection. Why so late? The design and testing work on the precise structure of the GIB is meant to be completed by Spring 2011, presumably in time for primary legislation to be introduced in the Finance Bill expected for April 2011. Anticipating a year to establish the GIB in law seems fair enough; but why then wait an extra year to grant it any funds?

Delaying such funding risks deterring private sector investment, and gives another year of slippage in which the UK can lose first mover advantage in capturing renewable and low-carbon markets. In sum: too little money, delivered too late.

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A few points emerge from the document:

• The Government will “improve efficiency of renewable support… on more cost-effective technologies”; possibly code for cutting spending on less advanced renewable technology types like wave and tidal. Chris Huhne yesterday confirmed that plans for the Severn Tidal Barrage had been dropped – though it would have generated 5% of the UK’s electricity from 2020.
• The UK “will contribute £2.9bn in international climate finance”. The section in the document that states over what time period this will be spent is illegible; if it’s over the next 3-4 years, that will be something of a victory, and may exceed previous pledges; if it’s spread over a longer time period, or conflated with existing Official Development Assistance, it may be less good.
• A bracketed sentence suggests that the Coalition will “Increase the proportion of revenue coming from environmental taxes”, with a caveat “Do n0t use if no tax announcement”. In an interview back in the summer Alexander stated the Government would “In due course [be]  looking at other ways to rebalance, looking at green taxes. It is about rebalancing.”
• Lastly, the document claims that “The Spending Review is fair: environmental spending is relatively protected to ensure sustainability for future generations. Over the SR [Spending Review] period, environmental spending will increase [30%] in real terms.” There is no evidence provided in the document to back up this claim.

The proof of the pudding, of course, will come in the eating – and that’s set to come in the next couple of hours as George Osborne unveils the Spending Review proper at 12.30, and over the coming days as more details emerge. I’ll be back with more analysis later today.

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In fact, McCandless’ beautiful infographic shows only two agencies dedicated to cutting emissions – the Carbon Trust and the Energy Savings Trust. That’s because most of DECC’s agencies receive only tiny amounts of funding – and bodies with budgets less than £25m are excluded from the diagram. Much climate spending is, in McCandless’ diagram, invisible to the naked eye.

The smallness of public spending on climate change hasn’t stopped recent decisions to axe a whole range of green bodies – like the Sustainable Development Commission, Royal Commission on Environmental Pollution, and Renewables Advisory Board – all of whose budgets are too small to be seen on McCandless’ infographic.

Look, the heart of the issue is this: the UK is not yet spending nearly enough on decarbonisation to meet our 2020 emissions targets. Yet so far all debate about public expenditure has focused on penny-pinching on a much shorter term time horizon – not 2020 but October 20th. It’s time to get some perspective and for the Government to outline how it will spend money to achieve its longer-term objectives.

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Cutting by 40%… but these campaigners wanted to cut emissions, not spending

I’m at the Labour party conference in Manchester this week, doing the rounds of the climate fringe events and asking whether ‘Red Ed’ will rediscover his previous persona as ‘Green Ed’. Expect a number of posts reporting back over the next few days.

First up, the future of the Department of Energy and Climate Change (DECC) itself. This emerged as a key concern at this morning’s Fabians discussion on green jobs, with speakers Emily Thornberry MP (Shadow Energy & Climate team), Michael Jacobs (former environment advisor to Gordon Brown),  Alan Whitehead MP, and Tony Hawkhead (CEO of environmental charity Groundwork).

The panel expressed great disquiet about the impact of the looming spending cuts on DECC. The department’s current budget is some £3.2bn; cutting its spend by 40% – as the Treasury asked all departments to model earlier this year – would leave it with just £1.92bn to spearhead the low-carbon transition. But it was pointed out that £1.7bn of DECC’s existing budget is spent on nuclear clean-up: liabilities that have to be taken care of and that Government can hardly divest themselves of. Assuming DECC would still be saddled with this responsibility, a 40% budget cut would leave the department with a paltry £220m to support renewables, energy efficiency, low-carbon cars and all the rest. DECC would effectively cease to function as a meaningful department – and it’s understood that DECC officials have said as much to the Treasury.

Opinions varied amongst speakers as to whether this level of cuts were likely. The average cut requested by Treasury across Whitehall is 25% – and whilst some departments may be forced to cut up to 40%, others will escape with shallower wounds. (Although PIRC understands that some departments have offered in excess of even 40% – naming no names, but young Conservative Ministers tend to be more ‘ambitious’ in this regard.)

Even if DECC emerges from the Spending Review with three-quarters of its budget intact, questions remain over how much power it will continue to wield, with a resurgent Treasury extending its mandate across Whitehall. The Guardian reported recently that the Treasury was considering absorbing DECC into its own fold – somewhat overblown rumours, as it turned out; but as the future of climate policy in the UK becomes increasingly bound up in finding sufficient low-carbon finance (notably for the Green Investment Bank), the role of the Treasury will only grow. A member of the audience, who identified himself as a former civil servant, worried that BIS or Treasury would take an increasing control over climate policy, with DECC emasculated just two years since its creation. It would take strong Ministers to resist this trend, said one of the speakers. Today’s Morning Star carries an article on this by former MP Alan Simpson, under the headline, ‘All hands on DECC’ [although they seem to have put up the wrong article at present - 1.30pm]

Looking at the figures, it’s worth highlighting again how much of DECC’s current responsibilities lie in the realm of managing liabilities – both nuclear and fossil. The Nuclear Decommissioning Authority, one of the bodies that will survive the Coalition’s ‘bonfire of the quangos’ – as revealed in a Cabinet Office document leaked last week – swallows up £880m on its own. Clearly no-one is arguing we should stop cleaning up nuclear waste. But it does underline how the full price of a nuclear-powered energy system isn’t confined to set-up costs; something that should always be borne in mind when people balk at the high up-front costs of renewables, which do not, however, incur costs for either fuel or waste processing.

Separately, in conversations after the workshop with staff working in local government, it appears that the low-carbon agenda isn’t just under threat from cuts to DECC. The Department of Communities and Local Government (DCLG) has also staged a full-scale retreat from all things climate since the Coalition government coming to power, with Minister Eric Pickles appearing to pursue a ‘back to basics’ approach and hiving off his low-carbon teams to DECC. Sustainable development used to be understood as something that had to be embedded across government, not just in one department. But that was in the days when we had a Sustainable Development Commission scrutinising all of Whitehall – and now that’s been axed, too.

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