Select Committee on Environmental Audit Appendices to the Minutes of Evidence


APPENDIX 3

Memorandum from English Nature

SUMMARY OF SUBMISSION

  We support the use of measures, such as differentiated fuel duties, to encourage the take up of fuel types which improve local air quality. However, Government needs to appraise fully the environmental efficiency of such fuels.

  Fuel duty is an appropriate measure for climate change objectives because it is correlated with carbon emissions: for a given type of fuel, more fuel used means more carbon emissions.

  Over the long term, we need more significant reductions in greenhouse gas emissions, beyond the current targets, and for a greater share of these reductions to come from the road transport sector. Road fuel duties have a clear role here.

  We accept that recent price rises will reduce the need for a formal rise in the rate of fuel duty in the next Budget. However, over the long term a fuel price incentive needs to be maintained to help achieve our environmental objectives.

  The effectiveness of the price signal would be increased if more emphasis were put on its environmental objectives, and if society could see that fuel duty increases are being accompanied by similar investment in alternative transport choices. This does not necessarily require a formal hypothecation fund.

1.  INTRODUCTION

  1.1  English Nature is the statutory body that champions the conservation and enhancement of the wildlife and natural features of England. We do this by:

    —  advising—Government, other agencies, local authorities, interest groups, business, communities, individuals;

    —  regulating—activities affecting the special nature conservation sites in England;

    —  enabling—helping others to manage land for nature conservation, through grants, projects and information;

    —  enthusing—advocating nature conservation for all and biodiversity as a key test of sustainable development.

  1.2  In fulfilling our statutory duties, we:

    —  establish and manage National Nature Reserves;

    —  notify and safeguard Sites of Special Scientific Interests (SSSIs);

    —  advocate to government departments and others effective policies for nature conservation;

    —  disseminate guidance and advice about nature conservation;

    —  promote research relevant to nature conservation.

  1.3  Through the Joint Nature Conservation Committee, English Nature works with sister organisations in Scotland, Wales and Northern Ireland to advise Government on UK and international nature conservation issues.

  1.4  Following discussion with advisers to the Committee, we understand that the term "UK air quality targets" in the Committee press notice is to be interpreted as covering both local air quality and international climate change objectives.

  1.5  Government policy in relation to road fuels and air quality targets is relevant to the following areas of concern to English Nature:

    —  Impacts of climate change on our biodiversity;

    —  Other impacts from air pollution, such as acidification and nutrient enrichment from sulphur dioxide and nitrogen dioxide, which cause damage to our wildlife.

  1.6  Government policy on road fuels is also relevant to our concerns about the construction and operational impacts of new road building. Direct impacts arise from land take, changes in topography, surface and sub-surface water drainage, stream diversions, earthworks, disposal of surplus material and haul roads.

2.  INQUIRY ISSUE (1): THE CASE FOR USING FUEL DUTY, AMONGST OTHER MEASURES, TO HELP US MEET UK AIR QUALITY TARGETS THROUGH REDUCING DEMAND FOR ROAD TRANSPORT

Local air quality objectives

  2.1  We support the use of measures, such as differentiated fuel prices, to encourage the take up of fuel types which improve local air quality. Such policies will help reduce air pollution damage to our ecosystems.

  2.2  However, the Government needs to evaluate the efficiency of so-called green fuels such as low sulphur petrol, in case they lead to increased greenhouse gas emissions.

Climate change objectives

  2.3  Fuel duties are an appropriate instrument to help tackle greenhouse gas emission targets. It is often argued that the fuel duty escalator has been a blunt instrument for environmental policy. While this view is valid in relation to the more locally specific costs of congestion, fuel duty is very well correlated with carbon emissions: for a given type of fuel, more fuel used means more carbon emissions.

  2.4  We believe that all sectors emitting greenhouse gases should make significant contributions to emission reductions. Even with the Integrated Transport White Paper the Ten Year Transport Plan and other measures, traffic is forecast by Government to grow significantly in the next ten years. Government measures in the transport sector, including the plan, will lead to a small reduction in emissions over the next decade. However, the reduction in this sector is modest in relation to the overall Kyoto target and the Government's more ambitious targets. Over the long term, we suggest the need for more significant reductions in greenhouse gas emissions overall, beyond the current targets. This will require a greater level of reduction from the road transport sector. Road fuel duties have a clear role here.

  2.5  We recognise that fuel duty increases can have social impacts in some areas, and recommend the use of targeted measures to offset such effects.

  2.6  Traffic congestion creates a variety of environmental costs, including additional air quality problems. Local incentive schemes, including road use charging, are the most appropriate measures to tackle congestion. The Government's Integrated Transport Commission has suggested less emphasis on fuel duties and more on local charging schemes. However, such programmes will take time to get off the ground and are being promoted cautiously by Government. This suggests an important continuing role for fuel duties in the medium term and a managed transition towards a wider mix of instruments over the longer term.

3.  INQUIRY ISSUE (2): THE RELATIONSHIP BETWEEN FUEL DUTY AND FUEL PRICES AND THE VALUE OF LONG TERM SIGNALS TO CONSUMERS

  3.1  We acknowledge the particular circumstances caused by the recent fuel price rises. However, these concerns should be considered in the appropriate context:

    —  Despite recent price rises, motoring costs remain similar in real terms to the level in the period from 1975-1985;

    —  During the same period, real incomes have grown significantly, as have the costs of other forms of transport. So road transport has become comparatively cheap;

    —  Motoring costs seem likely to reduce further, compared with income levels, in the future.

  3.2  This context suggests the need for a long term fuel duty incentive to be maintained in order to help achieve our environmental objectives. We recommend that the Government commits to an informal price indexing process to maintain the necessary long term signals.

  3.3  Some question the effectiveness of fuel duties as an environmental signal. We believe this is primarily because of background trends: while fuel duties have had an effect on emissions, this has been offset by the overall growth in traffic. However, as the Government has recognised, the position on emissions would have been significantly worse if the duty had not been in place.

  3.4  Some research estimates that the short term reduction in fuel use is proportionately less than the rise in duty. However, this should not be interpreted as meaning that the duty is ineffective. Indeed the short term price response seems to be similar or higher than other areas considered for environmental taxes, such as pesticides and aggregates.

  3.5  The effectiveness of the price signal would be increased if more emphasis were put on its environmental objectives, and if society could see that fuel duty increases are being accompanied by similar investment in alternative transport choices. This does not necessarily require a formal hypothecation fund.

4.  THE GOVERNMENT'S APPRAISAL OF THE IMPACT OF FUEL DUTY POLICY CHANGES

  4.1  We welcome the attempts at environmental appraisal of measures in the Pre-Budget Report, but believe that a more detailed analysis should be provided including the effects of different options. For example, the 10 Year Transport Plan suggests that if motoring costs were to be held constant over the next decade, this would lead to a further emission saving of about 1 million tonnes of carbon by 2010.

  4.2  We would welcome further explanation of carbon reduction resulting from changes to Vehicle Excise Duty (VED). Presumably the increase in environmental differentiation will lead to carbon emission savings and other benefits. However, the effect of lowering overall motoring costs is not made clear.

  4.3  Our comments in paragraph 2.2 are also relevant here.

  4.4  The pre-Budget report describes some carbon savings in tonnages, and others in percentage terms, which is confusing.

5.  OTHER COMMENTS

  5.1  We welcome some of the additional transport measures in the Pre-Budget Report, such as the Green Fuel Challenge and the further reforms of company car taxation.

November 2000


 
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