Memorandum from The Royal Society for
the Protection of Birds (RSPB)
The RSPB recommends that:
1.1 The Government should capitalise on
the momentum provided by the PIU by bringing forward a tightly-defined
White Paper and moving fast to implementation.
1.2 The White Paper should build on the
foundations laid by the PIU review, and endorse or amplify its
key recommendations, namely:
Environmental objectives will tend
to take precedence where energy policy decisions involve trade-offs
with other objectives.
To introduce a firm target for renewable
energy of 20 per cent by 2020.
To introduce a firm target for domestic
energy efficiency improvements of 20 per cent by 2010 and 40 per
cent by 2020.
1.3 The White Paper should strengthen the
PIU's recommendations and set a higher target for renewable energy
for 2030 and beyond, introduce firm targets for energy efficiency
in the commercial and industrial sectors, and focus on demand
1.4 The PIU review focuses largely on the
medium term (to 2020). To provide a clear framework for long-term
energy policy, the Government should respond to the Royal Commission
on Environmental Pollution report on climate change by acknowledging
the need for a 60 per cent carbon reduction target by 2050, and
setting interim indicative targets beyond 2010. These domestic
targets could form the basis for UK leadership in international
negotiations and would provide a strong rationale for introducing
measures to price carbon sooner rather than later.
1.5 In the short term, and as a matter of
priority, the Government should issue strong, clear social and
environmental guidance to OFGEM, based on the PIU's recommendation
to prioritise environmental objectives in energy policy, and should
ensure that problems caused for intermittent generators by NETA
The RSPB is Europe's largest wildlife charity
with over one million members. We work on a range of policy areas
and manage one of the largest conservation estates in the UK,
with more than 150 nature reserves covering more than 100,000
hectares. The RSPB is part of BirdLife International, a global
partnership of independent national conservation organisations
working in more than 100 countries worldwide.
3. THREAT OF
3.1 Climate change poses the biggest long-term
threat to global biodiversity. Plants and animals are already
changing their annual cycles and geographical distributions in
response to changing climate. Some may move but others will fail
to cope and will become extinct. The warming caused by the activities
of people will probably affect all 1.4 million documented species
on earth. Although birds' mobility will make them better able
to respond than some other organisms, they will not escape the
consequences of climate changetheir position near the top
of the food chain makes them vulnerable to changes anywhere else.
We are taking a major gamble with the future of life on Earth,
including that of our species, and that is why the RSPB places
so much emphasis on trying to prevent such change happening in
the first place.
3.2 National and international energy policy
has direct consequences for the climate which is why we believe
this inquiry to be so important. Sustainable energy policy in
the UK not only has important implications in itself for climate
change, but also has the potential to serve as an example and
catalyse political and practical leadership for the rest of the
world, in both developed and developing countries.
4. IMPACT OF
IN UK ENERGY
4.1 There have been several important changes
to UK energy policy in the past 18 months. These have followed
two principal paths: one towards increased competition within
liberalised energy markets (eg NETA) and the other environmental
protection and, specifically, carbon reduction (eg introduction
of the Climate Change Levy, Renewables Obligation, and the emissions
4.2 Partly because recent policy changes
have pursued economic, environmental and social objectives, overall
energy policy appears to lack coherence. Particular policies have
either pursued objectives incompletely or in ways that mutually
conflict, thereby neutralising or reducing their effects. These
tendencies have been especially true of policies directed at environmental
objectives, including carbon reduction.
4.3 An example of a policy that pursues
environmental goals incompletely is the Climate Change Levy (CCL).
Although its goal is carbon reduction, it is based on downstream
energy (rather than carbon) use, restricted to business and not
applied to the energy intensive sectors with exemption agreements.
Another example is the emissions trading scheme, which is voluntary,
in which participants are paid to take part and in which electricity
generators do not participate. Although we strongly support both
these policies in principle, in practice their environmental efficacy
has been reduced in order to avoid compromising social or economic
4.4 An example of where policies conflict
is the interaction between the Renewables Obligation and the New
Electricity Trading Arrangements (NETA). The Renewables Obligation
is an efficient, market-based policy for increasing the contribution
of renewable energy. However, because NETA systematically discriminates
against intermittent generators, it either raises the cost of
the obligation, or reduces the amount of renewable energy it will
deliver. This effect was entirely predictable.
4.5 Under certain circumstances, an economically
efficient energy system can deliver environmental benefits. Resource
consumption and pollution will be reduced where price signals
lead to generation and transmission infrastructure that provides
the right amount of energy in the right place at the right time.
NETA and new transmission pricing proposals will have these effects.
However, environmental impacts will only be reduced to economically
efficient levels if environmental costs and benefits are captured
in pricesthis is currently not the case. It is also unclear
whether the economic costs currently attributed and charged to
intermittent generators under NETA are an accurate reflection
of the true costs they incur. In cases where there is doubt about
economic cost, and as long as environmental costs are not priced,
policy could be made more coherent by favouring environmentally
benign optionsor at least by avoiding placing them at an
5. CURRENT POLICIES
Current policies comprise the Renewables Obligation,
capital grants for renewables and a budget for R&D. Some funds
recycled from the CCL through the Carbon Trust will also be available
to support renewable energy development. All this bodes well,
though targets and funding could both reasonably be higher. However,
apart from the difficulties intermittent generators face under
NETA, there are also intractable problems with the planning system.
Unless both NETA and the planning system can be made more compatible
with the needs of renewables, at the same time as preserving economic
efficiency and appropriate land use restrictions, it will be extremely
difficult even to meet the existing target of 10 per cent renewables
6.1 To some extent, the neutralising tensions
and conflicts described above are inherent in an approach which
attempts both to balance economic, social and environmental objectives
within energy policy, and to prioritise economic goals at the
same time. However, in most situations, the tensions manifest
themselves through the activities of departments and the agencies
or regulators. Whilst DEFRA and the Environment Agency tend to
favour environmentally focused policy options, the emphasis of
the DTI and OFGEM is principally on enterprise and competition.
OFGEM, whose consumer-centred remit is defined through statute,
is strongly focused on economic efficiency and price reduction,
and currently await social and environmental guidance from government.
6.2 For these reasons, clarifying and unifying
changes in energy policy and its objectives must come from the
highest political levels in order to be able to effect coherent
and comprehensive positive change. It is therefore encouraging
that the PIU review of energy was commissioned by the Prime Minister,
and it is especially encouraging that one of their principal recommendations
was that "Where energy policy decisions involve trade-offs
between environmental and other objectives, then environmental
objectives will tend to take precedence" (PIU Review, p.
5). This is a recommendation strongly supported by the RSPB and
one which, if endorsed by government, would have far-reaching
and positive implications for the environment and, ultimately
for the economy and society as a whole. It would, for example,
imply a radical re-ordering of OFGEM's priorities and give concrete
expression to their existing statutory duty to future, as well
as current consumers.
7. THE OUTCOME
PIU ENERGY REVIEW
7.1 The report can be viewed in two ways.
Within the limits of what is currently politically and pragmatically
feasible, it is arguably a radical set of proposals. A target
of 20 per cent renewables by 2020 is quite ambitious, and a 40
per cent improvement in domestic energy efficiency by 2020 will
not occur automatically. The RSPB strongly supports the report
as a whole and these recommendations in particular.
7.2 On the other hand, even within pragmatic
constraints, two aspects of the report are not especially forward-looking,
and suggest internal tensions and discrepancies:
(i) The recommendation that the nuclear option
be kept open is highly questionable and at odds with an energy
policy that prioritises environmental goals. Although it is carbon
free, nuclear power has various other serious and unresolved environmental
(and health and safety) impacts, including radioactive leaks,
catastrophic failure and high level waste disposal. It is also
likely to be expensive and face strong public opposition. Moreover,
a programme combining renewables and efficiency improvements could
more than compensate for the closure of existing nuclear plant.
For this reason, if a decision is made to keep the nuclear option
open, it will be vitally important that this does not deflect
funds, expertise, time or effort from truly sustainable options.
Clearly, granting an exemption to nuclear power from the climate
change levy would seriously risk making such options less likely
(ii) The report places repeated emphasis
on the need to avoid compromising international economic competitiveness
for environmental reasons. This is another example of the way
in which the report implicitly undermines its own recommendation
to prioritise environmental objectives in energy policy.
7.3 It is also disappointing that the scope
of the PIU review did not include transport since, as the fastest
growing source of carbon emissions, it is clearly an important
and intrinsically linked issue. This meant that the PIU did not
look at future interactions between transport and energy. This
was a missed opportunity given that the growth of new technologies,
such as biofuels and fuel cells, will lead to increasing synergies.
7.4 Therefore, although the report represents
a radical step in the right direction, there is some evidence
of a continuing tendency to serve several objectives simultaneously
and a continuing failure to completely eliminate incoherence.
7.5 From another perspective, the report
is arguably not radical enough. There is already compelling scientific
evidence of a practical imperative to move towards a carbon-free
economy much more quickly than supposed in the PIU reportthe
pace of climate change is faster than previously thought, even
quite recently. If true, political constraints on the available
options will change, perhaps drasticallyboth domestically
and internationally. Indeed, decisions on whether or not to adopt
significant long-term carbon reduction targets of the kind recommended
by the RCEP and IPCC rest with the Government. The PIU therefore
focused mainly on short- to medium-term policies (up to 2020)
for creating options that would enable us to meet significant
low carbon targets, should they prove necessary in the future.
However, it is not clear that these measures will create sufficient
options to respond fast or flexibly enough to potentially rapid
and significant climate change.
7.6 Nor is it clear that the mixture of
fiscal, regulatory and voluntary measures recommended in the report
would be as economically efficient as a single, comprehensive,
economic instrument focused tightly on the principal environmental
objectivecarbon reduction. The report makes passing reference
to the need to consider pricing carbon in the future, either through
a comprehensive upstream carbon tax, or a carbon cap and trading.
However, a 50-year review with carbon reduction as a primary goal
could arguably have made carbon pricing its central policy recommendation.
This has the potential not only to reduce carbon use progressively
to safe levels, but also to do so in a way that maximises economic
efficiency, by avoiding the need for a wide array of relatively
inefficient and sometimes mutually contradictory micro-policies.
The report's apparent reluctance to emphasise the carbon pricing
option represents a significant missed opportunity.
7.7 The PIU report is only a beginning.
It will be important for the Government to consult as soon as
possible, in order to maintain momentum and capitalise on the
immense interest the report has already generated. In order to
be effective, the consultation should reach as wide a range of
stakeholders, including the general public, as possible. It should
be also as tightly focused as possible on the few absolutely crucial
issues at stake, as identified above. An open-ended consultation
would be difficult to translate into practical policy. Actual
policy change and implementation in the direction of a sustainable
energy system are what is needed. The RSPB hopes that, at the
very least, the forthcoming White Paper will endorse the PIU recommendations
as they stand. The Government should build on the foundation laid
by the PIU by strengthening the targets it proposes and announcing
its intention to introduce measures specifically to price carbon.
To do this, and to win public acceptance of the need for such
measures, will require strong political leadership. The RSPB is
fully committed to lending every support to this effort.