January 2007
Climate Change And The Government: What You Need To Know
Following the publication of the Stern Report in October 2006, the debate on climate change has experienced a seismic shift. No longer able to ignore the science behind global warming, the report not only forced government to confront climate change as an environmental issue, but also put a social and economic cost on our inaction.
With the ultimate imperative for action, that of economics, there is a need to understand what change entails and what it means to you.
The report states that immediate action may mitigate the cost of climate change. If we don"t act now, the overall costs and risks of this will be equivalent to losing at least 5% of global GDP each year, until the end of time. This is a conservative estimate, with associated negative externalities raising the cost to as much as 20%. Preventative action could reduce this to around 1%.
Although the immediate disbenefits of climate change would be felt mostly in the developing world and some benefits may accrue to nations at higher latitudes (the developed world), this does not mean that the developed world can afford to ignore the issue. Apart from the economic cost, global security and migration patterns would profoundly change the world before wealthier nations also began to experience the negative side of climate change.
The link demonstrates the projected impact of climate change as predicted by the Stern Report:
Thus, in response to the unprecedented threat we face, the government proceeded to outline a number of proposals beginning with its Climate Change Bill in the Queens speech on 15 November 2006.
Planning to legislate for long term goals for emissions reductions which are both effective in their results and realistic for businesses to implement, the government"s proposals contain four key elements:
- Legislate a long term goal to reduce CO2 emissions by 60% by 2050.
- Establish an independent body – the Carbon Committee – to work with the government to reduce emissions across the economy.
- Create enabling powers for new emissions reduction measures to achieve this goal.
- Improve monitoring and reporting arrangements, including how the government reports to parliament.
An Energy Review in the UK concluded in 2006 and followed by consultations will form the basis of a 2007 Energy Bill. In addition to this, the Local Government White Paper published on 26 October 2006 provided for the strengthening of local leadership and powers, with Annexe F focussing on climate change and implementing it through a simplified performance framework.
Furthermore, the Office of Climate Change (OCC) was set up in November 2006 and has a mandate to work across government to provide a shared resource for analysis and the development of climate change policy and strategy. More specifically, the OCC will help support ministers through:
- High level management and reporting of progress on existing commitments.
- Developing a cross-government consensus on current progress and outstanding issues.
- Identifying short and medium term goals for particular sectors and/or areas and consequent priorities for action.
- Carrying out time-limited policy-focussed projects where Ministers agree this adds value.
- Promoting understanding of climate change across government and supporting departments to adapt their policies.
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