Environmental Impact Guidance
Step 5:
Include the monetised costs and/or benefits within the RIA. Where it has not been possible to report the impact of your policy in terms of tonnes of emissions and therefore to assign this impact a monetary value, a brief qualitative discussion of the carbon impacts should be included instead.
Where you have monetised the costs and benefits, these can be included in the Regulatory Impact Assessment amongst the other identified costs and benefits of your policy options.
Timescale: As with all monetised costs or benefits which occur over a number of years, you will need to consider the timescale over which you will consider the costs and benefits of the policy options. You should describe the impact on emissions over the same length of time over which you are looking at other costs and benefits, unless there are reasons to believe that there will be a significant long term impact. and apply a discount rate to the monetary value of the change in emissions in exactly the same way as you would with other costs and benefits, to produce a net present value for each policy option. The recommended discount rate is currently 3.5% unless the time scale exceeds 30 years, in which case a declining discount rate should be used (see http://greenbook.treasury.gov.uk/chapter05.htm#discounting for guidance on how to apply the discount rate and to calculate a net present value for each policy option).
Given that the costs and benefits of increasing or decreasing emissions may accrue over a longer time frame than most other costs and benefits associated with different policy options are considered over, you should also state the general effect on emissions beyond your chosen timescale for other costs and benefits if you believe this may be significant.
Decision makers are likely to want to see how the policy will impact on the UK's policy targets and objectives for emission reductions. We have set tough targets for reductions in all greenhouse gases for 2010 and further reductions for carbon dioxide in 2020. If it is possible, you should try to quantify, perhaps giving a range, the changes in emissions in both 2010 and 2020. If the values in 2020 are extremely uncertain, try to describe the impact qualitatively.
Where it has not been possible to quantify and therefore assign a monetary value to the change in emissions, it is still useful to provide a qualitative assessment of the magnitude of the impacts and whether this is felt to be significant enough to make certain policy options more or less appealing than others.
With information on the costs and benefits of each policy option, including those associated with changes in emissions, it may also be possible to consider other policy options, or adjustments to the existing options, which achieve the same benefits but at a lower cost.
| John first adds £3.4k to the other costs identified for each policy option in each of the ten years, before applying a discount rate of 3.5% to the total. He then repeats this exercise using the figure of £13.4k. He notes that in 2010, there would be an increase in emissions of about 96 tonnes of carbon. He has already identified that by 2020 the policy will have no effect on rail freight, but makes a qualitative note that as a result of the technological development which it is believed is likely to take place, there may be a reduction in emissions (compared to what would have happened in the absence of the policy) by 2020. |
Page last modified: 4 May 2007
Page Published: 16 November 2004