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Introduction

1. The Government welcomes the Select Committee's report as a constructive contribution to the development of a climate change programme for the UK.

2. In October 1998, the Government published UK Climate Change Programme: a consultation paper as the first stage in the preparation of new programme to deliver the UK's international target to reduce its greenhouse gas emissions by 12.5% below 1990 levels by 2008-2012 and to move towards the domestic goal of a 20% cut in carbon dioxide emissions below 1990 levels by 2010. The Committee noted that its report was based on this paper and that its inquiry had been completed before the Government and the devolved administrations published the draft UK climate change programme on 9 March 2000. The draft programme is currently out for consultation until 2 June. The Government and the devolved administrations will publish a final programme later in 2000. The Committee's recommendations are therefore extremely timely.

The Draft UK Climate Change Programme

3. The Committee has recognised that, with publication of the draft climate change programme, the UK is leading the way internationally in the fight against climate change. The draft programme sets out the Government's and the devolved administrations' strategy for tackling climate change. It explains why the climate is changing and what its effects might be; how the international community has responded and the active role that the UK has played; how the Government and the devolved administrations propose to meet the UK's climate change targets; what the UK needs to do to meet the longer term challenge of climate change and future targets; and what action might need to be taken to help the UK adapt to the impacts of a changing climate.

4. Alongside the draft programme, the Government made available two new working papers which provide up-to-date projections for the UK's carbon dioxide emissions and emissions of the other five gases covered by the Kyoto Protocol, and a paper describing how the carbon savings figures included in the draft programme were derived^[1]. An additional consultation paper on a new Energy Efficiency Standards of Performance for 2002-2005 was also published.

5. The draft climate change programme sets out a robust and far-reaching strategy for meeting the UK's climate change targets and the Government believes that it addresses the majority of the concerns outlined in the Committee's report. The draft programme aims to:

• ensure that the UK moves towards a more sustainable, lower carbon economy. It puts in place policies that give clear signals about the changes that will be needed over the coming decades. These policies also offer incentives and help for people and businesses to adapt to the new environment;
• outline a package of measures that will deliver the UK's target and move towards the domestic goal. The policies and measures that are included in the programme should mean a cut of 21.5% in the UK's greenhouse gas emissions by 2010. This equates to a cut of 17.5% in carbon dioxide alone. Together with those policies that cannot be quantified, this could cut carbon dioxide emissions by 20% and deliver the domestic goal;
• ensure that all sectors of the UK's economy and all parts of the UK play their part;
• put forward a flexible, cost effective set of measures which will safeguard and enhance the UK's competitiveness and, as the Committee has noted, deliver wider benefits through lower energy costs for both businesses and householders; improved air quality in towns and cities; reduced harm to health; new business and export opportunities; and 'first mover' advantages for business; and
• set a clear framework and direction that will enable and empower key players to do what they can to cut emissions. Action by the Government and the devolved administrations will not be enough. Action by other groups, organisations and individuals will be critical to the success of the draft programme.

6. The draft programme includes a discussion of the reductions in emissions that may be needed in the longer term and explains that the challenge of meeting future reductions should not be underestimated. Restraining emission levels to even a small increase on present levels during the 21^st Century would require major cuts in emissions from developed countries, as well as action by developing countries to reduce growth in their emissions. But developing countries rightly expect economic growth and, to accommodate this, developed country emissions may have to be reduced by more than the 60%-70% that may be needed globally; reductions of as much as 90% may be required. Therefore, in the light of this and new projections which forecast that the UK's emissions will begin increasing again after 2000 and rise even more steeply after 2010, the draft programme looks to the longer term and begins to consider how to make sure that emissions continue to be reduced beyond 2010.

Progress with International Negotiations

7. The Committee recognises that the Kyoto Protocol was a ground-breaking achievement. International negotiations on climate change have continued since Kyoto to try and resolve some of the detailed questions, for example, how the Kyoto mechanisms (emissions trading, joint implementation and the clean development mechanism) will operate and the extent to which carbon sinks (for example, forests) can be counted against targets. An effective compliance procedure also needs to be drawn up to ensure that countries meet their targets. At the Fourth Conference of the Parties (COP4) in Buenos Aires in 1998, Ministers agreed to a comprehensive two-year programme (the Buenos Aires Plan of Action) which set the Sixth Conference of the Parties (COP6) in the Hague in November 2000 as the deadline for decisions on most key issues. COP5 in Bonn in November 1999 reviewed progress to date and agreed to intensify the negotiating process over the coming months so that the COP6 deadline can be met. The Government is playing an active role in the international negotiations and officials will be attending a meeting of the Subsidiary Bodies in Bonn in June 2000 to help in the preparations for COP6.

The science of climate change

8. In the introduction to its report, the Committee has noted that, "Climate change is perceived by Governments as a serious threat" (para 1), and that "we recognise that the subject of climate change is a controversial one, both scientifically and politically. The Committee took no evidence as to whether or not climate change exists, nor – if it does – to what it is attributable. Some witnesses told us of their doubts about the existence or likely scale of climate change and we acknowledge the problems posed by such an issue, where science has not yet provided definitive answers to some critical questions. This study starts from the presumption that climate change may be occurring, and that it may be partially at least attributable to emissions resulting from human activity." (para 4).

9. The draft climate change programme begins by describing what climate change is and why many - not only Governments - are so concerned about one of the greatest threats facing the world today. The scientific evidence is mounting that man-made greenhouse gas emissions are having a noticeable effect on the earth's climate, and concern is growing about the impacts that climate change could have around the world.

10. The global temperature record shows that the earth has warmed by about 0.6^°C during the last century. The extent to which changes in temperature over the last 100 years are due to human activities has been studied by looking at patterns of change across the surface of the earth, and vertically through the depth of the atmosphere. Sophisticated climate models predict a characteristic 'fingerprint' pattern of change in response to increasing greenhouse gas concentrations. Statistical analysis shows that this fingerprint can be detected in observed temperature changes, indicating that at least 50% of the change which has occurred can be attributed to human activities. It also shows that natural effects (solar variability and volcanoes) cannot alone explain the observed warming – the role of greenhouse gases must be invoked too.

11. Independent evidence that the increase in atmospheric carbon dioxide is due to emissions from fossil fuel burning and deforestation comes from changing ratios of the isotopes of carbon in the atmosphere.

12. Future climate change can be simulated by a computer model. The model used by the Met Office's Hadley Centre – a world leader in this field – predicts that, under a 'business as usual' scenario, the earth could warm by about 3^°C over the next 100 years. The graph below shows the forecast temperature change from the climatic mean. It also shows that aerosols (which reflect sunlight) may have a slight cooling effect.

Observed and Predicted Global Temperature Change

This image has been made available as a MS Excel file: Observed and Predicted Global Temperature Change (63kb)

Source: The Met Office's Hadley Centre and the Climatic Research Unit, University of East Anglia.

13. Scientists do not fully understand all the changes that climate change will bring, particularly at the regional level. And, however effective policies are to reduce emissions of greenhouse gases, the world will still experience a significant degree of climate change. This is likely to have far-reaching effects on all aspects of the world's environment, economy and society. The draft programme provides details of what some of these are, and some of the potential effects on the UK.

A UK-Wide Programme

14. The scope and coverage of the UK climate change programme is heavily influenced by the new constitutional framework. The Government retains overall responsibility for the Kyoto target and for ensuring that a programme is put in place to deliver it. However, many of the means by which emissions can be reduced have been devolved to the Scottish Parliament, the National Assembly for Wales and the Department of the Environment in Northern Ireland.

15. The devolved administrations have agreed to join a programme to move towards the domestic goal of a 20% reduction in carbon dioxide emissions by 2010, demonstrating their commitment to tackling climate change. The draft programme is therefore truly a UK-wide programme, and details action being taken by the Government in reserved policy areas and in England, and by the devolved administrations in devolved policy areas.

Response to the Committee's Recommendations

16. The Committee's individual recommendations are dealt with point by point in the following paragraphs. This response does not include details of the action being taken by the devolved administrations.

(a) Alongside the right and proper use of the 'precautionary principle' in taking action to reduce emissions, it is also important to ensure that policies to reduce emissions do not have an excessive cost to the economy and to industry.

17. The Government agrees with the Committee's recommendation. The UK climate change programme is based on a number of principles including the need to safeguard, and where possible enhance, UK competitiveness, and to focus on flexible and cost effective policy options that will work together to form an integrated package. Demonstrating that significant cuts in greenhouse gas emissions can be made without causing economic damage will also be an invaluable means of drawing developing countries into the process in the longer term.

18. The draft programme is a positive response to the serious threat of climate change. The Government recognises the concern expressed by business about the implications of action on climate change for competitiveness. The policies and measures included in the draft programme are designed to be as flexible as possible, with the focus on economic instruments, which will allow business to respond cost effectively. They also reflect the specific circumstances of energy intensive sectors competing internationally. The programme is designed to offer incentives to business to stimulate better energy efficiency, to develop new, low carbon technologies and to exploit the growing international market for more efficient processes and renewable technologies.

19. As the Committee has recognised, taking early action to cut greenhouse gas emissions will bring 'first mover' advantages for the UK economy. Also, by taking a long term perspective at this stage, change can be introduced gradually, minimising the cost of transition and ensuring that the UK is well placed to exploit emerging business opportunities for low carbon goods and services. The draft climate change programme includes measures which will bring short term dividends in improved efficiency and lower costs. There are also a number of measures which are likely to pay longer term dividends, even if they only have a limited impact on the UK's emissions in 2010.

The Kyoto Protocol and the International Context

(b) We wish to commend this and the previous Government for the prominent and positive role they have played within the European Union and in negotiations from Rio to Buenos Aires. We hope that the Government will continue to demonstrate leadership in future negotiations, particularly those to set targets for emissions reductions beyond 2012.

20. The Government appreciates the Committee's commendation for the leading role the UK has played in international negotiations. The Kyoto Protocol states that negotiations on emission reductions beyond 2012 must be initiated by 2005 at the latest, and the UK will continue to play an active role in this process.

(c) We urge the Government to continue pressing for the ratification of the Kyoto Protocol by all Annex I countries. Further, the details of the Protocol must be resolved as soon as possible. In particular, if 'flexible mechanisms' are to be supplemental to domestic action, we believe that a cap must be placed on the contribution they can make to meeting a country's target. However, such a cap must neither be too high, which would permit 'trading in hot air', nor too low, which would act as a disincentive to signatory countries from making use of the mechanisms altogether. The level of the cap must be set with sensitivity, and by mutual agreement of all signatory countries wishing to take part in the trading mechanism.

21. The European Union and its member states will aim to ratify the Protocol at the same time. Before they can do so, they must convert the political deal reached in June 1998 on sharing out the Community's 8% reduction target into a legally binding agreement. At the launch of the draft programme, the Deputy Prime Minister called on all member states to ratify the Kyoto Protocol as soon as possible after COP6, subject to outstanding issues being satisfactorily resolved.

22. Under the Kyoto Protocol, the reductions generated through the 'flexible' or Kyoto mechanisms must be supplemental to action taken at home to reduce emissions. To meet this requirement, the European Union has proposed a 'concrete ceiling' to impose a cap on the use of the mechanisms to meet Parties' Kyoto targets. No agreement has yet been reached internationally on how such a cap should operate.

(d) We urge the UK to press for improved clarity of the status of the 'burden sharing' agreement within the EU. We also believe that a system of penalties for non-compliance should be sought so that all Member States are clear what the consequences would be of failing to meet their targets. An effective and credible system for monitoring emissions throughout the EU must be established to complement any non-compliance mechanisms. We urge the Government to press the European Commission to ensure that every possible action is taken against Member States which fail to meet their targets.

23. EU Member States reached political agreement in June 1998, under the UK Presidency, on sharing out the European Community's Kyoto target. As mentioned above, this must be formalised in a legal agreement before the Community can ratify the Kyoto Protocol. Discussions on the form of this agreement are likely to start after the 6^th Conference of the Parties in November. EU enforcement arrangements will be considered as part of wider discussions on implementation of the EU bubble. The UK will press for robust arrangements to ensure that all Member States deliver their targets.

24. The Government agrees with the Committee that an effective monitoring regime within the Community is essential. New monitoring arrangements came into force in May 1999. Member States are required to report annually to the Commission on their emissions, and the Commission must prepare a report for Council and the European Parliament. This reporting and review is essential for assessing whether Member States and the Community as a whole are on track to meet their Kyoto targets, and for bringing political pressure to bear on those Member States in danger of non-compliance. The Government will work closely with the Commission to ensure that the monitoring system operates effectively.

Targets and Projections

25. Paragraphs 10 and 11 of the Committee's report includes tables that were based on information contained on the October 1998 consultation paper. The draft programme contains updated projections of UK's greenhouse gas emissions. The projections, based on work in progress, model the effect of most existing policies and measures, including for example, the climate change levy, the fuel duty escalator to 1999 and the target to provide 10% of the UK's electricity supply from renewable sources of energy, ideally by 2010. The new projections are detailed in the table below.

New projections of emissions of the greenhouse gases included in the Kyoto target, MtC

Gas	Baseline	2000	2010	2020
Carbon dioxide	168.0	152.2	156.3	164.9
Methane	20.8	14.3	11.5	9.9
Nitrous oxide	18.0	11.8	11.6	11.9
Hydrofluorocarbons	4.1	1.9	3.4	3.9
Perfluorocarbons	0.3	0.2	0.1	0.1
Sulphur hexafluoride	0.3	0.4	0.4	0.4
Total greenhouse gas emissions	211.7	180.7	183.3	191.1
Change from 1990 levels (6 gas basket)		-14.6%	-13.4%	-9.7%
Change from 1990 levels (CO2 only)		-9.4%	-7.0%	-1.9%

1990 has been used as the baseline year for carbon dioxide, methane and nitrous oxide. 1995 has been used as the baseline year for hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride.

26. The new projections reflect the positive action the UK has already taken to reduce its greenhouse gas emissions. They also show that the UK would probably meet its Kyoto target without any further action. However, the gap to the 20% goal is still 22 MtC. The draft climate change programme outlines a range of policies and measures that are intended to move towards the goal and to ensure that the UK meets its climate change targets.

(e) Government Ministers and Departments have shown a lack of clarity in respect of the target of reducing carbon dioxide emissions to 20% below 1990 levels by 2010. This must be remedied as it risks undermining the Climate Change Programme. If the Government is to reach its 20% target, there must be a commitment from all Government Departments and Ministers to its achievement.

27. The Government believes that the draft climate change programme clarifies beyond doubt its commitment to the domestic goal.

28. On the basis of those policies and measures included in the draft climate change programme that can be quantified in terms of their emission reductions, it is estimated that the UK's carbon dioxide emissions will be 17.5% below 1990 levels by 2010. Those policies that cannot be quantified, for example, action by local authorities and public awareness campaigns, could cut carbon dioxide emissions even further and deliver the 20% goal. Annex A provides more details of the proposals.

29. The Government will keep emission projections and estimated carbon savings under review over the coming years. Some policies will undoubtedly change between now and 2010, new initiatives will be introduced, and estimates of the impact of particular policies will improve. The Government will estimate the impact of these changes on the overall programme and decide what action is needed to ensure that the UK continues to make good progress towards the 20% goal.

(f) We recommend that the Government develop a set of emissions reduction targets for the different sectors to deliver the national targets. The targets should be consulted on as soon as possible and reviewed every five years to take account of changing circumstances and new developments.

30. In developing the draft climate change programme the Government focused on cost effective policies that will bring wider benefits to the environment, economy and society. It believes that this approach produces a flexible programme of measures, based around clear delivery mechanisms. The draft climate change programme makes clear that all sectors of the economy must play their part in reducing emissions. It quantifies the carbon savings individual policies and measures are expected to deliver and indicates the Government's current estimate of the contribution each sector could make to the programme. The Government will keep these estimates under review as the programme is implemented, as well as considering the scope for introducing further cost effective measures.

(g) We believe that much greater detail of emissions projections, methodologies and the assumptions used should have been provided alongside the consultation paper. The lack of transparency in the projections and some aspects of their presentation have diminished the quality of responses. We therefore welcome the greater level of detail provided alongside the Draft Programme. We encourage the Government to abandon entirely the double-counting approach in order to identify better the targets of carbon saving measures.

31. The Government thanks the Committee for welcoming the additional level of detail about emission projections and savings that were published alongside the draft programme.

32. The Government recognises the Committee's concern about the clarity of figures in the consultation paper and its views about the "double counting" of the emissions from the energy supply industry. The draft programme aims to address this issue by presenting sectoral emissions in two ways - an "end user" allocation, where emissions from the energy supply industry are allocated to the users of electricity, petroleum products and other fuels; and a "by source" classification in which emissions from the energy supply industry are shown separately. This shows clearly how emissions from the energy supply sector have been treated.

33. Discussion in the draft programme on emissions from particular sectors is based on the "end user" figures. The Government notes the Committee's concern that this distorts the true "business as usual" picture for emissions from those sectors. However, it believes that it would be misleading to present sectoral figures that excluded the impact of the energy those sectors use, and which the key policies for those sectors are aiming to reduce. In order to give a full picture, the draft programme aims to highlight sectoral emissions trends and the impact that changes in the energy supply industry have had on those trends.

Climate Change Strategy

(h) We believe that if the climate change strategy is to permanently reverse the trend of increasing emissions of carbon dioxide, it must provide a clear signal to individuals and industry alike of the need fundamentally to change practices and behaviour.

34. The Government believes that the draft programme provides a clear statement about the level of emission reductions needed to meet the threat of climate changes, the scale of the challenge that lies ahead for the rest of the decade and beyond, and the need for everyone to act. Paragraph 6 of this response indicates that, globally, reductions of perhaps 60-70% will be needed to avoid dangerous climate change and that, for developed countries, reductions of as much as 90% may be needed.

The Transport Sector

(i) We were not able to come to a clear conclusion about the relative position of the UK hauliers against foreign operators but look forward to the publication of analysis from the Road Haulage Forum on this matter. The Transport Sub-committee is now undertaking an inquiry into the Road Haulage Industry and will examine this and other issues in detail.

35. The Government notes this recommendation.

(j) We agree with the Government that the public and political acceptability of fuel duty increases will be assured only if some of the revenues are recycled to give direct benefits to transport users. We urge the Government to make use of the link that it has created between fuel duty increases and transport spending at the earliest possible opportunity.

36. The Committee noted in their report that there was uncertainty about the impact of the fuel duty escalator on emissions of carbon dioxide. The draft climate change programme included refined estimates of the carbon savings attributable to this measure. Taken in isolation, increases in road fuel duties between 1996 and 1999 are estimated to have produced annual carbon savings of between 1 and 2.5 million tonnes of carbon equivalent (MtC) by 2010.

37. In the Pre-Budget Report in November 1999, the Chancellor announced that he would consider the appropriate rate of fuel duties on a Budget-by-Budget basis, taking into account all the relevant economic, social and environmental factors. Given the increase in oil prices since the Pre-Budget Report, the Chancellor decided in Budget 2000 that, other than the automatic inflation rise of around 2 pence a litre, there will be no increase in road fuel duties this year.

38. The Chancellor also recognised the case for investment on the road network and public transport system and, in Budget 2000, he made £280 million available for additional transport expenditure across the UK to tackle congestion hot-spots and modernise public transport.

(k) We strongly support the environmental reform of vehicle taxation and recommend that the Vehicle Excise Duty system be further modified to offer much larger incentives to select more fuel-efficient cars.

39. The Government agrees with this recommendation and Budget 2000 announced a range of measures to encourage the take-up of more fuel efficient models of car, and to ensure that the less cars pollute, the less tax their owners will pay.

40. From 1 March 2001, the reduced rate of Vehicle Excise Duty (VED) for existing cars will be extended from the current threshold of 1,100cc to cars with engines up to 1,200cc; giving a £55 cut to owners of an extra 2.2 million smaller cars. Also from March 2001, all new cars will go into one of four bands based on their rate of carbon dioxide emissions, with 95% of new cars paying up to £70 less under this new VED system than under the rates for existing cars.

(l) We recommend that the Government consider methods of providing greater incentives for the purchase of fuel-efficient cars and a system for removing old, inefficient cars from the fleet.

41. The Government has implemented a number of measures that aim to encourage the purchase of more fuel efficient vehicles. It also continues to assess other potential measures.

42. The Government is firmly committed to using the taxation system to improve the fuel efficiency of new cars. In addition to the fuel duty escalator, which will have an ongoing effect on the cars people choose to buy and the way they use them, and the changes to Vehicle Excise Duty (VED) mentioned above, the Government has also announced a reform of company car taxation. From April 2002, the tax charge paid by employees able to use a company provided car for private purposes will be based on a percentage of a car's price graduated according to its carbon dioxide emissions. The charge will range from 15% of a car's price for those with the lowest emissions to 35% for the highest emitters.

43. The Government is keeping the use of accelerated scrappage schemes under review. Such schemes are primarily aimed at improving air quality and it is not clear that an accelerated scrappage scheme introduced now would have a significant impact on carbon dioxide emissions. This is because, although engine fuel efficiency has improved since the mid-1980s, the overall impact has been small because vehicles have also become heavier to meet changing consumer demands and safety requirements.

(m) We are concerned that the Government is being over-optimistic about the emissions reductions which the ACEA/European Commission agreement will realise by 2010. This could have significant implications for the meeting of national targets.

44. The Government anticipates that significant reductions in carbon dioxide emissions from cars will be delivered through the voluntary agreement between the European Commission and the European car manufacturers (ACEA) to reduce average carbon dioxide emissions from new cars to 25% below existing levels by 2008. Similar agreements have also now been reached between the European Commission and the Japanese Automobile Manufacturers Association (JAMA) and the Korean Automobile Manufacturers Association (KAMA). It recognises the Committee's concern, however, that other initiatives will be needed to support and reinforce the aims of the voluntary agreements.

45. Even though the fuel duty escalator will now be set on a Budget by Budget basis, it is assumed that it will have an ongoing effect on people's decisions. As mentioned above, the Government has made changes to Vehicle Excise Duty and to company car taxation to encourage people to buy more fuel efficient cars. Furthermore, an additional element of the EC's strategy is the fuel economy labelling scheme. This scheme is aimed at providing potential buyers of new cars with information about the fuel consumption and carbon dioxide emissions. Labels will soon be attached to cars and information will be contained in posters displayed at points of sale, in a guide for all the car models on sale in each member state and in other promotional literature. The Directive is expected to be implemented by the end of 2000, but the majority of new cars sold in the UK should be labelled before then under a scheme put in place by the Society of Motor Manufacturers and Traders.

46. Since the consultation paper was produced, the Government has looked carefully at the modelling work that underpins the carbon saving estimates included in the draft programme. It now estimates that the package of voluntary agreements, the changes to Vehicle Excise Duty and the reform of company car taxation will result in savings of around 4 MtC by 2010. The Government will continue to keep these estimates under review, and it will closely monitor the effectiveness of the voluntary agreements and the other initiatives mentioned above as time goes by, particularly in the light of the information which will result from the European scheme to monitor the effect of the voluntary agreements across member states. The CO₂ Monitoring Decision requires members states to collect and transmit to the European Commission detailed information on the number and characteristics of new passenger cars registered. The information needs to be split by manufacturer, fuel type, carbon dioxide emissions, mass, maximum net power and engine capacity.

47. In the same paragraph of their report, the Committee noted that a witness commented that "the Government has produced rather high estimates of the savings which could result from better enforcement of speed limits" (para 31). The draft climate change programme does not include a quantified estimate of the potential carbon savings. However, it is possible that some savings will accrue from the Government's review of speed policy as part of the overall Road Safety Strategy. The Government would expect improved management of traffic speed, particularly on faster roads, not only to help improve road safety but also to contribute to a reduction in carbon dioxide emissions from vehicles.

(n) We welcome the Government's commitment to examine the case for taxes on aviation fuel or other climate-related charging measures but believe it is essential that any measures are introduced at a global level.

48. The UK will continue to work through the International Civil Aviation Organisation to explore possible policy options for reducing global emissions from aviation.

The Energy Supply Industry

49. The Committee notes in its report that, "one of the principal barriers to the development of greater combined heat and power (CHP) and renewable capacity is the delays and problems of gaining planning permission for new plant" (para 36). The Government agrees that the planning system has an important role in helping to deliver its targets and goals for CHP and renewable energy in particular. A positive, strategic approach to planning for renewable energy is needed from the regional level downwards, with appropriate provision made for development in local authorities' plans.

50. In order to promote this strategic approach from the regional level downwards, the Government Offices for the Regions are initiating work to prepare regional assessments and targets for renewable energy provision based upon - and, where necessary, updating - existing resource studies. On 9 February 2000, the DETR published Guidance on Preparing Regional Sustainable Development Frameworks. The guidance indicated that the Government hopes that the frameworks will draw upon this work and elaborate a regional approach to renewable energy, including regional targets which flow from the assessments of each region's capacity to generate electricity from a range of different sources. The Government would like to see frameworks in place in all regions by the end of 2000.

51. The frameworks will work alongside Regional Planning Guidance (RPG) and Regional Development Agencies' Economic Strategies in promoting sustainable development. Therefore, it is envisaged that RPG will take forward in land-use terms a region's strategy for delivering renewable energy targets by defining broad locations for renewable energy development and setting criteria to help local authorities select suitable sites in their plans. The Government is encouraging regional planning bodies to set targets in RPG, where sensible to do so, for the structure plan and unitary development plan areas within the region consistent with the regional targets provided by the regional sustainable development frameworks. Advice on this will be set out in the final version of the revised Planning Policy Guidance (PPG) note 11: Regional Planning. This is due to be published shortly.

52. Together with the national planning policy guidance in PPG 22: Renewable Energy, RPG – as taken forward through structure plans and Part I unitary development plans - will provide a strategic framework for policies and proposals for renewable energy development in local plans, including the identification in those plans of suitable sites. This, in turn, will feed through to decisions on individual planning applications. Taken as a whole, this package of measures should enable local communities to have a say both as to the type of renewable energy best suited to their area and where it should best be located.

(o) We are concerned that policies to ensure the development of combined heat and power are not yet implemented. However, we do welcome the Government's commitment to a target of 10,000 MW capacity by 2010. Given the lead time and the length of investment cycles involved, we urge that the Government work to remove the remaining barriers to CHP as quickly as possible.

53. The Government is committed to working closely with industry and other stakeholders to remove unnecessary barriers to the wider uptake of CHP. The Government has exempted good quality CHP from the climate change levy, and also from business rates. It is to be eligible for Enhanced Capital Allowances under the climate change package of measures announced in Budget 2000. The Stricter Consents Policy limiting new gas-fired generation made special provision for CHP. This has resulted in over 1,000 MW of CHP being authorised, with a further 1,700 MW of proposals under consideration. When the new Electricity Trading Arrangements are in place and the stricter consents policy is relaxed, the Government will continue its strong support for CHP, and has announced that it will continue to expect developers to explore the opportunities to use CHP.

54. The Government has ensured that the New Electricity Trading Arrangements provide for the operation of CHP. Moreover, the new mechanism provides new business opportunities through the potential for many CHP installations to generate electricity for export sale during peak electricity demand times, and provide further income to CHP operators. The DETR is also strengthening the information and advice to business, with the setting up of a 'CHP Club' under the Energy Efficiency Best Practice Programme.

55. The Government will shortly consult on a draft CHP strategy, pulling together these and other initiatives. The Government is confident that the measures will deliver its CHP target of at least 10,000 MWe of capacity by 2010. Additionally, the Utilities Bill provides a power for the Government to secure additional use of CHP through obligations on energy supply or distribution utilities to encourage or support CHP development, equivalent to the provisions for the promotion of electricity generation by renewables. However, the Government believes that the powerful mechanisms described above will secure its CHP target, and does not envisage this extra mechanism being necessary.

(p) We note that the Government is suggesting a renewables percentage obligation on all electricity suppliers in its draft Utilities Bill. We welcome this, but suggest the Government takes into account the call for clear market signals for the industry and makes this proposal clear and enforceable.

56. The new Obligation on suppliers will in effect provide a guaranteed market for renewable energy until 2025 – a clear, unequivocal signal to the industry of the Government's commitment to renewables. The Government is also considering the possibility of some limited additional support for offshore wind and energy crops which are the promising, longer term technologies.

57. The support given under the Non Fossil Fuel Obligation (NFFO) – with 750 MW of commissioned capacity to date – has provided a basis for the future development of the renewable energy industry. The Government will continue to honour existing NFFO contracts. The Government has also increased spend on research and development of renewable energy, with provision for £43.5 million spend over 1999-2002.

58. The Utilities Bill includes the broad framework enabling the Government to impose the new Obligation. Before an Order setting the level of the Obligation is laid before Parliament, there will be a need to consult industry, consumers' representatives and others, to ensure that an Obligation consistent with achieving 10% of the UK's electricity supplies from renewable sources by 2010 would not impose an unacceptable cost on consumers.

(q) We urge the Government to commit itself to achieving a 20% renewables target by 2010 and to set out a clear strategy as soon as is practicable as to how the target will be achieved. Further, to give a clear signal to industry, a target of 50% for the proportion of electricity supplied by renewables by 2030 should be established. This target will require more support for long-term renewable options along with greater funding to bring viable options to the market.

59. The Government prefers a step-by-step approach. The current proportion of the UK's electricity generated from renewable sources is under 3%. The Government must take account of the current state of technology and future prospects, and it must avoid unreasonable impositions on consumers. Against this background, the Government's existing targets of 5% by 2003 and 10% by 2010 are challenging but it is committed to these and it will reassess the situation before 2010.

60. The Government's research and development programme continues to explore opportunities that may emerge both in the decade ahead and in the longer term. But these opportunities are difficult to assess and the Government does not believe that it could realistically set targets of 20% by 2010 or 50% by 2030.

The Domestic Sector

(r) We believe that energy-efficiency in the domestic sector should be made more of a focus in the climate change strategy. Domestic energy-efficiency measures bring secondary benefits of warmer homes and improved living conditions for some of the poorest in society. New regulatory arrangements are predicted to lead to lower fuel prices for domestic users and consumers should be encouraged to use the money saved to improve the energy-efficiency of their homes.

61. The Government agrees with the importance of taking action to reduce emissions in the domestic sector, and that it offers one of the main 'win-win' options in its climate change strategy. The draft climate change programme outlines the policies and measures that are being introduced within a framework which will ensure that householders see the benefits of energy efficiency and start to install energy efficiency measures of their own accord. The Government agrees that this is an area where action to cut emissions can bring real benefits to people, especially those on low incomes. The draft programme included details of new Energy Efficiency Standard of Performance which should help some householders to realise these benefits (see below).

62. Increasing the take-up of energy efficiency measures in the home is, however, a challenge. It is difficult to influence the decisions of millions of individuals and their response is hard to predict. People can be reluctant to introduce energy efficiency measures, even when these are clearly cost effective for a variety of reasons – the up-front investment required, other spending priorities, simple inertia, or an unwillingness to have workmen in their homes. There is also uncertainty about the proportion of energy efficiency improvement which they will choose to take as increased comfort, rather than lower energy consumption. This is a particular issue for measures aimed at the fuel poor.

63. There are four main strands to the Government's work to improve energy efficiency in homes in England. (a) The Government wants to ensure that advice and information on energy efficiency is easily available to everyone, so that householders are aware that energy efficiency can make them more comfortable, save them money and help the environment. They also need to understand the costs and benefits of different energy efficiency measures. (b) Where necessary, incentives are provided to encourage the installation of energy efficiency measures. (c) Where appropriate, regulations are introduced to improve energy efficiency. And (d) the Government is working with others to provide a framework for the improvement of domestic energy efficiency and to create a climate in which energy efficiency becomes a routine, accepted part of life.

(s) Given the size of the fuel poverty problem and the large potential for energy-efficiency in the domestic sector, we believe that the overall scale of measures to improve energy-efficiency should be expanded by a factor of at least two. Without a more ambitious programme, the Government risks merely tinkering with a serious social and environmental problem.

64. The Government will ensure that energy efficiency improvements in the domestic sector make a significant contribution to the climate change programme. The draft programme suggests that the domestic sector provides scope for savings of 4-5.3 MtC each year by 2010. This is an estimate of the achievable savings from energy efficiency measures that are cost effective, in addition to savings made in the normal course of business.

65. These figures compare very well with the 6.1 MtC suggested in research carried out for the Electricity Association and mentioned by the Committee. The 6.1 MtC figure relates to the maximum potential savings from all cost-effective energy efficiency measures – assuming that every household installs all the measures that are cost effective. The Government's figure is lower as it makes allowance for human nature – taking account of the fact that not everyone will install every cost effective measure in their home.

(t) We are pleased that the Energy Efficiency Standards of Performance scheme is to be extended to include gas and look forward to further expansions of this scheme in future years.

66. The Government agrees with the Committee's comment about the importance of extending the Energy Efficiency Standards of Performance (EESOP) scheme to gas as well as electricity suppliers. On 9 March 2000, the Government also published proposals for a new Energy Efficiency Standard of Performance (EESOP) covering the period 2002-2005. The proposed "EESOP4" gives particular priority to householders receiving health and income benefits and pensioners, continuing and strengthening the social focus of the present EESOP scheme. The new shape of EESOPs has been developed in close consultation with the energy industry. In these discussions, the energy companies have demonstrated their commitment to playing a part in achieving the UK's climate change objectives and in helping their consumers to reduce their energy bills.

(u) We look forward to the results of the review of Building Regulations but believe that the process is taking far too long. We recommend that the final stages of the review be accelerated, with changes made to the Regulations as soon as is practicable. We believe that the Regulations should be made more stringent in respect of energy-efficiency for new buildings. We further recommend that the Department should examine the possibility of introducing regulations which cover existing buildings whenever renovation or conversion takes place.

67. The Government's review is being conducted very openly, with much consultation along the way on what could be done with all those having an interest in more efficient buildings. This has taken more time than originally anticipated but the Government believes the effort has been worthwhile. It is a statutory requirement to consult widely on any amendment proposals and consultations on a first stage of proposed amendments will begin shortly. The Government will proceed at best practical pace following the consultation period during the reconsideration of the proposals in conjunction with the Building Regulations Advisory Committee. This will clearly take some time but this further process is essential.

68. The aim of the review is to see what further contribution the Building Regulations can make towards achieving reductions in emissions whilst remaining proportionate, allowing design flexibility and avoiding unacceptable technical risks. The Government is looking to improve the performance standards for new buildings and those that already apply when alteration and conversion work are undertaken. Additionally the consultation document will include proposals for capturing more types of renovation work, although they are limited by the existing powers in the Building Act 1984. The consultation document will also include current thinking on possible future amendment measures.

(v) We recommend that the Government explore the need for minimum standards of competency for those contractors involved in improving the energy-efficiency of houses. The Government should also consider carefully the need for better dissemination of information and training to ensure that there is a growing force of well-trained people capable of undertaking energy-efficiency work.

69. Standards are already set for many contractors involved in improving the energy efficiency of houses. For example, the cavity wall insulation industry has its own training requirements which installers must undergo as well as providing a guarantee to householders on the quality of work. In the gas heating industry, installers must have passed the Corgi requirements before carrying out work. The gas boiler industry has also set up its own "Benchmark" scheme to further improve the quality of installations.

70. The Government's main energy efficiency programme for England, the Home Energy Efficiency Scheme (HEES), also sets high standards of workmanship and customer care. Work carried out under the scheme is monitored by the independent managing agent and installer companies are removed from the scheme where they fail to meet the required standards. This monitoring process will be further enhanced when New HEES is launched on 1 June 2000 when a second level of monitoring will be introduced to ensure that the quality assurance systems operated by scheme managers are effective.

71. The importance of contractors providing consistent and reliable standards of work has also been recognised by the Energy Saving Trust in running its DETR funded programme. The Trust has developed a network of 'Energy Efficiency Professionals' who have to meet certain criteria and standards (which are currently under review). Qualifying criteria vary according to the type of work, in the case of cavity wall insulation, for example, the installer must be BBA/BSI approved and must offer a CIGA guarantee.

72. Energy Efficiency Professionals follow the Trust's 'Energy Efficiency Code of Practice' which requires them to provide a high level of customer service, to carry out work competently and responsibly and to promote Energy Efficiency recognised measures within the professional's specialist field.

(w) We are disappointed that the financial institutions have so far failed to offer 'green' mortgages which would enable energy-efficiency improvements to be made to a property when it is sold. We urge the Government to work with the Council of Mortgage Lenders to develop suitable loan schemes.

73. The Government welcomes the development of Green Mortgages, although the details of schemes are a matter for the mortgage lenders. The Government also recognises the value of encouraging improvements to the energy efficiency of a property at the time it is sold and homebuyers are taking decisions on expenditure on the fabric of their home. Hence the Government supports Clive Efford's Energy Efficiency Private Member's Bill, which would require mortgage lender's valuation surveys to include an energy efficiency survey, with information on measures for improvement.

74. In addition, the Government's proposals for reforms to the home buying and selling process in England and Wales would require people marketing homes for sale to provide a pack of standard information (seller's pack) for potential buyers, including an energy efficiency survey with advice on improvement. The seller's pack is currently being piloted in Bristol.

(x) We regret that the Government has not given more consideration to the opportunities offered within EC legislation to secure a reduced rate of VAT for the installation of energy saving materials amongst other services. We urge the Government to make a genuine effort both to ensure the start of the promised review of reduced rates in the 6th VAT Directive and to achieve real progress with respect to energy saving materials.

75. Real progress has been made in achieving reduced rates of VAT on energy saving materials. In Budget 2000, the Chancellor announced that VAT on energy saving materials would be reduced from 17.5% to 5% from 1 April 2000. The reduction covers the supply and installation of insulation, draught stripping, hot water and central heating system controls and solar panels. Goods purchased for DIY installation are excluded. That is why the Paymaster General has written to the European Commission for the second time, to urge them and other member states to consider allowing a reduced VAT rate for DIY energy saving measures.

(y) We encourage the Government to explore further options to increase the share of emissions reductions in the public sector.

(z) To ensure that the public can be persuaded of the need to take action to reduce their own emissions, we believe that the Government must make greater efforts to reduce emissions from the public sector. Green procurement practices and transport plans should be established as quickly as possible and widely publicised. Ministers must also try and demonstrate environmentally-responsible behaviour whenever possible.

76. While the public sector accounts for a relatively small percentage of the UK's total greenhouse gas emissions, the Government agrees with the Committee that it has a critical role to play by leading by example. The draft climate change programme sets out details of action being taken and identifies areas where more could be achieved. The Government has also begun to work with other public sector organisations to develop an action plan for delivering carbon savings from this sector.

77. The strategy for the Government estate in England is to ensure that energy efficiency and other environmental issues are fully taken into account in Government operations. The Government's existing target is to improve the energy performance of buildings on its own estate by 20% by March 2000 (against 1990-1991 levels). Departments are well on their way to meeting this, achieving an 18.1% improvement by March 1998.

78. The Government has set new targets for energy management on its own estate from April 2000. The first of these is to achieve a further 1% per annum improvement in performance. The target will be measured in terms of greenhouse gas emissions from buildings rather than energy to provide a better fit with the climate change programme. The second target is for departments to benchmark all office buildings on the Government estate with more than 50 occupants by March 2001. The benchmarking process will enable the Government to measure its progress against the energy performance of the UK building stock as a whole. The third target is for departments to review the system changes needed to collect information on greenhouse gas emissions from official travel by March 2000.

79. Green Ministers have also agree that they will continue to do what they can to reduce energy consumption and contribute to an annual reporting exercise on energy use to monitor progress. They are also considering a Government-wide target on purchasing renewable energy.

80. The Government aimed to have green travel plans in place for all key Government buildings by March 2000. Most departments have met this target. The Government's guidance on local transport plans in England also advises local authorities that they should also lead by example and develop travel plans for their own major sites.

81. Finally, the Government is working with local authorities, hospitals and schools to ensure that, where possible, they also do what they can to reduce emissions. In total, the Government estimates that 0.5 MtC could be saved from the public sector in 2010.

(aa)The consultation document fails to recognise that the public remains uninformed and unconvinced of the need for personal action on climate change. We do not believe that the existing publicity campaigns will be effective in changing people's behaviour. In many cases, their profiles are low and their messages ineffective, largely as a result of inadequate funding. A sophisticated and targeted approach is required to change people's behaviour along with a much greater commitment from Government to 'doing its bit'.

82. The Government agrees that the public remains uninformed and unconvinced of the need for personal action on climate change. The majority of the general public are not aware that there is a link between their use of energy in the home/transport and climate change. That is why the Government substantially enhanced the budget devoted to the 'are you doing your bit?' campaign in May 1999 to create awareness of the link and motivate people to take action. It also liaised with the Energy Saving Trust to ensure that the emphasis of their "Energy Efficiency" campaign was complementary, reinforcing the benefits of energy saving action by stressing environmental benefits as well as financial and comfort benefits.

83. Both campaigns have been very successful in stimulating high levels of awareness among their core target audiences. Having achieved that and enthusiastic support from third parties, the challenge now is motivating people to take action.

84. 'are you doing your bit?' activity in 2000/01 is being geared up to make the call to action to individuals much stronger, demonstrating both the personal benefits of action and the wider macro benefits of cumulative action, showing people that their small simple actions can have a significant effect. The EST's "Energy Efficiency" campaign will make energy efficiency an issue, signpost consumers to incentives and engage them at point of sale through a product endorsement scheme designed to promote the uptake of efficient appliances.

85. The Government believes it has addressed the Committee's concerns on the scale of its environmental campaigns. They are now on a par with the money made available on road safety and drink drive publicity, but all face severe competition from the many other advertisers trying to capture public attention. Culture change does not come quickly or cheaply and campaigns often need several years of high profile activity to have effect.

86. The Committee noted informally that they had not seen 'are you doing your bit?' campaign activity. The main target audience for this campaign is women with children. A short report of campaign activity and achievements is at Annex B.

The Business Sector

(bb)We recommend that the Government negotiate with the largest landlords of commercial property to improve the energy-efficiency of their properties. Negotiated agreements should be sought to reduce energy use by at least 25% by 2010.

87. The Government recognises that energy use in the built environment accounts for nearly half the total UK energy consumption. There are significant opportunities for energy saving across the non-domestic buildings sectors and these are being promoted with the help of the Energy Efficiency Best Practice programme. One particular initiative which the Government is keen to explore further, in partnership with commercial landlords and their representative bodies, are voluntary agreements to cut out energy waste and achieve carbon savings. In February this year, the Government launched the first voluntary agreement of its kind with the commercial sector – building on the successful voluntary agreement with the Chemical Industries Association. The commercial buildings agreement is with the Hotel and Catering International Management Association and aims to cut 15% of carbon emissions by 2010. The Government will be exploring the scope for similarly challenging agreements with other commercial sectors.

(cc)We conclude that the Integrated Pollution Prevention and Control Directive will play a significant but partial role in reducing emissions from the business sector. We are not convinced that Government thinking is well advanced on the details of implementing IPPC to deliver energy-efficiency savings and urge it to ensure that the savings approach the 'maximum' suggested in the consultation of 3 MtC.

88. The Government agrees that the IPPC Directive has a serious role to play in reducing emissions. It is currently exploring the best way of combining the energy efficiency requirements of the Directive and the savings obtainable through the negotiated agreements under the climate change levy into a single, coherent regime, and the Government will bring forward specific proposals at it starts to roll out IPPC later this year.

(dd)We do not believe that the Climate Change Levy meets the tests of good taxation. The system of exemptions, negotiated agreements and reduced rates has produced an extremely complex and cumbersome market instrument which will result in a relatively modest emissions reduction.

89. The climate change levy package is estimated to save at least 5 MtC by the year 2010 - 2 MtC from the levy itself, 2.5 MtC from the negotiated agreements and 0.5 MtC from other energy efficiency measures in the levy package. The levy therefore forms an important part of the UK's draft climate change programme.

90. The Government does not accept that the climate change levy fails to meet the tests of good taxation, or that it is complex or cumbersome. The levy proposals have been developed in an open and consultative way, firstly though the work of Lord Marshall's task force and then through the extensive consultation exercises that followed the announcement of the levy in Budget 1999. The views expressed by business and other interested parties have helped to refine the design of the levy. Indeed, many features of the levy, such as the exemption for "good quality" CHP and electrolytic processes have been specifically requested by business.

91. The climate change levy is designed to be revenue neutral for the private sector as a whole - there will be no net financial gain for the public finances. Moreover, the levy package is expected to be broadly neutral between manufacturing and service sectors. The revenue raised will be recycled back to business through a 0.3 percentage point cut in employer's National Insurance Contributions and £150m of additional support for energy efficiency measures. The cut in employer NICs will help boost employment opportunities whilst the additional support for energy efficiency measures will help stimulate the development of new energy saving technologies.

(ee)We welcome the protection which the system of Climate Change Levy rebates and negotiated agreements will offer to energy-intensive industries.

92. The Government welcomes this recognition.

(ff) We concur with the Trade and Industry Select Committee that the use of Integrated Pollution Prevention and Control to define which industries are eligible to enter into negotiated agreements and receive rebates from the Climate Change Levy is "likely to create anomalies and inequities which will serve only to discredit the levy." We urge the Government to adopt a simple, rigorous and equitable approach to define energy-intensive industries eligible for agreements and rebates.

93. The IPPC Directive has a clear rationale in that sites covered by Directive have to operate in an energy efficient manner, a requirement to which other non-IPPC sites are not subject.

94. The Government invited suggestions for alternative eligibility criteria which would target the relief of energy intensive sectors exposed to international competition. But none of the alternative proposals submitted so far satisfied all the criteria set out in the Pre-Budget Report. Definition of eligibility for the negotiated agreements will therefore follow the lines of the IPPC Directive, formally defined as installations with processes listed in Parts A1 and A2 of the draft Pollution Prevention and Control (PPC) regulations.

95. A final consultation paper on the PPC Regulations has recently been issued by the DETR. As part of these wider consultations on the PPC Regulations, the Government will consider which processes currently covered by Part B of the PPC Regulations should, given their environmental effects, be more appropriately regulated under Part A2. The Government's objective is to lay the Regulations in Parliament before the summer recess.

(gg)We are concerned that the Climate Change Levy will have a negative impact upon small and medium-sized businesses and urge the Government to pursue schemes which alleviate this problem by targeting information and resources at these businesses.

96. The Government fully recognises that small and medium sized businesses will need help in order to respond positively to the energy price signal inherent in the climate change levy. Before the levy was first announced in March 1999, the Government launched an energy and environmental helpline to provide impartial information and advice for businesses and SMEs in particular. The helpline can also offer, where appropriate, site visits to advise on the scope for energy savings. In addition, through the Energy Saving Trust, the Government funds energy saving initiatives specifically for SMEs. These are complementary to the information and advice available through the Government's Energy Efficiency Best Practice programme.

97. Furthermore, as part of the climate change levy package: (i) £50 million per year is available to support the promotion and development of energy efficiency and renewable energy measures for business, especially SMEs; and (ii) the enhanced capital allowances scheme providing 100% first year capital allowances for eligible energy efficiency measures is intended to help businesses, including SMEs, bring forward their energy efficiency investment plans.

(hh)We believe an upstream carbon tax would have been simpler than the proposed Climate Change Levy but we are concerned about the implications this would have for fuel poverty. We also believe that there remains an opportunity for the rates of the levy to better reflect the different carbon content of fuels and urge the Government to bring forward proposals to do this.

98. The initial rates of climate change levy will be based on the energy content of the different energy products. Current electricity pool arrangements mean that is only possible to determine carbon content of electricity as broad average with a 'downstream' tax. However, the Government has said that it will keep under review the basis for setting climate change levy rates, in light of developments in electricity trading arrangements.

(ii) We welcome the Government's decision to exempt renewable sources from the Climate Change Levy.

(jj) We welcome the Government's decision to exempt 'good quality' combined heat and power from the Climate Change Levy.

(kk)We welcome the Government's plans to put £150 million from the total Climate Change Levy revenue towards energy-efficiency measures. However, we recommend that this amount be increased substantially in future years, with a sizeable fraction put towards helping small and medium-sized businesses overcome the various barriers to improving their efficiency.

99. The Government welcomes these three comments by the Committee and notes the recommendation in paragraph (kk).

(ll) We are concerned that the negotiated agreements are not open to public scrutiny and recommend that the details of draft negotiated agreements between Government and energy-intensive industries be made publicly available.

100. It would not be appropriate to make details of the negotiated agreements publicly available whilst they are still being negotiated. The Government plans to make them publicly available once they have been finalised.

Costs and Competitiveness

(mm) Some sectors will face difficulties and short-term concerns over competitiveness, but this should not prevent the development of a climate change strategy. We believe that a well-designed strategy should deliver 'gain not pain' for the economy as a whole. An ambitious set of climate change policies should offer employment benefits and give the UK significant 'first mover' advantages in a number of industries. It is also important to recognise that there are significant costs associated with not doing anything about climate change.

101. As mentioned above, the need to maintain, and where possible enhance, the UK's competitiveness is at the heart of the climate change programme. The Government has concentrated on those policies and measures that will being wider benefits to the economy, to society and to people's health, as well as to the environment. It also agrees with the Committee that there are significant 'first mover' advantages to be had, and both the 20% domestic goal and the scale of the draft climate change programme are intended to ensure that the UK reaps these benefits.

102. A draft Regulatory Impact Assessment was published with the draft programme. It does not attempt to estimate the cost of the total climate change programme as this would be extremely difficult to do, not least because the different policies that make up the programme are all at different stages of development. The draft RIA therefore provides a strategic, qualitative overview of the potential costs and benefits of the programme as a whole. It also looks at the programme's potential impacts on the environment, particular groups of society, business and health.

103. The Government agrees with the Committee that the potential economic, environmental and social impacts of climate change could be huge.

The Pace of Development of Policy

(nn)We recognise the need to consult about climate change strategy but are disappointed that the final Climate Change Programme is taking so long to finalise. Nevertheless, policy is developing and we encourage the Government to build rapidly upon the progress made to date and maintain the momentum already established in some sectors.

104. The Committee will appreciate that, due to the nature of climate change and the number of different interests involved, it takes time to consider all the information fully and to make sure that everyone is involved in the development of policy. The Government and the devolved administrations have been keen to ensure that everyone, especially local government, business and other organisations are fully consulted on the strategy as it develops. They will be crucial players in the delivery of many of the policies and measures included in the programme. It is worth noting that only two other member states of the European Union, and few other developed countries, have published programmes that show how they will deliver their Kyoto targets. The Government and the devolved administrations are aiming to publish the final programme later this year, ideally before COP 6.

Climate Change Policy Beyond 2010

(oo)We urge the Government to continue researching the impacts of climate change and to use this to develop a strategy for adaptation. We note the start made on this in the Draft Programme. If future costs are to be minimised, it is critical that changes are made in some policy areas, for example land-use planning in coastal areas and flood plains.

105. As the Committee notes, the draft programme for the first time looks at what the UK may need to do to adapt to the impacts of the projected climate change. The Government is keen to ensure that national adaptation strategies are developed as soon as possible.

106. The Government agrees that the land use planning system will be important in helping the UK to adapt. It is therefore preparing a good practice guide on climate change planning to help those involved in land use planning to focus on the role of the planning system in responding to climate change issues. The guide will, for the first time, bring together information about the part that the planning system can play in adapting to the unavoidable impacts of climate change with planning guidance that can contribute towards reducing future greenhouse gas emissions.

(pp)We must not allow the UK to stumble towards the year 2010 commitments without a clear idea of how emissions will continue to be reduced beyond that date. We believe that the climate change strategy must set in train policies which will start to put all sectors onto a radically more sustainable course. This means giving clear signals to industry so that it can invest with confidence and working towards achieving a 'behavioural transformation' in the way individuals and society operate.

107. The Government shares the Committee's view on the importance of looking beyond 2010 to the more challenging reductions the UK will need to make in the future. By setting the 20% goal, the Government is signalling the need to move beyond the Kyoto target. The draft programme aims to start to prepare the UK for making the transition to a sustainable, low carbon economy. It includes emission projections for 2020 to highlight the size of the task facing the UK and sets out details of the emission reductions that will be required globally in order to stabilise carbon dioxide levels in the atmosphere at a level.

108. The draft programme includes instruments which give signals about the long term direction of policy, offer an incentive for change, and aim to help organisations to innovate and adapt. The climate change levy and carbon trading will effectively place a price on carbon, providing an incentive to reduce emissions and develop the more carbon-efficient products and processes that will be needed in the longer term.

Annex A: Summary of the UK's draft climate change programme

Sector	Measure	Comment	Saving (MtC)
Business	Climate change levy, including exemption for CHP and renewables	In projections (2 MtC saving)
Transport	Fuel duty escalator to 1999	In projections (1 to 2.5 MtC saving)
Energy Supply	10% Renewables	In projections (around 2.5 MtC)
Business	Climate change levy agreements with energy intensive sectors/Implementation of IPPC	Carbon savings from first wave of agreements with energy intensive sectors. Negotiations on other sectors in progress	2.5
Business	Energy efficiency measures under the climate change levy package	Actual savings will depend on final design and take-up Savings additional to price effect of the climate change levy and exemptions included in the baseline projections	0.5
Business	Voluntary reduction targets through first stage of an emissions trading scheme	Depends on sectors brought into the scheme	0.5-2
Business and Domestic	Reform of building regulations (England and Wales only)	Review in progress	At least 0.25
Transport	Voluntary agreements on CO2 from cars and impact of changes to company car taxation and vehicle excise duty	Details of changes to company car taxation still under discussion, but unlikely to change total carbon savings significantly	4
Transport	Low intensity implementation of integrated transport white paper (ITWP) measures (England only)	Illustrative scenario. Transport Bill contains powers for a number of measures in the ITWP	0.6
Transport	Additional savings if there is high intensity implementation of ITWP measures by local authorities (England only)	As above	2.4
Transport	Additional savings if there is high intensity implementation of ITWP measures in other areas, eg. rail investment (England only)	As above	Up to 0.3
Domestic	Domestic energy efficiency (including impact of new EESOP)	Scope for savings from cost effective energy efficiency measures	2.7-3.8
Domestic	Action to encourage replacement of community heating systems	Identified potential	0.9
Domestic	New HEES	Programme announced	0.2
Domestic	Appliance standards and labelling	New labels introduced since 1995	0.2-0.4
Agriculture, Forestry and Land Use change	Afforestation	Continuation of current rate of growth	0.6
Public sector	New central Government, schools and NHS targets	Programme to be agreed	0.5
Total reduction (MtC)			17.6
Total % reduction in greenhouse gas emissions			21.5%
Total % reduction in CO2 emissions			17.5%
Examples of additional action not quantified at this stage	action by devolved administrations housing expenditure by local authorities improved management of traffic speed action by local authorities voluntary carbon offset initiatives public awareness campaigns		Additional carbon savings

Annex B: About the 'Are You Doing Your Bit?' campaign

Launched by the Deputy Prime Minister John Prescott in 1998, the "are you doing your bit?" campaign is designed to communicate elements of sustainable development to people. It encourages small but important behavioural changes in our everyday actions to benefit both ourselves and the local and global environment.

The campaign focuses on four priority areas:

• transport - with links to air quality and health, reinforcing and linking with both campaigning and industry partners such as Travelwise, Don't Choke Britain, the Pedestrians' Association and the Society of Motor Manufacturers and Traders;
• climate change/energy efficiency - reinforcing the link between individual actions and global warming and supporting the activities of the Energy Saving Trust;
• waste - reinforcing national waste strategy messages and Going for Green's theme month and providing support for the forthcoming National Waste Awareness Initiative.
• water use - linking with Going For Green, water companies, and equipment manufacturers.

Creative Approach

May 1999 saw the expansion of "are you doing your bit?" with activity designed to substantially increase the campaign's national presence and awareness. The campaign approach was led by a series of memorable award winning TV ads supported by national radio, consumer press, roadside posters and bus sides; and backed by a strategic campaign extension support programme.

In 2000/01, we wish to build on initial awareness and motivate people to act. Our advertising and campaign extension work will contain stronger calls to action, stressing both personal and environmental benefits, while sales promotion - a new arm of the campaign – will seek to engage individuals at point of sale through consumer incentives and provide the campaign with a greater legacy.

Achievements in 1999/2000

Notable highlights include:

• high levels of public awareness with 9 out of 10 people recognising the campaign; and prompted awareness of the logo/slogan up from 40% to 59%;
• more than £2million worth of sponsorship secured;
• more than £2million worth of free TV exposure;
• 750 media features including almost 9 hours of broadcast air time, a national tie up with the Daily Express and Classic FM and LBC in London;
• national exposure of the 'are you doing your bit?' logo in Boots stores;
• reinforcement of the campaign brand and messages in over 50 companies and 150 local authorities;
• widespread use of the campaign web site with over 25,000 visitors to the site;
• dissemination of more than 50,000 water saving devices in response to campaign promotions; and
• more than 30,000 visitors to the campaign's regional road show tour which visited 23 locations during August to October and generated 253 media features.

The campaign promotes joined up Government, with close links agreed with DVLA, who are reinforcing the campaign brand and sensible driving messages in all their publications aimed at motorists. The campaign is also increasingly featuring as the banner in Greening Government initiatives and heads all our own internal staff awareness initiatives.

The increasing adoption by local authorities of the campaign brand and messages is also helping to ensure consistency of messages at national and local level.

Activity in 2000/01

Advertising

Advertising plans for 2000/01 comprise a mix of TV, radio and press, primarily magazines. Our first burst of TV advertising commences in early May, and runs through May/July. Radio also runs initially in June/July, primarily focussing on transport messages. Radio adverts will also be used tactically to support the regional roadshow. To help build presence, press advertising will run simultaneously with either TV or radio, leading on transport messages in spring/summer consumer magazines.

Campaign Extension

Our aims for campaign extension are to develop an imaginative programme of promotional support to add value to "are you doing your bit?" ensuring synergies with the paid for advertising and sales promotion that is being developed. Specific campaign extension aims include:

• the development of media partnerships, building on those agreed with the Express, handbag.com and London's LBC radio station;
• supporting and stimulating synergistic activity by partners, local authorities and businesses; and
• providing regional support via a roadshow, campaign features and materials.

Initial promotions planned include:

the publication of children's research in May to support the re-launch of our advertising and the road show; water saving promotions in May to reinforce Going for Green's theme month; a celebrity feature to support World Environment Day and UK Environment Week in June; transport promotions in June highlighting for example the school run and walking short journeys and; reuse/recycling initiatives to help the delivery of the National Waste Strategy aims.

The Roadshow

Last year's tour, which predominantly focused on shopping centres, visited 23 locations, and attracted 31,000 visitors. In Roadshow 2000, we plan to engage people at leisure and will primarily be visiting festivals/events and county shows. The road show's tour started at the Natural History Museum in London on 2 May and runs until end September.

Supporting Partners

Activity to support and reinforce partner initiatives is a key aim for "are you doing your bit?" Many excellent partnerships have been developed and we intend to build on these to help promote greater consistency in messages disseminated to consumers.

Further details

A campaign office has been established to help businesses, local authorities and others on 020 7544 3131 or e-mail on aydyb@fishburn-hedges.co.uk. Two websites: www.doingyourbit.org.uk and www.useitaagin.org.uk have also been established to provide further guidance.

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1: Energy Projections for the UK, Working Paper, available from Energy Economics, EPTAC3, Department of Trade and Industry, Bay 188, 1 Victoria Street, London SW1H 0ET.
Projections of Non-CO₂ Gases for the UK, MMMarch 2000, WS Atkins Consultants Ltd.
Technical Paper on the Derivation of Carbon Savings.

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Published 8 August 2000

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