[getsmart-l] FW: Ministers ordered to assess climate cost of all decisions | Environment | The Guardian

[Janet May]

  _____  

From: Mary Jo Cullen [mailto:maryjocullen at onlink.net] 
Sent: December 22, 2007 10:26 AM
To: Janet at smartgrowth.on.ca
Subject: Fwd: Ministers ordered to assess climate cost of all decisions |
Environment | The Guardian

 

Hi Janet,

For possible forwarding to the smartgrowth list and the transportation
group, thanks to Susan Dexter.

Mary Jo

Begin forwarded message:

Date: Fri Dec 21, 2007 7:40:01 PM Canada/Eastern
Subject: Ministers ordered to assess climate cost of all decisions |
Environment | The Guardian
 
http://www.guardian.co.uk/environment/2007/dec/22/climatechange.carbonemissi
ons





Ministers ordered to assess climate cost of all decisions

Government says new 'carbon price' will favour eco-friendly policy choices

Patrick Wintour, political editor 
The Guardian, Saturday December 22 2007 

Coal-fired power stations, airport expansions and new road schemes could all
be put on hold following a decision by Gordon Brown that ministers must in
future take account of the true economic cost of climate change damage.

Ministers have been instructed to factor into their calculations a notional
"carbon price" when making all policy and investment decisions covering
transport, construction, housing, planning and energy.

That price - which will increase annually - is intended to frame all
day-to-day policy and investment decisions for the next 30 years. 

As a result carbon-free or clean technologies, including nuclear power, have
been given a significant boost as they will now become relatively less
expensive than polluting technologies.

The "shadow price for carbon", representing the cost to society of the
environmental damage, has already been agreed for every year up to 2050 by
government economists. It will be set at £25.50 a carbon tonne for 2007,
rising annually to £59.60 a tonne by 2050.

The climate change minister, Phil Woolas, said: "This will have huge
implications for [the] government. If for instance a new power station is
due to cost £1bn, but it will add £200m worth of carbon emissions, we will
decide that the cost of the power station is £1.2bn, even though its cash
price is £1bn. We are creating a new currency." 

In theory the carbon price will create a bias against roads and
carbon-emitting coal stations and make new "zero carbon" building
regulations appear more economic.

Decisions about investments in new nuclear power stations will be made
exclusively by the private sector, but the social carbon price is likely to
affect the role of regulators and make them more willing to back nuclear as
opposed to other more carbon emitting energy technologies. 

It has also been agreed that every major Whitehall policy and investment
decision will be monitored over the next year to check that policymakers are
actually incorporating the shadow price of carbon.

Woolas said: "This is far bigger than people realise. It is intellectually
thought-through and very tough. Gordon Brown may not ride a bike, but by god
he is showing a lead." 

Tony Juniper, the head of Friends of the Earth, said the "carbon price"
could change economic calculations around issues such as a third runway at
Heathrow. He added: "At the moment there are gaping holes in government
policy with them professing concern for climate change on one hand, and
rushing to expand airports and widen roads on the other. If this helps to
fill in that gap then it has to be a step in the right direction. Whether it
works or not will depend on whether they have set the carbon price high
enough."

The price has been set at a level calculated to ensure the government can
meet its major policy target of stabilising carbon emissions at between 450
and 550 parts per million carbon, the figure recommended by the review
conducted for the Treasury by Sir Nicholas Stern. 

The review found that the costs of addressing climate change now will be
cheaper than the costs of doing so later. 

The shadow price is partly drawn from new modelling on the scale of the
threat posed by climate change and partly by economic work undertaken by
McKinseys and the Stern review on behalf of the Treasury on the economic
costs of failing to address climate change. 

The price is intended to take into account the full global costs of the
damage carbon causes over the whole of its time in the atmosphere. 

Equivalent values will be used for other greenhouse gases.

A note setting out the government's thinking prepared in part by the chief
economist at the Department for Environment Food and Rural Affairs, Richard
Price, says ministers must refer to the shadow price. It states: "It is
important that the shadow price for carbon is applied consistently and
universally across decisions in government with significant implications for
emissions of carbon and other greenhouse gases."



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