13 May 2002
Speech by the Chief Secretary to the Treasury, Andrew Smith MP, at the SERA Seminar on How the Government has put sustainable development at the heart of policy-making
I am very glad to be here today.
In our first term we placed sustainable development - ?a better quality of life for everyone now and in the future? - at the centre of government policy.
It is worth taking a moment to review what we have achieved.
At Kyoto we signed up to a challenging and legally binding target - reducing emissions of Greenhouse gases to 12.5% below 1990 levels between 2008 and 2012. As things stand CO2 emissions are estimated to be about 8% below 1990 levels, and emission of Green House Gases as a whole are estimated to be down by around 13.5%: we are on course to meet and exceed the Kyoto target.
Government departments agreed challenging Public Service Agreements (PSAs) that contribute towards the sustainable development indicators. DEFRA have a PSA target on biodiversity. The DTI and DEFRA have a joint PSA target on reducing CO2 emissions.
The recent publication of the Government's second Annual Report on Sustainable Development demonstrated the progress we have made. Many of the headline indicators have changed direction since we produced the strategy in 1999 and are now moving onto a sustainable path. Investment, employment, poverty and social exclusion have all changed direction since 1999 and we are making good progress on other indicators like climate change, air quality, river water quality and education. There are a number of areas (road traffic, waste and biodiversity), which are not meeting the Government's objectives - these are the focus of special attention during SR2002.
We are determined to build on the successes of our first term and achieve further reductions in greenhouse gas emissions and carbon dioxide, further improvements in air quality, and further reductions in the trend towards decreasing bio-diversity.
Achieving these targets will improve quality of life for all of our citizens and enable us to fulfil our international obligations as we move towards the World Summit on Sustainable Development in Johannesburg later this year. The Prime Minister has already announced his intention to attend the summit, sending a strong signal across government, to industry, green NGOs, and other world leaders, that the UK is serious about sustainable development.
Achieving integration and balance between economic, social and environmental dimensions means new ways of looking at how we produce and consume, how we live, work, get along together, and make decisions. In government this means taking account of sustainable development in every decision we make: working to ensure a better quality of life for everyone - now and in the future. In our first term we achieved a lot, but we did not do enough to integrate sustainable development into the policy process. The challenge for the second term must be to ensure that we permeate all of our actions with the principles of sustainable development.
In this year's Budget, on April 17, we reaffirmed our commitment to the environment. We are engineering our tax system around the aims of sustainable development. In this Budget there are important proposals on haulage; motorists and road fuels; the climate change levy, business energy efficiency and green technology; and the landfill tax. We will also be looking at other areas such as agriculture and domestic energy efficiency. We are building consideration of the environment into the taxation system - releasing the growth potential of the economy and enhancing the competitiveness of British business as we achieve our sustainable development objectives. Incentives to invest in the development of Green technology, for example, open new opportunities for the business community and promote the sustainable use of scarce environmental resources.
We are also using economic instruments in other ways. Last month we launched the world's first economy-wide greenhouse gas emissions trading scheme. This followed the very successful auction for permits in March, in which thirty-four organisations agreed to save 1.1 million tonnes carbon per year by 2006 in return for a share of the incentive payment which the Government made available. The trading scheme will grow this year as more players join, including those companies covered by the climate change levy negotiated agreements.
We have also launched a consultation on the landfill tax credit scheme. This scheme has been very successful in helping local groups and communities to improve their environments. But we need to consider whether the current scheme is the most effective way of allocating resources, and what priorities funding should be focused on. For example, we recognise that more needs to be done to meet our waste targets, and revenue from the landfill tax could help here.
The way we raise money sends important signals. So too does the way we spend it. The focus of today's discussion is on the Spending Review.
Spending Review 2002 is an opportunity to integrate sustainability into our assessment of every department's spending priorities. We are building on the experience we gained in SR2000 and integrating sustainability even more thoroughly into the process.
Paul Boateng, the Treasury's Green Minister, is in the lead on this process. Paul has given evidence to the Environmental Audit Committee and has set out our position in a debate on sustainable development in the House of Commons. Sustainable Development Reports have been on the agenda at two green Ministers meetings. And Paul is engaged in a series of bilaterals with Ministers from departments that have a special part to play in delivering our sustainable development objectives.
I have published Sustainable Development Guidance and it has been issued to all government departments. Departments have used this guidance to produce Sustainable Development Reports alongside their departmental proposals.
The Sustainable Development Guidance asks departments to identify the social, economic and environmental implications of their top policy priorities. It also asks them to identify the Sustainable Development indicators they contribute towards; the measures they will take to mitigate any negative trade-offs their policies may have; and the distributional effects of their policies. This is the first time guidance like this has been issued and it represents an important step forward as we work to integrate sustainable development into the Spending Review.
In our first term we achieved a lot, reducing emission of carbon dioxide and greenhouse gases, encouraging companies to report on their environmental impact, and improving the quality of our air and water. We achieved a lot but there was a lot still to do. Our greatest challenge was to integrate sustainable development of the environment and the economy into each of our policy decisions. In the Treasury, with control over the collection and distribution of public funds, we are well positioned to implement this objective. We have set out our plans for raising the money - the next task is to agree our plans for spending it. Working closely with other government departments and green NGOs we have built sustainable development into the structure of the Spending Review.
We recognise that the goals of economic growth and environmental protection are complementary and mutually reinforcing - they come together in our definition of sustainable development - ?a better quality of life for everyone - now and in the future?. That is my message for you today and that is the message this government will be carrying forwards at Johannesburg and beyond.