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ANNEXE K

Transport, Infrastructure and Climate Change Committee

Report on the Scottish Government's Draft Budget 2009-10

The Committee reports to the Finance Committee as follows—

Introduction

1. The Transport, Infrastructure and Climate Change Committee is required to report to the Finance Committee on its consideration of the Scottish Government’s Budget for 2009-10, which was published on 16 September 2008.

Approach to scrutiny of the budget
2. The Committee agreed that this year it would focus its scrutiny on the climate change element of its remit. This report comprises three separate sections. Firstly, the Committee will consider the overall impact of the Draft Budget on climate change. Second, the report will examine the development of the Scottish Government’s carbon assessment tool for the Scottish Budget. Finally, the Committee will follow-up some of the issues raised in its report last year relating to transport spending.

Adviser
3. At its meeting on Tuesday 9 September 2008, members discussed potential candidates for the post of budget adviser. It was agreed that Ian Thomson of the University of Strathclyde should be appointed as the Committee’s adviser.

Witnesses
4. The Committee took evidence from John Swinney MSP, Cabinet Secretary for Finance and Sustainable Growth, at its meeting on 4 November 2008. Mr Swinney was accompanied by relevant Scottish Government and Transport Scotland officials. At its meeting of 28 October 2008, the Committee took evidence from the following individuals:

  • Professor Jan Bebbington, Department of Accounting and Sustainable Development, University of St Andrews;
  • Dr Craig Mackenzie, Department of Sustainable Enterprise, University of Edinburgh;
  • Roger Levett, Development Consultant, Levett-Therivel;
  • Dave Watson, Scottish Organiser, UNISON;
  • Dr Dan Barlow, Head of Policy, WWF Scotland;
  • Duncan McLaren, Chief Executive, Friends of the Earth Scotland; and
  • John Stocks, Manager, Carbon Trust in Scotland.

5. The Committee is grateful to these witnesses for taking the time to give evidence as part of this budget scrutiny.

Climate Change Impact of the Draft Budget 2009–10

6. The Committee’s assessment of the impact of the Draft Budget 2009-10 on climate change will involve, firstly, consideration of the climate change impact of the budget as a whole, and, secondly, consideration of the climate change impact of individual Scottish Government policies.

Overall impact of the Draft Budget

7. When questioned in evidence about the general impact of the Draft Budget on climate change, a number of witnesses highlighted the methodological difficulties faced in making such an assessment.

8. Professor Jan Bebbington told the Committee, for example, that—

‘The situation is too complex. Without any baseline data, it is difficult to comment. Some things in the budget will be positive and some will be negative, but quantifying that is virtually impossible from outside the system.’1

9. Dr Dan Barlow of WWF Scotland conceded that ‘it is difficult to assess what the impact of the budget will be’.2

10. Duncan McLaren of Friends of the Earth Scotland told the Committee—

‘…The level of detail in the budget document does not fully support the process, but there is a further problem. The purpose of undertaking a carbon assessment should be to drive budget reallocations, rather than our waiting in ignorance until the end of the process and then asking, "What is the carbon impact of this budget?" If the assessment is to be effective, it must be applied when the draft budget is published and not at some later point. I recognise the challenges of developing the methodology—on both fronts—but the speed of progress has been too slow to deliver on the promise for the 2009-10 budget.’3

11. The problems associated with assessing the overall carbon impact of the Draft Budget were acknowledged by the Cabinet Secretary, who told the Committee—

‘As your witnesses made clear last week, it is difficult to provide an overall assessment of that factor. There will be different examples in the different components of the budget, which will provide us with greater clarity about the climate change impact. However, it is difficult to establish an overall position at this stage.’4

12. The Committee will consider later in this report the actions the Scottish Government is taking in developing a carbon assessment tool for future budgets. In the meantime, however, it is clear to the Committee that it was not possible to arrive at anything approaching a meaningful evaluation of the climate change impact of the Draft Budget 2009-10.

13. In the view of the Committee, assessing the climate change impact of the Draft Budget 2009-10 was problematic for a number of reasons:

  • Despite the stated intention of the Cabinet Secretary in the debate in the Parliament on 23 January 20085 that there would be a formal carbon assessment of the Draft Budget 2009-10, this was not carried out;
  • There was too high a level of aggregation of many budget lines to allow a meaningful assessment of its carbon impact to be made;
  • There was no systematic link between budget lines and policy outputs or outcomes;
  • There was insufficient information as to how each budget line is to be spent;
  • There was a lack of information on cross-compliance impacts, e.g. when health prevention programmes that encouraged active transport also could reduce the carbon impact of ‘inactive’ transport; and
  • There did not appear to be any additional consideration of the climate change impact of the Draft Budget 2009-10 than previous budget rounds.

14. Despite the fact that it was difficult to reach specific conclusions regarding the carbon impact of the Draft Budget, there was a general consensus amongst witnesses that this was very much a ‘business as usual’ budget and lacked the radical policies required to deliver Scotland’s targeted reduction in greenhouse gases. Dr Craig Mackenzie, for example, told the Committee that—

‘If the climate change bill is passed, there will be a need to change pretty dramatically the trajectory of emissions in Scotland. In many respects, particularly with regard to major expenditure, the current budget is business as usual. There are some marginal improvements that might or might not be outweighed by marginal increases elsewhere, but if we are to achieve a 3 per cent per annum reduction over the next 30 years, our thinking on retrofitting housing stock, for example, has to change pretty radically. There is not much evidence in the budget document that the kind of transition that we are looking for has begun.’6

15. In particular, the Committee noted the concern which was expressed by some witnesses about the dominance of the rhetoric of economic growth and the lack of polices to decouple economic growth from carbon emissions. For example, Roger Levett told the Committee—

‘The fact that the overall purpose is framed in terms of growth rather than development will be a huge obstacle. It becomes much harder to reduce carbon emissions if the commitment is not to human wellbeing directly but to economic growth as a means of increasing human wellbeing. According to some interesting recent research, there is no measurable relationship between economic growth as measured in gross value added terms and human wellbeing. The problem is that in a globalised market, growth will almost inevitably be carbon intensive; indeed, we have already heard murmurs of the need to reduce fuel prices to get the economy moving. By framing economic objectives in terms of growth, we set up a tension with our attempts to reduce carbon that might not exist if they were framed in terms of wellbeing. The irony is that an awful lot in the budget is concerned not with growth but with wellbeing.’7

16. All witnesses identified a number of commendable policies and initiatives from a climate change perspective in the Draft Budget (further details are discussed in the next section). However, the general consensus from witnesses was that the potential benefits from these policies and initiatives would not bring about the level of carbon reduction commensurate with the Scottish Government’s challenging carbon reduction target of 80% by 2050. Witnesses also identified a number of policies and initiatives that would actually increase Scottish carbon emissions (again, these are highlighted in the next section) and the vast majority of policies where it simply was not possible from the quality and level of information provided to determine their carbon impact.

17. The Committee considers it unfortunate that there has been a lack of progress in improving the quality of information to allow appropriate scrutiny of the Draft Budget 2009-10 from a climate change perspective. It does, however, acknowledge the complexities and difficulties involved in assessing the carbon impact of the proposals outlined in the budget document and will discuss mechanisms for developing this process later in this report.

18. However, the Committee considers that it should be possible, even in advance of the establishment of an agreed carbon assessment process, to provide clearer information on how budget allocations relate to climate change, links with outputs and outcomes, and greater clarity on cross-compliance and non-obvious climate change expenditure embedded within spending programmes across portfolios. This would assist greatly in identifying in general terms where spend aimed and carbon and other greenhouse gas reduction was being proposed at where gaps might exist.

19. The Committee therefore recommends that the Scottish Government should introduce as soon as possible a climate change commentary to the budget documents to provide this information. This approach could be refined as mechanisms for carbon assessment of budget proposals are developed and introduced. The Committee will go on to discuss the proposal for a climate change commentary in more detail in the next section of the report.

Individual policy evaluations
20. During its evidence-gathering, the Committee sought to identify Scottish Government policies within the Draft Budget 2009-10 which would (a) reduce carbon emissions, and (b) increase carbon emissions. The Committee also sought to identify whether there were any missed opportunities in the Budget for reducing emissions. This section will summarise the views received by the Committee on these issues. However, it is worth noting that the level and quality of information disclosed in Draft Budget 2009-10 meant that it was not possible to definitively evaluate the carbon impact of most of the Scottish Government’s spending plans.

21. The policies highlighted in these sections therefore represent an indicative assessment of how the Draft Budget might impact on emissions, rather than a full assessment of its impact.

Policies which could reduce emissions
22. All witnesses identified a number of funded policy initiatives in the Draft Budget which could reduce carbon emissions. These include, for example, the commitment to public transport and the concessionary fares scheme, and the Active Travel Budget line (although it was noted that it was only 1% of the Transport Budget). Roger Levett commented, for example—

‘There are lots of positive things. There is the £11 million for active transport. I would rather that the figure was 10, 100 or 1,000 times as big as that, but it is a start. The emphasis on public transport is good.’8

23. Roger Levett also welcomed the emphasis in the Draft Budget on social equity and the commitment to better health for Scottish citizens, commenting that ‘getting people to live more active lifestyles by building walking and cycling into their daily routines is one of the best multiple hits that we can get on sustainability.’9

24. Professor Jan Bebbington highlighted the potenitally positive impacts of initiatives such as the Saltire Prize, support for the renewable energy sector (particularly marine energy) and the afforestation programme (although this is contingent upon the type of afforestation).10

25. Dr Dan Barlow of WWF Scotland welcomed the ‘significant investment in other sectors such as microgeneration and energy efficiency…That investment is to be welcomed and is likely to help to take us in the right direction.’11

26. Duncan McLaren of Friends of the Earth Scotland was supportive of the investment in affordable housing in the Draft Budget, commenting in relation to affordable housing that—

‘…With an assumption, which I hope is not too heroic, that the housing developments will be high quality in terms of efficiency, that is a positive move.’12

27. The Cabinet Secretary told the Committee—

‘The example…of the affordable housing programme is one with which I take no issue. If we are building new housing stock, we have to build it in the most sustainable fashion and to the highest building standards. Those issues are kept under constant review to ensure that the policy-making process in general is not only a driver of the budget process but makes sure that we spend our resources in the most sustainable fashion. The example that has been cited is a good example of an area in which we must ensure that we spend money effectively to deliver the correct outcome, which is to create sustainable housing stock and to reduce the emissions created by that stock.’13

28. The Committee notes other budget lines in the Draft Budget, such as the Climate Challenge Fund, which will help reduce emissions.

Policies which could increase carbon emissions
29. In addition to policies which might reduce carbon emissions, witnesses also identified a range of polices in the Draft Budget which they considered were likely to increase carbon emissions.

30. A number of witnesses mentioned the budget allocated to road building as a having a negative carbon impact. Dr Dan Barlow commented—

‘A huge sum of money will still be invested in motorways and trunk roads. Although a significant amount of money is being invested in public transport, the balance is not yet quite right if we are serious about tackling emissions from the transport sector. Such emissions are currently rising.’14

31. The continued residual support for the air route development fund in the Draft Budget was also highlighted by Duncan McLaren of Friends of the Earth Scotland as having a negative impact on emissions. Duncan McLaren also drew the Committee’s attention to the problems created by agricultural methane and nitrous oxide emissions, and noted the lack of incentives to prevent agricultural oxidations of carbon from organic, particularly waterlogged, soils.

32. John Stocks of the Carbon Trust in Scotland highlighted the need for budgets to take account of the carbon impact of the construction of public buildings. He argued that—

‘My issue with budgets concerns the public buildings that we are building—the schools and hospitals—and ensuring that there is adequate pressure in the financial system to drive people towards looking for lower carbon buildings, particularly at the earliest stage, so that we build the buildings with the minimum whole-life carbon cost. I do not think that there is enough pressure in the budgets for that. Too much of the pressure is the other way—there is too great a perception that good value is low cost.’15

33. Dr Craig Mackenzie argued that the promotion in the Draft Budget of certain types of tourism could have a negative carbon impact. For example, he suggested that ‘encouraging Americans to come to Scotland is, from a carbon point of view, a disaster—for all its other benefits to the economy’.16

34. Dave Watson of UNISON argued that centralised procurement policies were driving business away from small local business to larger global businesses, with negative consequences for emissions. He also criticised the methods of financing large capital projects that incentivise new build solutions at the expense of refurbishment, with a resultant negative carbon impact.

Missed opportunities in the Draft Budget
35. The Committee heard from a number of witnesses that there were ‘missed opportunities’ in the Draft Budget where the Scottish Government has not taken action to reduce emissions in particular areas.

36. Dr Craig Mackenzie argued, for example, that ‘we know that in a number of areas we should be significantly reducing emissions. For example, we need to dramatically improve the energy efficiency of the existing housing stock and find ways to reduce emissions that are associated with air travel’.17

37. Duncan McLaren of Friends of the Earth Scotland argued that there was a potential to redirect common agricultural policy funding to measures to reduce agricultural emissions—

‘There is probably also potential to redirect more money under the common agricultural policy budget headings to ensure that our agriculture industry cuts emissions. That is obviously of some concern now that we have agreed to have all six gases in the climate targets. The methane emissions from agriculture are significant, and the agriculture money should be targeted towards their reduction.’18

38. Professor Jan Bebbington argued that there should be investment in sustainable tourism initiatives, such as encouraging residents of England to visit Scotland in via low carbon transport modes.19

39. Duncan McLaren of Friends of the Earth Scotland suggested that ‘introducing effective project-level greenhouse gas assessments under the modernising planning agenda would provide not only quick wins but wins that would persist for many years because we would get the projects right.’20

40. Dave Watson highlighted a number of initiatives which he felt could be introduced by the Scottish Government, such as considering the carbon impact of the development of shared services in the Scottish public sector, and he suggested that there was a lack of initiatives in the Draft Budget to encourage localisation or greening the workplace initiatives.

41. Dr Dan Barlow of WWF Scotland emphasised the importance of encouraging the local production and consumption of high, quality, seasonal nutritious food and recognising the large carbon footprint of the food consumed in Scotland.

42. The Committee noted that some of the evidence received pointed to a lack of connectedness in policy making where major opportunities for multiple ‘hits’ to reduce emissions were not fully developed. For example, it was important to ensure not only that affordable houses were of a high standard but that they were built near public transport interchanges or where there was potential to use alternative, renewable energy sources. Dr Craig Mackenzie highlighted the issue of the retrofitting of housing stock, explaining—

‘If we are to meet the targets that are set out in the climate change bill, there will need to be big investments in retrofitting housing. However, only small investments are being made in that area.’21

43. Duncan McLaren commented—

‘At a symbolic level, an investment to match the £100 million that has gone into affordable housing would be on a scale that would show commitment. As John Stocks said, existing buildings account for a much greater share of emissions than new buildings do. More investment would of course be desirable.’22

44. Several witnesses argued that not increasing the budget for active travel represented a missed opportunity in the Draft Budget. Roger Levett told the Committee, for example—

‘…Quick wins could be achieved with safe routes to schools, hospitals and stations. I return to that tiny budget line of £11 million for active travel. If we multiplied that figure by 10, there are people out there who could spend the money effectively and quickly. That would provide a carbon win as well as a wide range of broader health and wellbeing wins.’23

45. The Committee will return to this issue later in the report.

Conclusion
46. In relation to the overall impact of the Draft Budget, the Committee endorses the view expressed in evidence by some witnesses that this represented a ‘business as usual’ budget. It agrees that there is an absence of expenditure proposals to make a significant contribution to the climate change agenda. The Committee further expresses its dissatisfaction at the disconnect between the commitment of the Scottish Government to climate change reduction targets set far in the future and the present lack of urgency in taking steps which would reverse the current annual growth of emissions. The Committee recommends that a programme of action to halt the rise in greenhouse gas emissions between now and 2011 is produced as a matter of urgency and that revisions are made to the 2009-10 budget which would facilitate progress in this regard.

47. It therefore considers it essential that future budgets, and certainly the next Spending Review, should identify budgetary proposals to complement the challenging legislative emissions targets that are to be brought forward shortly. The Committee would expect in future to see demonstrated a substantial shift in policy priorities specifically designed to contribute to the radical reduction of carbon and other greenhouse gas emissions and to otherwise contribute to addressing climate change.24

48. In relation to affordable housing, the Committee notes the commitment of the Cabinet Secretary to keep the Scottish Government’s spending in this area under review to ensure that new housing stock is built in most sustainable fashion and to the highest building standards. The Committee recommends that the Cabinet Secretary provides further information on how he intends to meet this commitment.

49. The Committee notes the evidence it has received in support of increasing the budget allocated to the retrofitting of existing housing stock, including comments from witnesses such as Duncan McLaren of Friends of the Earth Scotland. The Committee also notes the motion agreed following the debate in the Parliament on energy efficiency on Thursday 13 November 2008 which ‘calls on the Scottish Government to consider a comprehensive and fully funded Scotland-wide scheme on this scale [£100 million per annum] to provide energy audits, insulation provision and financial support for micro-renewables where appropriate.’25 The Committee notes the evidence it has received on the retrofitting of housing and the motion agreed by the Parliament on this subject, which call on the Scottish Government to consider introducing a new energy scheme. The Committee recommends that the Scottish Government should provide it with details of the outcome of its consideration of such a scheme.

50. The Committee notes the comments of UNISON highlighted above about the potential negative carbon impact of certain procurement policies. The Committee wishes to highlight these concerns to the Finance Committee, and also notes that some flexibility exists in EU Directives to allow rules governing procurement to take account of sustainability.

Carbon Accountability and Assessment

51. The second section of this report considers the Scottish Government’s approach to assessing the carbon impact of draft budgets. In evidence to the Committee, the Cabinet Secretary for Finance and Sustainable Growth summarised the Scottish Government’s approach to carbon assessment of the budget, and updated the progress made on developing a carbon assessment tool. The Cabinet Secretary told the Committee—

‘…We are determined to embed carbon assessment in the heart of the Scottish Government's decision-making process. We will have to ensure that the assessment tools that we develop are appropriate for the task at hand and that they will give us the certainty that we need to set us on a trajectory towards a low-carbon economy…

Given the complexity of the task and the uncertainties that lie ahead, we have taken a two-strand approach. First, we are seeking to develop a high-level assessment that will be used at the level of the spending review process. We have organised an international workshop conference for the end of November to help us to refine our thinking on the matter.

Secondly, we are about to start work on adapting methods for individual assessments that will be applied at the level of programmes, policies and projects. The committee may find it relevant to know that, in the letter that I issued to the Finance Committee convener in September when we published the budget, I set out the detail of the steps that we are taking to move forward the carbon assessment tool. We are entering a new and challenging area and so the Government will do all in its power to deliver the goal of bringing carbon assessment to the heart of our decision making and enabling that process to be taken forward by the Parliament as part of the scrutiny process.26

52. When pushed on details of the timescale for the introduction of the carbon assessment tool, the Cabinet Secretary told the Committee—

‘We will not have it in place by the 2009-10 financial year. As I said in my opening statement, I am working to have it in place by 2009-10. Unless I am mistaken, that extends to the end of 2010.’27

Progress on the Scottish Government carbon assessment tool

53. As the Committee has noted previously, the Draft Budget 2009-10 has not been subjected to any systematic evaluation as to its carbon impacts. In evidence, a number of witnesses discussed how to resolve this issue in relation to the current budget scrutiny process and any subsequent budget rounds. It was clear from the evidence gathered from witnesses that how the carbon assessment tools were used, and details of the carbon assessment methods, could have a major impact on the tool’s effectiveness in encouraging reductions in carbon emissions.

Support for the carbon assessment tool
54. The Committee firstly explored with witnesses the question of whether they supported the principle of a carbon assessment tool and what views they had on the progress made so far by the Scottish Government.

55. It appeared to the Committee that there was universal support and encouragement amongst witnesses for the Scottish Government’s commitment to develop mechanisms for assessing the carbon impact at individual policy level and the overall impact of total Scottish Government spending.

56. Roger Levett, commented, for example, that—

‘The commitment to carbon assessment, which the committee is considering, is an admirable move that would put Scotland well ahead in the game of carbon management and sustainable development…’28

57. John Stocks of the Carbon Trust in Scotland agreed, telling the Committee—

‘I welcome the notion that we should develop assessment tools. We should know what our carbon footprints are as individuals and what organisations' and the nation's carbon footprints are. As we battle with climate change and head towards achieving deep cuts in carbon emissions, we need to look hard at the numbers and measure and account for carbon. Any initiatives in that area are to be welcomed.’29

58. Dr Dan Barlow of WWF Scotland explained some of the potential advantages of a carbon assessment tool—

‘The tool may enable us to avoid missing opportunities to help deliver our carbon targets. There are a number of areas in which we are spending large amounts of money in a way that will perhaps not help to deliver the carbon targets, but the tool could readily help us to do so—carbon assessment could be positive and beneficial. With regard to the other areas, we must keep the focus on a strategic, high-level assessment of what the budget does.’30

59. Whilst witnesses recognised the innovative nature of the Scottish Government’s commitment, and the perhaps ambitious nature of the original timescale in developing a carbon assessment tool, some witnesses (for example, Dave Watson of UNISON) noted the apparent lack of progress to date, especially given the work currently underway on the Transport Carbon Balance Sheet, Strategic Environmental Assessments and other carbon assessment projects in the Scottish public sector.

60. Nevertheless, a number of witnesses accepted that there was not an off-the-shelf solution that was fit for the Scottish Government’s purposes and that considerable adaptation and innovation would be required to develop an effective set of carbon assessment mechanisms.

61. Roger Levett, for example, highlighted some of the challenges which the Scottish Government might face in developing a carbon assessment tool—

‘There are various methodologies around for such jobs, but, as far as I am aware, no tool has yet coped with the job of looking at the whole of a Government's budget. There are good reasons for that. The job of considering a Government programme in its totality is not at all the same as simply grossing up the effect of individual projects for which we can do carbon assessments, and it is very different from assessing private sector projects.’31

62. The Cabinet Secretary emphasised the pioneering nature of the Scottish Government’s proposals, telling the Committee that—

‘We are not aware of any other Government that assesses the carbon impact of its total expenditure, nor of any equivalent approach in the private sector. Together with our advisers, we are checking that and seeking to identify similar processes in other countries. Where good examples of existing practice can be found, we will adapt them to our needs. Where solutions are required—in areas such as the total Government spend—we will use the best advice possible to establish methods that are correct for Scotland.’32

63. The Committee welcomed the details provided by the Cabinet Secretary of an international workshop to be held on 24 and 25 November 2008 to map out the development of Scottish carbon assessment tools.

64. It is understood that this workshop will include a cross-section of representatives from the academic community, including Professor Jan Bebbington from the University of St Andrews and the Sustainable Development Commission, representatives from the Carbon Trust, Sustainable Scotland Network, a variety of international commentators from Statistics Netherlands and Statistics Denmark, and a UK Department for Environment, Food and Rural Affairs. It will consider the following issues: the concept of the carbon assessment project, how it will interact with our policy-making framework and how public spending and the budget interact.

65. It is also understood that the workshop will consider other carbon assessment projects, such as those carried out by the National Assembly for Wales and other jurisdictions. The Cabinet Secretary told the Committee that the Scottish Government would be drawing upon a number of sources in informing the development of the carbon assessment tool, such as international best practice, and regional best practice.

Timescale for the introduction of the carbon assessment tool
66. The Committee took evidence on the timescale for the introduction of the new carbon assessment tool.

67. Several witnesses suggested that waiting until the development of a ‘perfect’ carbon assessment tool to measure the climate change impact of the Scottish Government’s spending programme was not desirable. Professor Jan Bebbington made the point, for example, that—

‘Some of the risks are around our believing in the numbers absolutely and not acting in a strategic way in a policy context. The risk of not carrying out carbon accounting is severe, too. Given that we are perhaps painting a slightly gloomy picture about how difficult it is, it is worth emphasising that if we do not start to consider and quantify carbon, we will sleepwalk into the process, regardless of whether we hit reduction trajectories. Even if the data are difficult to obtain and it is difficult to draw the boundaries, it would be a huge risk for us not to carry out carbon accounting, because we would have no steer, particularly in relation to the climate change bill.’33

68. The Committee agrees with the concerns expressed by witnesses that delaying any carbon assessment until a ‘perfect’ carbon assessment tool could potentially lead to Scotland’s climate change position worsening, and might leave a shorter time period in which to meet the Scottish Government’s climate change targets, with the consequence that arguably more radical actions might then need to be taken.

69. In evidence, the Committee pressed the Cabinet Secretary for details of when the carbon assessment tool might be available, and, in particular, whether there was a risk of it not being developed in time for Spending Review 2010, which could mean that carbon assessment would be fully implemented until Spending Review 2013. The Cabinet Secretary was asked, specifically, whether he expected the tool to be in place and useable by the end of the 2009-10 financial year and whether the following year's budget would be carbon assessed. In response, he told the Committee—

‘That is what I am working towards being in a position to guarantee. That is my objective.’34

70. The Committee notes that the Cabinet Secretary did not consider this timescale to be problematic. The Committee also notes that witnesses have recommended a number of initiatives (see the next section on the methodology of the tool) that could with almost immediate effect, begin assessing the climate change impact of current Government Spending Plans. The Committee recommends, therefore, that the Scottish Government’s carbon assessment tool must be implemented in time to be used as part of the Draft Budget 2010-11 and Spending Review 2010.

Methodology of the carbon assessment tool

71. The Committee sought details from the Cabinet Secretary on the progress made on the methodology of the carbon assessment tool under development by the Scottish Government. The Cabinet Secretary reported that no significant decisions had been taken on the nature of the carbon assessment tool and thus he was unable to provide answers as to details of the proposed carbon assessment methodology. He told the Committee—

‘In a sense, the Government is operating on developing the carbon assessment tool without a predetermined agenda. There is a desire to establish a tool that is robust, credible and easy to administer so that it becomes a relatively straightforward and practical component of the budgeting and policy-making process within Government.

We are exploring a range of options for the methodology. One extreme is the concept of a traditional input-output model of the economy, which could be adapted. Another option is a more dynamic model that aims to capture a range of fiscal and social interventions and other items of data that capture particular practices. We are considering options within that range and will come to final conclusions as a consequence.

I stress that I want the process to be seen to be dynamic and I am happy for there to be interaction with the committee about it, either formally in an evidence-gathering session with my officials who work in the area, or informally, perhaps in the form of a workshop in which the committee could be involved in order to understand the different choices and dynamics that exist. I am happy for that to be undertaken, although it is probably best to wait until the international workshop has taken place towards the end of November.’35

72. The Cabinet Secretary highlighted in evidence to the Committee a number of important attributes of any carbon assessment tool, namely that it should be robust, credible, practical, embedded in policy making, able to evaluate policy options, understandable, scrutinisable and enabling people to make judgements as to the effectiveness of government climate change measures. He explained that—

‘I do not want to create an assessment tool that cannot be comprehended by those who are trying to undertake different policy choices. There would be no point in such an invention. I want a tool that can readily be assessed by parliamentary committees, external advisers and organisations such as the Sustainable Development Commission, the Energy Saving Trust and the committee on climate change that will now be part of the statutory framework. All those organisations will be able to see a robust mechanism that the Government has put in place to enable people to make judgments about the effectiveness of the interventions that we make. That must be the key test of the carbon assessment tool.’36

73. The Committee agrees that these are important attributes, but would also wish to highlight a number of other attributes and features that it considers to be critical to developing an effective carbon assessment process. These are attributes and features which were highlighted by witnesses in evidence to the Committee.

Carbon assessment mechanisms – characteristics

74. Witnesses to the Committee made a number of comments on the development of a carbon assessment methodology and process, in order that it could operate effectively in all future budget rounds. These comments were based on their knowledge of current and previous carbon accounting techniques, an evaluation of potential dangers from inappropriate carbon accounting and experience with integrating other forms of environmental management systems into institutional decision making.

75. All witnesses agreed on the importance of a rigorous form of carbon accountability to accompany any carbon assessment tools. Witnesses stressed that carbon assessment tools will be unable to eliminate uncertainty or judgements in policy making, however they can provide a robust evidence base to inform policy making processes.

76. The Committee notes that the aim of obtaining a perfect method of carbon assessment prior to its implementation is an unreasonable strategy due to the very nature of the global climate change agenda. Carbon reduction will never be reduced to a simple cost-benefit analysis. The Committee also notes that assessing the carbon emissions of a government is substantially different from that of a corporation mainly because the government cannot ignore ‘externalities’. In fact it is its responsibility to actively govern that which businesses and individuals attempt to externalise. A government’s responsibility for carbon is therefore different and therefore its methods of assessing carbon also have to be different.

77. Some of the witnesses made the point that, due to the relatively uncertainty and political dimension to carbon governance, a degree of independence from government was required to allow for transparency, minimise the perception of interference and enable the auditability of any carbon assessment tools. Dr Craig Mackenzie, for example, told the Committee—

‘Unless there is transparency, debate and discussion, there will be a lot of doubt about the veracity of judgments and the numbers that are implied. We have seen nothing about the tool in the past six months, which is not the best of starts as far as transparency is concerned.’37

78. The Committee’s adviser has assessed the views provided to the Committee by witnesses. At Appendix 1 of this report is attached a table prepared by the adviser summarising the key attributes of a carbon assessment tool highlighted by witnesses. At Appendix 2 is attached an assessment by the adviser of some of the views expressed by witnesses on the preferable characteristics of a carbon assessment tool.

Conclusion

79. In reaching conclusions about the most desirable form of the carbon assessment tool, the Committee notes, in particular, the comments of Professor Jan Bebbington, who explained to the Committee—

‘Our first round of measurements will not be perfect and nor will the second or third but, if we hesitate and wait for perfection, we might not start the learning process. Accountants have quite a casual attitude to numbers in many situations, as you probably know to your cost. As one myself, I would take a first-rough approach, believing that although the measurement is not perfect, it is perfectible. However, we must not ignore things that are quite significant but look like they might not be. That is perhaps the best hope for making the process work.’38

80. Most witnesses argued in evidence that there was a need for immediate progress on developing carbon accountability and assessment processes, given the urgency of the climate change problem and the challenging nature of the Scottish Government’s carbon reduction targets.

81. On the basis of the evidence received from witnesses, the Committee wishes to recommend that the following important steps are taken to assist in the process of developing effective carbon assessment tools.

1. A high level evaluation of the carbon equivalent emissions of Scotland including aviation and shipping should be established in order to work as a baseline. This exercise should be conducted periodically to map the overall carbon trajectory of Scotland.

2. In the first instance, carbon assessment should give a broad indication of the strategic direction of travel of policies in the budget rather than assessment being delayed until a toolkit is perfected. Professor Jan Bebbington suggested that for each budget line (level 3 would appear to be the most appropriate) a carbon commentary should be introduced. This would be a qualititative statement as to the direction of travel of this spending plan and should incorporate an assessment as to whether it will directly contribute more or level carbon, indirectly contribute more or less carbon or influence more or less carbon to be emitted. Initially this assessment could be based upon the Strategic Environmental Assessment which should identify greenhouse gas emissions. The Committee endorses this proposal.

3. The Scottish Government should develop clear interim carbon reduction targets / milestones for each three year spending round and consider each ministerial portfolio’s contribution to this reduction target.

4. For budget lines that significantly worsen carbon emissions, a higher level of disclosure to justify why this is occurring would be required in the Budget Report. Therefore the Committee considers that the budget report should identify policies which increase emissions and introduce a welcome level of carbon transparency and justification facilitating meaningful and focussed carbon discourse.

5. Each budget line should be linked with clear policy outputs and outcomes with more detail as to how the money was to be spent. The Scottish Government has claimed that it wishes to move towards outcome-budgeting. Despite claims in the Spending Review 2007 and the Draft Budget 2009-10, the Cabinet Secretary has expressed the view that this may be difficult to achieve.

6. Additional information on cross-compliance implications in relation to climate change impacts in the presentation of the budget should be developed and in particular identification of non-obvious expenditure.

7. As mentioned by all witnesses, including the Cabinet Secretary, the carbon assessment of specific policies, programmes and action was considerably less complex than the overall Budget, and a number of carbon assessment tools were considered potentially useful in this context.

8. In addition, the Committee considers that it would be useful if the Scottish Government could undertake an annual Climate Change Outturn Review similar to the Efficiency Outturn Review 2007-08. This review would clearly identify the Minister’s climate change programme (similar to Climate Change Report March 2007, May 2008), deal with issues of cross compliance and non-obvious climate change expenditure and provide an auditable review of progress (or lack of progress) towards climate change targets. This would be invaluable in creating an integrated planning and control system in relation to carbon emissions and climate change.

9. The next stage would be to be develop a summary evaluation of each ministerial portfolio’s overall climate change impact and to report this in the Spending Review / Draft Budgets.

10. The stage after that would be to develop a budget level assessment of the overall impact of the funded polices/programmes/action. It is critical that this is not a simple aggregation of policy or portfolio level assessments. It is important that this considers the interaction and interdependence of different policies and evaluates at a national systems level the emergent consequences of all policies.

11. It is recommended that it is only when the processes described above are robust and credible that consideration is given to the monetarisation of carbon for inclusion in cost-benefit analyses. Considerable doubt was expressed as to the additional information content that would be added by placing a monetary value on carbon. In addition the witnesses identified a number of problems in valuing carbon, for example, determining the appropriate value per tonne, misdirecting attention away from reducing carbon emissions, creating perverse incentives, inappropriate trade-offs and policy fudges. The end objective of carbon assessment is not to accurately value carbon but to assist in providing a sound evidence base in order to reduce Scotland’s climate change impact.

82. The Committee recommends that the Scottish Government considers these proposals as it develops the carbon assessment tool.

83. In summary, the Committee recommends that a robust, credible and transparent system of carbon accountability is in place at the latest in time for the Draft Budget 2010-11 and Spending Review 2010. The Committee notes the evidence from some witnesses that there will never be a single, perfect tool that will prescribe policy, but the Committee considers that there is a pressing need to adopt an evolutionary approach to developing a set of transparent, interrelated tools that are integrated with policy making within a carbon accountability framework.

84. The Committee recommends that the Scottish Government provides written responses to the Committee providing regular updates on the progress of the development of the carbon assessment tool and its response to the Committee’s recommendations.

85. The Committee welcomes the Cabinet Secretary’s invitation to become involved in the discussions on developing carbon assessment methodologies. The Committee views this report as the start of that dialogue.

Parliamentary scrutiny
86. One issue which the Committee has identified in the course of its budget examination relates to the parliamentary scrutiny of the carbon impact of the budget, and the role which this committee plays, relative to other subject committees, in examining this aspect of the budget. For example, a mechanism could be developed to place a requirement on all other subject committees to explicitly consider and comment upon the climate change impact in their scrutiny of Spending Reviews and Draft Budgets.

87. The Committee has not considered this issue in detail, but believes it is important that a robust parliamentary procedure is established to ensure that the carbon impacts of the budget are fully scrutinised. The Committee recommends that the Finance Committee begins dialogue with this Committee, in advance of the next budget process, to discuss how this might take place.

88. The Committee also considered the question of whether carbon assessment should become a statutory part of the Parliament’s scrutiny of Spending Reviews and Draft Budgets. This proposal attracted support from witnesses. The Cabinet Secretary stated—

‘Subject, of course, to the Parliament's consent, there will be a mandatory framework for emissions reduction, but I have given no consideration to the status of the assessment tool. In light of the committee's views, however, I certainly will do so.’39

89. The Committee considers that there may be merit in this proposal and recommends that the Finance Committee considers it further. The Committee notes that there may be an opportunity for this Committee to return to the issue of statutory carbon assessment during its scrutiny of the Climate Change Bill. The Committee hopes that the Finance Committee will also be able to consider these issues when it comes to consider the Bill’s Financial Memorandum.

90. The Committee further notes that there may be merit in the Finance Committee considering how carbon assessment could form a statutory part of Parliament’s consideration of other major expenditure projects.

Individual carbon assessments
91. In evidence to the Committee, the Cabinet Secretary commented that an individual level assessment of the carbon impact of new programmes and priorities, was ‘a tangible proposition and it could be done relatively easily’ because certain policy interventions can be more neatly compartmentalised and assessed.40 The Cabinet Secretary went on to say—

‘The challenge becomes greater the further up the food chain that we decide to go in respect of the total budget, because a significant amount of consideration requires to be given to how a figure can be arrived at. For example, if we wanted to test the carbon impact of the £100 million acceleration of capital investment in the Government's capital programme to deal with the economic climate we could pretty readily assess that—I offer that example in the hope that such an assessment could readily be done. If the committee were to ask me whether I could do that for all budget lines between now and the end of the month, I would have to say that I could not, but we could readily develop analysis of particular components of the budget.’41

92. The Cabinet Secretary went on to comment—

‘If the committee wanted the Government to look at a limited number of projects, I would be happy to give consideration to how and when that could be done and to advise the committee thereafter.’42

93. The Committee notes that the Cabinet Secretary has indicated that it would be possible to complete at least two carbon assessments of current spending programmes at this moment. The Committee welcomes this commitment by the Cabinet Secretary and is keen for such pilot assessments to take place. The Committee would wish to have further dialogue with the Cabinet Secretary about the most appropriate programmes to assess, however notes that this work falls outwith the scope of this report and should be taken forward by the Committee separately. The Committee notes that there may be scope for the Scottish Government to conduct carbon assessments, as appropriate, of new spending programmes as they emerge.

Transport Scotland’s Carbon Balance

94. Some witnesses expressed concern at the apparent limited progress to date on the development Transport Scotland’s Carbon Balance Sheet, on which work started in December 2006. The Cabinet Secretary offered the following timescale for publishing a Carbon Balance Sheet for transport—

‘As I am sure the committee knows, there was a commitment in the national transport strategy to construct the carbon balance sheet in relation to transport. It was expected that it would be introduced as part of the first review of the national transport strategy in 2010. There has been some consultation of stakeholders on the formulation of the carbon balance sheet and that dialogue will continue in the coming months.’43

95. This timescale indicates a change in emphasis in the role of the Carbon Balance Sheet since the 2006 National Transport Strategy from a policy development tool to an ex-post monitoring tool although this would appear to been hinted at in Climate Change Report of May 2008. For example, Scotland’s National Transport Strategy, published in December 2006 stated—

‘We also intend to present a 'carbon balance sheet' for transport in future reviews of the NTS. This will present the impact of all Scottish transport policies and projects that are expected to have a significant impact on carbon, whether positive or negative. This recognises the need to do more than simply focus on the positive contribution transport will be making without showing how this relates to the negative impact of other Scottish transport policies and projects. Our aim will be to show that the Scottish Government - through its own actions - is continually reducing the overall impact of Scottish transport measures.’44

96. In March 2007, the Scottish Government report ‘Scotland's Climate Change Programme: Annual Report 2007’ stated—

‘We are developing a transport carbon balance sheet to present the carbon impact of transport policies and projects, whether positive or negative. Such work to provide a strong knowledge base and clear strategic direction are the foundation stones for successful action to tackle climate change, and it is beginning to bear fruit.45

97. The Second Annual Report on Scotland's Climate Change Programme (April 2007 - March 2008) was published in May 2008 and stated—

‘The National Transport Strategy (NTS) committed to developing a Carbon Balance Sheet for Transport in Scotland. This will be used as a tool to monitor and review progress towards the strategic outcome of 'reduced emissions'. The balance sheet will be a monitoring tool showing the greenhouse gas emissions of the Scottish transport sector over time and explaining which transport policies and projects have had, or will have, the most significant influence on changes in carbon emission levels.’46

98. The Committee asked the Cabinet Secretary if lessons could be learned from the carbon balance sheet, when developing the carbon assessment tool. The Cabinet Secretary’s response suggested that at least the thinking underpinning the carbon balance sheet as well as the underlying method was further developed than previous disclosed—

‘Yes—there is a full read-over between them. Individual assessments will be a component of the carbon assessment tool. The thinking that has gone into the carbon balance sheet sits comfortably with the notion of exploring the carbon impact of an individual project or programme.’47

99. The Committee recommends that the Scottish Government provides clarity on the precise timescale for completing the transport Carbon Balance Sheet, and recommends that this balance sheet is made publicly available. The Committee would be concerned if the transport Carbon Balance Sheet was unlikely to be available until 2010 which was after key decisions would have to have been taken on transport strategy. This raised the possibilities of major strategic transport decisions, that would have significant impact on climate change, being taken without a formal carbon assessment.

100. The Committee recommends that every effort should be made to produce a transport Carbon Balance Sheet at as early a date as possible. The Committee considers that such information is essential to allow full assessment of the positive and negative impacts of such a key policy area as it relates to climate change. The Committee is of the view that it would be helpful if this document was to be made available to the Committee prior to the publication of the Strategic Transport Projects Review and NPF2.

transport budget

101. This final section of the report follows up some of the points made in the Committee’s last report to the Finance Committee on the transport budget.

Regional Transport Partnerships

102. In its budget report last year, the Committee expressed concern that the loss of direct capital allocations to RTPs could put at risk the momentum of delivery of regional transport projects. The Committee recommended in its report last year that the Scottish Government reflected on how well the new arrangements were working in practice. The Cabinet Secretary told the Committee—

‘That is one issue that I monitor as part of the relationship between the Government and local authorities and as part of Mr Stevenson's responsibilities on regional transport partnerships. The Convention of Scottish Local Authorities and the leaders of the regional transport partnerships, when I met them last, made it clear to me that they see their role as providing a gathering place for thinking from within local authority areas.

The arrangements that the Government has put in place to devolve to individual authorities the resources that were formerly available in capital grants to regional transport partnerships allow authorities the flexibility to pool resources to support cross-boundary projects. That is the spirit in which regional transport partnerships were established and with which the Government takes them forward.’48

103. The Cabinet Secretary also explained that—

‘…We attach a premium to local authorities making their own choices. They can choose to co-operate in certain areas, and we should not put in place a layer of decision making that second guesses or redirects their priorities. The existing structure works, and I do not see anything in the current constitution of regional transport partnerships that prevents local authorities from working together as they see fit.’49

104. The Committee also raised with the Cabinet Secretary the recommendation it made in last year’s report that the Scottish Government provided a statement to the Committee in advance of this year’s budget on how each RTP has been funded and delivered on its objectives in the last year. The Cabinet Secretary responded—

‘We certainly maintain an active dialogue with regional transport partnerships. Their strategies have been approved by ministers, and if the committee wants further information about the funding and operation of regional transport partnerships and makes a specific request to ministers, we will answer it.’50

105. The Committee has not changed its view that the effective funding of RTP projects is a key component in ensuring an integrated transport system across Scotland. The Committee is therefore disappointed that the necessary information was not made available following the request made in its report on the budget last year. The Committee recommends that the Scottish Government reviews whether last year’s change has had an adverse impact on the momentum of the delivery of the approved Regional Transport Strategies and should give further consideration to reinstating direct capital allocations to RTPs.

Concessionary Travel

106. In its budget report last year, the Committee noted that the budget for concessionary fares was under ‘intense pressure’ due to the popularity of the scheme. The Committee recommended that close monitoring of the concessionary fares budget occurs. The Committee also noted that this process would be assisted by the availability of more accurate information on the take-up of the scheme following the implementation of smartcard tickets.

107. In evidence, the Cabinet Secretary provided an update to the Committee on the progress made on monitoring more precisely the take-up of the concessionary travel scheme. He told the Committee—

‘The card is comprehensively deployed and the scheme is comprehensively used. We are rolling out smart card-enabled ticketing equipment, which will allow us better to monitor uptake of the scheme, and we expect that process to be completed during 2009. That will give us a great deal more accurate information about the utilisation of the scheme, on which basis the Government will be able to report further to the committee on the scheme's performance.’51

108. The Committee also explored with the Cabinet Secretary the budget allocation for concessionary fares, which does not appear to have increased since last year’s Draft Budget (remaining at £189.5 million in 2009-10 and £191.5 million in 2010-11). The Cabinet Secretary was asked whether this level of spending will be sufficient to meet the demand for concessionary travel—

‘Yes, but I will keep factors under review, as is the case with all aspects of the budget, and I will put forward any changes that are required at the autumn or spring budget revisions—assuming that the budget is approved by the Parliament.

The concessionary fares scheme operates in the context of Government commitments to expand the scheme. We have already undertaken to expand the scheme to take account of veterans' interests. We have guaranteed the same level of access to the scheme and all existing entitlements in relation to routes and frequency of travel.’52

109. The Committee has not, this year, taken evidence from transport organisations on the degree to which the concessionary fares budget might be under pressure. But the Committee notes that last year the Confederation of Passenger Transport made the comment that—

‘Demand must be managed. We have had a baby boom, more people are becoming eligible and more people are travelling, so the scheme must be made sustainable all round’53

110. The majority of the Committee notes these comments and expresses concern that the Cabinet Secretary does not appear to have taken these factors into account in preparing his budget. While budget revisions in the autumn or spring may allow adjustments to be made, the fact is that the budget provision made by Ministers does not appear to have taken account of known pressures arising from increased patronage. The majority of the Committee recommends that the Scottish Government considers the evidence emerging from its review of the concessionary scheme and adjusts the budget provision as necessary, to guarantee the commitments made to users of the scheme are honoured in full.54

111. The Committee also recommended last year that opportunities are explored for enhancing integration between commercial bus services and those services provided by other public sector providers, such as health boards and education authorities, in order to maximise availability to bus services, especially for fragile communities. The Committee asked the Cabinet Secretary for details of what progress the Scottish Government has made in this area. The Cabinet Secretary told the Committee—

‘The Government is working across portfolios to ensure that resources that are used in one compartment are not viewed as being utilisable exclusively in that area and not in other areas of policy. Boundaries and barriers that existed in many aspects of the delivery of public services are beginning to be dismantled as we try to encourage greater consideration among different policy agendas of how facilities from one service might be utilised in another. I would be happy to provide in writing examples of where that is happening.’55

112. The Committee recommends that the Scottish Government provides this information in writing.

Active Travel budget line

113. In its report last year, the Committee recommended that in future budgets the Scottish Government should make a gradual transfer of resources from the health budget to the active travel line, in order to realise the public health benefits from investment in walking and cycling projects. However, the allocation to the active travel line has not increased in this year’s Draft Budget, and remains constant at £11 million.

114. As previously mentioned, a number of witnesses highlighted the active travel budget line as being a ‘missed opportunity’ in the Draft Budget. Roger Levett told the Committee, for example—

‘I return to that tiny budget line of £11 million for active travel. If we multiplied that figure by 10, there are people out there who could spend the money effectively and quickly. That would provide a carbon win as well as a wide range of broader health and wellbeing wins.’56

115. Dr Dan Barlow of WWF Scotland mentioned that ‘greater investment in active travel and less in trunk roads and motorways would also be helpful.’57 The limited nature of the active travel budget line was also highlighted by Duncan McLaren of Friends of the Earth Scotland.

116. The Committee highlighted to the Cabinet Secretary the position of the cycling campaign group Spokes, who have proposed a transfer of resources from the trunk roads budget to support for cycling. The Cabinet Secretary told the Committee—

‘I have seen the material from Spokes. As an enthusiastic cyclist—although not one who gets on his bike as much as he used to—I am very much attracted by the lines of argument that Spokes puts forward.

However, I return to the point that it is terribly easy to look just at the budget headlines and not examine what is within individual budget lines. A proportion of the trunk roads budget is currently spent on supporting the development of cycle routes adjacent to trunk roads.’58

117. The Cabinet Secretary suggested that the active travel budget line should be placed in the context of other budget spending—

‘We have to be careful about taking the view that the only money that we spend on walking or cycling comes from budget lines that include those things in their titles. I made the same point about climate change—the money that we spend to tackle climate change comes from a variety of different sources.’59

118. The Cabinet Secretary went on to explain that—

‘There will be elements of spending in other categories that are not immediately obvious. There is a budget line of £11 million to support sustainable and active travel and there is also a budget line of £9 million for cycling, walking and safer streets—that fund is currently ring fenced. If we add to that what is going on through the trunk roads budget, what will be going on through individual local authorities' contributions to developing some of these activities and, as Mr McNulty reminded us, what the Deputy First Minister is doing in the health field, we can see that there are a variety of different interventions.

While I understand that last week's witnesses would have looked at the budget on the face of it, that does not always tell the entire story about where investment is being made, when we drill down into specific details. I am happy to provide the committee with information on expenditure in other areas that would support that activity.’60

119. The Committee considers that the comments by the Cabinet Secretary about the complexity of the budget allocation to walking and cycling highlights the need for a carbon commentary on the budget, which is recommended elsewhere in this report.

120. The Committee believes that there is a strong case for increasing the active travel line in the budget. It recommends that the Government re-examines this provision and in that context looks carefully at the proposal put forward by Spokes with the support of a number of other environmental organisations, and evidence from other witnesses. The Committee believes that consideration should be given to additional funding for both walking and cycling measures. The Committee does not have enough information about the trunk road budget at this stage to determine whether money could be moved from that budget line as Spokes recommend or whether money could be earmarked from slippage in that budget or the road maintenance budget for active travel which would prevent it being lost to the transport portfolio as has happened in previous years.

Appendix 1 – Key Attributes of a Carbon Assessment Tool Mentioned in Evidence

Transparent Credible
Practical and easy to use Auditable
Developed sooner rather than later Applicable to all policies/ programmes/ actions
Based on best available scientific data As objective as possible
Robust Understandable
Able to model outcomes of policy options early in policy making process Provides clear information on strategic direction of travel
focus on carbon reduction rather than carbon assessment Provides overall assessment of carbon emitted in Scotland
Provides overall assessment of planned carbon emissions in Scotland Designed to measure actual absolute carbon reductions not simply reducing rate of growth
Integratable with other carbon / environmental assessments technologies Identifies direct / indirect/ influence on carbon impacts
Integratable with Best Value processes Based on carbon equivelants
Able to facilitate multilayered and nested analysis (e.g. policy, programme, action, portfolio, budget, national) Integrated into institutional decision-making processes not an ex-post description of policy consequences
Identifies the differential carbon impact of policies and policy options Does not regard budget carbon assessment as a simple aggregation of policy carbon assessments
Recognises cross-compliance issues and facilitates ‘joined-up thinking’ and connectivity issues Allows the identification and attainment of potential carbon reductions of key spending decisions
Enables a carbon accountability process Uses appropriate time scales
Does not create perverse incentives for example creative carbon accounting, carbon risk transfers and ineffective offsetting schemes. Enables evidence-based political judgements whilst recognising the appropriate level of scientific uncertainty


Appendix 2 – Summary of Witnesses’ Views on Characteristics of Carbon Assessment Mechanisms – Committee Adviser

Carbon Assessment Mechanisms – System Characteristics

Any carbon assessment should be incorporated at the early stages of any policy formulation, where there was still the possibility of considering alternatives, rather than an after-the-fact data collection exercise. If carbon assessment is to be more than another bureaucratic exercise then it has to be used to reduce the carbon impact of the Scottish Government’s policies and programmes – not simply document a worsening situation. It is also worth considering developing (and building upon local carbon assessment exercises), standard protocols that can be used throughout the Scottish public sector (and related agencies) and eventually extended to the third sector and businesses. This would allow for much more reliable data and allow the carbon reduction programme to be much more widespread.

All witnesses agreed that carbon assessment should be incorporated into the statutes governing the budget setting process.

It was recognised that an iterative approach to building a carbon accountability process should be adopted, with each iteration moving towards an effective integration of climate change into all the operations of the Scottish Government. Experience from other institutions developing analogous systems suggest that at least three iterations will be required to achieve an integrated system, although in the case of the overall budget level carbon assessment this maybe optimistic.

Many of the witnesses’ suggestions required very little changes in the way budgets are already set and were to do with how the information is presented. It was also considered important that an annual report monitoring the climate change (carbon equivalent outturn of the Scottish Government’s Spending Plans) is developed to complement the carbon assessment planning tool. This report will be similar to the Scottish Government’s Efficient Government Outturn Report 2007/8. This carbon outturn report will enable more effective scrutiny of Government Spending Plans as well as an important technique in facilitating the government meeting its carbon reduction targets.

EXTRACT FROM THE MINUTES OF THE TRANSPORT, INFRASTRUCTURE AND CLIMATE CHANGE COMMITTEE

11th Meeting, 2008 (Session 3) Tuesday 27 May 2008

Budget process 2009-2010 - appointment of adviser: The Committee agreed to seek approval for the appointment of a budget adviser and agreed to focus their budget scrutiny on climate change. The Committee agreed to consider a paper at a future meeting which will include a list of possible candidates for the post.

15th Meeting, 2008 (Session 3), Tuesday 24 June 2008

Budget process 2009-2010 - appointment of adviser (in private): The Committee considered a list of candidates for the post of budget adviser and agreed a ranking of candidates for the post.

16th Meeting, 2008 (Session 3), Tuesday 9 September 2008

Budget process 2009-10 - appointment of adviser (in private): The Committee considered a list of candidates for the post of budget adviser and agreed a ranking of candidates for the post.

18th Meeting, 2008 (Session 3), Tuesday 7 October 2008

Budget process 2009-10 (Stage 2) - witness expenses: The Committee agreed to delegate to the Convener responsibility for arranging for the SPCB to pay, under Rule 12.4.3, any expenses of witnesses during consideration of the Scottish Government's Draft Budget 2009-10.

Budget process 2009-10 (Stage 2) (in private): The Committee agreed its approach to the scrutiny of the Scottish Government's Draft Budget 2009-10.

19th Meeting, 2008 (Session 3, Tuesday 28 October 2008

In attendance: Ian Thomson, Committee Adviser

Budget process 2009-10 (Stage 2): The Committee took evidence on the Scottish Government's Draft Budget 2009-10 from—

Professor Jan Bebbington, Department of Accounting and Sustainable Development, University of St Andrews;

Dr Craig Mackenzie, Department of Sustainable Enterprise, University of Edinburgh;

Roger Levett, Development Consultant, Levett-Therivel;

Dave Watson, Scottish Organiser, UNISON;

Dr Dan Barlow, Head of Policy, WWF Scotland;

Duncan McLaren, Chief Executive, Friends of the Earth Scotland;

John Stocks, Manager, Carbon Trust in Scotland.

20th Meeting, 2008 (Session 3), Tuesday 4 November 2008

In attendance: Ian Thomson, Committee Adviser.

Budget process 2009-10 (Stage 2): The Committee took evidence on the Scottish Government's Draft Budget 2009-10 from—

John Swinney MSP, Cabinet Secretary for Finance and Sustainable Growth, Philip Wright, Deputy Director Climate Change, David Reid, Head of Finance Programme Management, Malcolm Reed, Chief Executive, Transport Scotland, and Guy Houston, Director for Finance and Corporate Services, Transport Scotland, Scottish Government.

Budget process 2009-10 (Stage 2) (in private): The Committee considered the main themes arising from its evidence sessions on the Scottish Government's draft budget 2009-10.

22nd Meeting, 2008 (Session 3), Tuesday 18 November 2008

In attendance: Ian Thomson, Committee Adviser

Budget process 2009-10 (Stage 2) (in private): The Committee considered a draft report to the Finance Committee on the Scottish Government's Draft Budget 2009-10.

The Committee agreed to circulate an amended draft report for agreement by correspondence.


Footnotes:

5 Scottish Parliament. Official Report, 23 January 2008, Col 5290

24 In relation to paragraphs 46 and 47, Charlie Gordon, Patrick Harvie, Alison McInnes, Des McNulty and Cathy Peattie agreed; Rob Gibson and Shirley-Anne Sommerville disagreed; Alex Johnstone abstained.

44 Scotland's National Transport Strategy, December 2006, paragraph 135

45 Scotland's Climate Change Programme: Annual Report 2007

46 Second annual report on Scotland's Climate Change Programme (April 2007 - March 2008)

54 Charlie Gordon, Alison McInnes, Des McNulty and Cathy Peattie agreed; Rob Gibson, Alex Johnstone and Shirley-Anne Sommerville disagreed; Patrick Harvie abstained.

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