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"No nation can move in isolation on carbon price because there is embedded carbon in everything. It would crucify us competitively. All it will do is put national prices up and make people poorer. It needs international cooperation to agree on a high price which is why it is such a huge challenge for mankind."
Peter T Jones OBE, Advisor on waste, carbon and materials efficiency
Moving to low carbon infrastructure will require changes to the environment in which clients, owners and engineers operate. We must establish a stable, long-term framework that reduces risk for investors, manufacturers, the construction industry and other stakeholders.
While this chapter focuses on government´s role, the engineering profession and its representative bodies need to play their part. This should include reforming key industry tools such as procurement methodologies, design guides, contracts and environmental assessment schemes.
Government strategic level actions
Carbon price
To deliver investment in key technologies we need a realistic and long-term carbon pricing mechanism with a guaranteed floor. This could be achieved by either a carbon tax or government commitment to maintain prices within the European Union Emissions Trading System (EU ETS). A current criticism of the system is that EU government issues free `permits to pollute´ which undermines low carbon planning and this should be resolved urgently.
Standard carbon measure and counting standards
Different methods for measuring and counting carbon are springing up in each infrastructure sector. A common UK system will save time, increase comparability and allow carbon measures to be used in decision-making. Once a workable common system is in place, it can be refined to deliver optimum outcomes.
The government can help by establishing a standard methodology for carbon counting. This could be applied throughout government asset procurement and maintenance contracts and become a defacto British Standard as soon as possible.
Reduce risk in the planning system
The process for securing planning approval for major infrastructure deters investment because of its length, uncertainty and cost. The new regime put in place by the Planning Act 2008 has the potential to improve this situation. It establishes the need for infrastructure via a series of national policy statements (NPSs) and has created an Infrastructure Planning Commission (IPC) to adjudicate on applications within a fixed timescale.
NPSs will be owned by ministers, who will need to demonstrate how the policies contained within the statements contribute to climate change goals. This will provide further clarity and ICE strongly supports the full implementation of this new system. But the IPC and NPS systems only apply to larger projects of national significance. The lower tiers of planning down to local authority level should also put a low carbon agenda at the heart of all development decisions.
Stable and coherent policy Infrastructure UK
Government has introduced a range of measures to support low carbon technologies, such as the Renewables Obligation and, from 2010,
feed-in tariffs for micro-generation. It has also created new bodies to drive delivery of nuclear, renewables and carbon capture and storage. Finally, in July 2009 it published an extensive Low Carbon Transition Plan with a promise that a road-map to 2050 will follow in spring 2010.
This activity in overlapping policies needs to be coordinated and its impact monitored. More importantly, there needs to be a focal point for triggering remedial action if policies are not working. Infrastructure UK, the new body being developed by HM Treasury and the Department for Business, Innovation and Skills, should take on this role.
Funding National Infrastructure Investment Bank
All of the above measures will be useless unless adequate funding at affordable rates is available for new and upgraded infrastructure. Under
current conditions there are real concerns that this will not be the case 2009 has seen many projects struggle to find capital at affordable rates, if at all. Although the government has created the Treasury Infrastructure Finance Unit (TIFU) to ensure PFI projects are able to access capital, at the time of writing little has been done to address the cost of capital. ICE believes that Infrastructure UK needs to be complemented by a mechanism, such as a National Infrastructure Investment Bank, to fill this gap and provide secure long-term funding at competitive rates of interest to major national projects
Government operational level
Regulatory reform
The remit of the Office of Gas and Electricity Markets (Ofgem), the Water Services Regulation Authority (Ofwat), and all relevant transport
and waste regulators should include the regulation of carbon emissions associated with individual infrastructure assets and the operation of the network as a whole. The current regulatory remit is too focused on shortterm consumer price and carbon performance suffers as a result. The regulatory remit must be expanded so the reduction of carbon is a fundamental driver in determining both infrastructure investment and consumer price.
Making counting carbon count planning and procurement
Measuring the carbon impact of infrastructure is not enough; government must drive decisionmaking. It must take a lead and ensure public
procurement and strategic planning is driven by the need to reduce carbon emissions. At a local authority level, councillors and council officials must accept their responsibility for implementing these national imperatives for low carbon development. Important planning policies such as local development frameworks must encourage and require designers and developers to deliver low carbon solutions.
"Regulators, government and the renewables sector need to work more closely together to ensure development and application of best practice industry standards and methods of working. This would help ensure that planning delays due to environmental requirements were minimised."
Scottish Environmental Protection Agency
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