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Infrastructure blog

Reforming the Green Book in the face of a climate emergency

18 November 2020

Following on from the conclusion of a consultation on Green Book reform, ICE has published its recommendations.

Reforming the Green Book in the face of a climate emergency
HM Treasury. Image credit: Shutterstock

Last month, ICE published a discussion paper on reforming the Green Book to achieve better outcomes from infrastructure investment. After over 40 interviews and written submissions, including a roundtable and evidence from members on ICE’s The Carbon Project, we’ve set out our recommendations for reform.

How is the Green Book perceived?

The views from the majority of respondents indicated that there is little wrong with the Green Book as a project appraisal tool. Indeed, many respondents recognised that the success of the Green Book has been in its ability to provide guidance and a framework to draw out the right evidence in a transparent and objective way.

So the problem is not in the effectiveness of the Green Book as an appraisal tool, but rather in how it is used. We received plenty of evidence which highlighted gaps between what stakeholders want infrastructure to do and what the current process generates as an output, with inconsistencies both between government departments and at local and national levels.

It's clear that the focus should be on improving the application of the existing Five Case Model, rather than ripping up the Green Book completely. ICE has previously called for a standardised scorecard to be developed to prioritise, identify and weight non-financial outcomes for major projects – an approach like this would be welcome and go some way to support the wider strategic case that projects are appraised on.

Urgency of reaching net-zero

ICE’s initial discussion paper raised the possibility of a separate, sixth net zero case being added to the existing Five Case Model to ensure net zero and the climate emergency are considered as a core part of project appraisal.

While there was some support for this approach, most responses felt the existing Five Case Model was the right way to continue to appraise carbon emissions. However, the 2050 net-zero emissions target will only be reached if net zero itself is explicitly and clearly set out as a core objective throughout Green Book guidance and within the narrative. Any future refresh of the Green Book should ensure net zero is the golden thread woven through it.

Targeted outcomes from investment

Linked to the need to set out net zero as a core objective, there was a firm belief from responses to the consultation that certain policy areas must be distilled in a way that allows the strategic case to be prioritised properly. For example, while we know the government has a net zero target and wants to ‘level up’ the country, there is little clarity on how exactly it intends to achieve those objectives.

Government departments will be able to better apply the Green Book where targeted outcomes are clear – the definitions and hard targets that sit behind core national objectives therefore must be set out. The upcoming National Infrastructure Strategy should provide some further clarity in this regard, but it is evident that a net zero infrastructure plan – something ICE called for in our State of the Nation report earlier this year – must also be developed.

Improving local capability

While national objectives are clearly important, it’s also vital for the Green Book to align with specific regional objectives.

The relatively limited devolution of powers across the country means that decisions on infrastructure investment cannot always be taken locally. Meanwhile, a lack of appropriate resourcing and training means there can be deficiencies in preparing an effective strategic case or having a strong body of evidence to draw on. Regional investment should therefore be judged through both national and regional priorities and be backed up with greater devolution of infrastructure decision-making powers and funding.

Read the paper in full her

  • David Hawkes, head of policy at ICE