Environmental policies and procedures in both the public and private sectors are now ubiquitous. This article examines the motivations and incentives of those public authorities who have embraced the current climate for energy efficiency policies and more generally "green ethics".

Reasons For 'Going Green'

The Kyoto Protocol has prescribed that the UK will reduce its carbon dioxide and greenhouse gas emissions by 12.5%. Furthermore, the UK is imposing on itself legally binding national targets to reduce carbon dioxide emissions by 26-32% by 2020 and 60% by 2050. Central to meeting these targets is greater energy efficiency in buildings, as buildings are responsible for approximately 50% of the UK's total carbon dioxide emissions. An increase in the use of renewable energy will also be central in facilitating the above targets being met.

Owing to the dwindling stocks of oil and gas in the North Sea, the UK has become increasingly reliant on imported fuels from Russia, Central Asia, the Middle East and Africa. In turning to renewable energy, the UK can reduce its reliance on imported fuels. Further, the move towards use of renewable energy has been hailed by Gordon Brown as a "fourth technological revolution", and is clearly regarded as a hotbed for investment opportunities. Indeed, government estimates suggest that:

  • industries such as renewable energy, waste management and water treatment will be worth US$700 billion globally by 2010;
  • by 2050, the annual value of the global low carbon energy sector could be US$3 trillion; and
  • the UK environmental sector is currently worth £25 billion and employs 400,000 people with it predicted that this could double within 20 years.

These monetary projections have been key in motivating green policies in both the public and private sectors.

EU Member States frequently implement and apply EC environmental law because they are aware that the European Commission will threaten them with action for failure to fulfil their obligations under the EC Treaty if they fail to do so, rather than because they have a burning desire to implement policies which will protect the environment. In addition, the Environment Commission aims to facilitate green public procurement and other incentives for greener products. It has set a target for half of all public procurement to be 'green' by 2010.

Schemes Which Reward Public Authorities For Their Green Initiatives

There are many schemes which incentivise public authorities to adopt green policies. One such example is the Beacon Scheme which was set up to promulgate best practice across local government. Beacon status is granted to those authorities that demonstrate "a clear vision, excellent services and a willingness to innovate within a specific theme".

Almost every local authority in England has applied for Beacon status in at least one of the seven years that the scheme has been in operation. The scheme provides the chance for public authorities to gain national recognition for the innovation shown by their teams. Furthermore, Beacon winners have access to a range of benefits and opportunities as follows:

  • recognition for the authority within the community;
  • free 360 degree health check for the authority; and
  • access to additional funding.

Furthermore, it has been observed that local authorities are uniquely placed to provide vision and leadership to local communities, raise awareness and help change behaviours. Without taking action on the issue of climate change, authorities risk severe financial, social and environmental damage to their region.

The Nottingham Declaration

The Nottingham Declaration was launched in October 2000 and has been signed by more than 300 English Councils. The Declaration recognises the central role of local authorities in leading society's response to the challenge of climate change. In signing the Declaration, Councils are pledging to systematically address the causes of climate change and to prepare their community for its impacts.

As well as reassuring residents of the commitment to combating climate change, one of the chief incentives for local authorities to ascribe to the Declaration is the fact that a range of support and resources are available for those local authorities who adopt climate change and energy initiatives. By way of example, Salix is an independent company who are funded by the Carbon Trust to work with the public sector to reduce carbon emissions through investment in energy efficiency measures and technologies.

Further, local authorities have cited many examples of significant savings that have resulted from sustainable energy measures that have been introduced. For example, Kent City Council have estimated that they are saving £160,000 annually after receiving support for their energy saving measures.

Pressure To Publicise

Councils and the private sector alike are coming under increasing pressure to report on the extent of their greenhouse gas emissions and to make public their policies as to what they are doing to reduce their carbon footprints. Previously climate change policies may have been implemented as a way of differentiating local authorities and companies from their counterparts. However, in today's green focused culture, evidence of such policies are a prerequisite and the absence of proactive policies not only carries the risk of legally enforceable penalties, but moral condemnation and damage to reputation as well. Given the importance that corporate social responsibility has gained in recent years, this threat to reputation is no small concern and is undeniably a consideration at the forefront of both the public and private sectors' minds.

Interaction Between Private And Public Sector

In addition to the interaction discussed above between the public and private sectors in respect of funding initiatives, the two sectors are imminently due to be participants in a compulsory emissions trading scheme named the Carbon Reduction Commitment (CRC). This scheme will be an obligatory emissions trading scheme for all non-energy intensive businesses and public sector organisations in the UK who are believed to account for approximately 10% of the UK's total carbon dioxide emissions. It is anticipated that the scheme will come into force in 2010. The scheme will apply to all businesses and other organisations in the UK whose total half hourly metered electricity consumption exceeded 6,000 MWh during 2008. The Government will stipulate a cap or 'allowance' on the total amount of carbon dioxide those businesses governed by the scheme can emit in one year. The Government will then auction those allowances. At the end of the year those participating businesses and organisations will have to show that they have a sufficient number of allowances to cover the amount of carbon dioxide they have emitted. If they are found to have emitted more than the number of allowances they hold, they will have to buy more allowances from other participants and likewise, if they have emitted less than the number of allowances they hold, they can sell their surplus allowances to other participants in the CRC.

The scheme is currently being consulted on and the public and private sectors have both been active in shaping the CRC.

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