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Mr Barker said the Group had really helped to “inform, nourish, sustain and drive forward the progressive thinking in Opposition that ultimately has informed our manifesto and then subsequently the manifesto blended with the best of the Liberal Democrats to create the Coalition Agreement. You really have played an important part in getting us to where we are now.”

Mr Barker welcomed the Aldersgate Group’s report, ‘Dealing with Deficits’ and agreed with its central message, “that we should seek the best value regulation.” He insisted that the “government is not anti-regulation per se” and can create positive outcomes, such as in energy efficiency and providing long-term certainty. However he cautioned that this Government remains determined “to cut regulation where it’s out of date, where it’s unnecessary and where it’s burdensome.” Ultimately, “provided we get a sensible, pragmatic balance right and use regulation proportionately it will remain a key tool in the drive to a low carbon energy, resource-efficient, business friendly, entrepreneurial economy.”

The Coalition Government’s priority has been dealing with the public deficit and putting the UK back on the path of sustainable growth. That growth, Mr Barker emphasised, must be financially, economically and environmentally sustainable. This Government aspires to be the ‘greenest government ever’, which means creating the right policy framework to drive long-term green growth. “I firmly believe that restoring our economy to growth and making it green are certainly not mutually exclusive goals.”

Mr Barker argued that “decarbonisation is not only a positive thing, but it really mustn’t mean de-industrialisation. On the contrary, we need more advanced manufacturing in this country, we need to import less, we need to bring less kit from halfway around the world, we need to draw on our ability for innovation, science and actually make things to a high quality here.” The green sector will be fundamental for much of this development, in goods, financial services, clean technology and green energy. These sectors are the potential “powerhouses of growth in the twenty-first century”, where Britain can reduce its own carbon emissions, drive a balanced economy in both the north and the south, and power a “long-term renaissance in a balanced manufacturing economy.”

On the issue of mandatory carbon reporting and whether it has a place in a smarter regulatory framework, Mr Barker admitted, “that’s still a very live debate in government.” He voiced his support for mandatory reporting for business, because of the benefits for investors in understanding a company’s carbon risk and for company directors who need to understand their exposure to the prices of carbon, oil and gas. “How are we ever going to get off the oil and gas hook otherwise?” The risk posed by carbon and the costs of carbon will only become more pronounced as this century progresses, “and a common reporting practice is going to be good for business.”

Since it was established in 2006, the Aldersgate Group has published three reports on regulation because one of its founding principles was for “making the economic case for good environmental standards and those are often secured – not always – through regulation.” Sir John clarified that the Aldersgate Group’s definition of regulation is “the whole scope of government intervention,” which includes fiscal measures and incentives.

Sir John provided the background to regulation: “The first motive for having environmental regulation was and remains public protection.” The importance of this is largely inarguable and no amount of cost/benefit analysis can diminish it. The second motive is the need for a form of market correction on issues such as atmospheric carbon concern, where climate change has come to be seen as the biggest market failure. “Environmental regulation in its full sense is a means of dealing with market failures, even if those failures have their costs far in the future.”

The Aldersgate Group believes the third motivation for good environmental regulation builds on the second, because the economy of the future needs to be low carbon and resource efficient, with a respect for “its impact on the natural systems upon which we all depend.” Although this challenge is recognised to an extent, understanding how to make the transition to this economy is unclear. “All the short-term drivers on industry, business and investment actually don’t point in that direction”, so part of the Government’s role is “to help shape that future, to help lead the UK to a position of future competitiveness and future economic viability, through anticipating some of those changes.”

The Coalition Agreement “‘recognises that protecting the environment is one of the gravest challenges that faces us and that urgent action is required. It is committed to using a wide range of levers to cut carbon emissions, decarbonise the economy and support the creation of new green jobs and technologies.’ We are at one, on that.”

Sir John concluded by recommending to Greg Barker, “to carry on talking about good, purposeful regulation, remembering what its purposes are. There are plenty of voices, some of them in government and many of them outside, who simply want to hack and slash. That would not just be destructive of social protection, but destructive of our future economic competitiveness.

Mr A’Hearn worked for the Victoria Environment Protection Agency (EPA), which was set up in the 1970s, when “the only thing that changed business behaviour around the environment was regulation.” Now there are other drivers such as CSR commitments and supply chain requirements, which means now “what we should be doing is rewarding and supporting those who are meeting standards and wanting to innovate, and we should be very hard on those that don’t.”

Mr A’Hearn welcomed the Aldersgate Group’s report, noting that it asks the question of “what is Britain’s appetite for regulatory reform?” One system which was used in Victoria addressed the question of how to reduce energy use and to achieve this, we “made energy efficiency mandatory, solely on a financial payback measure.” The law mandated that companies had to do an energy audit – which has now been extended to waste and water as well – and anything with a three-year or better payback was mandatory. “We could then prosecute companies, as much as for putting out benzene which might cause cancer as if they didn’t turn their lights off, if that meant a three year payback.” Mr A’Hearn noted that the scheme saved over a million tonnes of greenhouse gases (GHG), or 1% of Australia’s GHG emissions, and $40m annually in energy bills. Mr A’Hearn insisted, “make the financial outcome the measure and then it’s very hard for businesses to say, we won’t do X,” if it’s going to make them money.

A second Australian example was around licensing. At one stage one water authority in Victoria had 26 separate licences and 226 pages of prescriptive conditions. They now have a single corporate licence with 3 pages of outcome-based obligations. They would send in 400 pages of monitoring data, “that we would pretend to read and if we did read it we often wouldn’t really understand it.” The EPA changed the law in Victoria so each company has the option of sending in a one-page statement signed by the CEO and that signature gave the regulator the assurance of the company delivering the compliance that was stated there. This “freed up the regulator’s resources to send people out inspecting sites, doing random orders, so that we could check and verify in a much more productive way than what was going on.”

“Has Britain got the appetite, as outlined in the AG report, to go much further?” Mr A’Hearn argued that licences must be simplified and can be as small as the modern driving licence – “You’re either licenced to use the environment or not in running your business and further resources can be put into checking. Like with driving.” People are licensed and then resources are put into speed cameras, for example to catch those who break the law.

“I also commend the report to you and look forward to playing our role from WSP in helping to implement the ideas that are in it.”

This event was supported by WSP Environment & Energy.