AG INSIGHT | 15/02/2021
Businesses need strong interim targets in the Environment Bill
To deliver much needed investment in nature restoration, businesses require legally binding interim targets in the Environment Bill to drive rapid policy action, argues the Aldersgate Group’s Signe Norberg
Today the Aldersgate Group and several of its business members have published a letter calling on MPs to support an amendment to make interim targets legally binding when the Environment Bill returns to Parliament on Tuesday 26 January.
The Environment Bill is a crucial building block towards meeting the UK’s environmental goals and supporting the delivery of its net zero ambitions, and if designed correctly, it has the potential to help reverse the decline of the natural environment. This is a strong ambition, and the Bill establishes several mechanisms which support this vision – not the least by creating legally binding long-term targets in four priority areas, air quality, water, biodiversity, and resource efficiency and waste reduction. The Bill requires that these targets be comprehensive, set at least 15 years ahead of time, and supported by interim targets that are created every five years.
This Bill has the potential to deliver ambitious environmental improvements on the ground, but as it is currently written, the Bill does not guarantee continuous action to meet its long-term targets. There are no legal consequences if interim targets are not met, and the Secretary of State can set new interim targets if the previous ones look to be missed. Having this uncertainty over near-term delivery built into the target setting process undermines the ambition of the long-term targets. There needs to be a robust framework in place, with a legal requirement to deliver continuous improvements to the natural environment over the course of several years and successive governments. Stronger milestones towards the achievement of long-term targets would help ensure that government remains on track to meet them, and provide businesses with a clear policy and regulatory framework to invest in.
Furthermore, there is no legal requirement to meet the long-term targets until 2037. This creates a significant lag between the introduction of the targets and their realisation, which pushes the impetus to meet long-term targets into the future. To be successful and provide certainty to businesses, there needs to be incentives for successive governments to act urgently and without delay. Otherwise, we risk backloading action which could undermine the delivery of long-term targets and make their delivery more costly. Consequently, the framework for interim targets is too vague and it must be made more robust.
Businesses benefit from strong interim targets
Businesses have long supported an ambitious Environment Bill and see the delivery of urgent environmental improvements as a necessity for the wellbeing of the economy, our infrastructure and society. That’s why today, the Aldersgate Group and several businesses, including Anglian Water, Suez, Ikea and Willmott Dixon, have published a public letter ahead of the Bill’s return on Tuesday to make the case for legally binding interim targets. These businesses emphasise that long-term targets must be underpinned by regular and binding milestones that will require consecutive governments to act.
One needs to only look at the successes of carbon budgets established under the Climate Change Act to understand the benefits of strong, intermediate milestones. The legally binding nature of carbon budgets, and the requirement they make for government policies in the near term, acts as a reliable investment signal for business. Their success can be particularly noted in sectors such as low carbon power and transport. Carbon budgets are therefore a good model which should serve as a blueprint for the targets established under the Bill.
The combination of reliable long-term and interim targets will help establish a framework for government policies, market mechanisms and regulations within which businesses can receive predictable revenues to support their investments in more resource efficient and environmentally restorative business models. Stronger interim targets will also help deliver a level playing field for businesses in the near term, based on increasingly higher environmental performance.
Delivering a world leading environmental programme
When the Bill was introduced to Parliament last year, it was heralded as helping achieve the Conservative Party’s commitment to have the “most ambitious environmental programme of any country on earth”. Whilst it is true that this a Bill that has the potential to deliver ambitious environmental outcomes, much of this progress will depend on the ambition of the long-term targets and whether they are supported by robust and nearer-term milestones to drive continuous environmental actions. Stronger interim targets are crucial to this.
As the Environment Bill returns to Parliament on 26 January, MPs should seize the opportunity to support an amendment that will strengthen the interim targets process by making it the Secretary of State’s duty to ensure that interim targets are met. It is a reasonable amendment, which will reinforce the credibility of the Bills’ long-term targets and deliver a much clearer policy and regulatory framework which businesses can invest against. Never has there been such a clear economic, social and environmental case for overturning the decline in the state of the natural environment. Let’s make the most of it and legislate a strong Environment Bill which sets the course for environmental improvement for decades to come.