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    Environment Bill 2009, Center partyA Bill to reduce The United Kingdom's greenhouse gas emissions in the most efficient manner, and to support The United Kingdom's burgeoning green enterprise sector.

    Preamble
    In 1997 the Labour government made a pledge to cut carbon dioxide emissions by 20% from 1990 levels by 2010. This is extremely unlikely to be met. The 2008 Climate Change Bill set an ambitious target reduction of 80% from 1990 levels by 2050 and a mandatory limit of 60%, with an intermediate target of between 26% and 32% by 2020. Meeting these requires urgent action.

    The Stern Review concluded that:
    • The scientific evidence points to increasing risks of serious, irreversible impacts from climate change associated with business-as-usual paths for emissions.
    • Climate change threatens the basic elements of life for people around the world — access to water, food production, health, and use of land and the environment.
    • The impacts of climate change are not evenly distributed — the poorest countries and people will suffer earliest and most. And if and when the damages appear it will be too late to reverse the process. Thus we are forced to look a long way ahead.


    Most importantly for this Bill, it concluded that the economic benefits of strong, early action to combat climate change are likely to vastly outweigh the cost of acting.

    The Stern Review called for emissions trading, technology investment and cooperation and action to reduce deforestation.

    Emissions trading is a useful tool. However economic theory and the evidence from Phase I of the European Union Emissions Trading Scheme (EU-ETS)show that large fluctuations in the price of permits, and thus of energy. This is a problem for firms who want to plan for their emissions and know how much they need to save. Martin Weitzman, Ernest E. Monrad Professor of Economics at Harvard University, proposed a hybrid system which sets a minimum and maximum price for these permits. Gernot Klepper and Sonja Peterson estimated that The United Kingdom had an abatement cost (and thus estimated price of permits) of €25 per metric tonne in order to reach the long-term EU-ETS limit.

    This Bill aims to meet the targets suggested by The Stern Review and enacted into law by the 2008 Climate Change Bill by implementing a selection of these measures. Moreover, this Bill aims to ensure The United Kingdom becomes a world leader in green technology and enterprise.

    BE IT ENACTED by The Queen's most Excellent Majesty, by and with the advice and consent of the Commons in this present Parliament assembled, in accordance with the provisions of the Parliament Acts 1911 and 1949, and by the authority of the same, as follows:-

    1. Emissions trading

    (1) The United Kingdom's allowance under the EU-ETS will be subject to a minimum price of £10 per metric tonne and a maximum price of £40 per metric tonne.
    (a) These limits will be in place for the length of Phase II of EU-ETS, which runs until 2012. They will be reviewed then.

    (2) Permits will be auctioned, subject to the maximum and minimum prices above.

    2. Green technology and enterprise

    (1) Part of the stimulus package announced by The Chancellor of the Exchequer will be used to launch a social venture capital fund. This fund will:
    (a) be allocated to enterprises based on both likely commercial return and likely impact on world greenhouse gas emissions.
    (b) be run by a committee of entrepreneurs, financiers, economists and climate change experts. The committee will report to and be appointed by the relevant Secretary of State, in the same manner as the Bank of England's Monetary Policy Committee.
    (c) be initially of an amount of £1 billion, to be reviewed annually in the budget.

    (2) Research councils will be given additional funding for research that could be implemented to reduce The United Kingdom's greenhouse gas emissions.

    (3) The government will provide support for infrastructure development needed to encourage clusters of green enterprises, especially technology enterprises. This will include, but not be limited to, transport links, telephone lines, high-speed broadband connections, mentors for new entrepreneurs and support for universities to link research with enterprise and bring innovation to the market.

    3. Support for businesses and households to reduce their emissions

    (1) Emissions reduction efforts launched by firms will be tax deductible.

    (2) Emissions reduction efforts launched by households, such as increasing insulation or installing solar panels, will reduce the council tax paid on that property.

    4. Deforestation

    (1) Producers of paper-based products must plant one tree for every tree used in their products that are sold in The United Kingdom.
    (a) This clause does not apply to firms who use less than 1000 trees per annum.
    (b) This clause applies equally to all firms whether based in The United Kingdom or abroad.
    (c) Efforts to plant trees greater than the number required are tax deductible.

    5. Commencement, short title and extent

    (1) This Act may be cited as the Environment Bill 2009.

    (2) This Act shall come into force on 1 January 2010.

    (3) This Act extends to all parts of The United Kingdom.
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    At least this Bill has been drafted at a high standard of quality unlike many of the ones I have witnessed during my stand-in as M.P.
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    Surely we have better things for the government to be spending its money on, especially during a recession?
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    (Original post by BruceTaylor)
    Surely we have better things for the government to be spending its money on, especially during a recession?
    Are you joking ?
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    (Original post by 01kij114)
    Are you joking ?
    I don't think he is.
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    Does the Center Party have any MPs?
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    (Original post by UniOfLife)
    Does the Center Party have any MPs?
    The two independent MPs joined the party.
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    As for the bill (i'm not too well versed on the EU ETS, so correct me where i'm mistaken)

    1) Are the price limits imposed just for the government allocation of emissions under EU ETS II, or for the actual trading of emissions? Because if its the latter, does the restriction apply to only trading in the UK, or to companies buying from elsewhere in europe too (and if so, how will this effect the UK in being unable to trade at a higher or lower rate than the boundaries set?)

    2) Can you be more specific as to the source of funding, and what this will cut elsewhere to launch the fund? 2.2 seems a bit vague too, and both 2.2 and 2.3 don't state any sort of projected level of funding to enact. Given the state of the economy at the moment, while i am totally in support of green initiatives in general, and agree with the economic benefits in the long term, in the short term, can you give an estimate to the additional costs this may cause?

    3) Simple question, to what extent will they be tax deductable for both businesses and households? And what is the likely shortfall in incoming tax because of this?

    4) The idea is interesting, but in practice, is a government inspector going to go and count every single tree a company plants? How will this be enforced? And by paper based products, does this exclude wood based products (furniture etc)? And planting trees being tax deductable, does this apply only to companies which the previous parts of 4 apply, or any company?
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    (Original post by 01kij114)
    Are you joking ?
    I just don't place green issues at the top of my agenda, personally. And I don't feel wasting money on them right now will benefit the people. The only bit of this bill I support is the tree planting bit.
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    Remove section 4. "Deforestation". Firstly, it sounds great until you realise it would probably lead us to a paper shortage. Secondly, it would not help to reduce deforestation. Deforestation hurts rainforests the most and can be stopped by granting property rights to the people who have lived in those areas for tens of generations but have watched as the Government takes it from them and contracts it away. The UK's response to deforestation ought to be putting as much diplomatic pressure as possible on Brazil, Indonesia and Malaysia as we can to do this.

    The thing is that I don't really believe in global warming, but if I did, I wouldn't think that Britain is in much of a position to change anything. I do kinda like Section 2 though.

    That said, I'd be more inclined to vote for it if everything was tax-deductible.
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    I'd like to add a couple of points before the debate gets fully started:

    Firstly, here’s a breakdown of world greenhouse gas emissions by cause:



    As this shows, to significantly cut emissions, we need to hit a lot of areas – transport, energy, industry and deforestation. Enterprise and innovation is one way of doing this, as it keeps it open.

    Secondly, on the deforestation clause, this follows from Velvet’s pledge to plant 3 trees for everyone one they use. If a firm can do that and remain commercially viable, it suggests doing it one-for-one will not be massively costly. Moreover, since this applies to all firms UK sales, there is no anti-competitive effect for British firms.

    (Original post by Eru Iluvatar)
    1) Are the price limits imposed just for the government allocation of emissions under EU ETS II, or for the actual trading of emissions? Because if its the latter, does the restriction apply to only trading in the UK, or to companies buying from elsewhere in europe too (and if so, how will this effect the UK in being unable to trade at a higher or lower rate than the boundaries set?)
    It will apply to the actual trading and only applies to the UK. Basically, the UK gets an allocation we have to meet as a nation. Setting maximum and minimum prices says that, if it is actually a lot cheaper than expected to reduce emissions (less than £10/tonne), we'll reduce it by more; and if it's far more expensive than expected (more than £40/tonne), we'll reduce it by less by purchasing permits from elsewhere.

    The price limit guards against these two eventualities, and would have no impact if the actual cost of abatement is between the two prices.

    (Original post by Eru Iluvatar)
    2) Can you be more specific as to the source of funding, and what this will cut elsewhere to launch the fund?
    Source of funding? It's investment, so it doesn't need funding. Or rather, it funds itself. The aim of social venture capital is to break even in real terms while having the biggest impact possible, as opposed to traditional venture capital that tends to make significant profits. The fund managers will be charged with making it cost-neutral.

    (Original post by Eru Iluvatar)
    2.2 seems a bit vague too, and both 2.2 and 2.3 don't state any sort of projected level of funding to enact. Given the state of the economy at the moment, while i am totally in support of green initiatives in general, and agree with the economic benefits in the long term, in the short term, can you give an estimate to the additional costs this may cause?
    I'd expect it to be done as part of the stimulus package. Again, these are both primarily investment spending, as better infrastructure and more research will lead to more jobs. Government infrastructure spending tends to pay for itself many times over, if invested wisely.

    We could state amounts, but I felt this something that would be something better dealt with by the minister out of their budget, so it can react to demand - if there are lots of great bid for research projects, we should fund more than if there are not many. We need this to be adaptable to circumstances, so I’m reluctant to put a specific amount on it. I could put a limit on it for the next reading if that would be preferred? What sort of limit would be acceptable?

    (Original post by Eru Iluvatar)
    3) Simple question, to what extent will they be tax deductable for both businesses and households? And what is the likely shortfall in incoming tax because of this?
    We can't know exact (or indeed any reasonable estimate of the) figures because it depends how many firms do it. Currently the cost would be minimal. The better way to view it is for each decision, will it be worth it:

    Effectively, this will mean that, above the limit firms must do to be socially responsible, they will pay 70% of the cost and the government will pay 30% of the cost. Given the private benefit is likely to be less than 70% of the total benefit (as the main benefits of the extra trees will be social), if it's worth a company doing it, it's net beneficial socially.

    This will not be a huge amount of money, as so few firms do it when they pay 100% of the cost, paying 70% will mean more firms do it, but planting trees is not hugely expensive and I can't see a huge number of firms doing this. Indeed, since the government currently pays 100% of the cost to plant and cultivate forests, this may reduce government spending.

    (Original post by Eru Iluvatar)
    4) The idea is interesting, but in practice, is a government inspector going to go and count every single tree a company plants? How will this be enforced?
    Generally, these sort of things are put into company accounts and signed off by auditors, in the same way the company's finances are.

    (Original post by Eru Iluvatar)
    And by paper based products, does this exclude wood based products (furniture etc)?
    We could extend it to that, but in its current form it excludes these.

    (Original post by Eru Iluvatar)
    And planting trees being tax deductable, does this apply only to companies which the previous parts of 4 apply, or any company?
    Good point, it is unclear. In the next reading it will be any company, as the benefits are there whoever plants it.

    (Original post by BruceTaylor)
    Surely we have better things for the government to be spending its money on, especially during a recession?
    Absolutely not. Green enterprise is one of the fastest growing industries and is bound to be huge given the worldwide focus on it. Britain being in a good position is vital. It creates jobs as well as being beneficial to the environment. This is exactly the kind of thing the government should be spending the surplus on.
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    (Original post by Bagration)
    Remove section 4. "Deforestation". Firstly, it sounds great until you realise it would probably lead us to a paper shortage.
    It won't. It's already done by some paper companies and would lead to relatively small costs. It would raise the price of paper by a small amount (a few percent), but this seems reasonable considering the effect deforestation has on greenhouse gas emissions (see my post above this).

    (Original post by Bagration)
    Secondly, it would not help to reduce deforestation. Deforestation hurts rainforests the most and can be stopped by granting property rights to the people who have lived in those areas for tens of generations but have watched as the Government takes it from them and contracts it away. The UK's response to deforestation ought to be putting as much diplomatic pressure as possible on Brazil, Indonesia and Malaysia as we can to do this.
    I agree. Though deforestation hurts quite a lot of areas, and replanting trees will do a lot to reduce this impact.

    (Original post by Bagration)
    The thing is that I don't really believe in global warming, but if I did, I wouldn't think that Britain is in much of a position to change anything. I do kinda like Section 2 though.
    On it's own, you're right. But we have made a promise, along with other countries and recently at the G8, to reduce our emissions as they reduce theirs. Doing our bit is important to help keep the pressure on other countries to keep to their promises.
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    *Centre Party.

    This is interesting, and when I finally get around to finishing the last section of my bill I'll take this one into account.

    Just one question for now, can you give us no better answer on funding for section 2? I understand your argument but I mean, are you positive you can actually get any meaningful impact out of this without investing limited public funds in and cutting from somewhere else?
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    (Original post by Drogue)
    It won't. It's already done by some paper companies and would lead to relatively small costs. It would raise the price of paper by a small amount (a few percent), but this seems reasonable considering the effect deforestation has on greenhouse gas emissions (see my post above this).
    If you can source this I'll submit on that point.

    (Original post by Drogue)
    I agree. Though deforestation hurts quite a lot of areas, and replanting trees will do a lot to reduce this impact.
    OK. Perhaps you could add a clause as well about H.M. Government pressuring countries with irresponsible forestry policies to be more responsible?

    (Original post by Drogue)
    On it's own, you're right. But we have made a promise, along with other countries and recently at the G8, to reduce our emissions as they reduce theirs. Doing our bit is important to help keep the pressure on other countries to keep to their promises.
    Is that promise enshrined in law or was it verbal? Did we actually sign a binding contract at Kyoto, or did we just say we'd comply?
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    Simple question - why don't we plant more trees?
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    (Original post by Bagration)
    If you can source this I'll submit on that point.
    I'm going on holiday in a couple of hours, so I'll be unable to work it out before I go away. Though I can say this is already done by some firms and these firms did not raise their prices at all when they implemented it. If it can be done within the profit margin, it won't raise prices much.

    (Original post by Bagration)
    OK. Perhaps you could add a clause as well about H.M. Government pressuring countries with irresponsible forestry policies to be more responsible?
    Happy to.

    (Original post by Bagration)
    Is that promise enshrined in law or was it verbal? Did we actually sign a binding contract at Kyoto, or did we just say we'd comply?
    It is enshrined in international agreements, though (IIRC) there are no penalties for not meeting them other than losing our standing in discussions on the issue. However the point is, if we meet our targets, it puts more pressure on other countries to do so as well. This means it's not Britain acting alone, it's Britain leading the world in acting.

    (Original post by Thunder and Jazz)
    *Centre Party.

    This is interesting, and when I finally get around to finishing the last section of my bill I'll take this one into account.

    Just one question for now, can you give us no better answer on funding for section 2? I understand your argument but I mean, are you positive you can actually get any meaningful impact out of this without investing limited public funds in and cutting from somewhere else?
    Yes on 2(1). As the bill says, investments will be based both on commercial return and likely impact on emissions. I will add a clause that the managers are required to break even and there will be financial penalties if they do not.

    On 2(2) and 2(3), it is less clear cut, but such spending is likely to pay back more than invested. Moreover, this would be part of the stimulus (much of it is not yet allocated), and thus would not require cuts from anywhere else. The spending here will only be in the medium term, while we need the stimulus. It also won't be of an amount to make much odds. I'm happy to put a limit here though to ensure the cost is not significant.


    How would people feel about adding a clause raising the tax to fossil fuels and reducing income tax, at amounts set so that this bill is tax neutral? This could allay any fears of cuts in spending or extra debt elsewhere.
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    (Original post by UniOfLife)
    Simple question - why don't we plant more trees?
    That's what this bill will do. However it's more efficient to make firms internalise the social cost of cutting down trees (that another needs to be planted) than for government to pay for it, and on the tax deducatible clauses, it's more bang for our buck to pay only 30% of the cost of it. If these measures don't do enough, we could plant more trees centrally, but let's see how much effect these (more efficient) measures have first.
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    (Original post by Drogue)
    That's what this bill will do. However it's more efficient to make firms internalise the social cost of cutting down trees (that another needs to be planted) than for government to pay for it, and on the tax deducatible clauses, it's more bang for our buck to pay only 30% of the cost of it. If these measures don't do enough, we could plant more trees centrally, but let's see how much effect these (more efficient) measures have first.
    I don't see much in this Bill about planting trees save that cut ones must be replaced with new ones. Very nice.

    Why don't we reduce the carbon emissions of the entire country by adding a small tax to carbon emissions and using that money to plant trees that reduce the carbon in the atmosphere? Forget about targets and tax deductibles and energy efficiency etc etc. Simply work out how many trees need to be planted to remove a certain amount of carbon. Work out how much that would cost and then charge carbon emitters that amount. Isn't that the most sensible and simple way of making the country carbon neutral?
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    (Original post by Drogue)
    It will apply to the actual trading and only applies to the UK. Basically, the UK gets an allocation we have to meet as a nation. Setting maximum and minimum prices says that, if it is actually a lot cheaper than expected to reduce emissions (less than £10/tonne), we'll reduce it by more; and if it's far more expensive than expected (more than £40/tonne), we'll reduce it by less by purchasing permits from elsewhere.

    The price limit guards against these two eventualities, and would have no impact if the actual cost of abatement is between the two prices.
    How would this effect companies in the UK, in a european marketplace for permits (as i understand it, its the companies, rather than the government, who would have to trade for extra permits if they want to produce more than their current allocation for a year). Would it mean that if the "market price" of permits was above £40 a tonne in europe, that UK companies couldn't sell their allocation for above that, or if it was less than £10, they couldn't sell it below that, or they couldn't buy permits outside that price range either? I might be not quite understanding the scheme, so correct me if i'm making a mistake about how it works.


    (Original post by Drogue)
    Source of funding? It's investment, so it doesn't need funding. Or rather, it funds itself. The aim of social venture capital is to break even in real terms while having the biggest impact possible, as opposed to traditional venture capital that tends to make significant profits. The fund managers will be charged with making it cost-neutral.
    I know, but in the short term, the money has to come from somewhere. What sort of period would you estimate we would be looking at for investments to become cost neutral? And the question was more about, what stimulus fund (just for reference), and whether or not the funds were already allocated by the RL government for other schemes, and if so, what would be effected by allocating it to this instead (again, in the short term, before it becomes cost neutral)

    (Original post by Drogue)
    I'd expect it to be done as part of the stimulus package. Again, these are both primarily investment spending, as better infrastructure and more research will lead to more jobs. Government infrastructure spending tends to pay for itself many times over, if invested wisely.

    We could state amounts, but I felt this something that would be something better dealt with by the minister out of their budget, so it can react to demand - if there are lots of great bid for research projects, we should fund more than if there are not many. We need this to be adaptable to circumstances, so I’m reluctant to put a specific amount on it. I could put a limit on it for the next reading if that would be preferred? What sort of limit would be acceptable?

    Its not any particular limit i have in mind, its more that the funds are there in the first place to fund them. Again, in the long term, it will be beneficial, and if this bill was written a couple of years ago, when the public finances were better, i would probably not be asking the question. But this money has to come from somewhere, so would it come from raised taxation, or cuts in other areas (so if it comes from the stimulus fund, is this money unallocated already, or would it have to be removed from a different area or different schemes, or if it was from a ministers budget, would anything have to be sacrificed in order to pay for this infastructure).

    (Original post by Drogue)
    We can't know exact (or indeed any reasonable estimate of the) figures because it depends how many firms do it. Currently the cost would be minimal. The better way to view it is for each decision, will it be worth it:

    Effectively, this will mean that, above the limit firms must do to be socially responsible, they will pay 70% of the cost and the government will pay 30% of the cost. Given the private benefit is likely to be less than 70% of the total benefit (as the main benefits of the extra trees will be social), if it's worth a company doing it, it's net beneficial socially.
    The question was asked about 3), not 4) (reductions in emissions, not planting trees). But mostly, i get your point, but as this is also going to apply to existing schemes that companies have under way, or would have had under way anyway, which will then be tax deductable, and lots of companies are investing in greener technology already (for the marketing benefit, if nothing else). What basis are you using that this wont have a significant impact on tax income?

    (Original post by Drogue)
    This will not be a huge amount of money, as so few firms do it when they pay 100% of the cost, paying 70% will mean more firms do it, but planting trees is not hugely expensive and I can't see a huge number of firms doing this. Indeed, since the government currently pays 100% of the cost to plant and cultivate forests, this may reduce government spending.
    So will this only apply to trees planted in the UK?

    (Original post by Drogue)
    We could extend it to that, but in its current form it excludes these.
    Was it intentional to exclude them (and if so why)? I've not got an opinion yet either way, so i want to hear what you think first.


    (reply was a little rushed, have to go to work, will try to clear stuff up if i haven't been clear or explained myself well enough, this evening)
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    (Original post by UniOfLife)
    I don't see much in this Bill about planting trees save that cut ones must be replaced with new ones. Very nice.

    Why don't we reduce the carbon emissions of the entire country by adding a small tax to carbon emissions and using that money to plant trees that reduce the carbon in the atmosphere?
    I'd love to add this, but I'm not sure it'd pass. If there's support for this, I'll add it to the second reading. Though I'd want to keep this bill as close to tax-neutral as possible, given the recession, so would want to use some of the extra money to reduce income tax.

    (Original post by UniOfLife)
    Forget about targets and tax deductibles and energy efficiency etc etc. Simply work out how many trees need to be planted to remove a certain amount of carbon. Work out how much that would cost and then charge carbon emitters that amount. Isn't that the most sensible and simple way of making the country carbon neutral?
    No, because we wouldn't have enough land. We can't keep planting trees to replace the carbon we use, as we have a set amount of land and need some of it for houses or agriculture. We have to both plant trees and reduce emissions.
 
 
 
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