Policy paper

2010 to 2015 government policy: energy and climate change, evidence and analysis

Updated 8 May 2015

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

This is a copy of a document that stated a policy of the 2010 to 2015 Conservative and Liberal Democrat coalition government. The previous URL of this page was https://www.gov.uk/government/policies/using-evidence-and-analysis-to-inform-energy-and-climate-change-policies. Current policies can be found at the GOV.UK policies list.

Issue

To create effective policies to mitigate the effects of climate change and meet the UK’s energy demand, the government needs to understand:

• the existing situation – the climate system, energy supply systems and energy use
• the things we need to change to reduce UK emissions and meet energy demand
• the possible solutions and how they would work
• how our policies work in practice

Actions

The Department of Energy & Climate Change (DECC) employs a range of analytical specialists (scientists and engineers, economists, statisticians, social researchers, customer insight specialists and operational researchers). We also work with the broader research community to provide the evidence, research and analysis we need to make sure climate change and energy policies are well-informed and based on relevant evidence.

Research – economic, technical, social and trials

We examine the economic, technical and social perspectives of the problems we are working on to make sure we fully understand the issues and how they are playing out in practice. This helps us design and implement technically feasible policies in the most cost-effective way.

For example, by understanding how people and organisations interact with our policies, we can make the policies more effective and efficient. Research trials can help us understand the likely impact of our policies and improve their design before we implement them fully. This work also helps us to develop our knowledge to inform future policy decisions.

Read more about the different types of research we undertake.

Appraisal of policy options

We estimate the impacts of different options to help us make better decisions when developing policies. By bringing together a wide range of analytical experts, we can help identify the options that are most likely to maximise policy benefits and minimise costs. We can also better understand the wider effects of these policy choices.

Find out about impact assessments and the other tools we use to measure the potential impact of our policies.

Monitoring and evaluation

We monitor and evaluate policies to help understand how they are working in practice. We use this information to change policies (where necessary) so they work as effectively as possible, and to inform future policy decisions. It is essential that we assess whether our policies are meeting their objectives and understand why or why not, to improve both current and future policy development and implementation.

Read more about how DECC monitors and evaluates its policies.

Modelling and analytical projections

At DECC we use a range of models to inform our thinking in developing policies. These include models to evaluate alternative policy options and models to produce projections. We publish regular projections that cover energy, emissions and fossil fuel prices.

We use a number of these models to estimate the impacts of our policies and publish the results in the impact assessment for the policy. We have also published the 2050 calculator, which we use to look at long-term pathways and engage the wider public.

We are developing a modelling strategy and plan to publish more models and modelling outputs to allow others to use them and join the debate about the UK’s energy future.

Read more about our modelling projects and access our analytical projections data.

Statistics

We collect statistical data under laws and agreements including:

• UK Statistics of Trade Act
• Electricity Act 1989
• Gas Act 1995
• EU Energy Statistics Regulation
• IEA/EU Oil Stock Holding Obligation
• EU Renewable Energy Directive
• Kyoto Protocol
• Climate Change Act

We also collect a range of non-statutory data from UK energy companies, which we also use to inform energy and climate change policies.

The statistics we collect help to inform the National Accounts produced by the Office for National Statistics.

DECC’s Statistics page has links to all our main statistical series.

Background

Scientific evidence on climate change has led to:

• international agreements to reduce greenhouse gas emissions
• the UK’s own requirements to reduce greenhouse gas emissions by 80% by 2050

Who we’re working with

The Committee on Climate Change (CCC) is an expert, independent, statutory public body that advises us on climate change issues. It was created to assess:

• how the UK can best achieve its emissions reduction targets for 2020 and 2050
• progress towards the statutory carbon budgets

Appendix 1: modelling and analytical projections

This was a supporting detail page of the main policy document.

At the Department of Energy & Climate Change we use a range of models to inform our thinking in developing solutions.

We are working on a modelling strategy and plan to publish more models and modelling outputs. These will allow others to use them and join the debate about our energy future.

Examples of our modelling

2050 Calculator

We have published the 2050 Calculator to let everyone consider some of the choices and trade-offs the UK will have to make over the next 40 years to make sure we have enough energy to meet our needs.

Analytical projections

DECC produces and publishes a range of analytical projections:

• Fossil fuel price projections
• Energy generation cost projections
• Generation dispatch and investment modelling
• Energy and emissions projections
• Policy impacts on prices and bills

These are important inputs in modelling and other evidence used to inform policy development at DECC and across other government departments.

We are committed to updating these projections regularly to reflect changes in the real world that necessitate changes to the underlying assumptions of the projections. An update to all the projections was published in October 2011.

Appendix 2: policy appraisal

This was a supporting detail page of the main policy document.

When we develop policy at the Department of Energy & Climate Change (DECC), we must consider the costs and benefits of the options available so that we can identify the best way of meeting our policy objectives. We present the estimated effects of policies in impact assessments (IAs), which are produced in collaboration by our:

• economists
• scientists
• statisticians
• engineers
• social researchers
• modellers

Analysts follow central guidance to make sure energy use and greenhouse gas (GHG) emissions are valued consistently across government. To ensure the quality of these appraisals, the Interdepartmental Analysts’ Group (IAG) on Energy and Climate Change offers a cross-government multi-disciplinary peer review forum for policy appraisals and other analysis.

Impact assessments (IAs)

DECC and other government departments use IAs to help understand and explain the effects of policy proposals on individuals, businesses, the public sector and third sector organisations. IAs explain:

• why we are proposing to intervene
• the alternative options (both regulatory and non-regulatory) that have been considered
• the costs, benefits and risks associated with these different options

By helping policy makers think through the consequences of proposals, IAs give ministers quality advice and encourage public debate.

They are also essential for us to develop policy and to track progress towards the UK’s legally binding climate change targets. The IAs are supplemented by a number of specific tests, including one to assess the impact of our main policy on GHG emissions on other policies targeting GHG emissions. The GHG-specific impact test allows us to collect and monitor:

• information relating to absolute changes in GHG emissions
• information on the cost-effectiveness of the climate change policy landscape

We use this information to support future policy development and track progress on existing commitments under our carbon budgets.

DECC’s IAs include:

• consultation stage IAs
• final stage IAs

Find out more about how government assesses the impact of new regulation.

You can access all of DECC’s IAs since May 2011

Appraisal guidance

Green Book supplementary guidance: Valuation of energy use and greenhouse gas emissions for appraisal

HM Treasury’s Green Book sets out a system for departments to use to appraise and evaluate policies consistently. DECC has consulted with analysts across government to produce supplementary Green Book guidance that provides a set of rules for valuing energy usage and GHG emissions.

This guidance explains how government should implement the carbon valuation methodology for UK policy appraisal and how we can calculate the cost-effectiveness of climate change policies. The guidance also outlines the reporting requirements for compliance with our carbon budgets.

The guidance on valuing energy use and GHG emissions is also accompanied by:

• Supporting tables with detailed figures on all the issues covered in the guidance

• Background documentation on the guidance, providing more detail about the valuation of energy use and GHG emissions, and explanations of the methodology.

• A calculations toolkit that converts increases or decreases in energy consumption into changes in GHG emissions and values the changes in both emissions and energy use. The spreadsheet also contains the latest assumptions (for 2010 to 2100) on:

  • carbon values

  • energy prices

  • long-run variable energy supply costs

  • emission factors

  • air-quality damage costs.

Along with

• guidance on using the toolkit

• a template for reporting emissions savings.

The guidance was last updated in September 2013.

Previous editions can be found on the National Archives website.

Email GHGappraisal@decc.gsi.gov.uk with any questions on this guidance, the spreadsheet toolkit or background information.

The Interdepartmental Analysts’ Group (IAG) on Energy and Climate Change

The IAG on Energy and Climate Change was set up in 2001 to:

• peer review analysis by government and related bodies of policy impacts that affect our objectives to reduce GHG emissions and make sure the UK has sustainable and secure energy supplies
• generate ideas and recommendations for making cross-government analysis more consistent
• discuss new methodological approaches for estimating and valuing climate and energy impacts
• disseminate agreed methodological approaches and values to ensure consistency in approach across the government analytical community
• increase efficiency and consistency in the use of analytical resources and share best practice and experience both across government and with external stakeholders

Analysts wishing to present to the IAG (or requiring further information on the group) should email iag@decc.gsi.gov.uk with at least 2 weeks’ notice.

Appendix 3: research – economic, technical, social and trials

This was a supporting detail page of the main policy document.

DECC uses research to understand issues and problems. We also use research to inform the design and implementation of our policies. This helps us make sure they’re technically feasible, practical and represent value for money.

To ensure we are focusing our resources on the right areas we have published Developing DECC’s Evidence Base. Building on DECC’s Science and Innovation Strategy, this document sets out the Department’s multidisciplinary evidence needs over the next 3-5 years and provides the basis for considering DECC’s future research and analysis priorities.

Economic research

Our economists provide evidence to underpin the appraisal and evaluation of all aspects of DECC policies. They work with policy colleagues, other analysts and scientists to make sure policy decision-making is informed by high-quality analysis and a reliable evidence base.

The costs and benefits of different policy options, including their distributional impacts, are presented in impact assessments (IAs).

Our economic research concentrates on improving the evidence base supporting this analysis. Economic research typically involves analysing the incentive properties of different policies, carrying out cost-benefit analysis, and working to improve the evidence base to inform future policy decisions.

Technical research

We employ scientists and engineers to study climate science, energy systems and geology. Our research programmes include:

• climate observations
• climate and energy modelling
• technology performance testing, eg heat pumps
• new technologies

DECC also supports the demonstration and deployment of technologies for renewable energy, smart networks and heat and energy.

Social research and customer insight

Social research and customer insight at DECC provide real-world evidence and analysis to help us understand individuals, groups, organisations and communities – their needs, attitudes, perceptions, motivations, experiences and behaviours – and how they interact with our policies.

This understanding improves policy design and implementation, and helps us:

• fully understand the problems and issues we need to deal with, in particular the role and likely reaction of people and organisations
• assess whether various policy choices are practical
• understand the likely and then the actual impact of policies, especially on individuals and groups

If we understand the social elements of our policies, it’s more likely our policies will achieve what they set out to do. For example, we used customer insight expertise to better understand how to explain the Green Deal. We used an ‘iterative’ research testing technique to identify problem areas and to test potential solutions. This improved how DECC explains the policy and lets others, from assessors to providers, explain their offers clearly and transparently, particularly to the most vulnerable people.

Social research and customer insight helps DECC better understand how people use energy. This work draws on behavioural economics, social psychology and sociology to examine different ways of changing ‘energy behaviour’. It draws on some of the main models and theories of behaviour change in relation to energy, and presents them in a way that we can use to shape policies.

Social research in DECC adheres to the Government Social Research (GSR) Code, which covers the professional standards for people and products. This ensures the research and the researchers working in this area are of the highest quality.

Policy trials

Policy trials are an effective way of testing out a policy, or aspects of a policy, to better understand its potential impact and any issues in its implementation. DECC is running some trials to find ways of changing people’s ‘energy behaviours’ and encourage people to insulate buildings.

For example, we are currently running an energy efficiency labelling trial in collaboration with John Lewis department stores. DECC and John Lewis will introduce a product-labelling trial in summer 2013 to look at the impact on consumers of different ways of providing information on the running costs of appliances. A similar trial in Norway showed that providing information on lifetime running costs led to consumers purchasing goods that are more energy efficient. This trial seeks to build on that work and understand how we can encourage more energy-efficient purchasing in the future.

Appendix 4: monitoring and evaluation

This was a supporting detail page of the main policy document.

We monitor and evaluate policies because we need to:

• know if our policies work in practice and whether or not we are likely to meet our targets
• know which elements of our polices work and which elements don’t
• know whether our policies represent value for money
• be transparent, accountable and able to demonstrate effective use of our resources

Monitoring and evaluation are important for policy development and delivery because they provide evidence of what is being produced, how it is being implemented and whether or not it is achieving its objectives (and why or why not). At the Department of Energy & Climate Change (DECC) our social researchers, statisticians and economists work closely with our policy colleagues to make sure the emerging understanding is timely and useful.

The evidence from monitoring and evaluation can then be used to:

• decide if the policy is working
• make the policy more likely to meet its objectives
• further develop the policy
• inform future policies in the same and related areas.

Resources

To support policy evaluation at DECC, our policy evaluation team has developed:

DECC evaluation guide

DECC evaluation planning template

DECC also uses the cross-government guidance on evaluation, the Magenta Book.

DECC and the Department for Environment, Food and Rural Affairs (Defra) developed supplementary guidance on the Magenta Book. Quality in policy impact evaluation The guidance advises on the main methods used to evaluate the impact of a policy as well as its pros and cons.

These resources help those who are developing policy evaluations to think through the steps for making effective evaluation plans that will produce the right evidence at the right time to inform decision making.

You can search for DECC publications that deal with policy evaluation.

Appendix 5: scientific evidence to help us understand climate change

This was a supporting detail page of the main policy document.

The earth’s climate is changing. This change is being driven by human activity. Scientists overwhelmingly agree this is the case. Without action, the impacts of this change will be damaging and potentially catastrophic. Climate change poses a major risk to the UK’s citizens and economy, as well as the wider world. More information on the science of climate change can be found on the ‘climate change explained’ page.

We use climate science to inform international negotiations to avoid dangerous climate change, as well as the UK’s own targets of an 80% reduction in greenhouse gas emissions by 2050. The UK Government is taking action though a range of polices to achieve our targets. We also need to understand climate change in order to protect ourselves from the worst of the impacts.

A definition of climate change

A formal definition of climate change is:

“A change in the statistical characteristics of the atmosphere (such as temperature, rainfall, pressure, or winds), oceans (such as heat content or sea level rise), cryosphere (such as extent of sea ice or length of glaciers) or land surface (such as changes in vegetation type) typically sustained over several decades or longer. A change in climate may be due to natural or anthropogenic (i.e. due to human activity) factors, or a combination of both.”

Human-induced climate change is the current, past and future change in climate being driven by greenhouse gas emissions and other human activities, such as deforestation.

When Government talks about “climate change policy”, or action to “tackle climate change”, we are talking about climate change mitigation and adaptation. Adaptation is taking steps to minimise exposure to damaging impacts of climate change, and to build resilience and reduce vulnerability to a changing climate. Mitigation is taking steps to minimise the scale of global temperature rise by reducing emissions of greenhouse gases and taking other steps, such as planting more forests.

Our work

Met Office Hadley Centre (MOHC)

Government funds the Met Office Hadley Centre (MOHC) Climate Programme, a world-leading programme of climate research and modelling.

The programme works with research councils, UK academic centres and collaborators worldwide, to build the scientific evidence that informs our policy and decision making. This includes analysis of earth observations, computer based models, climate change predictions, and assessments of the extent to which human activities have contributed to extreme weather and climate events.

DECC Earth Observations Strategy

Observing the real world is important for understanding how and why our climate is changing, and for developing better climate models. The DECC Earth Observations Strategy seeks to ensure cost-effective access to the data that is needed for climate modeling and to develop climate policy. DECC co-funds some important earth observations including:

• the international ‘Argo’ programme, which deploys more than 3000 submersible floats that measure salinity, current velocity and temperature in the global oceans;
• the satellite-based Along-Track Scanning Radiometer (ATSR) and Jason-3 programmes for measuring sea surface temperature and sea level respectively
• four atmospheric greenhouse gas monitoring sites (three are in the UK and one in the Republic of Ireland), where the data are used to monitor trends, verify greenhouse gas inventories and contribute to scientific understanding of the build-up of concentrations in the atmosphere.

Avoiding Dangerous Climate Change Programme (AVOID)

DECC funds AVOID to provide evidence to inform mitigation and adaptation strategies for avoiding dangerous climate change. This evidence is delivered by a group of leading UK research institutes comprising:

• MOHC
• Grantham Institute for Climate Change
• Walker Institute for Climate System Research
• Tyndall Centre for Climate Change Research

We support the assessment of the impacts of climate change to advise on appropriate levels of emission reductions and to underpin adaptation strategies.

We have delivered climate impact assessments for 25 key economies, which were presented at the United Nations Framework Convention on Climate Change (UNFCCC) Conference of the Parties in Durban in 2011, and bilateral projects with India and China on impacts and adaptation.

UK Greenhouse Gas Inventory

We manage annual compilation of the UK greenhouse gas inventory, which is produced according to IPCC guidelines and is used to monitor the UK’s progress against the Kyoto Protocol.

It is used to show whether or not the UK is on track to meet its legally binding carbon budgets set under the Climate Change Act 2008, on the basis of advice from the Climate Change Committee (CCC).

UK Greenhouse Gas Inventory

UK emissions statistics

Intergovernmental Panel on Climate Change (IPCC)

Our scientists support and co-ordinate UK input into the IPCC, a body set up to give governments the most up-to-date assessments of the scientific, technical and socio-economic aspects of climate change. These assessments inform domestic climate policy and the UK position in international climate negotiations.

Other work we’re supporting

We are:

• supporting NERC in studying the crucial consequences of climate change, including those on ocean acidification and the Arctic environment, which are very likely to impact on the UK in coming decades.
• commissioning work into the possible impacts of a changing climate on UK and European wind regimes, solar energy and other renewable energy sources
• working with international partners on forestry projections and the monitoring, reporting and verification needed for climate negotiations
• funding desk-based research into the environmental impacts of geo-engineering proposals to counter climate change caused by greenhouse gas emissions
• supporting global research on the governance of geo-engineering and working with NERC and MOHC to identify knowledge gaps in our understanding of the technology

Geo-engineering research: the government’s view

Climate change statistics