The future for environmental regulation: Green growth not red tape
Sir James Bevan, Chief Executive of the Environment Agency, delivered a speech this morning at the Westminster Energy and Environment Forum.
What is regulation?
Regulation is the controlling of an activity by means of rules. Environmental regulation is the controlling of activities which can harm the environment, and in this country the organisation responsible for that is the one I lead: the Environment Agency. The clue is in the name.
Why regulate?
One word: Bhopal. In 1984 the city of Bhopal in India was the scene of the world’s worst industrial accident. The release of toxic gas from a chemical plant killed thousands of people and contaminated the city’s air, soil and water. They are still contaminated, and people are still suffering the after effects. I know because I have been there. The chemical plant is still there, derelict and rusting away. People still live all around it, many of them the victims of the explosion or their children. The land is still poisoned and the water is still undrinkable.
Bhopal is a textbook example of failed regulation. A hazardous industrial plant was allowed to operate in the middle of one of the most densely populated cities in the world without proper checks and precautions until one day disaster struck. Bhopal is why I believe in regulation. Teachers say that if you think education is expensive, try ignorance. And I say that if you think regulation is expensive, try not doing it.
Regulation works
Regulation works. Done right, it creates a better world. The Environment Agency has played its part in that.
We have cleaned up the air we breathe. Since 2008, our regulation of polluting industries has cut emissions of sulphur oxides by 81%, Nitrous Oxide by 65%, greenhouse gases by 47%, and PM 10 – one of the most damaging particulates – by 37%.
We have cleaned up our waters. The sewage treatment works the EA regulates now put 60% less phosphates and 70% less ammonia into those waters than in 1995. Rivers that were biologically dead when I was born now have salmon and otter back in them. Meanwhile the quality of bathing waters around our coasts is the best it has ever been. In 2019 for the first time more than 70% achieved the Excellent standard, and 98.3% met or exceeded the minimum standard to protect health. In 1995 over half would have failed.
We have cleaned up our land. The amount of waste going to landfill in England has been cut by nearly half (43%) since 2000. Pollution from abandoned mines, which seeps into groundwater and contaminates land, has been substantially reduced and many old mining sites remade as nature habitats.
None of these things happened by accident. They happened because of the controlling of activities by means of rules – regulation. The future of environmental regulation: the background
So environmental regulation has a good story to tell. And now is a particularly good time to have a debate about its future. That’s because several factors have come together that give us a unique opportunity to rethink how we do it:
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Covid and the economic crisis, which are driving the need for rapid growth and calls for the removal of “red tape” (ie regulation) to allow it.
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The UK’s departure from the EU, which means we are free to set our own environmental rules and establish new arrangements to ensure they are implemented.
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The government’s environmental ambitions, which include that we will be the first generation to enhance the environment rather than degrade it
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Popular pressure for a cleaner, greener world, which has pushed the environment up the agenda and means we are all, rightly, under greater scrutiny.
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The climate emergency, which is the biggest factor of all, because unless we tackle it successfully it will destroy not just our environment but our economy and society too.
All of these factors need to shape our response.
The future of environmental regulation: the way forward
So what would that response look like? What is the right future for environmental regulation?
The first thing we need to do in this debate is to refuse false choices. It is wrong to say that we have to choose between regulation on the one hand or prosperity on the other, between protecting the environment or unlocking growth, between sustainable development or tackling the climate emergency. With the right approach we can have all of these things.
What should that approach mean in practice? I see three core elements.
First, we need a truly modern approach to regulation itself.
Good regulation is not about a process - what some call red tape - but an outcome: a greener world. So all good regulation must be outcome focused, stipulating what needs to be achieved rather than focusing only on the means to achieve it. And the ultimate aim of environmental regulation should not be to slow the decline of nature or even just protect it, it should be to enhance it.
Good regulation is not about eliminating risk – almost all worthwhile activities carry some risk, and most risks can never be removed entirely - but about managing and reducing it. So while good regulation does need to be risk based, focusing on the activities that pose the biggest threats to the environment, it also needs to be proportionate, focusing on the interventions that make the most difference and calibrating the costs of the regulation to the benefits we achieve.
Good regulation is not about stopping businesses operate or constraining growth. Good regulation is business friendly, with simple processes, clear goals that make it easy for operators to do the right thing, and rewards for those who do and painful consequences for those who don’t. Good regulation is also good for the economy, because it creates certainty and a level playing field, allowing well-run and law-abiding businesses to thrive and stopping those who don’t play by the rules from undercutting them.
Good regulation also needs to be funded properly. The core environmental principle is that the polluter pays. Those who carry out activities which could harm the environment should indeed pay, both the cost of the regulation necessary to prevent potential pollution from their activities, and the costs of cleaning things up where they do cause environmental harm. And where it isn’t possible or fair for individual polluters to pay some of the critical costs of regulation, like monitoring the environment or enforcing the rules, the government should. The EA’s funding for regulation comes from both these sources: from the industries we regulate in the form of charges for the regulatory services we provide, and from the government in the form of grants. Neither of those sources fully fund what we think we actually need to do to protect and enhance the environment. Ultimately we will get the environment we are prepared to pay for.
Second, we need to seize the opportunities of EU Exit. The Free Trade Agreement the government successfully concluded with the EU on Christmas Eve is explicit that the UK now has the right to determine the environmental levels of protection it deems appropriate; that it will not reduce, in a manner affecting trade or investment, our current environmental levels of protection; and that the UK will strive to increase those levels of protection.
We welcome all of that. Of course we want to maintain and where possible enhance the environmental protections we already have, much of which currently derives from EU law, much of which (let us not forget) was written by UK experts. But we also think that not all EU environmental regulation is perfect, either because the goals it sets are not the right ones or because the methods specified are not the best ones for actually delivering the outcomes we want.
Which is why we welcome the Prime Minister’s invitation to business leaders to identify which rules and regulations they would like to see gone now Brexit has happened. We should indeed have a grown up debate about which parts of EU environmental law now repatriated into UK legislation we should keep, which bits we should repeal, and which bits we should reform. In all instances, the test for any change should be simple: what will deliver better environmental outcomes. And that is a debate in which the more voices there are the better: from government, from business, from the NGO community and the public.
EU Exit has also brought us the new Office of Environmental Protection, the independent watchdog established to hold the government and other public authorities to account for their environmental performance now that the European Commission and European Court of Justice have no role in that.
The EA strongly supported the establishment of the OEP, which will complement the EA’s own role as an independent regulator. We also warmly welcome the appointment of its excellent Chair-designate, Dame Glenys Stacey – who apart from being exactly the strong, independent individual prepared to speak truth to power that the job requires, is also one of the country’s most distinguished regulators. I look forward to working closely with her.
And third, we need to ensure that our future environmental regulation focuses on the main thing: the climate emergency. The EA is doing that. Our current five year action plan, which guides everything we do, has deliberately put climate at its heart. We already play a critical role in mitigating climate change through our regulation of the industries that emit most of the UK’s greenhouse gasses, and are bringing those emissions down year on year: since 2010 greenhouse gas emissions from the sites we regulate have been reduced by 43%. And from 1 January we have taken on an important new role in administering the UK’s new Emissions Trading Scheme now that the UK has left the EU’s equivalent. Meanwhile many of the EA’s other activities, like building flood defences and shaping planning decisions, are helping make the country more resilient to the effects of climate change.
Both of those things – mitigation of the extent of climate change and adaptation to its effects – offer great opportunities for innovation, growth and prosperity. So if we get our response to climate change right we really can – to borrow a phrase – have our cake and eat it.
Conclusion
Let me conclude with a quote from Margaret Thatcher who – let us not forget – was calling for action on climate change long before it was mainstream. She had views on most things, including regulation, about which she said:
“Every regulation represents a restriction of liberty. Every regulation has a cost. That is why, like marriage in the Book of Common Prayer, regulation should not be enterprised unadvisedly, lightly or wantonly”.
Let us resolve to avoid wanton regulation. But let us also recognise that good environmental regulation is not red tape: it is what will get us a green recovery and a blue planet.