Twenty-eighth Report Adapting Institutions to Climate Change Cm ...

Chapter 5
5.16
5.17
5.18
The Department for Communities and Local Government (CLG) has published extensive
guidance on multi-criteria methods that should be used in evaluating investment options. 1 In
addition, Defra has also published guidance on valuing ecosystem services. 2 While this is a
welcome development, there remain significant difficulties in applying such valuation methods.
The revision to the Treasury Green Book on investment appraisal 3 also advocates the use of option
values, a major modification to standard cost–benefit analysis, which the Commission believes is
particularly useful for any project for which climate variability is a consideration, because the
technique increases flexibility in the investment appraisal process.
The Commission commends the Government for advocating and in some cases pioneering
these new approaches to valuation and appraisal. The Commission recommends that
the new flexibilities in the supplementary guidance to the Treasury Green Book are
fully used by public sector bodies in making investment appraisals, particularly for
infrastructure investment.
The Commission also recommends the use of a range of alternative discount rates
(including zero) in appraising investments with very long-term impacts, given the
ethical problems involved in discounting the impacts of current behaviour on future
generations.
AN ADAPTATION DUTY
5.19 An adaptation test will be an important means of ensuring that adaptation is embedded in
decision making. But it is also important that public bodies have a clear responsibility for
addressing the issue.
5.20
5.21
The Climate Change (Scotland) Act 2009 imposes a duty on public bodies, requiring them to
exercise their functions in the way best calculated to contribute to the delivery of the Scottish
Government’s climate change adaptation programme. Similarly, in 2007 a duty was placed on the
Mayor of London and the London Assembly to “address climate change” and to “take action with
a view to mitigation of, or adaptation to, climate change” (3.7). 4
The Climate Change Act 2008 stops short of imposing a more general obligation of this kind.
The Commission recommends that the Climate Change Act 2008 should be amended to
impose an adaptation duty on public bodies of the kind included in the Climate Change
(Scotland) Act 2009 or the Greater London Authority Act 2007.
REPORTING AND MONITORING
5.22 Introducing a duty of this kind raises the issue of how compliance with it is to be monitored. The
Climate Change (Scotland) Act 2009 provides the possibility of establishing a monitoring body
to fulfil this function. In the event that a duty of this kind were to be introduced in other parts
of the United Kingdom, it would be important to consider which body or bodies could play
this role. The Commission recommends that the Adaptation Sub-Committee should be
responsible for ensuring that appropriate and transparent systems of accountability are
in place for monitoring compliance with a general adaptation duty imposed on public
bodies. One possible system of accountability could be based on the concept of peer review, for
example by one local authority reviewing the work of another.
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