Given that climate change policy now had to be delivered via energy policy, a commitment to the RCEP agenda would necessarily imply a fundamental shift away from short-term economic efficiency concerns and towards a long-term strategy to reduce carbon emissions. This was unlikely to be achieved overnight, and seemed to require a move away from the traditional technocratic approach to energy policy, towards greater public engagement. In wider politics there was a move towards greater public and stakeholder involvement in policymaking, and the UK government initiated a new energy policy process that, until 2003, seemed promising and was broadly consistent with much of the approach advocated in Chapter 7 below.
The first stage was setting up an energy review project in Prime Minister Blair's Cabinet Office. The Performance and Innovation Unit (PIU, now called the Strategy Unit) had a mandate to determine what an energy policy that put the UK on a path to 60 per cent emission reductions by mid-century would look like, consistent with simultaneously securing energy supply, maintaining competitive energy markets and combating fuel poverty. The PIU team combined civil servants from several departments with an equal number of external specialists, and worked intensively for six months in the second half of 2001.
The process included intensive engagement with a wide range of stakeholders, from the nuclear industry to environmentalists, and from city financiers to trade union representatives, though it stopped short of active public engagement. It reported in The Energy Review (PIU, 2002), concluding that climate change objectives should be the heart of future energy policy and making some detailed recommendations about their pursuit. The PIU's advantage was that while it worked within the official policymaking structure (located within an internal government 'think tank' close to the prime minister) it had more degrees of freedom to think radically than a conventional department-based government reporting group.
While taking energy security as an important objective, the PIU report concluded that threats to security were, in practice, limited and that reliance on the operation of the energy markets would take care of security problems (PIU, 2002). It argued that competitive energy suppliers would have a strong self-interest in security and would behave in ways that would ensure sufficient security without major new public policy intervention. This left climate change as the dominant public policy objective in energy policymaking and the Energy Review made a range of detailed policy recommendations in pursuit of emission reductions. The recommendations majored on a need to pursue energy savings more vigorously, and to continue to support the diffusion of renewable energy. It also pointed to the need for much more radical action in the area of transport, where carbon emissions were rising rapidly. It was lukewarm on the role of nuclear power, which was in any case in a dormant state both in the UK and internationally.
While the PIU Energy Review argued that competitive energy markets would continue to be a useful context in which to pursue carbon emission reductions (and would indeed help the pursuit of energy security), it represented a sea-change in the analysis of policy substance. No longer would the pursuit of competition be the centrepiece of energy policy: there would be continued reference to the importance of competitive markets, but this was increasingly used as a means of trying to persuade other EU member states that their market should be made to look more like the UK's, rather than a statement of the central policy thrust. The Energy Review also marked the beginning of a different, less incremental approach to energy policymaking, in addition adopting a more inclusive and less technocratic process. This was subsequently abandoned after 2005 (see Section 5.2.2 below), but is important as a possible model for the future.
Government then announced that there would be a new White Paper on energy policy building on The Energy Review, with the process led by the DTI. In May 2002 the DTI launched a major programme of public and stakeholder engagement. For stakeholders (those with a prior and ongoing interest in energy policy) government initiated or facilitated a range of workshops, meetings, conferences and seminars: some directly run by government and some by stakeholders. This was more wide-ranging, thorough and lengthier than conventional consultations, where government characteristically suggests policy directions, asks questions (often narrowly framed and pre-judging major issues) and then passively waits for written responses.
Government was also innovative in engaging with the wider public. This involved a range of activities that, while not new in other areas of policymaking, were highly innovative in the previously technocratic, expert-dominated culture of energy policymaking. The DTI commissioned focus groups, deliberative workshops, an outreach programme to school students and a web-based questionnaire. Among the deliberative events, a set of regionally based citizens' panels, which reported their findings to a large mixed group of both public and stakeholders, was especially effective. Over 6500 individuals and groups took part, including 2500 written consultation responses (DTI, 2003c, p. 20). Preparation for the White Paper also included the commissioning of a wide range of consultancy reports on major issues, including costs and security of supply. The process thus sought to combine public and stakeholder views together with expert advice and analysis in a relatively open and transparent way - something never before done in the energy policy field in the UK.
In February 2003 government published the results in a White Paper entitled Our Energy Future - Creating a Low Carbon Economy (DTI, 2003c). While not explicitly showing how it had taken account of public and stakeholder views, it was widely welcomed by those who had participated, and offered a long-run and in some respects visionary new approach to energy policy. It also promised that the new style of wideranging public and stakeholder engagement would be continued.
The White Paper started from the architecture of the Energy Review, for example adopting its view on the central objectives of GHG emissions reductions, energy security, competition and fuel poverty. While arguing that all four objectives would be pursued simultaneously, it was explicit that climate change was now the primary objective. Carbon emission reductions were now the 'new direction' of energy policy (DTI, 2003c, p. 3), and four out of seven substantive chapters were devoted to the subject. The White Paper also set out intermediate objectives for 2020. In these it gave little attention to nuclear power as an investment option, stating plainly, 'we do not propose new nuclear build ... the current economics of nuclear power make it an unattractive option for new generating capacity and there are also important issues for nuclear waste to be resolved'. It also promised the 'fullest public consultation' and a further White Paper before any decision would be taken on proceeding to build new nuclear power stations (DTI, 2003c, p. 61). But nuclear new build was not a major policy issue at the time, and its consideration occupied less than a page of text in the 2003 White Paper.
Our Energy Future represented a major change in energy policy, both in its inclusive process and in its promise of radical change in direction and strategic long-term focus. Major criticisms at the time focused on three issues: (i) the lack of detailed policy measures in support of the long-term ambitions; (ii) the failure to propose any change in the machinery of policymaking to underpin the major change in policy direction; and (iii) complacency about security of supply in the assumption that the market would deliver with limited further government intervention.
In relation to the first criticism, it could reasonably be argued at the time that new policy measures might evolve over the next few years. The White Paper set out the strategy and there had not been time enough to work through all the detailed policy implications. Annual reports and reviews of policy were forthcoming, and these seemed a promising vehicle for continued and publicly visible policy development. The second criticism (unchanged government organisation) was more immediately worrying. The only proposed change was to set up a Sustainable Energy Policy Network across government departments and other public bodies, but this was never much more than an electronic communication device. Until 2008 DBERR still dealt with energy supply, Defra with energy efficiency and climate change policy, and the Department of Transport was still concerned mostly with growth, meaning road-building and airport expansion. The third criticism was a matter of analytical and political judgement. It certainly provided a major hook for the changes in policy that emerged subsequently.
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