Climate Change vs Fairness vs Spending Cuts
As nearly £4bn is stripped out of Scotland's annual public spending over the next four years, a whopping great invoice is about to land on the nation's doormat.
It's a number worth a bit of reflection. Eight billion pounds is the amount the Scottish government thinks it might cost to implement its own legislation on climate change.
Being a world leader, with a legislated target of 42% less carbon emitting by 2020, is turning out to be quite expensive.
This autumn, the Scottish government will set out its plan for hitting that reduction from 1990 levels.
It will include estimates of what it might cost to adapt the government's own assets and spending profiles to lower emissions, including energy use, transport, housing and offices.
It has given Crawford Beveridge's Independent Budget Review Panel a sneak preview of its figures.
Although there are very wide margins, it thinks £8bn is the best bet.
The Beveridge document is unclear how fast this will be needed - 2020 in one section, and 2022 in another.
Let's assume 2020 is intended, as that's when the target is set.
Lumpy and unpredictable
You might have thought this figure should have been clear to legislators before they voted through the Climate Change Act. But it wasn't.
Posted online on 19 June 2009, the revised financial memorandum accompanying the bill went like this: "In addition to steady, year-on-year emissions reductions (e.g.
arising from enhanced energy efficiency), some of the more significant emissions reductions will take the form of step changes resulting from, for example, the introduction of new technology.
"This means that in practice a straight line reduction trajectory is unlikely.
"For example if carbon capture and storage is successfully introduced as a mechanism for avoiding emissions of carbon dioxide into the atmosphere, the national reduction trajectory will take the form of series of step changes as the technology is adopted at fossil fuelled power stations."
In other words, progress is likely to be lumpy and unpredictable, like a camel or bad custard.
It goes on: "Currently there are not any climate change studies which estimate the costs of reducing emissions by 2020 which could provide a reference point on which to base Scottish costs.
"As emissions reductions will not occur in a straight line trajectory, taking a proportion of the cost estimated for delivering the 2050 target would not provide a credible cost estimate.
"The risks and errors with such an approach are too significant."
Missing the big picture
Even if making an estimate were possible or credible, neither does the memorandum offer any detail on the 2050 target of 80% reductions, beyond the Stern Report's estimate (a UK commission that looked to the global picture) that implementation of necessary measures would cost the whole economy between 1 and 2% of national income, or up to £2.2bn in Scotland at 2006 prices.
Despite such large gaps, the Scottish government's financial memorandum was able to give precise figures on a proposed plastic bag tax or making bottles returnable, or the £2.5m cost of setting up an advisory panel on climate change.
Useful, no doubt, but somehow missing the big picture.
One point that arises from this is underlined on Monday morning in a survey commissioned by O2, the telecom company.
Its survey of 500 British business leaders found that 36% expect to ditch their sustainability efforts over the next two years "in favour of strategies to generate short-term profits and enhance their balance sheet".
The report goes on: "One in three argues that they (sic) don't have the expertise to quantify and justify sustainability's benefits, resulting in it failing to fly in the boardroom".
If private businesses see it as a luxury they can or should ditch when financial times get much tougher, that leaves the government and household sector with more of the strain if those targets are to be met.
How this fits into public sector budgeting is not much clearer from the Beveridge Report.
Its authors make clear that climate change, as with demographic change, is going to add to costs at the same time that resources are being slashed.
But they only point out the tensions there, rather than offering a way to resolve them.
And on re-reading the work of Crawford Beveridge's Budget Review Panel, that's one of the approaches that is striking for its absence.
Who's the fairest of them all?
What the panel delivered was a costed list of possible cuts, and a sense of urgency about prioritising them with a mature political debate.
What it did not do was examine those trade-offs to say which options would have the biggest impact on competing priorities: not just action on climate change, but economic growth or fairness across socio-economic groups or generations.
That fairness test is particularly relevant when comparing the approach with the coalition government at Westminster.
Because of the political background Conservatives and Liberal Democrats bring to their partnership, George Osborne's budget in June made a strong play of being fair.
There are those who question whether it was, but perceptions of Conseratives are such, and the requirements of Lib Dem grassroots are such, that claims of fairness had to feature.
Casting a long shadow
It's easier to make such claims when the big issues in that budget were mainly about taxation.
It's much harder to say which groups are hit hardest by changes to spending on services, which is what the Scottish government's choices are largely about.
To be fair to the authors of the Beveridge Report, they were limited by both time and a paucity of data.
And they implicitly address at least the fairness question.
Underpinning the report is an unwritten assumption that removing universal provision of services to all across the income and wealth range is no longer affordable, and that retreating from that to a more targeted approach ought to be fairer. Or at least it could be the less unfair approach.
But it is one of numerous trade-offs between different targets and priorities in Scottish public sector spending.
Fairness and climate change have barely been mentioned, but will cast a long shadow over the political choices.
Monday 2 August, 22:00
Recycled glass is half full
Eight billion pounds is only one side of the ledger, or so I'm told from deep inside the Scottish government.
The other side - which was not presented to the Beveridge panel - is measured in the number of 'green' jobs that can be created from all that spending at home, and by export of that Scottish green technology overseas.
There are big numbers for that - notably a claim of 60,000 green jobs in a decade. Lots of that is tied up with private sector investment in renewable energy.
A significant counter-balance is the reduced cost of fuel if all those energy efficiency efforts actually reduce usage.
It's reckoned that, by 2022, Scotland - that includes the government, business, household and transport sectors - could be paying £2.6 billion less each year for our fuel.
That would be a welcome return of investment, of course, just as there's good to be done in doing our bit on climate change.
But the £8bn or so has to be found first, and that printed variety of green stuff is what's in scarce supply.