UK Government Loses Court Appeal

The government has lost its appeal against a judge's ruling that its cuts to solar power subsidies were illegal, suggesting thousands of homes and businesses will now be able to claim the higher payments.

Three court of appeal judges unanimously rejected the appeal from Chris Huhne, the secretary of state at the Department of Energy and Climate Change (DECC), who said he would be taking the case on to the supreme court. "We want to maximise the number of installations that are possible within the available budget rather than use available money to pay a higher tariff to half the number of installations," he said.

The decision to prolong the uncertainty that has seen the number of solar panel installations fall since 12 December and was immediately condemned by opponents of the cuts. Green party MP Caroline Lucas said: "Having lost twice in the courts and been roundly humiliated over the shambolic handling of solar policy, it is absolutely beggars belief that Huhne is planning to appeal to the supreme court."

The government announced proposed cuts to the solar feed-in tariff payments in October but in December, a high court judge ruled that the government's handling of the cuts was "legally flawed", after a challenge by a coalition of solar installation companies and Friends of the Earth.

On 19 January, the government said that if it lost the legal case, it would fund the higher rate payments for any panels installed by 3 March, which would affect about 3,700 homes and businesses. A DECC spokeswoman said: "We totally appreciate the uncertainty in the solar industry and hopefully the 3 March date will provide some certainty."

DECC's legal fees have cost taxpayers £58,000 so far, though this does not include the costs of their opponents, which the appeal court said DECC must also pay.

The court of appeal refused permission for Huhne to seek a hearing in the supreme court, but this does not prevent the secretary of state going directly to the higher court. He has 28 days to lodge permission to appeal. Some campaigners have suggested this continued uncertainty may reduce the number of new installations, and therefore reduce the number eligible for the higher feed-in-tariff if the government ultimately loses its case.

John Cridland, director-general of the CBI, said: "The judgment should be used to draw a line under this saga, which saw the government scoring a spectacular own goal."

Gaynor Hartnell, chief executive of the Renewable Energy Association, said the rejection of the appeal prevented a precedent being set which would allowed the government to make retrospective policy changes in future. "The government is well aware that it would be incredibly unwise to reduce payments to renewable energy producers after they had commissioned their projects, as it knows what immense damage that would do," she said. 

The judgment stated: "The question [is] whether parliament conferred a power [to DECC] to make a modification with such a retrospective effect. It did not."

The cuts proposed in October – from 43.3p per kWh of energy generated to 21p – prompted a furious backlash, with the main complaint being the speed of the changes, which were designed to come into effect just six weeks later, on 12 December. Critics also drew attention to the fact that the consultation did not end until 23 December – over a week after the changes were proposed to take place.

In December, a cross-party group of MPs said in a strongly worded report that the reductions were "clumsily handled", had threatened jobs and could have dealt a fatal blow to the scheme, because the changes required homes to meet the C-rated energy efficiency standard before becoming eligible for the solar feed-in tariff.

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A hundred days of the 'greenest-ever' government

In an era when everything environmental - including biodiversity, waste, and fish stocks - is measured with indicators announcing that you will be the UK's "greenest-ever government", begs a number of questions - most obviously, "measured how?"

If you preside over a fall in greenhouse gas emissions while seeing numbers of farmland birds tumble, for example, how should those two trends be balanced against each other? Which is more important in assessing whether you are the "greenest ever"?

For many in the climate field, the coalition government began with a positive bang, by announcing it would not support the construction of a new runway at Heathrow Airport.

This had become a symbolic indicator of whether government was prepared to fight the green corner against business interests.

But it was also a simple measure by which the Conservatives and Lib Dems could distance themselves from their Labour predecessors, given that all three main parties are basically in the same climate camp.

Since then, Chris Huhne's Department of Energy and Climate Change (DECC) has taken other small steps designed to stimulate a growth in green energy, such as allowing councils to sell renewable electricity generated on their lands - a policy that builds on Labour's introduction of feed-in tariffs for renewables.

Delivering on the economy?

On the other hand, budget cuts for DECC have led to the scaling down or scrapping of funds designed to support offshore wind, biomass and geothermal energy.

There have been similar small steps towards improving home insulation, regarded in many circles as a win-win-win, as it reduces energy spend, cuts emissions and tackles fuel poverty.

But like Labour, the coalition is a long way short of establishing the nationwide energy efficiency scheme recommended by the Committee on Climate Change, the government's advisers, who called last year for a street-to-street programme that would insulate 10 million lofts and 7.5 million cavity walls by 2015.

More small steps are anticipated in coming months, including realisation of the Green Investment Bank, a review of the electricity market structure and a strategy to stimulate energy micro-generation.

Climate of austerity

The potential of the new austerity to scupper DECC initiatives is a concern raised by Mike Childs, head of climate with Friends of the Earth UK, "The future is looking ominous," he says.

"The Treasury is threatening the much-heralded 'Green Deal' on energy efficiency for homes, to starve the new Green Investment Bank of cash, and cut the Renewable Heat Incentive which would reduce rewards for generating heat from renewable sources."

So far, the government's headline commitment to cutting emissions and developing a low-carbon economy has not been challenged by the climate-sceptic rump of the Conservative Party; the maths of coalition politics do not permit it.

Nevertheless, practical moves to reduce emissions are influenced by numerous departments - the Treasury, Communities and Local Government, Transport - and some of those departments may see initiatives retarded rather than advanced by chiefs who do not share Mr Huhne's enthusiasm for carbon restraint.

Internationally, Mr Huhne recently joined counterparts from France and Germany in calling for the EU to raise its collective emissions-cutting pledge to 30% on 1990 levels by 2020, rather than the current 20%.

Although that has won plaudits, it is tempered by data showing that the recession has lowered emissions so much across the bloc that 30% looks much more achievable today than it did two years ago. Real ambition, some are saying, now implies calls for a 40% cut.

Overall, DECC's first 100 days under the coalition are marked by three over-arching themes:

• fiscal stringency
• consultation on detailed policy measures
• emphasising the tie-up between restraining emissions, energy security and "green" jobs

Mr Huhne has acknowledged that the UK lags most of western Europe woefully on renewables. Whether that gap shrinks or expands over the next few years will be a litmus test of the "greenest-ever" claim.

Wider vision

Under Labour, there were times when the word "environment" seemed to have become replaced by the narrower "climate", so high did the latter ride up the overall agenda - certainly in terms of the political noise.

On that measure, the coalition looks, sounds and feels very different.

Biodiversity, the economics of nature loss, reducing waste and producing energy from it: Caroline Spelman's Department for Environment, Food and Rural Affairs (DEFRA) has been vocal on all of these issues during its initial 100 days.

Ms Spelman's initial list of priorities included: an "absolute commitment" to reversing the trend toward reduction in biodiversity seeking "genuine reform of the Common Agricultural Policy (CAP)... for farmers, taxpayers, consumers and the environment alike" maintaining an increase in the money that taxpayers spend on flood defences this year, with "no impact on the number of households that we protect"

There has certainly been more talk about biodiversity than was common under Labour, although you could argue this is largely down to the coalition's accession coinciding with the run-up to the UN Convention on Biological Diversity (CBD) meeting in October.

But there are concerns that the government's structural and fiscal reforms are going to work against its headline commitment to the issue.

"It's difficult to be optimistic," says Matt Shardlow, chief executive of the wildlife charity Buglife.

"We've seen in the first 100 days an agenda dominated by cuts, and... there's a feeling of hard-won gains, such as the contribution of agro-environment resources of CAP spending to the environment, being under threat."

Ms Spelman has announced major cuts to the 90-odd "arm's-length" bodies funded by DEFRA.

Some are uncontroversial. But budgetary slashing for Natural England, the statutory conservation agency for England, has aroused major concern, with about one-third of its staff likely to go.

Twenty-five organisations including major players such as the Royal Society for the Protection of Birds (RSPB) have sent a letter to government warning that cuts "could have profound and perhaps irreversible consequences for wildlife, landscapes and people".

They have also raised the alarm over proposals to sell off some of the UK's wildlife reserves, although the full picture of what's being proposed has yet to emerge.

And the decision to axe funding for the Sustainable Development Commission has raised in some people's minds questions of whether the coalition is prepared to countenance the really big questions of whether the UK economy, with its continued commitment to growth, is developing along inherently unsustainable lines.

Biodiversity protection may also suffer from the government's commitment to localism, according to Mr Shardlow.

Putting important wildlife sites under local aegis may sound attractive, but he argues that if your aim is a coherent biodiversity strategy across regions, then you have to organise work on a pan-regional basis.

"If you devolve it too far down, you go way beyond the place where the expertise lies," he says.

"You may have people in every village who know where they would like their playing ground to be situated, but you don't have people in every village who know how to conserve endangered bees."

Caroline Spelman's commitment to flood protection may have a sting in the tail as well. This forms a major component of Environment Agency spending; so if that is to be preserved, everything else the agency does may face a disproportionately large cut.

DEFRA is also talking a local game on waste and bio-energy, aiming to encourage local initiatives that would develop a "zero-waste UK", with technologies such as anaerobic digesters coming into increasing use.

But as with Labour, the question remains of how to make this happen without a raft of financial carrots and sticks - something that is likely to prove difficult given this government's cost-cutting agenda.

Culling costs

The Court of Appeal, meanwhile, has removed one of the coalition's biggest potential banana-skins, with its decision last month that the proposed badger cull in Wales could not proceed.

Urged on by DEFRA's Agriculture Minister Jim Paice, the coalition was set to begin culling in England within a few years.

As Labour realised, such a decision would be hugely contentious. The Welsh postponement gives a little more breathing space in which other cattle TB curbs can be shown to work, and for development of a vaccine to advance, making it less likely that the government will need to make a quick decision.

If you had to paint a picture of the coalition so far, you would probably sketch a stern-faced accountant at work inside a big tent carrying the word "society".

Strategies on environment and climate are tucked away in the tent somewhere. They already look different from when Gordon Brown and then David Cameron went to see the Queen 100 days ago; but what it all means for the environment has yet to become entirely clear.

Reference: BBC News, Environment correspondent, Richard Black