|Written Parliamentary Question (WPQ)
|Climate Change Bill
|To ask the Secretary of State for Environment, Food and Rural Affairs what discount rate was used (a) to calculate net present value of costs and benefits of the Climate Change Bill in the final impact assessment and (b) to calculate costs and benefits of mitigating climate change in the Economics of Climate Change by Professor Stern.
|Dept for Environment, Food and Rural Affairs
|[holding answer 17 June 2008]: The Climate Change Bill Final Impact Assessment complied with the Better Regulation Executive’s guidance on development of Impact Assessments. This states that HM Treasury’s discount rates should be applied, as set out in their publication “Appraisal and Evaluation in Central Government-The Green Book”. The Green Book sets out a declining discounting schedule which discounts costs and benefits for the first 30 years at 3.5 per cent. per annum, and costs and benefits for years 30 to 60 at 3 per cent. per annum.Professor Stern’s Review did not apply a single rate of discount, but rather calculated the discount rate endogenously within the analysis, varying according to the scenario.
|House of Commons (HoC)