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1. Policy objectives 

The objectives of the policies contained within the Developing the UK Emissions Trading Scheme government response are designed to improve the effectiveness of the scheme in driving emissions abatement within the traded sector. These policies are designed to aid a sufficient pace of abatement needed to meet the climate obligations of all four governments of the UK ETS Authority and ensure the UK plays its part in mitigating the worst impacts of human-induced climate change, which are likely to be felt most acutely by future generations.

2. Gathering evidence and engaging with children and young People

The UK ETS is an industrial policy aimed at driving abatement associated with process emissions within the traded sector and as such, outside of the consultation process itself, engagement on developing the scheme has primarily been conducted with participants within the scheme and stakeholders with an interest and expertise in climate and industrial policy. 

In attempting to understand the effects of the scheme on children this CRIA has sought to gather evidence which relates to a primary negative externality associated with industrial emissions to air, notably the impact on health and the differential impact this has on children and young people.

3. Analysing the evidence and assessing the impact

The principal right that the proposals to develop the UK ETS are likely to affect is a child’s right to health and health services, as set out in Article 24 of the UN Convention on the Rights of the Child (UNCRC). These proposals should enhance these rights for children by driving emissions abatement and thereby reducing the volume of airborne pollutants that are released by the traded sector.

Academic evidence suggests that airborne pollutants are increasingly being identified as a preventable risk factor for a range of negative health outcomes for children and young people[1]. This includes air pollution being linked to increased incidence of asthma, reduced lung function and exacerbation of respiratory diseases. The World Health Organisation lists several reasons why children are more at risk of air pollution than adults, which are: 

  1. [Children’s] lungs are still developing, and air pollution can interfere with this biological process.
  2. Their bodies are less able to metabolize, detoxify, and excrete the toxicants contained in air pollution.
  3. Their brains are still developing, and neurotoxic compounds in air pollution can affect children’s cognitive development.
  4. They inhale more air per unit of bodyweight than adults.
  5. They are more active and therefore breathe in more air pollution.
  6. Babies born to women who were exposed to air pollution during their pregnancy are more likely to be premature and low birthweight. 

The UK ETS ensures that there is a legislated cap on greenhouse gas (GHG) emissions that can be emitted over the course of the scheme and the proposals contained within the Developing the UK ETS government response, amongst other changes, seek to tighten the current legislated cap. The UK Government estimates that the preferred policy options could reduce cumulative emissions to 2030, from the traded sector, by approximately 12.0 to 38.7MtCO2e. While it has not been possible analytically to attribute this reduction across UK nations, it is reasonable to expect that tightening the cap will lead to emissions being lower across all nations and regions than would otherwise be the case. Many of the GHGs have common sources with other local air pollutants, that cause health issues, particularly in children as listed above.  Therefore the proposals would bring about an overall health benefit to children. 

Apart from the direct impacts mentioned above, the overall benefits brought about by mitigating climate change will ensure a healthy natural environment that will bring health benefits to children and young people. The proposals, therefore, are in line with the thinking behind the Well Being of Future Generations Act and support our goal for A Healthier Wales which aims for a society “in which people’s physical and mental well-being is maximised and in which choices and behaviours that benefit future health are understood”. 

Evidence from the ONS suggests that families with at least one dependent child within them are more likely to experience some form of financial vulnerability. The same survey also found that 57% of parents living with their children were finding it difficult to pay their energy bills compared to 42% of adults who either have no children or do not live with them. Therefore, the possible impacts on household energy bills identified in the IIA will need to continue to be monitored in this context [2], to ensure the scheme is not having a negative long-term impact on children from low-income households. As the IIA sets out, it has not been possible to quantify these impacts, however they are expected to be minimal relative to other factors that have contributed to increased energy bills in recent months.

[1] Brumberg, H et al. (2021) Ambient Air Pollution: Health Hazards to Children. Pediatrics June 2021; 147

[2]   Those impacts being that short-term electricity prices may be higher because of the proposals but that longer term prices could be reduced.

4. Ministerial advice and decision

The UK ETS is a specific tool within the wider climate change policy area. Ministerial advice therefore focused on the mechanisms of the scheme while reflecting the options in view of the wider benefits of climate change such as the health impacts of air pollution, which have been imparted as part of policy advice at various points by relevant climate change policy officials. The Minister has considered and approved the proposed policy changes.

5. Monitoring and Review

The UK ETS Authority has committed to a two-phase study that will evaluate the process outcomes and impacts of the UK ETS in the first four years (2021-2024) of phase I of the UK ETS scheme. As well as the economic impacts of the scheme, this evaluation will help to inform our understanding as to how effectively the scheme is driving emission abatement in the traded sector, with the associated benefits identified in this CRIA it would bring.