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Accounting for the effects of climate change

 Accounting for the effects of climate change


Chapter 1. Introduction and background 1.1 The purpose of the guidance This supplementary guidance to HM Treasury’s Green Book supports analysts and policymakers to ensure that policies, programmes and projects are resilient to the effects of climate change, and that such effects are being taken into account when appraising options. This guidance: • builds on the conventional Green Book appraisal methodology to account for the effects of climate change • supports analysts and policymakers to identify if and how their proposals could be affected by climate risks • supports analysts and policymakers to design adaptation measures in response to climate risks supports analysts to appraise the costs and benefits of policy options with climate change included in the baseline. The focus of the guidance is to provide proportionate advice on accounting for the effects of climate change for analysts and policymakers. For additional technical guidance on appraising the effects of climate change consult Annex D for further resources. Please note that while this guidance uses examples of adaptation to flooding, projects seeking funding from the Flood and Coastal Defence Grant-in-Aid (GiA) for flood works should refer to the Environment Agency’s own guidance on flood risk management. 1.2 The importance of considering the effects of climate change Our climate has already changed and will continue to do so due to man-made greenhouse gas emissions. While reducing emissions has significant benefits, the effects of current emission cuts will only be seen after 2040 because of delays in the climate system. This means that further climate change is unavoidable for at least the next 15 years (Watkiss 2023). The UK contributes a relatively small share of global greenhouse gas emissions, so even if the government meets its Net Zero target, it is still possible for further warming of up to 4°C to occur this century. Many policies, programmes and projects will be directly or indirectly affected by a changing climate (reflected in, amongst other things, their effectiveness and costs). The risks and effects of climate change can substantially impact on the value for money of these proposals in ways that can make a difference to decision-making (see Section 4.1). It may also be possible to build adaptation measures into policy options and this can affect

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