Is the Green Book fit for purpose in a climate emergency?
Recommendations from a round table discussion which took place in Autumn 2022. The Green Book, is produced by HM Treasury (HMT), and sets out how to assess public sector projects or policy interventions to ensure that projects give value for money.
Green House think tank hosted a round table discussion with experts in the field, including academics (heterodox, ecological and environmental economists, and a philosopher), civil servants, ecologists, an elected local councillor, a finance expert, a Green Party peer and members of Green House. This event followed on from a Green House gas entitled ‘Measuring What Matters: Updating the Treasury’s “Green Book” for the Climate Emergency’.
In this round table event we discussed how the current system of project appraisal can be improved when considering environmental factors for which we’re overshooting planetary boundaries. This document details eight recommendations based on the discussions. Very little direct criticism of the current content of the Green Book was voiced, rather, the discussions highlighted: where detail or analysis is currently typically lacking in a Green Book type appraisal; where extra explicit information could aid meeting environmental goals; and where a Green Book type analysis is not currently required but better decisions might be made if such an analysis were required. These recommendations are not a unanimous consensus of all the participants; rather, what is hoped will be a useful input into what needs to be considered for future iterations of the Green Book.
The key recommendations are:
- The Strategic Case should be strengthened
- The strategic case should cover potentially irreversible side-effects of the project or programme
- The amount of greenhouse gases should be explicit in the strategic case
- National goals for environmental factors need to be cascaded down to local levels
- A standardised Green Book appraisal including environmental factors should be used at the local level
- Significant procurement projects, public private partnership projects and government subsidies should be subject to a Green Book appraisal
- Consider requiring a Green Book appraisal for planning permission for significant projects
- The discount rate and the way risk is dealt with need reviewing
About the Green Book:
The Green Book, produced by HM Treasury (HMT), sets out how to assess public sector projects or policy interventions to inform public sector spending decisions and to ensure that projects give value for money. It is a highly respected document, and is used not only in the UK but also by practitioners in many other countries who want a recognised tool for appraising large projects. The Green Book is part of a wider suite of guidance including the HMT five case model, the focus here being the Strategic Case and the Economic Case in the five case model. The methodology in the Green Book is primarily based on cost-effectiveness or cost- benefit analysis, in which all the material effects of the project are monetised,2 and count towards the costs and benefits. Thus all the environmental impacts will also be rolled up and amalgamated with other costs and benefits.