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Written question asked by Stephen O'Brien (Conservative) on Thursday, 10 April 2014, in the House of Commons. It was due for an answer on Monday, 28 April 2014. It was answered by Lord Barker of Battle (Conservative) on Monday, 28 April 2014 on behalf of the Department of Energy and Climate Change.

Policy

Question

To ask the Secretary of State for Energy and Climate Change in what circumstances he uses a calculation of the (a) value of preventing a fatality, (b) willingness to pay and (c) cost-per-quality adjusted life year approach to quantify the value of a policy intervention; what other tools he uses to quantify the benefit of a policy intervention; and if he will make a statement.

Answer

All new policies, programmes and projects in the Department of Energy and Climate Change (DECC) are subject to comprehensive but proportionate assessment of costs and benefits following Her Majesty’s Treasury (HMT) Green Book guidance. The guidance provides advice on valuing costs and benefits including where there is no market value:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/220541/green_book_complete.pdf

In cases where non-market costs or benefits have a significant impact on the outcome, DECC adopt different valuation techniques to elicit values as far as possible. For example, willingness to pay and willingness to accept techniques have been used to elicit the value that users attribute to security of electricity supply (value of lost load):

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/224028/value_lost_load_electricty_gb.pdf

Quality-adjusted life year (QALY)-based methods have also been used by the Department to illustrate the potential health impacts of improving the energy efficiency of fuel poor homes in the ‘Fuel Poverty—a framework for future action’. Work is planned to understand how estimates of QALYs may be incorporated into cost-benefit analysis in the future:

https://www.gov.uk/government/publications/fuel-poverty-a-framework-for-future-action

On other tools to quantify non-market costs and benefits, DECC has produced supplementary guidance to the Green Book which applies the Green Book techniques and principles in the specific context of valuing energy use and greenhouse gas emissions:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/254083/2013_main_appraisal_guidance.pdf

Secondary information

Type
Written question
Reference
196462; 579 c508W
Session
2013-14
Subjects
Policy Department of Energy and Climate Change
Link
View this Written question on www.publications.parliament.uk