IAG guidance for policy appraisal

The Inter-departmental Analysts’ Group (IAG) was set up in 2001 and its purpose is to:

• provide internal peer review of analysis by government and related bodies, of the impacts of policies that affect the Government’s objectives to reduce greenhouse gas emissions and promote sustainable and secure energy supplies
• provide a forum to generate ideas and recommendations for the analysis, which can be considered to make the analysis more robust and more consistent between government departments
• discuss new methodological approaches for estimating and valuing climate and energy impacts. Disseminate agreed methodological approaches and values to ensure consistency in approach across the government analytical community
• increase efficiency and consistency in the use of analytical resources and share best practice and experience both across government but also with key external stakeholders
• undertake other relevant tasks, as agreed  

Analysts wishing to present to the IAG should contact the IAG Secretariat at least two weeks in advance.

Valuation of energy use and greenhouse gas emissions for appraisal and evaluation

Valuing energy use and greenhouse gases is vital to ensure government takes full account of climate change and energy impacts when appraising and evaluating public policies and projects. In consultation with analysts across government, DECC has produced guidance that provides government analysts with a set of rules for valuing energy usage and greenhouse gas emissions:

• Valuation of energy use and greenhouse gas emissions for appraisal and evaluation 

The new DECC/HMT guidance provides practical information about implementation of the revised Carbon valuation methodology for UK policy appraisal (July 2009). It also outlines the reporting requirements for compliance with carbon budgets and guidance on how to calculate the cost effectiveness of climate change policies (refer to chapter 4 of the ‘Valuation of energy use’ document above for full details on cost effectiveness).

This guidance supplements the HM Treasury: Green Book, which provides general guidance on how to conduct appraisal and evaluation.

There is a complementary spreadsheet ‘toolkit’ that converts increases or decreases in energy consumption into changes in greenhouse gas emissions and values the changes in both emissions and energy use. The spreadsheet also contains the latest assumptions on carbon values, energy prices, long-run variable energy supply costs, emission factors and air-quality damage costs throughout the 2008-2100 period:

• Toolkit for guidance on valuation of energy use (October 2011)

Tables 1-24 and a suggested template to report emissions savings for carbon budget accounting are also available in Excel format:

• Guidance tables 1-24: supporting the toolkit and the guidance (October 2011)
• Template for reporting emissions savings for carbon budget accounting

Further background analysis and explanations of the methodology adopted can be found below:

• Background documentation for guidance on valuation of energy use and greenhouse gas emissions

This guidance was last updated on 14 October 2011.

Previous editions of the IAG guidance

Please note, the guidance below is historic and should only be used for reference.

• June 2010 guidance and supporting documents
• January 2010 guidance and supporting documents 

Any questions on this guidance, the spreadsheet toolkit or the background information should be addressed to GHGappraisal@decc.gsi.gov.uk