Ever since the modern environmental movement emerged in the 1960s and 1970s, it has channelled much of its energy into foiling the ambitions of big business. Eclipsing the established conservationist groups, this new radical alliance – born on the same counter-cultural platform as the movements for women’s liberation, gay rights and nuclear disarmament – used non-violent direct action to challenge the government and industry on a range of global issues, including nuclear testing and waste, ozone depletion, acid rain and, of course, climate change (then known as global warming).

One of the movement’s biggest targets was our energy infrastructure: coal-fired power stations were vilified for contributing to acid rain, waste incinerators for releasing pollutants, and nuclear power for radioactive leaks and its waste legacy. Indeed, as public opinion swung behind the ‘greens’, the government drew back from nuclear power and incinerators, and shifted gradually from coal-fired to cleaner gas-fuelled power stations.

Recognising the green movement’s incremental acceptance into the mainstream, both Conservative and Labour governments steadily raised the bar on environmental protection. While responsibility for the environment has wandered up and down Whitehall – sitting at different times with local government, transport, regional policy, and food and rural affairs – green issues have gradually moved up the list of priorities, creating a powerful set of lobbies within government.

Meanwhile, popular opinion was also dragging at the calculations of big business. But this 30-year evolution in public thinking only really came to a head with the 2006 publication of the Treasury’s Stern Review on climate change: crystalising British industry’s gradual conversion to a precautionary stance on CO2 emissions, the review clearly spelt out the business case for acting to minimise temperature and sea level rises.

In the reshuffle of autumn 2008, Gordon Brown capitalised on this new consensus by creating the Department for Energy and Climate Change: taking responsibility for energy from the Department for Business, Enterprise and Regulatory Reform (where it had sat since John Major abolished the Department for Energy in 1992) and climate change from the Department for the Environment, Food and Rural Affairs, DECC combines two formerly divergent government agendas. And these are two particularly important agendas: after some years of stability, both energy supplies and our climate are likely to become increasingly difficult to manage. “It isn’t that big a department, but it is a big agenda,” says Moira Wallace, the new department’s permanent secretary.

Asked to set out DECC’s role, Wallace splits it three ways. The first is “delivery of energy, within a context where some of our capacity needs to be retired and it needs to change to meet carbon objectives”. This, she adds, means investing in renewable power generation, and creating a “smart grid” better able to serve renewable generators and foster efficient electricity pricing. 

Second is “the international side of things: energy markets and, critically, climate change. This is a very important year, in which we’re hoping that the world will sign up to ambitious goals for emissions reductions,” she says. At Copenhagen, the world’s leaders will meet to consider replacing the ageing Kyoto Protocol (see pVII) and, says Wallace, “We’re the lead department; we want to ensure that a good agreement is reached and delivered.”

The third strand, Wallace explains, is delivery: “It’s about meeting the targets we have – and the new ones that we will have – to reduce our emissions; implementing the Climate Change Act, and getting on a path to an 80 per cent emissions reduction by 2050 [on 1990 levels]; introducing carbon budgets; and creating policies that will affect the behaviour of individuals, businesses and departments.”

In short, DECC’s agenda is that of adapting Britain’s energy infrastructure to fit a low-carbon economy; persuading the world to follow suit; introducing a universal carbon accounting system; and creating a wholesale shift in the population’s behaviour. Even given today’s widespread support for action on climate change, that is a very ambitious and challenging agenda.

Happily, Moira Wallace is a very ambitious person – and one who likes a challenge. A long-time high-flyer, experienced in agency launches and interdepartmental operations (see box, left), she has a businesslike, no-nonsense demeanour that, one senses, cuts rapidly through turf wars, personality clashes and empire-building. “I like jobs that have a clear and measurable and worthwhile goal. I like jobs that are quite challenging, but not impossible,” she says. “I’m also interested in opportunities to change the civil service; I’ve been involved in one or two new institutions, so a new department is very exciting. It was just such an opportunity!”

So, how did Wallace go about forging a department from two disparate arms of the civil service? “What is key to making these things work is a very clear sense of mission and a focus on the outcomes you want to achieve,” she replies. “So we’re doing a lot of work on our strategy, any trade-offs and choices that we need to work on, and the milestones that we need to operate towards. Having focused on the outcomes, we worked out how our structures, policies and timetables would help us meet them.”

Just as important as clear direction, she says, is “making decisions as quickly as you can. So we decided quite quickly to make this [former Defra] building our permanent home – we could have had a longer process, but wanted to establish some firm points fairly soon – and we decided very quickly on our new organisational structure (see box overleaf). It would be quite normal to spend another three months doing that, but so much was changing, we needed to settle something and create some stability.”

Good communication with the staff, Wallace continues, is another key factor: “We’re doing a lot of talking to people, trying to build teams and a board. We can get most of the department in one large room, and we’ve already had a couple of meetings to which the whole department was invited. That’s quite an opportunity, both for the secretary of the state, the ministers and the board to say what we think the issues are, but also for staff to say: ‘This is what we want to get on with’.” There are bound to be “a lot of uncertainties” in the early stages, but “you just have to be honest: let people know what is and isn’t known, and when things will become clear.”

Crucially, the department begins its work with the goodwill of many of its staff and key partners. “There was quite a desire amongst those working in this field to see a department in this shape, so it didn’t come out of the blue. And many people were quite used to working with the people who they now find themselves alongside,” recalls Wallace. “Because the future of these policy areas is inextricably bound together, a lot of the staff – the majority, I would say – thought that it made fantastic sense to bring the decision-making around those two policies into one place.”

Even given the consensus around climate change, I suggest, it must be difficult to align the policies of two departments with such differing interests, histories and stakeholder groups. But Wallace is having none of it: “It’s a misunderstanding to suggest that, for example, energy policy under BERR wasn’t well aligned to climate change,” she says, pointing out that the department’s autumn 2007 energy white paper recognised the importance of reducing carbon emissions. “That was when the importance of nuclear power in a low-carbon world was articulated,” she argues. “It’s not right to say that these two policies emerged blinking into the sunlight and had to take notice of each other; actually, they were quite well integrated.”

Surely, though, there are areas where conflicts need to be resolved? How about ‘combined heat and power’: a highly efficient system of distributed energy generation, whose growth has been constrained by regulations that favour centralised power stations? Or the tension between energy providers’ commercial need to increase the amount of power sold, and the energy efficiency targets which aim to reduce the amount consumed? However, Wallace is giving nothing away on policy. “We’ll be saying more about energy saving and heat in the next couple of months,” she says. “And sometime in the summer, I would expect us to produce a big omnibus document, bringing together everything the department does and saying how it all fits together.”

Until such policy documents emerge, the balance of power within DECC will remain fairly opaque to outside observers – and lobbyists on both sides will remain nervous. Green groups in particular are wary; many fear that renewables and energy efficiency will play second fiddle to a new generation of nuclear power stations. But Wallace is confident that the department is finding a middle way that will ensure progress on all fronts. “Because we’ve got people coming together from different departments, for a while each side will think the other is doing better,” she responds. “And I’ve heard comments in fairly equal measure from both sides, saying: ‘Will a balance be retained?’ Everyone leading the organisation has to make sure that the way they spend their time and the order in which they mention things gives due weight to each side of what was two departments and is now one.”

In order to break down these internal divisions, Wallace continues, “We’re trying to move quickly to a point where you can’t see the breaks: each of the groups led by a director-general is a blend of subjects and staff that were previously in different departments.” So the international group brings together the two departments’ overseas units, for example, while DECC’s domestic climate change operation combines a Defra unit with BERR policy teams working on heat and smart metering. “We’ve quite deliberately blended the paint, rather than leaving things sitting in two halves,” says Wallace, “And people are working very well together. Strong teams contain people from different backgrounds, and there’s a lot of strength in the difference within the department.”

In fact, this internal diversity will be essential to DECC’s work, which involves engaging with a very wide range of stakeholders and departments. The new department’s remit is complicated by the fact that while DECC leads on reducing greenhouse gas emissions, Defra retains the responsibility for adapting to climate change – and for key non-departmental public sector players such as the Sustainable Development Commission and the Environment Agency. Meanwhile, the Cabinet Office will keep its responsibility for driving down the government’s own CO2 emissions, while the
Office of Government Commerce works to improve practices in public procurement.

In this complex landscape, DECC will need to win the continued support and commitment of other departments – many of them distracted by the deepening recession – in order to cut the government’s own emissions and shift policy across a range of key fields. For this multi-faceted role Wallace is recruiting staff from across government, and says that DECC will be “an interdisciplinary department”.

“This is a very, very big behaviour change agenda. What makes people feel comfortable about making the kind of changes that we need to make?” she asks. “We need people with communications nous. We need social policy skills, economic skills, climate science skills. It’ll be quite a mix.”

As the department moves to develop policies around carbon budgets, tightening emissions targets, energy generation and the Copenhagen talks, Moira Wallace is confident that DECC’s formation has “reduced the number of problems” that emerge when policy must be formed and delivered across interdepartmental boundaries. “I don’t think it’s created any new gaps of any significance, and it’s reduced the number of interfaces,” she says – but she knows that DECC’s success will rest on its ability to engage and enlist the support of other departments.

“It’s important to keep open the links and dialogue with other departments that have a big impact on emissions, and to make sure that just because we’ve brought together departments A and B, we don’t forget about departments C, D, E and F,” she concludes. “This will be a department with interfaces – and it ought to be, because it’s about changing the whole economy. We’re dealing here with one of the most challenging problems facing government.”