new thinking heroNew Thinking & Other Projects - Economic Regulation and Sustainability


During 2003 and early 2004, SF undertook research into the roles of the economic regulators for water and energy - Ofwat and Ofgem - and sustainability. This examined the duties of the regulators and the ways in which they dealt with social and environmental issues. The research was conducted at a time when the water regulator had been given an explicit duty to take account of sustainable development, although efforts by members of both Houses of Parliament to introduce a similar duty for Ofgem had been rejected twice (in 2000 and 2003).

The report was published in June 2004 when further attempts were being made to give Ofgem a sustainable development duty. SF’s report recommended that such a duty be introduced, and was cited in the debate in the House of Lords on the Energy Bill, in support of an amendment to achieve this. Lord Jenkin of Roding said : “My Lords, I would like to add my support to this and draw the House's attention to what I have found a compelling report by Sustainability First, Economic regulation and sustainability policy.

In the session on 15 July 2004, the Government agreed to insert a sustainable development duty for Ofgem into the Energy Bill (now the Energy Act 2004).

In September 2004 SF held a discussion dinner in collaboration with the Sustainable Development Commission on the issues raised in its report – in particular to discuss how the regulators would implement these new duties. The dinner was attended by the regulators and senior representatives of DEFRA, DTI, the Environment Agency, energy and water companies, consumer organisations and academics.

SF acknowledges with thanks the sponsorship provided by RWE npower for this research.

See publications page for details of the report