|
The Government is required to set a series of carbon budgets in order to monitor progress against the UK's statutory targets, as set out in the Climate Change Act, to cut carbon emissions by at least 34% by 2020 and by at least 80% by 2050. Each carbon budget places a limit on the UK's emissions over a five year period. Under the Act, the Committee on Climate Change is charged with advising Government on setting the level of the carbon budgets, and to report annually on progress on cutting emissions. The first three carbon budgets, covering the period 2008-2022, were set in May 2009 and the Government was required to set the fourth carbon budget, covering the period 2023-2027, in law by 30 June 2011.
The Committee on Climate Change provided advice on the level of the fourth carbon budget, consistent with its recommended emissions reduction trajectory, in December 2010. The Committee on Climate Change also made a number of other recommendations to help ensure that the fourth carbon budget can be met. The Government is not required to follow the Committee on Climate Change's advice and in the build up to the Government setting the fourth carbon budget there were reported disagreements between Ministers on whether that advice should be followed or a less stringent fourth carbon budget set.
In carrying out this inquiry we explored the Government's decision on the level of the fourth carbon budget and its response to the recommendations made by the Committee on Climate Change, and examined the Government's 'Carbon Plan' to meet the carbon budgets.
The Government can be commended for setting the fourth carbon budget at a level recommended by the Committee on Climate Change. This would entail a 50% reduction in emissions by 2025, and would be consistent with the more distant 2050 target. However, at the same time that it decided to accept the recommended fourth carbon budget, the Government also announced a review of the carbon budgets in 2014 that could ease the budget if it is found that the UK's emissions reduction trajectory is inconsistent with that of the EU Emissions Trading System (EU ETS). The Government's concern is that a too lax EU-wide carbon cap in the 2020s might put unreasonable demands for emissions reductions on the sectors of the economy not covered by the EU ETS.
The developing science and international dialogue is building the case for seeking more, not less, ambitious emissions reductions. The fourth carbon budget as currently set represents the minimum needed to ensure the 2050 emissions reduction target is met, and loosening the budget following the review in 2014 would put achieving that target in jeopardy. The prospect of the review changing the budgets in itself undermines the benefit of having a degree of longer-term certainty about Government policy that investors in low-carbon need. Moreover, the 2014 review comes before a review of the EU ETS and a possible international climate change deal to limit global temperature rise to 1.5°C, so will come at a point when it will be little better placed to reflect likely developments than now. There is, more fundamentally, an inconsistency in the Government's position of trumpeting its acceptance of a recommended carbon budget for 20 or so years hence while at the same time envisaging the possibility of overturning that commitment just three years from now, and risks undermining the Climate Change Act which aims to set a long term trajectory of emissions reductions based on independent scientific advice.
We would expect a 'greenest Government ever' to accept all the recommendations made by the Committee on Climate Change, but it has not done so. We are concerned about the lack of transparency of how the Government's response to each of the Committee on Climate Change's recommendations was arrived at, and communicated. The Government's proposal for the fourth carbon budget did not respond to each recommendation made by the Committee on Climate Change and was silent in a number of areas. The Government has rejected other important recommendations from the Committee on Climate Change: on making the second and third carbon budgets consistent with the pace of emissions reductions required by the fourth budget, and rejecting the use of international carbon offset credits to meet the second carbon budget. This risks making the fourth carbon budget unattainable.
Carbon budgets reflect emissions produced in the UK, and exclude emissions embedded in goods imported from abroad. The scope for measuring emissions on a consumption basis, and how that might be worked into the carbon budgets regime, should be reviewed.
It is difficult to assess whether the policies listed in the Government's draft Carbon Plan are likely to deliver the carbon budgets. The draft Carbon Plan abandons the departmental carbon budgets regime of the 2009 Low Carbon Transition Plan. The Government's rationale for this is unconvincing. Departmental carbon budgets could provide a useful way of understanding the quantum of effort required by each department and provide a way of focusing departments' policies in their sector on the resultant emissions impacts.
Moves to monitor emissions reductions at a local authority level are welcome but it will not be enough to ensure that all local authorities make a full contribution to emissions reduction. Local Authorities should be required to set emissions reduction targets, supported by the Committee on Climate Change. A review of local authorities performance in reducing emissions should be presented to Parliament by Ministers. In a similar vein, mandatory reporting of emissions by businesses will help aid transparency and illustrate the contributions businesses are making, and need to make, to help tackle climate change.
When setting carbon budgets the Government needs to be mindful of the possibility that action on climate change may result in some production and jobs moving abroad, to countries with less stringent policies or carbon-related taxes. Without care, this could harm UK industry and could actually increase global emissions. Some energy intensive industries have expressed particular concerns about the carbon budgets driving production abroad, but Government has given little priority to generating hard evidence of such 'carbon leakage'. A lack of transparency and information on the risks to energy intensive industries, and how these should be tackled, need to be resolved to allay fears of lobbying dictating policy. We recognise the importance of policy measures to help energy intensive industries, but before these are introduced a comprehensive and robust assessment of the actual risk to each sector affected, on a case by case basis, should be made by departments working in concert. Measures to help energy intensive industries must be fair and tailored to each sector affected, and should keep a strong incentive to reduce emissions.
| 
