A step change is required in the pace of UK emissions reduction to meet carbon budgets, says the first annual report to Parliament by the Committee on Climate Change (CCC), published today. It concludes that in some areas new policy approaches will be required to deliver the government’s Low Carbon Transition Plan.
The Climate Change Act requires the Committee to report each year on emissions reductions relative to the UK’s carbon budgets. Complete sets of emissions data are not yet available for the initial year (2008) of the first budget. In this first monitoring report, the Committee has therefore focused on analysing progress in the years running up to the first budget period, understanding the impact of the recession on emissions, and identifying leading indicators (e.g. investments or policies which need to be in place) which the Committee will track to ensure early warning of future possible under-achievement versus budget.
In the 5 years 2003-2007, emissions reductions averaged 0.5 per cent per annum: going forward, reductions of 2-3 per centpa will be required to meet the carbon budgets. A step change in the pace of reduction is needed.
Declining economic activity is likely to have produced an emissions cut of around 2 per cent in 2008, and recession could reduce emissions in the first budget period by a total of 40-70 million tonnes. But recession induced reductions must not be confused with underlying progress, which could be undermined by a recession induced fall in the carbon price. The UK should now aim to overachieve emissions reductions in the first budget period.
Analysis of the actions needed to ensure delivery of the first three carbon budgets, suggests a need to revise or strengthen policy in 3 particular areas.
Electricity generation
Rapid decarbonisation of electricity generation is a crucial priority, and scenarios to achieve a reduction in grams per kWh from today’s 540g CO2/kWh to less than 300g CO2/kWh in 2020, could include 23 GW of new wind capacity, up to 3 new nuclear stations and up to 4 CCS demonstration plants by 2016.
The report suggests, however, that current electricity market arrangements together with the EU ETS trading scheme are unlikely to deliver required sector decarbonisation, and would instead lead to increasing dependence on imported gas. So the Committee has called on the government to undertake a review of alternative arrangements to reduce investor risks and ensure delivery of investment in low-carbon technologies.
Options to be considered include carbon price strengthening, providing more certainty on the price paid for low-carbon generation (e.g. through feed-in tariffs), and ensuring low-carbon investment (e.g. through a low-carbon obligation or emissions performance standard).
Progress on CCS demonstration plants is vital to assess whether CCS will be a viable technology to achieve further decarbonisation in the 2020s. The Committee reiterated its previous recommendation that there can be no role for conventional coal generation in the UK beyond the early 2020s.
Residential and commercial buildings
Energy efficiency in homes could be improved by 35 per cent by 2020 with an ambitious programme of improved insulation (e.g. covering 10 million lofts, 7 million cavity walls and 2 million solid walls), the installation of 12 million energy efficient condensing boilers, and major improvements in electrical appliance efficiency.
But achieving this programme is likely to require a shift from the existing Carbon Emissions Reduction Target (CERT) approach in which electricity companies meet their supplier obligation through specific measures (e.g. the supply of energy-efficient light bulbs). Whole house approaches (simultaneously implementing the full range of measures) and street-by-street approaches involving local government and energy companies within a strategy defined by national government are likely to be required.
Road transport
As outlined in the Committee’s first report in December 2008, road transport emissions need to be reduced via a combination of efficiency improvements (reductions in grams per km) and measures which will constrain growth in traffic volumes: emission cuts of 30 per cent by 2020 are possible.
The Committee reiterated its belief that the carbon-efficiency of new cars can and should be reduced from above 160g/km today to 95g/km by 2020. This reduction could be achieved by improvements to fuel efficiency on conventional cars, but further reductions beyond 2020 will require a significant role for electric cars.
Manufacturer announcements of electric car initiatives have progressed even more rapidly than the Committee envisaged, and significant progress on battery cost reduction continues.
But to ensure rapid progress, two new mutually reinforcing government policies are required: Support for new car purchase to drive initial volumes and help manufacturers achieve economies of scale; and support for battery charging infrastructure.
