Download Meeting the UK’s carbon budgets

UK CLIMATE CHANGE ACT
2008
David Nelson, DECC
Budapest
Tuesday 13 October 2009
Background to the Act
•
•
•
•
2006: growing political consensus in UK on need for
exceptional action to tackle climate change
Stern Review – cheaper to act early. Price carbon, support low
carbon technologies, remove barriers to behaviour change
Pressure from the public/ in Parliament/ NGO campaigns –
45,000 letters by end
Why legislate?
– provide long-term framework for improving carbon
management, increase certainty for business
– help drive the transition to a low carbon economy
– give a strong statement internationally – commitments well
beyond our current international obligations
2
UK greenhouse gas emissions:
progress towards targets and goals
3
Timeline
March – July 2007
Draft Bill for public consultation and pre-legislative
scrutiny – reports by THREE parliamentary committees
October – November
2007
Government response to consultation; Bill introduced
to Parliament
November 2007
- November 2008
Parliamentary consideration – Climate Change Act
became law on 26 November 2008
1st December 2008
Committee on Climate Change formally established,
recommends first three carbon budgets 2008-2022
31 May 2009
First three budgets set with Parliamentary approval
July 2009
Low Carbon Transition Plan setting out how we will
meet first three budgets
October 2009
First annual progress report from CCC – government
must respond by January: annual cycle June/ Oct
4
Main provisions of the Act
Legally binding
targets
• Cut GHG emissions by at least 80% by 2050 and by at least
34% by 2020.
Carbon budgets
& accountability
•Five-year carbon budgets set three budget periods ahead;
•Set the trajectory towards the 2020 and 2050 targets, and
ensure that cumulative emissions are limited
•indicative annual ranges + progress reports to Parliament.
Committee on
Climate Change
• To advise Government on carbon budgets and targets and
cost effective emissions saving; and to scrutinise and report
to Parliament on progress.
Measures to
reduce emissions
• Requirement to develop and produce report on policies and
proposals to meet budgets.
• Powers to introduce new emissions trading schemes in UK
Adaptation
• Government to report at least every five years on impacts
on UK of climate change and publish a programme to
address them.
• Power to require public authorities to take action based on
risk assessment.
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Major changes made in Parliament
•2050 target changed from 60% CO2 to 80% - and to cover all six Kyoto
Greenhouse Gases
•Limit on use of international credits to meet each budget – to be set
by Parliament in secondary legislation
•‘indicative annual ranges’ within budget periods
•Treatment of international aviation and shipping – ‘take into account’
now in setting budgets, aim to fully include from 2012
•Adaptation sub-committee of Committee on Climate Change and
framework for adaptation
•Corporate emissions reporting – guidance by 2009, consider by 2012
6
Timeline
March – July 2007
Draft Bill for public consultation and pre-legislative
scrutiny – reports by THREE parliamentary committees
October – November
2007
Government response to consultation; Bill introduced
to Parliament
November 2007
- November 2008
Parliamentary consideration – Climate Change Act
became law on 26 November 2008
1st December 2008
Committee on Climate Change formally established,
recommends first three carbon budgets 2008-2022
31 May 2009
First three budgets set with Parliamentary approval
July 2009
Low Carbon Transition Plan setting out how we will
meet first three budgets
October 2009
First annual progress report from CCC – government
must respond by January: annual cycle June/ Oct
7
Carbon budgets – a novel approach
A concrete reporting
cycle set through UK
law
•
•
•
Genuine financial
consequences if
budgets aren’t met
Setting limits on
emissions for each
five year period
•
Set fifteen years in
advance to give longterm clarity – 20222026 to be set 2011
•
regular reporting to
Parliament, and
scrutiny by the CCC
•
Climate Change Act
means carbon
budgets must be met
Any shortfall would
mean unplanned
purchase of
international credits
For a significant
shortfall, this could
run to £billions
Going beyond
international
commitments and
ensuring their delivery
•
A higher level of
ambition than our
international
commitments require
•
A crystal clear
framework enshrined
in domestic law for
delivering economy
wide emissions cuts
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The Government will drive the transition to a low carbon
UK using our legally binding carbon budgets
Chapter 2: Driving
the transition
Carbon budgets
are equivalent to a
34% cut in
greenhouse gas
emissions in
2020.
....and will be
tightened after a
successful
Copenhagen deal
– around 42%??
The UK will also
cut emissions by
80% by 2050.
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...along with our intention to meet them
through domestic action
Our aim is to meet the budgets
through domestic action alone,
without buying credits
(except under the EU Emissions
Trading Scheme)
To reinforce this, we have set a
zero limit on international credit
purchase in the first budget
period
•Carbon budgets include both traded and non-traded sector emissions – but
we assume the EU ETS cap will deliver emissions within the traded sector
•So the challenge is to ensure we make the reductions we need outside the
traded sector
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What does it mean for Government?
“And every new policy will therefore be
examined for its impact on carbon
emissions, not just those which reduce
emissions but those which increase them.
Where emissions rise in one sector we will
have to achieve corresponding falls in
another.”
Prime Minister Gordon Brown, 1 May 2008
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We are creating ‘departmental carbon budgets’
to share accountability across Government
•Policies must already be assessed for their carbon impact, as part of the
overall impact assessment required for all new policies.
•But a strong internal mechanism is required to ensure that every
department takes responsibility for carbon budgets.
Sectoral allocations based on
share of influence and emissions
projections
Public sector allocations based on
an agreed level of ambition and
emissions projections
The total will make up a departmental carbon budget for each Whitehall
Department
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We are now setting in place an approach to
managing the system...
The UK Low Carbon Transition Plan set out the policies and proposals to
meet our carbon budgets, and departmental budget allocations
We are creating a Carbon Budget Management Unit to oversee delivery,
supporting Government Departments to meet their commitments
By Spring 2010, every Government Department will publish a Climate
Change Strategy, stating how it will reduce emissions, and manage
adaptation to climate change
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The UK Low Carbon Transition Plan
showed how we will meet the budgets
The plan will reduce
emissions in every
sector
Taken together with measures already included in the baseline, the policies set
out in the Transition Plan should meet our first three carbon budgets
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...requiring big changes across our
economy
•Decarbonising our energy supply: a seven-fold increase in renewable energy
by 2020, alongside new nuclear energy and clean fossil fuels through Carbon
Capture and Storage
•Greener homes and communities, with huge increases in energy efficiency,
and community level measures such as district heating
•Transforming our transport system, with ultra-low carbon vehicles entering the
market, and decarbonising public transport such as rail and aviation
•Changing our jobs and workplaces as more people are employed in industries
delivering the low carbon technologies of the future
•Transforming our agriculture and use of land, using new methods to reduce
emissions while still meeting our society’s needs
•UK low carbon economy worth £150bn and employ 1.2 million by 2015.
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Power to 2020: we will get 40% of our electricity
from low carbon by 2020 and half by 2025
Implementing a carbon price – EU ETS
30% of electricity
through renewables –
delivered through
financial incentives.
Growing new industries
in the UK
Up to 4 new coal fired
power stations with
carbon capture &
storage demonstrated
First new nuclear
power stations
anticipated around
2018.
Operators have plans to
build over 12 GW in
UK.
Ten year rollout plan for smart meters as part of a new vision for smart grids
Monitoring security of supply, defining a response, ensuring the right
conditions for continued investment
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Financial incentives for renewable energy: the
Renewables Obligation
Obligation on electricity suppliers to source a proportion
of electricity sales from renewables
Generators receive Renewables Obligation Certificates (ROCs) for the renewable
electricity they produce
Different renewable technologies receive different numbers of ROCs, to support
technologies that are less well-developed or further from the market.
Generators can sell ROCs to suppliers, who submit these to meet their obligations.
If suppliers do not submit enough ROCs, they pay a penalty. Penalty payments are
redistributed to suppliers who have complied.
•Under RO renewable energy generation has tripled between 2002 and 2008
•RO will be worth around £1bn/year to renewables industry by 2010
•RO will be retained and extended to at least 2037
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Information to encourage action: “smart” meters
•
Let customers know exactly how much energy they
are using and on what.
•
Encourage action on energy efficiency.
•
Allow suppliers to offer improved services e.g. wider
range of tariffs and incentives, and facilitate micro
generation.
•
The Government has committed to a roll out of smart
meters setting an indicative timetable for completion
of the roll out by the end of 2020.
•
Key step towards future “smart grids”.
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2020 Homes and communities: we will also deliver
40% reduction in carbon by 2020 from 1990 level
Delivery short term
Meeting the 6M homes
by Dec 2011. Via:
• Increasing support,
providing £3bn to help
households improve
energy efficiency
• New large scale
community based pilot
of ‘whole house/ whole
street‘ approach
Piloting “pay as you
save” ways to help
people make their
whole house greener –
the savings made on
energy bills would be
used to repay the
upfront costs
Community scale
pilots
Future delivery
Information
New incentives/ finance:
“Clean energy cashback”
“Pay as you save”
New delivery models?
•Ensuring fairness by protecting the fuel poor, including targeting policies at vulnerable communities and
seeking to mandate social price support for energy consumers.
•Amending legislation to clarify that OFGEM’s remit includes security of supply & reducing emissions. 19
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Financial incentives for households:
“pay as you save” and “clean energy cashback”
•
In the longer term, substantial changes to homes will be needed, such as
solid wall insulation and new low carbon sources of heat & electricity.
•
New forms of financial support may be required to achieve this.
“Pay as
you save”
“Clean
energy
cashback”
•
Upfront costs of improvements to energy efficiency spread into
the future.
•
Repayments lower than the savings on energy bills.
•
Uptake will be tested in a pilot.
•
Feed-in tariffs, from April 2010, will provide payment for
renewable electricity produced by small-scale generators,
including householders.
•
New Renewable Heat Incentive (RHI) will provide households,
communities and businesses with payment for getting heat from
renewable sources, from April 2011.
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By 2020, we will cut emissions from workplaces by
13% on 2008 levels
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•
•
•
•
Greener
workplaces &
jobs
Capping emissions from heavy industry, business and the public
sector through the EU ETS and Carbon Reduction Commitment.
Climate Change Levy and Agreements to incentivise energy
intensive industries to cut emissions and costs.
Loans to SMEs and the public sector for low carbon technologies.
£405m to support a world leading low-carbon sector.
Facilitating access to up to £4bn of new capital for renewable
energy projects from the EIB.
delivering
•
•
•
•
UK low carbon economy could be worth £150bn and employ 1.2
million by 2015.
All new schools zero carbon by 2016, public buildings by 2018
and all non-domestic buildings by 2019.
Up to 500,000 new jobs in UK renewable energy by 2020.
Public sector emissions cut by 30% on 1999 levels by 2020.
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The Carbon Reduction Commitment
and Climate Change Agreements
CRC
CCAs
•
New energy saving and emissions reduction scheme to target
energy use by large, non energy-intensive, businesses and public
sector organisations (around 10% of UK emissions).
•
Cap and trade mechanism. Will come into force in 2010 and
deliver emission savings of at least 4 MtCO2 per year by 2020.
•
Overall, participants will benefit financially. A league table of
performance will be published to create a reputation incentive.
•
Give energy intensive businesses 80% reduction from the
Climate Change Levy (energy tax) in return for meeting energy
efficiency or carbon targets. Agreements cover over 50 sectors.
•
Estimated that they will save more than 22 MtCO2 by 2010 –
equivalent to taking more than 5 million cars off the road.
•
Also save around £1.5 bn a year in energy costs, despite strong
output growth in many of the sectors involved.
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By 2020, we will cut emissions from
transport by 14% on 2008 levels
•
•
•
•
Transforming
the way we
travel
Setting and meeting ambitious EU standards for new car
emissions.
Pressing the EU to require new vans to be more efficient.
Supporting innovation in ultra-low carbon vehicles, through
demonstrations and £2-5000 grants for ‘early adopters’ from 2011.
Investing in cycling and public transport, including up to £30m in
low carbon bus technology.
delivering
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•
•
•
Several hundred low carbon buses introduced over 2009-10
40% improvement in new car fuel efficiency (from 2007) by 2020
10% transport fuels to come from renewable sources by 2020
A target to limit UK aviation emission to below 2005 levels by 2050
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...and, for the first time, we will limit
emissions from farming
•
Transforming
farming, and
managing land
and waste
sustainably
•
Encouraging English farmers to reduce emissions, e.g. through
more efficient use of fertiliser, better management of livestock and
manure, by:
• Providing advice and demonstrating cost-effective action
• Support for efficient, low-carbon farming through Carbon Trust
• Research to improve measurement of on-farm emissions
• Support for anaerobic digestion of farm waste
Encouraging private funding for woodland creation
•
Continuing to reduce emissions from landfilled waste
delivering
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•
•
By spring 2010, an action plan for reducing emissions, agreed by
the farming sector on a voluntary basis.
Review voluntary action in 2012. Shortlist of options for intervention
if progress is insufficient.
Cut emissions from farming and waste by 6% on 2008 levels by
2020
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The UK Low Carbon Transition Plan received positive
feedback from stakeholders and the media
“We welcome this mature and open debate that has been initiated by the Government
on the future of Britain's energy requirements.”
“The commitment to a joined-up approach across Government is very welcome, as is
the commitment to delivering 15% of renewable energy by 2020 from domestic sources.
There appears to be a genuine commitment to a radical transformation of UK energy
generation.”
“This is a promising start, and includes many measures the CBI has been calling for to
reduce emissions across the economy.”
“It is easy to criticise governments when they publish such programmes… (and) it
would be easy to greet this one with a cynical rictus. I don't think that would be right ... It
is thoughtful, ambitious, and - for just about the first time I can remember - gives the
impression that the various government departments know what meeting their headline
targets will entail in practice.”
"This is a very welcome document that maps out not just a proper response to the
threat of climate chaos but also starts to map out the shape of the UK economy after
the recession.”
“No other government in the world has published anything quite like this, both a
collective statement of intention and a fairly detailed description of how carbon
reduction might be achieved.”
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