Energy Insight: UK carbon budgets

What is a carbon budget?

“A carbon budget places a restriction on the total amount of greenhouse gases the UK can emit over a 5-year period. The UK is the first country to set legally binding carbon budgets.” Department for Business, Energy & Industrial Strategy (BEIS), 2019

Carbon Budgets - guidance. Link to, formerly Department of Energy and Climate Change (DECC) website.

The Climate Change Act (2008) established a framework to develop an economically credible emissions reduction path. It also strengthened the UK’s leadership internationally by highlighting the role it would take in contributing to urgent collective action to tackle climate change under the Kyoto Protocol. An overview of the Act and its administration can be found on the Committee on Climate Change's (CCC) website.

Under a system of carbon budgets, every tonne of greenhouse gas (GHG) emitted since the start of the first budget in 2008 counts towards total emissions. If and when emissions rise in one sector, the UK will have to achieve corresponding falls in another.

Who sets the budget?

The CCC is a non-departmental public body, set up under the Climate Change Act (2008) to advise the Government on emissions targets, and report to Parliament on progress made in reducing GHG emissions. Carbon budgets are set by the UK Parliament for periods of 5 years, and the Climate Change Act (2008) is amended, by Statutory Instrument, to reflect the changes.

The first, second and third carbon budgets were set in 2009 as following:

The first carbon budget for the 2008–2012 budgetary period was 3018 Mega-tonnes (Mt) of carbon dioxide equivalent (CO2e). 
The second carbon budget for the 2013–2017 budgetary period was 2782 Mt CO2e. 
The third carbon budget for the 2018–2022 budgetary period is 2544 Mt CO2e. (SI 2009 No. 1259)

To work out how much carbon is emitted over a certain period, the government must look at emissions of GHG in the UK, removal of GHG from the atmosphere and the use of carbon units, which can be brought in from overseas to offset UK emissions. Removal of GHG from the atmosphere is currently achieved through afforestation, but the government has stressed the need to deploy carbon capture usage and storage (CCUS) technology during the 2030s to speed the removal of atmospheric CO2. Emissions statistics are compiled using aggregate gross emissions from sources in the UK, including emissions from land use, land use change and forestry (LULUCF). The Intergovernmental Panel on Climate Change (IPCC) produces clear guidelines on methodologies and best practice for measuring and monitoring CO2 estimates at the national level.

Figure from Final Statement for the First Carbon Budget Period, DECC, May 2014. Reproduced under Crown Copyright

The Climate Change Act 2008 (Credit Limit) Order 2011 set a limit on the number of carbon credits that could be credited to the net UK carbon account for the 2013-2017 budgetary period.

The fourth carbon budget was set in 2011:

The Carbon Budget Order 2011 (SI 2011 No. 1603)
The carbon budget for the 2023–2027 budgetary period is 1950 Mt CO2e.

The fifth carbon budget was set in 2016:

The Carbon Budget Order 2016 (SI 2016 No. 785)
The carbon budget for the 2028-2032 budgetary period is 1725 Mt CO2e.
The data behind the CCC’s fifth carbon budget - link to CCC website

The sixth carbon budget will be set in 2021.
The CCC will, in September 2020, publish its recommendations on the level to be set, giving ministers advice on the volume of greenhouse gases the UK can emit during the period 2033-2037

What progress has the UK made?

 BudgetCarbon Budget Level (Mtonnes CO2 equivalent)  Reduction below 1990 levels (%) Result
 1st carbon budget (2008-2012) 3018 25 Exceeded target by 1%
 2nd carbon budget (2013-2017) 2782 31 Exceeded target by 14%
 3rd carbon budget (2018-2022) 2544 37 (by 2020) In progress (on-track)
 4th carbon budget (2023-2027) 1950 51 (by 2025) Not on-track
 5th carbon budget (2028-2032) 1725 57 (by 2030) Not on-track
 2050 target (Climate Change Act) Approx. 800 80 Not on-track
 2050 target (May 2019 CCC report) Net-zero 100 Not on-track

According to the CCC, “the UK is currently on track to outperform on the second (2013 to 2017) and third (2018 to 2022) [carbon budgets]. However, it is not on track to meet the fourth (2023 to 2027).”

In the 2018 edition of the Energy Barometer, 83% of energy professionals surveyed predicted that the UK will fail to meet the fifth carbon budget (although had fallen to 78% in the 2019 Energy Barometer). This is reflected in the official 2018 BEIS energy and emissions projections, which show that the UK is set to fail to meet the fourth carbon budget by 109Mt CO2e and is set to fail to meet the fifth carbon budget by 165 Mt CO2e. 

In June 2019, the UK became the first major economy to pass a net zero emissions law - requiring the UK to bring all greenhouse gas emissions to net zero by 2050.

Efficacy and long-term goals

The Climate Change Act (2008) created the initial framework for the UK to begin reducing GHG emissions. In the decade that has followed, the majority of UN members adopted the 2015 Paris agreement, committing to limit global temperature rise to ‘well below 2°C’. In May 2019, the CCC released “Net Zero – The UK’s contribution to stopping global warming”, which incorporated the latest scientific evidence on climate change, including the landmark IPCC SR1.5 report. This new report updates the Climate Change Act goal of 80% reduction in GHG emissions (on 1990 levels) to a new recommended target of net-zero emissions by 2050. 

The report also recommends that Scotland should pursue a more ambitious goal of net-zero emissions by 2045. Within the UK, Scotland is uniquely well placed to reduce carbon emissions. This is thanks to sufficient space for afforestation and peatland restoration, as well as significant potential CO2 storage sites in the North Sea. Conversely, the report sets a more modest goal for Wales of 95% reduction in GHG emissions on 1990 levels by 2050, owing to higher Welsh agriculture emissions and limited potential in the country for CO2 storage.

The CCC cites falling costs in key technologies such as batteries and offshore wind as a means to achieve net-zero emissions for roughly the same cost as the original 80% reduction target (estimated at 1-2% of GDP in 2050). However, meeting this new, more ambitious target requires greater urgency and a ramp-up in policy regarding domestic heating, CCUS development, hydrogen, heat pumps and afforestation.

Further Reading

‘Do it now’: UK must set zero-carbon target for 2050, say official advisers – The Guardian, 2nd May 2019

In-depth analysis of CCC Net-Zero report – Carbon Brief, 2nd May 2019

Achieving net-zero emissions is a realistic goal for Britain – Financial Times, 2nd May 2019

2nd Climate Change Risk Assessment (CCRA2) – Committee on Climate Change, 18th January 2017. 
CCRA3 will be released in 2022.

Updated energy and emissions projections: 2018 – Dept. for Business, Energy & Industrial Strategy, 11th April 2019

Special Report: Global Warming of 1.5°C – Intergovernmental Panel on Climate Change, 8th October 2018

Final statement for the second carbon budget - Dept. for Business, Energy & Industrial Strategy, 23rd May 2019

This energy insight was originally published on 8th July 2016. It was updated on 10th May 2019.
Updated on 23rd May 2019 to add a link to the final statement for the second carbon budget.
Updated on 1 Noveber 2019 to show the date the CCC will publish its recommendations in 2020, and to report the UK's net zero emissions law

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