A step change is required in the pace of UK emissions reduction to meet carbon b ...

A step change is required in the pace of UK emissions reduction to meet carbon budgets, says the Committee on Climate Change (CCC) in its first annual report to Parliament. Further, in some areas, new policy approaches will be required to deliver the Government’s Low Carbon Transition Plan. Key findings are that: In the five years 2003-2007, emissions reductions averaged 0.5% per annum: going forward, reductions of 2-3% pa 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% in 2008, and recession could reduce emissions in the first budget period by a total of 40-70mn tonnes. But recession-induced reductionsmust 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 over-achieve emissions reductions in the first budget period. The Climate Change Act requires the Committee to report each year on emissions reductions relative to the UK’s carbon budgets. Initially, the Committee has focused on analysing progress in the years running up to the first budget period, understanding the impact of the recession on emissions, and identifying indicators which the Committee will track to ensure early warning of future possible under-achievement versus budget. Analysis of the actions needed to ensure delivery of the first three carbon budgets suggests a need to revise or strengthen policy in three particular areas, says the Committee: electricity generation, residential and commercial buildings, and road transport. Electricity generation Rapid decarbonisation of electricity generation is a crucial priority, and scenarios to achieve a reduction in grams per kWh from today’s 540 gCO2/kWh to less than 300 gCO2/kWh in 2020, could include 23 GW of new wind capacity, up to three new nuclear stations and up to four carbon capture and storage (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. The Committee therefore calls on the Government to undertake a review of alternative arrangements to reduce investor risks and ensure delivery of investment in low-carbon technologies. Residential and commercial buildings Energy efficiency in homes could be improved by 35% by 2020 with an ambitious programme of improved insulation (eg covering 10mn lofts, 7mn cavity walls and 2mn solid walls), the installation of 12mn energy efficient condensing boilers, andmajor improvements in electrical appliance efficiency. But achieving this program 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 (eg 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, says the Committee. For commercial and public buildings, a key policy initiative commencing in April 2010 will be the Carbon Reduction Commitment Energy Efficiency Scheme. The Committee will advise in 2010 on the future trajectory of caps under this system. This policy should however be buttressed by: the roll-out of Energy Performance Certificates (EPCs) and Display Energy Certificates (DECs), a commitment that the public sector will implement all costeffective measures to improve energyefficiency by 2018, and a policy to ensure that all SMEs should achieve a minimum EPC rating of ‘F’ or higher by 2020. Road transport Road transport emissions need to be reduced via a combination of efficiency improvements and measures which will constrain growth in traffic volumes - emission cuts of 30% by 2020 are possible. The Committee reiterates its belief that the carbon efficiency of new cars can and should be reduced from above 160 g/km today to 95 g/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 vehicles. The Energy Institute supports the call from the CCC for an urgent step change in the pace of carbon emissions reduction. James Smith, President of the EI, commented: ‘This report sets the right priorities and tells us how Britain can get the energy we need for the lower carbon emissions we can afford. There is a cost, but the cost of doing nothing will be higher. Retooling Britain’s energy supplies will need investment, new technology and new skills. On the bright side, it means new jobs and new opportunities for British business at home and abroad.’