House of Commons - Environmental Audit

Select Committee on Environmental Audit Fourth Report

CLIMATE CHANGE: UK EMISSION REDUCTION TARGETS AND AUDIT ARRANGEMENTS

The national target and programme

28. In its manifesto the Government committed itself to a target of cutting CO₂ emissions by 20 per cent by the year 2010. In evidence published with the Committee's Second Report Mr David Davies of the Advisory Committee on Business and Environment said that as far as he was concerned this target did not emerge out of a long-term framework discussion.[37] The Institute of Directors stated that the strategy should have come before targets.[38] We asked Mr Meacher where the 20 per cent target had come from and what process led to its adoption as a target. Mr Meacher told us the commitment emerged within the Labour Party in opposition and was arrived at on the basis of consultation. He said that the Government is still committed to it, and believes that although it is testing and challenging it is reachable and would be beneficial to business as well as the country if it were achieved.[39]

29. We were disappointed that the Government did not detail to us substantive work to support its adoption of the 20 per cent target. In its memorandum to this Committee the Department of the Environment, Transport and the Regions described it only as a "firm political objective" and said that the first priority for the forthcoming programme will be to deliver against the legallybinding Kyoto target but the Government will also be launching a debate on "how to move beyond that towards achieving the 20 per cent reduction in CO₂".[40] This language is repeated in other Government publications.[41]

30. We commend the Government's identification of a more challenging target for reducing CO₂ emissions, as being appropriate given the scale of the problem. It is also valuable in showing leadership both within Europe, along with Germany, Austria and Denmark which have also agreed unilateral targets, and in the global arena. We urge the Government to set out for consultation a programme to meet the full 20 per cent CO₂ target by 2010.

31. The Kyoto Protocol makes provision for individual countries which beat their targets to add this to their allowance in subsequent periods.[42] Mr Meacher confirmed that this arrangement would also apply within the EU so that if the UK exceeded its legal commitment to 12½ per cent it would be permitted to bank it and other Member States would still be expected to achieve their targets.[43] With regard to the provisions of the Protocol relating to joint implementation, we do not see any basis for this assertion. The Department of the Environment, Transport and the Regions confirmed to us that surplus emission reductions could not be both traded and used to offset a shortfall by others. But they noted that further consideration is likely to be needed within the EU, and under the Convention, on the banking of surplus emissions by countries which are operating within a joint agreement. This question is of particular concern in view of the Department's evidence that the EU Member States' shares give a total reduction for the EC of some 8.008 per cent and accordingly there is no spare margin. It is expected that individual countries will build a contingency into their own programmes.[44]

32. We consider the Government should press for clarification, within the EU, on what arrangements will apply if Member States exceed or fall short of their share of the EC commitment. We note that, if the UK programme is geared towards meeting the 20 per cent target and surplus reductions are tradeable, the UK may be able to earn itself a valuable asset.

EU negotiations

33. We note that the changes in the targets for EU Member States, which were agreed following bilateral negotiations, show no common pattern. The Department of the Environment, Transport and the Regions told us the targets reflect Member States' differing economic circumstances. We have set out the targets and the changes to the targets since those previously agreed in March 1997 in Figure 1 opposite. Most of the Member States which in 1997 agreed to reductions in emissions of the basket of three greenhouse gases, negotiated slightly less demanding limits for the six gas basket, with the exception of Austria which negotiated a significantly less demanding reduction and the UK which agreed to a more demanding target. Most of those countries which in 1997 were allowed to increase emissions, agreed in 1998 to less high increases, except for Greece whose emission limit has been increased by five percentage points.

34. We also reviewed emission limits compared to emissions per capita. Unfortunately figures for greenhouse gas emissions per capita for all countries were not available. However using the latest available figures for CO₂ emissions per capita we found no evidence, contrary to what Mr Meacher said to the Committee[45], of a move towards convergence in Europe. For example Belgium, the Netherlands and Finland all had higher CO₂ emissions per capita in 1994 than Germany, Austria and the UK but have agreed lower emission reduction targets.

35. Mr Meacher declined to give us any further detail on how the shares within the EU target had been agreed, although he commented that he too was disappointed in the result. He told us that the UK had been pressed extremely hard in the negotiations, which they resisted, and the 12½ per cent target was the result.[46] The Environment Ministers' communication of the outcome of their proceedings also gave no information on the total of the emission reductions agreed between Member States.

36. We welcome the speedy agreement of targets within the EU. However, we are concerned that, just as individual countries have set unilateral targets, so it could have been desirable for the EU to show leadership by going beyond the legal requirement.

37. We consider the opaqueness of the negotiations process is unhelpful. For example, without providing supplementary information on expected emissions on the business as usual scenario, it is not clear whether the significant increases in emission levels for Greece and Portugal represent challenging or easy targets for them. These high emission allowances may therefore send the wrong message to developing countries.

38. In our view transparency in EU negotiations would help in showing the public the scale of the problem to be addressed at EU level, the need for EU wide measures and the role for national programmes and action. In particular we consider that information on greenhouse gas emissions per capita should be published for each country for the base year and for 2010 to show the extent to which there is convergence within the EU.

Figure 1: European Community joint commitment on climate change under the Kyoto Protocol Kyoto Protocol
Member State	Share-out of EU 8 per cent target for 6 greenhouse gases - June 1998¹	Indicative share-out of 3 greenhouse gases - March 1997²	Change in share-out between March 1997 and June 1998	CO₂ emissions in kilo tonnes per capita (1994)
Luxembourg	-28	-30	down 2	29.85
Denmark	-21	-25	down 4	12.06
Germany	-21	-25	down 4	11.04
Austria	-13	-25	down 12	7.45
UK	-12.5	-10	up 2½	9.53
Belgium	-7.5	-10	down 2½	11.96
Italy	-6.5	-7	down ½	7.21
Netherlands	-6	-10	down 4	11.44
Finland	0	0	same	11.61
France	0	0	same	6.47
Sweden	+4	+5	up 1	7.31
Ireland	+13	+15	up 2	9.39
Spain	+15	+17	up 2	5.85
Greece	+25	+20	down 5	8.48
Portugal	+27	+40	up 13	4.77
Sources: Department of the Environment, Transport and the Regions and the European Environment Agency Notes: 1. A "minus" target means a target for reducing emissions compared to the 1990 baseline. 2. In March 1997 the EU negotiating position for the Convention was for a reduction of 15 per cent but its indicative share-out was for a total reduction of 9 per cent. The three gases covered by this agreement were CO₂, methane and nitrous oxide.

39. The EU Environment Ministers have set out a long list of pan-European and common measures which could help Member States achieve their emission targets.[47] They are a mix of old and new with some requiring EU action and others requiring domestic action. We welcome this renewed pressure on the European Commission. In particular it should complete consideration of the tax exemption on aviation fuel, which is already 7 months overdue, and the differentiation in tax levels for energy saving products, a measure this Committee has already called on the Government to negotiate within the EU.[48] We note that Mr Meacher expects the Commission to provide a timetable for these measures to be considered at the October or December meeting of the Council, and that the forthcoming UK Climate Change Programme will cover measures and options where there is a prospect of European-level action.

40. We consider it important that the forthcoming UK Programme should set out clearly respective UK and EU responsibilities for delivery.

The UK programme

41. Significant new policies are required to meet both the legally binding target and the "political aim" of achieving a higher reduction of 20 per cent in CO₂ emissions. As Mr Meacher put it "new and tighter policies are needed".[49] He commented that there would be three main pillars for action under the forthcoming programme: power generation, transport and energy efficiency. Since Mr Meacher gave evidence to the Committee the Government has completed its review of energy sources for power generation and produced its White Paper on the future of Transport. The former stated that its proposals were consistent with the Government's environmental objectives and existing projections of emissions. The latter claimed that there is the potential to reduce road traffic CO₂ emissions by 22-27 per cent, on forecasts for 2010, as a result of the key measures in the paper.[50]

42. We consider that in addition to setting out programmes for action to reduce emissions, particularly in these key areas, a fully rounded strategy should address all Government activity in connection with implementing the Protocol and pushing forward the negotiations. In particular it should include UK policies for helping developing countries to develop in a way that takes due account of climate change concerns. It should also address foreign policy objectives in relation to the Kyoto process. And it should set out policies and plans for adapting to the effects of climate change.

43. Major policy changes in these areas will impact on all key sectors and all citizens. To achieve such changes now and in future commitment periods the public will need to be persuaded. Mr Meacher assured the Committee that the forthcoming programme will set out government departments' responsibilities and that local authorities, business, nongovernmental organisations and local community groups will also be involved. The programme is also expected to encourage individuals to play their part and to include a check list of the actions the Government wants them to take.[51] Mr Meacher considered the programme must also "be accompanied by a major road show and a tremendous government, business, local authority, non-governmental organisation impetus ....making the points extremely strongly".[52]

44. We applaud the vision of an inclusive approach to tackling climate change and commend the prospect of a major information and consultation process to accompany the Programme. Having regard to the further substantial reductions of emissions that will be needed in the longer term we consider that the strategy should also set out a long-term plan for promoting public and private sector research and development in the new technologies that will be needed, particularly in the energy and transport sectors, to adapt to a world of much lower emissions.

45. As discussed in the Committee's First Report, we regard taxation as a valuable tool for pursuing environmental sustainability.[53] Taxation can contribute to many aspects of policies to address greenhouse gas emissions. The Government believes it has started on this, but the Committee has noted the large amount of outstanding work required on relevant fiscal instruments referred to in Budget announcements.[54] Mr Meacher stressed to us that measures adopted should not undercut competitiveness and that the Government is offering full opportunities to debate particular mechanisms. The Task Force on the Industrial Use of Energy, chaired by Lord Marshall, is a case in point.[55] We are encouraged by this approach, and indeed by Mr Meacher's acceptance in one case discussed, vehicle excise duty for less polluting heavy goods vehicles, that the £500 reduction .... is not sufficient and there is a need to look at this further.[56]

46. We urge the Government to set out clearly in the forthcoming Climate Change Programme the potential for use of further fiscal measures. Actual measures and their projected impact should be clearly set out in Budget documents.

47. In our Second Report, on the Greening Government Initiative, we considered whether the Government could make greater use of voluntary agreements with business and industry on a range of issues.[57] The Government's consultation paper on "Sustainable Business" describes such agreements in relation to tackling carbon saving in business sectors as a "valuable option"and laid out some clear requirements to achieve effective voluntary agreements.[58] We look forward to these requirements also being applied to existing voluntary agreements, for instance on energy efficiency in the chemicals industry. We note that the last Government's second report on climate change reported voluntary agreements with five sectors of industry to minimise emissions of hydrofluorocarbons. Although mentioned in the "Sustainable Business" document, there appears to have been no reporting on progress with those agreements despite Mr Meacher's emphasis upon addressing hydrofluorocarbon use in advance of its expected growth (as a substitute for ozone-depleting hydrochlorofluorocarbons).

48. If voluntary agreements are to form a part of the forthcoming Climate Change Programme, the arrangements for setting targets, monitoring, verifying and reporting performance should be clearly set out and followed.

37 The Greening Government Initiative, p211, Q526 Back

38 The Greening Government Initiative, p232, paragraph 4 Back

39 QQ 20 & 22 Back

40 Ev p1, paragraph 1 Back

41 See, for example, Sustainable Business, consultation paper, 1998; Review of Energy Sources for Power Generation, Consultation Document, 1998 Back

42 Article 3 (paragraph 13) of the Kyoto Protocol Back

43 Q34 Back

44 Ev p18, paragraph 2 Back

45 QQ 6 & 65 Back

46 Q36 Back

47 Outcome of Proceedings, Environment Council, June 1998, 9702/98 Back

48 First Report, Environmental Audit Committee, The Pre-Budget Report, HC547, Session 1997-98 Back