Select Committee on Environmental Audit Second Report


APPENDIX I


GOVERNMENT RESPONSE TO THE ENVIRONMENTAL AUDIT COMMITTEE'S FOURTH REPORT: CLIMATE CHANGE: UK EMISSION REDUCTION TARGETS AND AUDIT ARRANGEMENTS

Introduction

The Government welcomes the Environmental Audit Committee's Fourth Report on climate change and we are pleased that the Government's approach to the development of a new UK climate change programme is generally in line with the Committee's recommendations.

Since the report was published, the Committee will be aware that the Government has published its consultation paper on climate change. The paper launches a national debate on how the UK can meet its targets - both the legally binding reduction of 12.5% in six greenhouse gases by 2008-2012 and the manifesto goal of a 20% reduction in CO2 by 2010. It sets out a wide range of policy options, what they could achieve, what the costs might be and it asks for views. The consultation closes on 12 February 1999. The Government intends to have a new UK climate change programme in place by 2000 so that the UK is ready to ratify the Kyoto Protocol as soon as the time is right. By consulting on detailed options now, the UK is well ahead of many other countries.

The latest analyses show that the UK is well placed to deliver its climate change targets. On latest estimates we will be about 10% below 1990 levels by 2010 over the 6 gas basket.

Significant progress was also achieved at the fourth Conference of the Parties (COP 4) in Buenos Aires in November 1998. Decisions were needed at COP 4 to prepare for the future entry into force of the Kyoto Protocol and, at the same time, to meet the specific concerns of developing countries and to strengthen the implementation of the Convention itself. It was also crucial to maintain the political momentum of Kyoto and to send out a clear signal that Governments are serious about tackling the threat of climate change.

The Conference achieved those goals. After extended negotiations, in which the UK again played a major role, we were able to reach agreement on a number of key issues, including elements of a Buenos Aires Action Plan. The most important of these was the adoption of a decision setting out a work programme to put in place rules for the operation of the "Kyoto mechanisms". These mechanisms - emissions trading, joint implementation and the clean development mechanism - will have an important role to play in support of domestic action to enable countries to meet their Kyoto targets. The decision agreed a two year deadline for completion of the work.

We also secured agreement on elements of a workplan and a COP 6 target date (the year 2000) for completion of important procedures and guidelines on other key issues such as a comprehensive compliance regime, including the strengthening of systems for compiling and reporting national inventories of greenhouse gas emissions and for the review of countries' performance in meeting commitments. We were also able to agree a package of measures to enhance the technological and financial assistance which we are committed to providing developing countries under the Climate Change Convention.

Specific Comments on the EAC's Report

We would like to make the following comments on the EAC's report. Please note that the paragraph numbers refer to those in the report itself.

4.  The Kyoto Protocol made provision for countries jointly to fulfil their commitments. On this basis the European Community agreed to reductions of the six greenhouse gases of 8 per cent. Agreement on Member States' shares of this commitment was reached on 17 June 1998 at the EU Environment Ministers Council. The UK share has been set at 12.5 per cent less than 1990 levels. If the European Community fails to meet its target as a whole each Member State will be held individually responsible for achieving the reduction targets within the joint agreement.

We would like to clarify the point made in the last sentence. In the event of failure by the Parties to an agreement to meet their combined aggregate reduction, only those individual Parties (Member States) which fail, plus the Community as a whole, will be held responsible.

5.  On current trends overall UK emissions of the six greenhouse gases will be 7.5 per cent below the 1990 baseline by 2010. So to meet the UK Kyoto target for greenhouse gases of 12.5 per cent, new policies will be needed to deliver further reductions totalling 5 percentage points. The current trends for UK emissions project a decrease for the basket of six greenhouse gases, but within this, CO2 emissions are projected to rise by one per cent while the other five greenhouse gases are projected to fall by 37 per cent. This means that to meet its own target for a 20 per cent reduction in CO2 emissions the Government will need these new measures to deliver a reduction of 21 percentage points in CO2 by 2010.

On 26 October 1998, the Government published its consultation paper on climate change. The paper updates the UK's projected emissions to 2010, taking account of the 1997 National Road Traffic Forecasts (NRTF). Current trends now suggest that, on central projections, the UK's overall emissions of the six greenhouse gases will be 10% lower in 2010 than they were in 1990. Within this, the breakdown for each gas is as follows:



1990 (MtC equiv)

2000 (MtC equiv)

2010 (MtC equiv)

Carbon dioxide

168

157 (-6.5%)

163 (-3%_)

Methane

25

19 (-24%)

16 (-36%)

Nitrous Oxide

18

11 (-39%)

12 (-33%)

Hydrofluorocarbons

4.2*

1.2 (-71.5%)

1.6 (-61.9%)

Perfluorocarbons

0.2*

0.1 (-50%)

0.2 (0%)

Sulphur hexafluoride

0.2*

0.3 (+50%)

0.3 (+50%)

Total greenhouse gas emissions

216

189 (-12.5%)

194 (-10%)

*1995 base year used for HFCs, PFCs and SF6

_ column relates to %age change on 1990 figures




6.  Discussions on outstanding issues under the Kyoto Protocol will continue at the next annual Conference of the Parties to the Convention in November 1998 in Buenos Aires. Once the Protocol has come into effect, meetings of the Parties of the Protocol will approve procedures and mechanisms for the operation of the Protocol and any proposed amendments to the Protocol.

After extended negotiations, in which the UK again played a major role, Parties at Buenos Aires were able to reach agreement on a number of outstanding Convention and Protocol issues including the adoption of a decision setting out a work programme to put in place rules for the operation of the "Kyoto mechanisms" by COP6 (probably late 2000).

11.  We believe that Kyoto has marked a turning point and the agenda has now moved on from whether there is global warming. The focus of international and national attention should now be on action to ensure that we deliver against our commitments to reduce emissions.

The Government agrees with the Committee's recommendation and is doing all it can to pursue this point.

13.  It is against this background that it is important for international efforts to address both developed and developing countries' emissions. The Protocol is based on the principle that those who are the main cause of the problem, the developed countries, should take action first. Mr Meacher told us that there is the expectation that the developing countries will become involved in the process before long.

Involvement of developing countries in target setting continued to be a very sensitive issue at COP 4 in Buenos Aires, with G77 and China firm on their position that the developed world must first demonstrate fulfilment of their commitments under both the Convention and the Protocol. No agreement was reached on reviewing the adequacy of those commitments in meeting the ultimate objective of the Convention, which is to prevent dangerous man-made interference with the climate system. However, during his address to the COP, President Menem said that Argentina would voluntarily adopt a target and that this target would be announced at COP 5. Kazakhstan also announced its intention to take on a formal target and join Annex B of the Protocol. However, a formal legal route to enable either country to do this has yet to be found.

16.  Mr Meacher told the Committee that the Government believes in the equity principle in that all countries should be involved and that it should be one of the principles underlying the allocation of future emission reduction targets. However, he considered that developing countries will not get involved in the process if they see it as a constraint on growth. The Government believes that developing countries have to be able to grow and that developed countries can assist them in doing so in ways that are less damaging to the environment. Mr Meacher saw the Protocol as the beginnings of contraction and convergence because as a result the developed countries "are moving, albeit pretty marginally, in the direction of the same level as developing countries per capita". He expects the world to move gradually in the direction of convergence.

In 1990 most developed country parties to the Climate Change Convention had per capita emissions between 1.9 and 6.7 tonnes of carbon equivalent per capita. Under the Kyoto Protocol (and the subsequent EU burden sharing agreement) by 2010 this band is expected to contract to between 1.7 and 5.8 tonnes carbon equivalent per capita. Developing countries do not yet have targets but are generally increasing their emissions towards the levels in developing countries. Therefore (although some Party's per capita emissions rise and some fall within the band) the Protocol and the EU agreement do represent a degree of convergence. Transfers, under the flexible mechanisms, of parts of assigned amounts of emissions reductions will affect this picture to some extent but should ultimately promote convergence by ensuring emissions reductions are made in the most cost effective manner across the globe as a whole.

18.  The Committee accepts the reality of the situation on international negotiations and supports the UK and the EU in exercising leadership. In particular we endorse the Government's view that the allocation of emission rights should have regard to the principle of equity. We urge the Government, and the EU, to use all available means to encourage the US to ratify. We consider it crucial that the targets should be reviewed at an early date and that the Government should contribute to efforts to encourage developing countries also to sign up to emission reduction targets.

The Government welcomes the comment made by the Committee in the first sentence. On Thursday 12 November 1998, during the High-Level segment of COP 4, the US announced that they had signed the Kyoto Protocol. This is a formal first step towards US ratification. The move was universally welcomed by the conference. The Government is also playing its part in both encouraging and looking for ways to facilitate US ratification.

We would not necessarily use the language of emission "rights". On the contrary, the Kyoto Protocol imposes obligations to reduce emissions. But the Convention states that countries have "common but differentiated responsibilities". The negotiation of emission reduction obligations has taken this into account and shall continue to do so.

The UK/EU continued to press for a review of the adequacy of commitments under the Convention to meet its ultimate objective, but no decision on this matter was reached. We will continue to press this matter at future Convention meetings. Under the Kyoto Protocol, a review must be carried out at the second Conference of the Parties serving as the Meeting of the Parties (COP/MOP 2), possibly around 2003. By 2005, developed countries must have made demonstrable progress in achieving their commitments under the Protocol and consideration of targets for future commitment periods (i.e. after 2012) must begin in that year.

19.  Under the clean development mechanism the Protocol allows developed countries to meet their emission reduction limits by funding certified emission reductions from project activities in developing countries. The Protocol also provides for emission limits to be traded and in subsequent commitment periods this may occur between developing and developed countries. There are currently no agreed mechanisms for either procedure. The details of both these procedures, termed "flexible mechanisms", are to be approved at the first meeting of the Parties to the Protocol after the Protocol comes into force. Preliminary discussions will take place at the Buenos Aires meeting.

The flexible Mechanisms work plan which was agreed at Buenos Aires sets a clear deadline for completion of work - COP6 (end 2000), and a process for getting there: two UN workshops, submissions by Parties by end February 1999 and end March 1999, with discussion at the Subsidiary Bodies in June 1999.

21.  We agree with the Government's emphasis on the primacy of action to reduce actual domestic emissions of greenhouse gases. The clean development mechanism has the potential to be a worthwhile investment for the global environment whilst also meeting international development policy objectives. We urge the Government to press in the Buenos Aires discussions for rules for emissions trading which prevent the trading of 'hot air'. We also agree with the Government's line that there should be a tight cap on these flexible mechanisms.

As was expected, supplementarity and the issues of a cap on the use of the Kyoto mechanisms and of hot air trading were not something which could be agreed at Buenos Aires. However the UK, along with our EU partners, negotiated specific references to a 'concrete ceiling' and hot air in the work programme on the Kyoto mechanisms. This will ensure that Parties have to address - and come to an agreement on - these issues in future.

23.  We urge the Government to press for international action to agree appropriate mechanisms for dealing with environmental emergencies.

The Government recognises the devastating effects environmental emergencies can have and indeed continues to press the relevant international institutions to take appropriate action.

25.  We support the Government in seeking to negotiate tight rules for the counting of changes to carbon sinks towards emission limits.

The Government continues to work in the negotiations for tight rules for sinks allowances, because sinks are vulnerable and uncertain, and we the need to maintain incentives to reduce actual emissions of greenhouse gases which are the main cause of climate change.

27.  We consider the Government should press the international community to give priority to identifying solutions for adapting to the unavoidable impacts of climate change and consider mechanisms to assist those developing countries which are predicted to be badly affected.

The Government has already done this by pressing for the GEF to take further action on adaptation at COP4 in Buenos Aires. In Buenos Aires, it was also agreed that within the work programme, priority will be given to the clean development mechanism. One of the main objectives of this mechanism is to assist countries in achieving sustainable development. Our bilateral aid Programme has also taken climate change into account.

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.

The climate change consultation paper sets out the various policy options which the Government could introduce to meet its climate change targets. This shows that a 20% reduction in CO2 emissions would be achievable from measures quantified in the paper. Following the consultation exercise, the Government will develop a programme of measures to deliver its priority, the legally binding target, and to move towards its domestic goal of a 20% reduction in CO2 emissions.

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.

The arrangements for enforcing the EU bubble are still subject to negotiation within the EU. The UK will want to ensure that its additional efforts do not allow other Member States to deliver lower emission reductions than agreed.

We will consider carefully the link between our domestic climate change goal and an international trading regime. As the Committee notes, one option could be to trade any surplus beyond our legally binding target; another could be to bank it for future commitment periods. Trading our surplus could simply allow others to do less. We would also need to consider the signal that trading a surplus would give to the international community. This issue requires further analysis and thought.

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, 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.

Taking all six gases into account, emissions from most EU Member States, lay between 6.9 and 15.4 tonnes of CO2 equivalent per capita (tCO2 /cap) in 1990. With the distribution of targets agreed under the UK Presidency, this range will have converged to between 7.5 and 13.6 tC/cap in 2010.

The exceptions are Ireland, whose emissions are projected to increase from 16.5 to 17.3 tCO2/cap, and Luxembourg, whose emissions fall from 42.5 to 26.5 tCO2/cap. The revised distribution of targets did reduce the per capita emissions allowance for Ireland in 2010 as against the initial allocation, but not enough to bring Ireland within the range quoted. Per capita emissions of Luxembourg are projected to fall very rapidly, but this is not yet sufficient to take them within the range for most other MS by 2010.

36.  We welcome 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.

As the Report itself notes (in paragraph 33), the UK agreed to a greater reduction in its emissions than the previous Government had offered in March 1997, whilst most other Member States sought less demanding limits. Against this background, it would not have been possible to have gone beyond the 8% legally binding target.

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.

Per capita emissions are calculable from published data, but we would support publication being made a requirement for Parties under the reporting requirements for the Climate Change Convention, which are under review.

We would point out a small mistake in figure 1. The figure for Greece under the March 97 burden sharing arrangement was 30%, not 20%. Columns 3 and 4 of Fig 1 should read '+30%' and 'up 5%' respectively.


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 1999
Prepared 12 February 1999