Select Committee on Environment, Food and Rural Affairs Ninth Report


CCA—Climate Change Agreement

Climate Change Agreements are coupled with the Climate Change Levy (see below). Businesses are entitled to an 80% discount on the Levy providing they sign-up to 10-year negotiated agreements to reduce their emissions or improve their energy efficiency.

CCP—Climate Change Programme

The UK Climate Change Programme was set up by the then Department of the Environment, Transport and the Regions (DETR) in 2000 with the reduction of UK CO2 emissions by 20% below 1990 levels by 2010 as its main target. This is a domestic target and goes beyond the UK's Kyoto obligations. A review of the UK CCP is currently underway; terms of reference were announced by the Department for Environment, Food and Rural Affairs (Defra) in December 2004.

CDM—Clean Development Mechanism

Established by the Kyoto Protocol, CDM ties in with Emissions Trading (see ETS below) and allows developed countries or companies to invest in emissions reduction projects in developing countries. As there are no allowances to be transferred from the latter to the former (see ETS and JI), an equivalent amount is "generated" and credited to the investor after independent certification. The emissions reductions achieved by the project can then be used by the investor to meet their targets.

CCL—Climate Change Levy

This is a tax on the use of energy by businesses. The revenue generated by the levy is recycled back to business through reduced National Insurance Contributions. It also goes to funding The Carbon Trust, who advises business on energy saving issues. Renewable energy and combined heat and power are exempt from the Levy.

EEC—Energy Efficiency Commitment

The EEC, along with the Building Regulations, is one of the principal policy mechanisms for improving the energy efficiency of existing homes. The aim is to help electricity and gas consumers in the household sector to use energy more efficiently and in turn reduce their fuel costs. Under the current EEC, electricity and gas suppliers in Great Britain are required to meet targets for the promotion of improvements in energy efficiency in households. These targets are non-prescriptive and can be achieved by carrying out a combination of approved measures, such as installing insulation or providing low-energy light bulbs.

ETS—Emissions Trading Scheme

Emissions trading is a system whereby countries or companies are set a target for emissions of greenhouse gases. Should that country or company emit more than their target, they have to purchase the difference from another participant which has emitted less than their target. Participants are allocated "allowances" of emissions proportionate to their target. These allowances can then be traded.

The UK emissions trading scheme began in March 2002, and was the first economy-wide greenhouse gas emissions trading scheme in the world. Over thirty organisation adopted voluntary reduction targets for the duration of the scheme (2002-06). Those companies with CCAs may also use the scheme to buy—or sell—allowances in order to meet their targets. An EU-wide ETS was established by Directive in October 2003 and formally began on 1 January 2005. Effectively a "cap and trade" scheme, the EU ETS currently only applies to industrial sectors and only CO2, although other greenhouse gases may be introduced in the second phase (2008-2012). Member States allocate "allowances" of CO2 to particular company plants—see NAP.

IPCC—Intergovernmental Panel on Climate Change

The IPCC is a UN body which assesses available advice on climate change and advises other UN bodies which address the problems posed by climate change. Thus far the IPCC has produced three major assessments of climate change (in 1990, 1995 and 2001), covering the science, impacts and response measures. The IPCC's reports are agreed by scientists from around the world and are regarded as the authoritative text on climate change.

JI—Joint Implementation

This also ties in with Emissions Trading (ETS) and allows for investment in emission-reducing projects (e.g. the establishment of a renewable energy plant) in a developed country by a government or company in another developed country. The emission reductions achieved by the project can then be used by the investor to meet their targets.

NAP—National Allocation Plan

The NAP plays an integral part in the EU ETS, each Member State issuing a NAP stating how many allowances are issued, and to which installations. The UK was the first Member State to publish a draft NAP in January 2004, however failed to meet the 31 March deadline for submission of the final Plan to the Commission. The UK's Plan was finally approved in July 2004, covering installations responsible for approximately 46% of all UK CO2 emissions.

RO—Renewables Obligation

This was introduced in 2000 and defines the amount of electricity energy suppliers must provide from renewable sources of energy. Originally set a target of 10.4% by 2010/11, the Government announced in December 2003 that the RO would be extended, with a target of 15% of electricity coming from renewables by 2015.

ROCs—Renewables Obligation Certificates

These tie in with the RO (see above). Compliance with the RO is demonstrated by presenting ROCs to Ofgem (the Gas and Electricity Markets Authority). ROCs were issued to accredited generators for eligible renewable electricity generated within the UK (including its territorial waters and Continental Shelf), and supplied to customers in Great Britain. They can be traded to allow electricity suppliers to meet their targets at the lowest cost.

UKCIP—UK Climate Impacts Programme

This was set up by Government in 1997 to co-ordinate a stakeholder-led assessment of the impacts of climate change at a regional and national level and to help organisations prepare for the impacts. In 2002 the Programmes contract was renewed for three years.

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