Memorandum submitted by the Environment
Agency (U22)
SUMMARY
The Environment Agency is responsible both for
regulating emissions that cause climate change and for preparing
for the consequences.
Key issues for the new UK Climate Change Programme:
— Climate change may well be an even
greater threat than was realised at the time of the original 2000
programme.
— The new programme needs clearer statistics,
which avoid potential for double counting and facilitate accountability.
— There are inconsistencies between
government policies and indications of a likely shortfall in meeting
targets.
— Further action is needed to secure
the 20% manifesto target for CO2, and to work towards
the 60% target for emissions.
— The current programme does not take
account of the central role that a robust EU Emissions Trading
Scheme will play in achieving success.
— There needs to be a much greater
focus on adaptation.
— The programme should take account
of the essential role of regional and local action to limit and
adapt to climate change.
The Environment Agency believes that, with sufficient
effort from all players, the national targets for CO2
reduction can be achieved. This will show international leadership
and help to persuade the rest of the world to act.
1. Context
1.1 The Environment Agency plays a major
role in respect of climate change and energy. We regulate industries
responsible for 40% of UK Greenhouse Gas (GHG) emissions, and
are the competent authority for the EU Emissions Trading scheme.
We take a lead role for England and Wales in adapting to some
of the serious effects of climate change, including flood risk
and water resources management.
1.2 Scientific evidence since 2000 suggests
that we may need to tackle climate change more intently. New evidence
has emerged on concentrations of greenhouse gas emissions, data
from ice cores, rates of glacial melting, emissions from peatlands,
and the likely implications on species and habitats. We ourselves
have unwelcome, fresh operational experience of extreme events,
possibly due to increased climate variability, which remind us
starkly of the difficulty in dealing with them.
1.3 It is important that the forthcoming
review builds on the Energy White Paper 2003, and current understanding
about climate change science to set out a clear programme of action
addressing both emissions reductions and adaptation to anticipated
changes in climate. We would urge that any shortfalls arising
in the programme to deliver emissions reductions should be addressed
now to ensure we are on path to meet the 2050 goal.
1.4 The public sector has a key role. There
must be willingness by Government and Regulators to act quickly
to remove any inconsistencies across regulatory regimes and to
ensure a consistent message. For example, the Environment Agency
is examining its own regulatory practices to see if we impose
any unnecessary barriers to increasing renewable energy supplies.
2. Mitigation of Emissions
General
2.1 In terms of emissions projections &
trends we are concerned that the UK is not on track to meet its
20% 2010 and 60% 2050 targets. Recent Cambridge Econometrics and
DTI forecasts show increases in the projected baseline carbon
emissions such that the Government's 2010 carbon reduction target
of 20% will be missed. This is due to poorer performance than
had been expected in transport, domestic energy consumption, renewables
generation, and Combined Heat and Power (CHP) development.
2.2 We are also concerned about data consistency
and credibility. To facilitate understanding, and ensure comparisons
are possible, we suggest that thought is given on how best to
present data consistently in the revised strategy. Wherever possible,
all government strategies and related statistical reports should
present data in a comparable manner. Data needs to be presented
transparently for each gas, sector and measure to avoid double
counting. With a likely shortfall in meeting future targets it
becomes even more essential that the strategy is made transparent
and that some headroom for slippage is built into the next version
of the programme.
2.3 Energy consumption, as the major contributor
to GHG emissions, must be reduced. It needs to be both easier
and cheaper to reduce energy use and GHG emissions, and unpopular
and expensive to add to them. Increasing energy efficiency remains
the single most cost-effective way to reduce emissions.[41]
Energy efficiency
2.4 The scope for greater energy efficiency
in the industrial and commercial sector remains great. Agency
research[42]
found that industry could cut its energy consumption by a fifth
by 2020 if the right policies were put in place. The findings
found that without new policy objectives, energy use would only
be cut by 10%. Other research[43]
explored the potential for energy savings from different industry
sectors. It showed that savings could be made in chemicals, refineries,
food and drink, and paper production—all from adoption of
CHP in the near future.
2.5 We would like to see businesses given
more support from Government and others to achieve resource efficiency
savings, and to overcome barriers, such as a lack of information
or access to capital. Programmes such as Envirowise, with support
from the Environment Agency, have proved very cost effective at
working with businesses.
2.6 We share concerns that the target for
domestic energy efficiency has been downgraded even as its overall
share of energy and emissions is expected to grow. The target
of 5 MtC in the Energy White Paper has been reduced to 4.2 MtC
in the Energy Efficiency Action Plan.
2.7 The growth in vehicle use has resulted
in a 62% increase in greenhouse gas emissions (CO2)
from transport, which now accounts for 27% of UK emissions. And
aviation emissions (not counted towards Kyoto) may well overwhelm
the efforts in other areas unless tackled.[44]
Renewables
2.8 To develop renewable fuels for transport
we see promotion of biofuels as important.
The biofuels strategy should:
— Set out a long term vision that does
not just focus on current technology or short term blends of existing
fuels.
— Make sure decisions taken on biofuels
are driven by climate change policy and are not just a substitute
for reducing the causes of traffic pollution and congestion.
— Ensure that the interaction between
biofuels and biomass for heat and power is fully explored to minimise
competition while securing appropriate benefits from both.
— Ensure that the overall environmental
impacts of biofuels across their whole life cycle are taken into
account.
2.9 The Environment Agency recognises the
benefits for the environment of sensitively sited renewable energy
technologies. Progress with the Renewables Obligation targets
has been steady, but slower than expected. Already a shortfall
is likely in the 2010 10% target, which was intended to make 2.5
MtC savings. The UK will need a more rapid adoption of renewables
to meet a target of 20% of electricity generation by 2020.
2.10 To increase the use of renewable energy
and other low carbon technologies more effort is needed to encourage
diversity of sources. This will include support for technology
development and commercialisation, eg for buildings-integrated
photovoltaics, for tidal energy, and to develop wave power. We
also support an improved approach to planning for renewables,
which cascades down from regional targets to community level,
with increased public participation.
2.11 Developers of new technologies need
to know there will be long-term consistency and certainty for
investment, to assist their financial planning and for making
the business case for projects to sell power. Environmental considerations
need to be included at an early stage in the development and application
of each technology. Energy grid and system upgrades will need
to complement this.
Combined heat and power
2.12 More energy is used in this country
in the form of heat, either in space heating, industrial processes
or water heating, than any other energy service.[45]
At the same time, the current electricity generation and distribution
system discards more heat than the entire heat demand for the
country. This highlights the need to accelerate the use of CHP.
2.13 The Climate Change strategy set a target
of at least 10 GW of CHP capacity by 2010, but there is every
indication of output falling short of the target. The barriers
to CHP deployment need to be addressed, and these include:
— Further efforts to ensure whole of
life costing of options to address the capital cost barrier from
new, quality CHP.
— More support for feasibility studies
across mixed land uses and regeneration schemes and where landlord-tenant
issues exist.
— Greater attention to the obstacles
to promotion of CHP through the planning system and building regulations,
where many opportunities are missed.
— Issues around electricity trading
and embedded generation, which are system-wide problems for smaller
and intermittent generators.
Coal
2.14 At present, a quarter of UK CO2
emissions are from coal even though its use fell over a third
from 1990-2002. The recent growth—due to gas price rises—raised
emissions from electricity generation by 6½% in the year
2002-03. If coal is to have a future in energy supply, it should
only be medium-term and based on Integrated Gasification Combined
Cycle (IGCC) technology. Any long-term future would require reliable
techniques for large scale CO2 capture.
Carbon capture and storage (CCS) technologies
2.15 The use of carbon capture and storage
(CCS) technologies was not envisaged when the UKCCP was written.
However, the Energy White Paper recognises the potential that
CCS could play a useful role. Our North Sea gas fields could store
all of UK CO2 emissions at current levels for up to
15 years. The use of saline aquifers offers capacity that could
last hundreds of years. However, CCS activities should be put
firmly in the context of an overall vision of a low carbon future.
CCS should be regarded as part of an interim approach not as a
long-term solution. The development of such technologies should
not divert resources from the more sustainable and longer-term
solutions.
2.16 There are potential risks from CCS
technologies to the local environment and human health and safety.
We consider that the environmental impacts are not yet well enough
understood and that a programme of research and demonstration
is needed to inform the selection of storage sites to minimise
the risk of CO2 leakage with its consequent impacts
on surrounding air, land and water quality. A new and robust legal
and regulatory framework is also needed that protects the environment
and human health, including provisions that address issues of
long-term liability and remediation.
Nuclear power
2.17 The Environment Agency believes that
an assessment of the role, if any, to be played by nuclear power
must take full account of the financial and economic costs of
the management and storage of radioactive waste and the regulatory
framework. The Agency would, in any case, question the commissioning
of new nuclear generating capacity in the absence of a sustainable
long-term strategy for radioactive waste management. Until this
issue is resolved, and public concern properly addressed, then
any major changes of policy to encourage the construction of new
nuclear generating capacity would appear to us premature.
EU Emissions Trading Scheme (EU ETS)
2.18 The current UKCCP was written before
the introduction of the EU ETS. The 2003 Energy White Paper cites
the scheme as a "central plank" of future emissions
reduction policies, helping deliver additional savings of 2-4MtC
by 2020. It is imperative that the scheme delivers. The Environment
Agency is committed to the implementation of a robust trading
scheme to help protect the environment. It called for a more stringent
cap on emissions from installations covered by the EU ETS during
the first phase of the scheme 2005-07. The cap is only consistent
with a 15.3% reduction on 1990 levels by 2010, substantially short
of the 20% domestic target. Although the Government has made a
commitment to raise the cap in the second phase (2008-12) in line
with the 20% target, we are concerned that the postponement will
necessitate tougher measures to make the 20% target achievable.
2.19 The weakness of some of the caps set
by Member States for the first phase undermines the effectiveness
of the EU ETS, representing as it does a "business as usual"
emissions path. The Dti's Updated Energy Projections show that,
without any action, the power sector will achieve a 30% reduction
in emissions between 1990 and 2010. The first phase cap thus represents
a significant windfall for the sector as it will be allocated
allowances in excess of those it needs to meet its target.
2.20 We note that a recent Carbon Trust
report The European Emissions Trading Scheme: Implications
for Industrial Competitiveness[46]
finds that the EU ETS does not threaten the competitiveness of
most industry sectors in Europe, providing the EU Member States
take a broadly consistent approach. The electricity, cement and
paper sectors are shown to profit under all economic scenarios
used in the study. Only the aluminium industry is expected to
lose—despite, or indeed partly because of, the fact that
it is not within the EUETS system.
2.21 The UK government will need to set
a tougher cap in the second phase, taking account the need to
achieve the 20% target and the potential shortfall of other measures
in the current UK Climate Change Programme. In parallel, the UK
should put pressure on other EU Members States to tighten up their
National Allocation Plans. A recent study by the environmental
consultancy, Ecofys, concludes that only the NAPs of the UK, Germany,
Latvia and Lithuania imposed caps consistent with even their national
Kyoto targets.
2.22 We are also concerned that the interaction
between existing mechanisms, such as the Climate Change Levy and
Climate Change Agreements, and the EU ETS is not well understood.
All aim to reduce emissions from the energy and industrial sectors.
The Government should review the need for the continued use of
the many different policy instruments to tackle emissions of carbon.
The second phase of the EU ETS could be the main policy instrument
to control carbon emissions provided more parts of the economy
are brought under the scheme. At the very least, the Government
should ensure that the interactions between the different policy
initiatives are understood and accounted for in its review of
the UKCCP and that a revised set of projections makes transparent
the relative contributions of each instrument to meeting the national
targets.
Sustainable Communities Programme
2.23 The Sustainable Communities programme
offers an opportunity to implement aspects of the climate change
strategy. The standards Government sets for the siting, design,
and construction of new homes and associated infrastructure, and
their ensuing resource requirements, will set important benchmarks
for the future. We would like to see:
— A tightening up of building regulations
in order to improve the energy and water efficiency of buildings
by 25%, as recommended by the Sustainable Buildings Task Group.[47]
— The proposed Code for Sustainable
Buildings to provide a single, coherent and consistent framework
for constructing buildings with higher levels of environmental
performance than those stipulated by regulation. Such a Code should
be used for all public procurement of buildings to drive its adoption
by the industry, as well as account taken of the consequences
of development in flood plains (see Adaptation).
Changing behaviour
2.24 Changes in public and organisational
behaviour are essential. Government should take the lead with
a package of regulatory and fiscal measures to drive changes in
behaviour, accompanied, where appropriate, by education and awareness
initiatives. The over-riding message to the public should be that
energy use, as the major contributor to GHG emissions, must be
reduced. The focus should be on direct energy use in the home
(electricity, oil, and gas) and for transport (car and air travel).
Unless energy efficiency is addressed, any gains from switching
to low carbon options could be lost through increased energy use
overall.
2.25 Further regulation may be necessary,
though this will generally act on the public through regulation
of business, for example product policy to progressively remove
energy inefficient appliances from the market. Economic instruments
should be used to reward behaviour that helps achieve reductions
targets, and penalise behaviour that hinders them. The Climate
Change Levy is a useful instrument, but its is now cheaper in
real terms than when it was introduced, so the incentive to act
has fallen. The prices of energy flowing through the economy will
need to increase overall and taxation is one of the most cost
effective means to deliver such changes. Such fiscal measures
must be applied in parallel with social instruments to avoid negative
impacts on disadvantaged groups.
3. Adaptation
3.1 Whilst we strive to exert global leadership
to ensure the world does not have to face dangerous climate change,
we shall still need to adapt to some unavoidable impacts already
in systems. The Environment Agency has been closely involved in
national and regional initiatives to understand climate impacts
and to prepare for adaptation. We expect this role to grow as
the Government establishes its Adaptation Policy Framework. Our
role is central for an effective delivery of measures, which will
ensure we are able to cope with unavoidable climate change. Issues
concerning the water cycle are related to most of the critical
impacts and we have lead responsibilities for both droughts and
floods. While flooding has damaging effects on people and property,
we must not lose sight of the public health issues associated
with more frequent droughts. The environment we regulate in respect
to air and water will itself be affected more broadly in relation
to temperature change and fluxes and flows, so this is a major
issue for our environmental protection responsibilities. Waste
management, for example, is likely to have to change significantly.
3.2 We have recently made a full submission
to the Committee about water and climate change issues, so will
not cover the same ground here but touch on some new developments.[48]
3.3 We will be responding in detail to the
new government consultation paper "Making Space for Water"
and its new thinking in the means to tackle flood risk and its
consequences. The forthcoming Government flood strategy must face
up to the scale of the challenge that this facet of climate change
adaptation poses, as highlighted in the recent Foresight report.
The key messages for us are:
— A far wider range of responses can
be applied to tackle this, and an increase in resources is needed
or flood risk could grow to unacceptable levels in future, particularly
in south-east England.
— Tackling flood risks needs to be
undertaken using a broad range of measures, including engineering
and other large-scale interventions.
— Policies and measures need to be
flexible combining funding, incentives and regulation in order
to adapt to accommodate the uncertainties of the future.
— Inappropriate development in the
flood plain must be prevented. We need to clarify and update PPG25
and strengthen it. The Environment Agency should become a statutory
consultee on flood risk and we advocate its replacement with the
proposed PPS25 on Development and Flood Risk, with Technical Annexes,
to reflect Defra's strategy on flood risk management.
Water
3.4 Water resources are threatened by both
climate change and growing demand. The new strategy should take
an integrated approach to managing demand and dealing with projected
threats to future resources. A long term view is needed on infrastructure
decisions. It is vital that decisions we take now are future-proofed
against future changes in climate. It is clear that making better
use of existing resources will be essential if we are to have
more hot, dry summers. More attention must be paid to leakage
control and to demand management, ensuring that we are investing
for future generations. The next periodic review must be informed
by significantly better analyses of the impact of climate change,
and vulnerable water companies must start work on these immediately.
3.5 Potentially, the Water Framework Directive
(WFD) could be a way to integrate the management of climate change
within the water cycle within catchments. We recognise climate
change will require integrated solutions, for example adopting
land management measures that can mitigate drought and flood impacts.
The WFD will require the integrated management of pressures on
the water environment and will provide the opportunity to "join
up". There will also be a need to ensure that CAP reforms
help deliver complementary land management practices.
3.6 Somewhat surprisingly, the WFD text
does not deal with climate change. However, climate change has
the potential to affect reference sites and thus the whole concept
of "good ecological quality". We have already recognised
that failure to factor in allowances for climate change in the
implementation stage could lead to failure in meeting the environmental
objectives set out in River Basin Management Plans (RBMPs). Also,
freshwater species are potentially vulnerable to direct and indirect
climate change effects arising from changes in discharge, water
temperature, habitat, and physio-chemistry of rivers, still-waters
and wetlands. Therefore, we are undertaking research to characterise
ecological status in the face of natural variability and changing
climate conditions for different emissions and models.
Research
3.7 To cope with unavoidable climate change
more effectively, we need more information. Defra and its predecessors
have led the world with an innovative programme of research which
has led to the establishment of the Hadley Centre and many cutting
edge projects. Recently the research councils have established
the Tyndall Centre, which has already a crucial role. We would
like to see the Climate Change Programme Review provide an improved
framework for climate change research within the UK. We are already
working with other partners on our research programme and are
keen to do more as we develop next stage work. With so many of
the Environment Agency's functions affected by climate change
this has become a priority in our new science strategy. We have
already begun the process of assessing how and where such impacts
will fall and the ways our operations and infrastructure will
be affected. Our current research programme starts to deliver
technical methods and information that can be used for strategic
and operational assessments of existing standards, regulated activities
and the protection of environments that are potentially affected
by climate change.
4. Local and Regional Action
4.1 Regional initiatives are well underway
which contribute to energy policy and integrate these issues into
other strategies and plans: the Environment Agency is a committed
player in these throughout England and Wales. In fact we have
a unique, integrating perspective by being active on both energy
policy actions and adaptation at regional level. Many of the impacts
of climate change will be manifest and need to be handled at a
regional and local level. Delivery on renewable energy policy
needs active participation throughout the country. We are working
with the Local Government Association on a protocol that will
help frame complementary actions on climate change.
4.2 Better integration across regional plans
and strategies is needed. To help make this happen, national planning
policy and guidance should require regions to factor climate change
into regional documents. This includes making regional contributions
to national carbon reduction targets and the need to adapt to
climate change impacts. Regional documents should provide a policy
framework for climate change mitigation and adaptation in the
region. For example, Regional Spatial Strategies should form the
basis of regional adaptation (eg flood resilience and sustainable
development) and mitigation (eg better buildings and transport
policies).
4.3 The Water Framework Directive (WFD)
will establish a catchment-based approach to the management of
the water environment. The Agency expects that many of the actions
that stakeholders will need to take to meet ecological objectives
in the WFD will involve land management and land use planning.
In seeking to manage the impacts of climate change, an integrated
catchment approach where environmental planning and prioritisation
are taken forward in conjunction with investment regimes (CAP
funding and AMP) will be required.
4.4 We would like to see local planning
policies strengthened in a number of areas relevant to climate
change, particularly PPS 1 and PPG25 (Flood Risk—see paragraph
3.3). The Strategic Environmental Assessment Directive is a means
whereby relevant public plans and programmes give full consideration
to their climate change and other environmental implications.
4.5 In planning and project assessment the
full environmental costs of all energy technologies need to be
internalised to enable decision-making on a level playing field.
The whole life of a development should be used as the basis for
decision making. Commitments need to be made about decommissioning
facilities after use, whether major power developments or small
scale sites and equipment for local generation at the same time
as development is approved.
4.6 We suggest that regional bodies concerned
with economic development, infrastructure and other functions
should be required to "climate proof" their activities.
RDAs, in particular, have an influential role to play with the
business community and through the services they sponsor. Specific
guidance should be prepared for their operations and strategies.
This should emphasise that moving to a low carbon economy offers
investment, economic and employment opportunities.
1 October 2004
41 "The cheapest, cleanest and safest way of
addressing all our goals is to use less energy. We have to improve
energy efficiency far more in the next 20 years that in the last
20" Energy White Paper: Our energy future-creating a low
carbon economy DTI, 2003. Back
42
Potential for Energy Efficiency in Industry, Environment
Agency, 2002. Back
43
The Environment Agency Contribution Towards Achievement of
Greenhouse Gas Reduction Targets. R&D Technical Report
P4-089/TR, Environment Agency 2001. Back
44
Government airport plans have a long way to go if the environment
is to be protected. Environment Agency press release, date published:
16 December 2003. Back
45
Space heating and hot water accounted for 82% of domestic use
of energy and 64% of commercial use of energy in 2000, Energy
Consumption in the UK, DTI, 2002. Back
46
The European Emissions Trading Scheme: Implications for Industrial
Competitiveness-Carbon Trust, July 2004. Back
47
Better Buildings, Better Lives. Sustainable Buildings
Task Group Report. DTI. May 2004. Back
48
Climate Change, Water Security, and Flooding-report of the EFRA
Committee inquiry, September 2004. Back
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