Memorandum submitted by WWF (U35)
EXECUTIVE SUMMARY
WWF welcomes the opportunity to contribute to
the Efra Committee's inquiry into climate change. This opportunity
is timely for WWF since we are shortly to launch our first global
climate change campaign—Powerswitch!—designed to address
climate change in over 50 countries across the world.
As part of this campaign in the UK, WWF will
be intensifying its efforts in challenging the government, power
sector and industry to deliver on targets and take the urgent
deep cuts in greenhouse gas emissions required to avoid dangerous
climate change. There are no excuses: recent WWF research modelled
by ILEX shows that the UK power sector can in fact achieve 60%
reductions in CO2 emissions by 2020, without any major
shifts in current policies and in a way that is cost-effective
to the power sector and delivers significant savings to government
and consumers.
We have chosen to orientate our submission explicitly
around the issues of UK leadership on climate change and the forthcoming
UK Climate Change Programme (CCP) review. Our recommendations
can be summarised as thus:
1. UK Leadership in 2005: G8 and EU
WWF strongly advocates that the UK government
use its leadership position globally to:
— Promote and seek agreement from parties
to the 2C ceiling (staying below an average global temperature
rise of 2C above pre-industrial levels) for avoiding dangerous
climate change.
— Reaffirm its commitment to implementation
of the Kyoto Protocol, and continue to use its influence to ensure
Russia confirms its final ratification of the Protocol.
— Initiate discussions on the adoption
of an international framework for climate change action post-2012,
which builds on the Kyoto process, and agrees that G8 countries
adopt mandatory absolute caps for the post-2012 time period.
— Engage with the larger emitters among
the developing countries to assist them in decarbonising their
development, and build new coalitions of Heads of State on deep
emissions' reductions targets.
— Ensure that the EU conducts a thorough
review of its progress towards meeting its Kyoto target.
— Ensure effective implementation and
enforcement of the EU Emissions Trading Scheme (ETS), and strong
National Allocation Plans (NAPs) for the second phase.
— Call for the EU to take on deep cuts
in the second commitment period (ie post Kyoto).
— Lead in ensuring that international
sustainable energy initiatives (eg JREC and REEEP) result in measurable
commitments.
— Initiate engagement with the most
vulnerable developing countries to build a broader international
consensus on the scale and urgency of climate change.
— Lead the debate for redirecting agricultural
subsidies and introducing stronger incentives to support biomass
production.
2. Forthcoming Review of Climate Change Programme
In light of the forthcoming review of the UK
CCP, WWF would recommend the following to the UK Government:
— A reinforcement of a robust commitment
to the 20% emissions reduction target by 2010 within the CCP.
— CCP policies that correctly reflect
and address the longer term aspirations of the Energy White Paper
(EWP) (2003), and set interim targets for 2015 and 2020 towards
achieving the 60% reductions target in 2050.
— A commitment to serious reductions
in emissions from the CO2-intensive power sector, which
currently contributes over one-third of total UK greenhouse emissions.
— Set challenging limits to CO2
emissions on electricity generators and other sectors covered
by the EU ETS.
— A strong NAP for Phase 2 of the ETS
based on robust and fixed projections from the start.
— Fiscal and regulatory incentives
for reducing energy demand and increased energy efficiency across
all sectors (including homes and other buildings), and support
for energy-efficient technologies in the context of the Energy
Efficiency Action Plan.
— The development of a robust Code
for Sustainable Buildings (CSB), as recommended by the Sustainable
Buildings Task Group, with incentives to encourage the private
sector to meet the CSB.
— The introduction of fiscal and regulatory
measures to encourage and incentivise large integrated power generators
and suppliers to offer energy management services to consumers.
— The extension of the Renewables Obligation
to 20% by 2020, in line with the level identified in the EWP,
and supported by increased investment in a diversified portfolio
of renewable energy technologies (including biomass, solar, wave
and tidal technologies).
— Renewable energy policies that cover
provision of funding for research and development of technologies,
address current network/infrastructure and planning constraints
that currently hinder projects' development, and allow for appropriate
community consultation, accurate communications and promotion
in the public arena.
— The cessation of investment in nuclear
power.
— Incentives for power companies to
promote Combined Heat and Power (CHP), and offer embedded generation
benefits for industrial users that invest in CHP on-site.
— A government requirement that all
new public buildings install CHP and all new communities meet
zero carbon standards.
— The implementation of targets and
policies to cut new road spending and invest substantially in
public transport systems (eg bus and rail).
INTRODUCTION
Climate change is the most serious environmental
threat facing the world today. Aside from its environmental impacts,
climate change has far-reaching implications for poverty eradication,
development, population migration, international relations and
security worldwide. As such, the UK and other countries must treat
climate change as a foreign and domestic policy priority. Global
warming is already having a huge impact and countries' decisions
in the next five to 10 years will be crucial in avoiding long-term
irreversible damage.
To avoid the worst impacts of climate change,
we need to ensure that, as agreed by the UK government at the
European Council conclusions of May 2003, global mean temperature
is limited to a 2C increase above pre-industrial levels,
and that warming is reduced as fast as possible from that peak.
To exceed such levels would have tragic implications for people,
ecosystems and species—jeopardising food security (with
potentially hundreds of millions more people at risk of hunger
and poverty); significantly damaging or disrupting arctic ecosystems,
boreal forests and mountain ecosystems; and threatening millions
of species with extinction[25].
To limit global warming to a 2C peak, it
is critical that all countries cut down on their emissions of
greenhouse gases. This will require industrialized countries to
reduce their emissions by at least 60-80% over the next few decades[26].
Large emitters in the developing world also need to ensure that
their emissions go down: some may need to set carbon caps, others
to ensure that their carbon emissions do not grow in parallel
with their economic development. The most vulnerable developing
countries, from Africa to Central America, largely mountainous,
arid or island states need to be brought more fully into the climate
negotiations, particularly in terms of adaptation to impacts which
are, in some countries, already occurring.
WWF has a strong presence in other European
and G8 countries, as well as many developing countries, and has
long been an important player in international climate change
negotiations. WWF has been working across the UK, EU and internationally
via its network to ensure commitment for keeping below this 2C
ceiling, and achieving deep cuts in emissions.
Building on these efforts, WWF will shortly
be launching its first ever global climate change campaign—Powerwsitch!—later
this year, to lift the profile of climate change in the public
arena and challenge governments and industry to make a swift and
major shift away from fossil fuels consumption. Through this campaign,
WWF is specifically challenging the biggest global carbon dioxide
(CO2) emitter—the power sector in developed countries—to
become CO2-free by 2050. As part of this campaign in
the UK, WWF is calling upon the UK government to deliver on its
targets and take serious action on the power sector and industry
to cut emissions.
1. UK Leadership in 2005: G8 and EU
The UK Government has an unprecedented opportunity
in 2005 to steer discussions and negotiations on climate change
internationally, particularly as Chair of the G8 and President
of the European Council, as well as in parallel processes. The
Prime Minister's commitment to use the UK's position to advance
international action on climate change is vitally important. It
is an opportunity that, if missed, will undermine UK credibility
in this area. WWF would urge the UK government to prioritise the
following objectives:
1.1 COMMITMENT TO STAYING BELOW THE 2 DEGREES
THRESHOLD: The UK government promotes and seeks agreement from
parties to the 2C ceiling for avoiding dangerous climate
change. Countries must commit to keeping below a maximum global
mean temperature increase of 2C above pre-industrialised
levels (ie not from present day), consistent with the current
science and accepted thinking on thresholds and impacts.
1.2 KYOTO PROCESS: The UK reaffirms its
commitment to the implementation of the Kyoto Protocol, and continues
to use its influence to ensure Russia's quick ratification. The
Russian government has now signed off on the ratification documents
and set in train the process for ratification in the Russian parliament[27].
1.3 POST 2012 FRAMEWORK: The UK should initiate
discussions on the adoption of an international framework for
climate change action post-2012, which builds on the Kyoto process.
At the very least, the UK should be pushing for a future climate
change action regime that is based on:
(a) reduction targets that will avoid a level
of global warming increases exceeding 2 above pre-industrialised
levels; and
(b) recognition that, from the outset, industrialised
country targets need to be more aggressive than developing country
targets.
For the G8 specifically, the UK must promote
agreement for a multi-lateral "cap-and-trade" system
for emissions globally, based on mandatory absolute caps from
Annex 1 countries. Bilateral schemes will not deliver the emissions
reductions required to stay within a 2-C regime. The sound low-carbon
technology investment initiatives currently promoted by UK government
are unlikely to realise full business and economic potential without
a strong international framework to incentivise uptake of such
technologies. The two are interdependent.
In terms of the EU Council specifically, the
UK should promote adoption by the EU of the Climate Action Network
framework as an effective long-term regime for climate change
action[28].
WWF supports this equitable "multi-track approach" which
includes three elements: (a) continuation of the Kyoto process
in ensuring deep cuts from industrialised countries; (b) decoupling
of economic growth and emissions in developing countries (ie decarbonisation),
and (c) an increase in resources for adaptation in vulnerable
countries.
1.4 ENGAGE LARGE EMITTERS: Through the G8
process the UK must engage with the larger emitters among developing
countries and build new coalitions of Heads of State on deep emissions'
reductions targets. These countries include China, India, South
Africa and Brazil. Their involvement will be key to achieving
meaningful global emissions reductions in any future climate change
policy and market regimes. Discussions must focus on decarbonisation
strategies as a way forward—decoupling economic growth from
carbon emissions.
1.5 US APPROACH: The UK government should
hold a firm position on its objectives for advancing climate change
action internationally next year, whatever the outcome of the
US elections in November 2004. The UK government will need to
act more assertively in driving forward the agenda towards setting
mandatory caps globally, and building coalitions with the aforementioned
developing countries. The UK must ensure that re-entry of the
US into the international climate change regime is based on US
commitments to tough emissions reductions domestically.
1.6 EU TARGETS: The UK should ensure that
the EU conducts a thorough review of the EU's progress towards
meeting its Kyoto target (ie "demonstrable progress"),
identifying areas where more effort is needed, irrespective of
whether or not the Protocol enters into force.
Effective implementation and enforcement of
the EU ETS and the delivery of strong NAPs for the second phase
(2008-12) is essential. The UK is in the best position to lead
on this issue, since it implemented the first domestic trading
scheme and has the experience and expertise to share on delivery
of such systems. The UK must work with the EU towards tightening
the rules governing the scheme to enable it to set far more challenging
targets in the second phase of trading, and seek clarification
and harmonisation of rules for consistent application across Member
States.
The UK should drive discussions on increasing
harmonisation of the system in terms of review processes for plans
and verification procedures, in addition to the introduction of
auctioning of allowances and the future inclusion of non-traded
sectors (most notably transport and aviation) in the ETS for the
second and subsequent phases. WWF believes that the ability of
participants to source allowances from outside the EU severely
undermines the integrity of the system and recommends that this
be disallowed from Phase 2 onwards.
The UK must also call for the EU to take on
deep cuts in the second commitment period (ie post Kyoto) and
adopt a 30% emissions' reductions target by 2020.
1.7 SUSTAINABLE ENERGY INITIATIVES: The
UK must lead in developing a robust and coherent strategy to reorient
global investment away from fossil fuel intensive and inefficient
energy infrastructure, particularly in middle income countries.
Sustainable energy initiatives—notably JREC[29]
and REEEP[30],
but also any initiatives aimed at implementing recommendations
arising from Renewables 2004, the Extractive Industries Review
and the G8 Renewables Task Force—must result in measurable
commitments, be better integrated and far better resourced if
they are to form the basis of a coherent and comprehensive plan
to support decarbonisation in developing countries. The UK's 2004
Spending Review must reflect this and the UK presidencies should
be used as a means to secure matching funding from other developed
country governments.
As part of this process, the UK should seek
financial commitments through the Extractive Industries Review,
countries' Export Credit Agencies, and International Funding Institutions
for supporting investment in renewable energy development and
energy efficiency initiatives in developing countries.
The UK should promote a meaningful follow-up
process to the Renewables 2004 Conference to ensure that technology
transfer and development approaches are better coordinated and
that voluntary commitments made at the Bonn conference are implemented.
At present, the credibility of these programs in delivering meaningful
outcomes is questionable.
1.8 ENGAGE MOST VULNERABLE COUNTRIES: Any
international agenda must act to reduce the vulnerability of developing
countries and poorer communities where climate change impacts
are already occurring or will occur soon. The UK government could
play a lead role in initiating engagement with these most vulnerable
developing countries—drawing attention to specific climate
change impacts and developing a longer term global action framework.
This development outreach could fit well as part of the climate
change science conference proposed for February next year. The
UK can uniquely bring to this forum the expertise on the "2C
science" and related impacts from highly reputable research
institutes such as the Hadley Centre, and can articulate the scale
and urgency of climate change, disseminate research on thresholds
and impacts, and address adaptation needs.
1.9 AGRICULTURAL SUBSIDIES AND INCENTIVES
FOR BIOMASS: The UK is in a good position to lead the debate for
redirecting agricultural subsidies and introducing stronger incentives
to support biomass production. Such initiatives could provide
an important contribution to reducing international and EU dependence
on fossil fuels for energy and transport, as well as reducing
commodity dumping on developing countries and facilitating greater
market access and economic prosperity for African and other developing
farming communities.
This initiative provides natural synergies between
the UK government's Africa and climate change agendas for the
G8 and a clear focus for the UK's G8 and EU Presidencies. It could
help deliver on both OECD biomass commitments and policy imperatives
to assist developing countries as well as enable the UK to align
multiple constituencies including the environment and development
lobbies and farmers. Even in the US, environmentalists, agricultural
states' representatives and farmers' lobbies have identified support
for bioenergy as a potential "win-win" for climate and
rural development.
This will coincide with the planned EU Biomass
Action Plan and EU Biofuels Directive, and builds on progress
already made by the UK in linking agriculture, trade and the environment
in the EU. In particular, there is considerable scope under the
current EU Common Agricultural Policy (CAP) reform to press for
more support for a stable, environmentally sustainable biomass
supply.
2. Forthcoming Review of the CCP
The UK government's credibility as a global
leader on climate change will be fatally undermined unless it
sets an example on the homefront, and does more to tackle UK emissions
through energy supply, housing and transport domestically in line
with its targets.
In 1997, the Government set an overall domestic
target of a 20% cut in CO2 emissions by 2010, and a
goal of 60% reductions by 2050 in the 2003 Energy White Paper
(EWP). However, we are not on track to meet these targets with
the CCP failing to deliver on emissions reductions, and emissions
actually rising in 2003[31].
In its audit of the CCP (February 2003), the Sustainable Development
Commission stated that the UK could fall well short of its domestic
goal, highlighting over-optimistic baselines and reductions projections.
With only five years left to deliver, UK government needs to take
urgent action. The forthcoming review of national climate change
policies and their effective implementation will be critical.
WWF would identify the following objectives as being of critical
importance to the delivery of an effective UK CCP:
2.1 COMMITMENT TO TARGETS: First and foremost,
the UK should reinforce a robust commitment to the 2010 20% CO2
emission reduction target and demonstrate, in detail, how this
will be achieved through each of the policies within the CCP.
The CCP must also reflect, incorporate and address the longer
term aspirations of the EWP and set interim targets for 2015 and
2020 towards achieving 60% reductions target in 2050. Targets
must be set for the EU ETS, energy demand reduction, combined
heat and power (CHP) and energy services, renewable energy, housing
and transport. Reference to reductions in carbon dioxide and other
greenhouse gas emissions must be clear and consistent in relation
to each policy and overall targets outlined therein.
2.2 ROLE OF TREASURY: WWF firmly believes
that the Treasury must play a key role in the development of these
policies. Strategic investment and fiscal incentives will be critical
to successful implementation (eg in renewable energy technologies
and energy efficiency measures), and must be duly reflected and
supported in the government's budget plans and allocation.
2.3 THE UK POWER SECTOR: The UK power sector
currently accounts for over 30% of total UK greenhouse emissions.
If the UK government is serious about meeting its overall national
reductions targets, the emissions from the CO2-intensive
power sector need to be drastically reduced. The UK government
should set tough targets on the power sector and indicate how
this should be achieved.
A forthcoming report commissioned by WWF[32]
and conducted by ILEX provides significant evidence to suggest
that with minor extensions to current policies, and by incorporating
additional aspirations from the EWP, the UK power sector could
cut its CO2 emissions by 60% from 1990 levels between
now and 2020. Moreover, while being easily achievable, reductions
could save the government billions of pounds. Results show that
reductions could be achieved:
— at low cost, and in many cases lower
than the costs of continuing "business as usual";
— with a likely net saving of more
than £1.9 billion in 2010, and £4 billion in new investment
in 2020;
— with potential savings on electricity
bills totalling close to £0.9 billion in 2010, and £1
billion in 2020, delivered through implementation of energy efficiency
measures;
— with existing technologies as opposed
to radical policy shifts; and
— without resorting to new nuclear
power (and with closure of all reactors by 2020).
2.4 EMISSIONS TRADING: The UK government
must set challenging limits to carbon dioxide emissions on electricity
generators and other sectors covered by the EU ETS and press other
European countries to take similar robust action through their
NAPs for the second phase (2008-12).
Through (stringent targets, companies will be
encouraged to respond to increasing carbon costs by changing their
investment decisions and exploring the different options available
for reducing this economic impact via uptake of cost-effective
low-carbon abatement technologies.
The UK must deliver a strong NAP for Phase 2,
and prevent the power sector from unnecessarily weakening the
scheme as has occurred for Phase 1. WWF's research shows that
the UK power sector has the capacity to reduce its emissions significantly
below a "business as usual" scenario, at relatively
low cost. Earlier research commissioned by WWF (again, through
ILEX[33])
indicated that the power sector can in fact deliver up to nine
times the amount currently stipulated by current government projections
for the first phase ie delivery of 48.2Mt CO2 reductions
compared to 5.5MtCO2.
It is also important that the UK's Phase 2 allocations
are negotiated using previously agreed and robust projections.
This will avoid the situation that is occurring at present whereupon
DTI have steadily revised projections upwards, leading to increasing
allowances, after the Plan has already been submitted to the Commission.
2.5 ENERGY DEMAND AND EFFICIENCY: The UK
government should prioritise further development and implementation
of energy policies that underpin the achievement of EWP aspirations
on energy demand. WWF recommends using a reduction target for
energy demand of 0.2% per annum. Targets should be set in relation
to overall energy demand, with further investment in the provision
of appropriate information and active promotion for the uptake
of energy efficient technologies.
Energy efficiency forms the cost-effective backbone
of the EWP, expected to contribute 50% of reductions under the
2050 scenario. Indeed, WWF's research shows that implementing
energy efficiency measures would represent a net saving rather
than a cost during the next six to 16 years. Under one scenario,
for example, a reduction in UK energy demand could produce a net
saving of £4.2 billion from reduced investment in new plant
in 2020, if the EWP's aspirations regarding electricity demand
are met. Generation costs could also be up to around 8% lower
than "business as usual".
However, while measures to reduce electricity
demand, as outlined in the EWP, are potentially extremely cost
effective, they will be rendered meaningless unless the government
ensures that the current obstacles to energy efficiency and demand
are overcome. Developing proper incentives for increased energy
efficiency across all sectors (including homes), and for supporting
energy-efficient technologies in the context of the Energy Efficiency
Action Plan, can significantly help deliver this goal, but the
government also needs to set a target in relation to overall demand.
Through its One Million Sustainable Homes (OMSH)
campaign, WWF is lobbying for better building standards and a
range of incentives in energy efficiency to facilitate the development
of sustainable homes.
As per the recommendations of the Sustainable
Buildings Task Group, WWF is calling on government to develop
a robust Code for Sustainable Buildings (CSB) with minimum standards
for energy efficiency. The minimum entry level to the CSB should
be equivalent to the BREEAM/EcoHomes "Very Good" standard.
Compliance with the CSB should be a requirement for all publicly
procured buildings. The government should also introduce incentives
to encourage the private sector to meet the CSB such as preferential
treatment in the planning process and fiscal incentives such as
rebates in stamp duty. Stamp duty rebates should also be offered
to home buyers who carry out energy efficiency improvements within
a certain period after moving in.
Over the longer term, the government should
require all new communities to meet zero carbon standards.
2.6 DELIVERY OF ENERGY SERVICES: There
must be provision in the Programme to encourage large integrated
power generators and suppliers to increase their efforts to develop
energy services. The government should introduce fiscal and regulatory
measures to incentivise suppliers to offer energy management services
(eg that result in discount schemes for residential customers
who cut their energy use by a certain percentage)[34].
By becoming energy service providers rather than suppliers of
units of energy, power companies would ensure that business and
private households had electricity at a lower cost without forfeiting
comfort and lifestyle. Given that the general trend for energy
policy is to increase the cost of emissions, power companies will
gain by gearing up for a radically new business environment.
2.7 RENEWABLE ENERGY: The Renewables Obligation
should be extended to 20% by 2020, in line with the level identified
in the EWP. This should be supported by increased investment in
a diversified portfolio of renewable energy technologies, including
biomass, solar, wave and tidal technologies. Our research shows
that extension of the Renewables Obligations to 20% (combined
with energy efficiency aspirations) with almost exclusive regard
to onshore and offshore wind will be sufficient to more than halve
power sector emissions by 2020. But if we are looking beyond this
date—to the 60% emissions' reductions target set by the
government—we need to diversify the UK's sources of energy
further. This has additional multiple benefits in terms of security
of supply, rural development and reduction of system costs.
Provision of funding of research and development
of technologies cannot alone boost market uptake of renewable
energy in the UK. WWF strongly urges the government to make a
formal commitment to addressing current network/infrastructure
and planning constraints that currently hinder development and
are major reasons for our shortfall on current renewables targets.
Appropriate community consultation is also essential. Lack of
public understanding, misleading information and inaccurate negative
press have proven prohibitive for project uptake.
The government should also lead by example in
relation to consumer take-up of green electricity to drive demand
in the market place, and set a favourable procurement policy in
place for all public agencies to source a set percentage (eg 10%)
of their electricity from renewable sources.
2.8 NUCLEAR: The government should not
commit to any new investment in nuclear power. Our research shows
that it is possible to achieve our desired emissions' reductions
without resorting to nuclear energy. Instead, concerns about security
of supply can be easily addressed by diversifying our fuel sources,
investing in a wide variety of renewable sources and, above all,
reducing our energy consumption.
2.9 COMBINED HEAT AND POWER: The government
is grossly falling short of its target of 10GW of CHP capacity
by 2010. The reasons why the UK is not in line with this target
need to be addressed with further action taken to increase capacity.
For example, the government should provide incentives
for power companies to promote CHP and provide embedded generation
benefits for industrial users that invest in CHP on-site (eg rebates
or funding). The government must insist that all new public buildings
install CHP and renewable energy generation.
2.10 TRANSPORT: Effective transport policies
and targets are crucial. Based on DTI projections, transport emissions,
if left unchecked and unabated, are likely to surpass power sector
emissions in 2015, and as early as 2005 if the emissions' reductions
potential from WWF's research is fully realised. Policies to cut
new road spending and invest substantially in public transport
systems (eg bus and rail) must be explored and implemented.
The increased spending and expansion of
airports as envisaged by the Aviation White Paper must be revised
and amended in line with national climate change targets so that
the forecast rise in passenger demand is constrained. Onsite airport
vehicle fuel and aviation fuel taxes should be introduced, rather
than the perverse tax free status the industry enjoys at present.
8 October 2004
25 See www.metoffice.com/research/hadleycentre/obsdata/globaltemperature.html;
www.ipcc.ch/pub/SYRspm.pdf Back
26
Decision by the UNFCCC in Bonn in 2001 (decision 5/CP.6). Back
27
http://www.panda.org/news_facts/newsroom/other_news/news.cfm?uNewsID=15352 Back
28
A Viable Global Framework for Preventing Dangerous Climate Change-CAN
Discussion Paper, COP9 (Dec 2003)- http://www.climatenetwork.org/docs/CAN-DP_Framework.pdf Back
29
Johannesburg Renewable Energy Coalition. Back
30
The Renewable Energy and Energy Efficiency Partnership. Back
31
See www.defra.gov.uk/news/latest/2004/emissionsstats-250304.htm Back
32
This report will be made publicly available shortly. Back
33
The WWF-ILEX note can be made available, upon request (from WWF). Back
34
See California's 20/20 Rebate Program (http://savepower.lbl.gov) Back
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