Select Committee on Environment, Food and Rural Affairs Minutes of Evidence


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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