Memorandum submitted by the Carbon Trust
Please find attached our recent publication
which looks at the UK Climate Change Programme and its potential
evolution for business and the public sector which we would like
to submit to your evidence sessions seeking to evaluate the 2006
Climate Change Programme. This document outlines how policy could
evolve to deliver a step change in energy efficiency while maintaining
or improving UK competitiveness. We fed the findings of this work
into the Government's Climate Change Programme Review and the
Energy Efficiency Innovation Review.
The business and public sectors generate over
one third of UK CO2 emissions and have significant
untapped opportunities to reduce carbon emissions while at the
same time generating bottom line financial benefits. The attached
report maps out how these emissions are distributed, the existing
carbon abatement opportunities, the barriers that are preventing
their take up and the drivers that could be harnessed to motivate
action. The report then examines how the Climate Change Programme
could evolve to address these barriers and leverage the business
drivers in each segment of the market. Headline findings from
the report include:
— The current Climate Change Programme
is a good basis on which to build. The EU Emissions Trading Scheme,
Climate Change Agreements, Building Regulations and the soon to
be introduced Energy Performance of Buildings Directive are key
components, but all have significant implementation issues that
need to be addressed if they are going to both deliver further
carbon savings and enhanced business competitiveness;
— In addition, there are gaps in the
current Programme particularly for less energy intensive organisations.
A simple new UK emissions trading scheme could incentivise change
in large organisations in this segment of the market, but it would
need to be implemented in a way that avoids creating additional
administrative and financial burdens for participants. Further
instruments are also required to support the public sector and
small and medium sized enterprises (SMEs).
The 2006 Climate Change Programme recognises
these findings, making a commitment to explore many of the recommendations,
including the need for a new instrument to address emissions from
large, less energy intensive organisations:
— "The Government is considering
the proposal [for a new UK emissions trading scheme], which raises
some important issues, and will decide in due course whether to
take it forward"
We hope that the Energy Review can make the
decisions required to achieve this and the other changes we have
highlighted to strengthen the current Climate Change Programme.
We have concentrated our work on the business
and public sectors, which can continue to play a key role in reducing
emissions, but as we state in our report it is important that
the transport and domestic sectors take equivalent action going
forward (emissions from both these sectors increased between 2000
and 2004, whereas business sector emissions fell—indeed
transport emissions are forecast to continue to increase out to
2020).
May 2006
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