Budgetary periods
44. The draft Bill proposes establishing five-year
carbon budgets, beginning with the period 2008-12. The Secretary
of State will set binding limits on CO2 emissions for
each five-year budgetary period. Carbon budgets will be set for
three periods ahead. Clause 3 (2) explains that the "annual
equivalent" within any carbon budget can be defined as "the
carbon budget for the period divided by the number of years in
the period". The Bill requires the proposed Committee on
Climate Change to report annually to Parliament on the UK's progress
towards achieving its targets and budgets. The Government response
will also be laid before Parliament.
45. Much evidence, including that from the Environment
Agency and EDF Energy, is supportive of the five-year budgetary
periods. EDF Energy expresses considerable concern that annual
targets would cause too great a focus on short-term reduction
objectives, resulting in investor uncertainty.[53]
46. However, others are less satisfied, often expressing
concern that the 5-year budget is very likely to include more
than one Parliament, thus allowing for abdication of blame or
responsibility for failing to meet a budget. Whilst Friends of
the Earth supports annual budgets for this reason,[54]
both it and the RSPB are ultimately content with the notion of
5-year budgetary periods, with the proviso that there are explicit
annual 'milestones' to ensure that the Government can be held
accountable for making emission reductions throughout the 5-year
period and not just at the end.[55]
The Association of British Insurers is likewise supportive on
an "indicative trajectory" for individual years.[56]
47. Friends of the Earth believed that:
because you are talking about the total amount of
carbon actually under the line [see graph on page 12], the actual
amount emitted, it does not really matter a hoot whether the reason
you failed was because of a cold winter or because of a change
in the fuel price, you are still absolutely under an obligation
to redress that during the following year.[57]
48. The OCC defended the five-year budgetary period:
The only con to a five-year period is that it is
a longer period of accountability. The pros were quite overwhelming
on the other side in the sense that the consistency with the international
framework struck us as absolutely crucial, making sure that the
periods are coterminous with the Kyoto framework but also with
the EU Emissions Trading Scheme framework, and in a sense to deal
with the accountability issue, and that is why we then also have
in the Bill this annual accountability cycle where the Committee
holds the Government to account in Parliament and the Government
responds. The accountability point is addressed through that second
part of the Bill.[58]
49. The Energy Saving Trust (EST) proposes an alternative
to the concept of fixed budgetary periods, whereby a 'rolling'
5-year average target is used instead, but Rupert Edwards of Climate
Change Capital was sceptical of the Energy Saving Trust's proposal,
noting that "[t]hat is a nice mathematical idea and it might
smooth out the bumps, but I do not think it is practical. […]
I do not think it will work."[59]
50. The OCC is likewise somewhat sceptical of the
element of accountability in the EST's proposal: "there does
not seem to be a whole lot of difference between this concept
of rolling five-year budgets and annual targets, in the sense
that it does not really get over the problem of the Government
being held to account in any single year for emissions, which
could fluctuate according to normal variations in the weather,
for example."[60]
51. We remain
unconvinced that annual statutory targets should be used owing
to inevitable fluctuations in energy demand and the unavoidable
lag in reporting on progress. We accept the case for five-year
budgetary periods, but we recommend that clear annual 'milestones'
are set—and published—by the Committee on Climate
Change in order that it may become apparent well before the end
of a budgetary period whether or not policies are working. This
also reflects the fundamental significance of cumulative emissions,
and the trajectory involved, by which the five-year budgets are
reached. As well as providing a far greater
degree of accountability, annual milestones would provide an early
warning system by which underperforming policies could be improved
or done away with, and successful policies extended, in order
to maximise carbon dioxide reductions as early as possible.
52. We recommend
that once the Bill becomes law, the Government should publish
a sectoral breakdown of its national emission reduction targets
to help different sectors of the economy and society—including
Government, businesses, communities, households and individuals—appreciate
what action they will have to take if the UK as a whole is to
achieve its emission reduction objectives.
Post-hoc revision of budgets
53. Clause 13 (5)states:
An order setting the carbon budget for a period may
not be amended after 31st May in the second year following the
end of the period.
54. A letter from the Lords Delegated Powers and
Regulatory Reform Committee to the Chairman of the Joint Committee
states that "[…] it is clear from subsection (5) that
it is envisaged that the budget might be amended more than a year
after the end of the budgetary period. […] we consider that
the case has not so far been made out for a power retrospectively
to amend a carbon budget after the end of the budget period."[61]
55. The provision
to amend a budget more than a year after the end of a budgetary
period makes a nonsense of the entire concept of budgetary periods,
and would render any sanctions completely unworkable. This is
simply wrong. Subsection (5) of Clause 13 should be removed in
its entirety.
53 Ev 168 Back
54
Ev 27 Back
55
Qq 88-89 Back
56
Ev 163 Back
57
Q 90 Back
58
Q 370 Back
59
Q 135 Back
60
Q 379 Back
61
Written evidence from the House of Lords Delegated Powers and
Regulatory Reform Committee to the Joint Committee on the Draft
Climate Change Bill Back
