Carbon budgets - Environmental Audit Committee Contents

4  Delivering the carbon budgets

The Government's track record in reducing emissions

50. The Government has a domestic target to reduce emissions of carbon dioxide by 20% on 1990 levels by 2010. The Secretary of State believed that the domestic 2010 target was very stretching but that the UK had made good progress against it.[122] In 2009 the Government predicted UK emissions of greenhouse gases were on track to fall by around one-third from 1990 levels by 2020 and would be lower than required for the first and second carbon budget periods and well within the range of uncertainty for the third budget period.[123]

51. Professor Ekins told us emissions would have been higher if the Government had not had policies in place to meet the 2010 target but that the Government "will miss its 20% domestic carbon dioxide reduction target for 2010, despite having been aided […] by the global recession. Policy-related emissions reductions since 1997 have clearly been difficult to achieve".[124]

52. Between 2003 and 2007 emissions fell at below 1% per year.[125] Lord Turner told us that the UK would meet the carbon budgets for the first budget period but only because of the economic recession.[126] Declining economic activity was likely to have reduced emissions by about 2% during 2008. He warned that recession induced reductions must not be confused with underlying progress, but the Government maintains underlying progress has been made and disputed the Committee on Climate Change's assessment of the impact of the recession.[127] In a report published in July 2007, we said that the Government's was consistently over-optimistic when projecting how successful its policies would be.[128] Professor Anderson believed that the Committee on Climate Change and the Government had been far too optimistic.[129]

53. This contested record in reducing emissions, and the consistent optimism bias in the Government's projections of progress towards its 2010 target, raises concerns about the prospects of hitting the 2020 target. The Government will want to be optimistic about the policies it has devised and the progress it is making but it must be careful that this optimism does not cause it to downplay the impact of the recession or over-estimate the underlying progress that has been made in reducing emissions during the economic downturn. The Government should investigate whether there is a way to report emissions figures corrected for the economic cycle as is done for the public service agreements on productivity (PSA1) and employment (PSA8).

The rate of emissions reduction

54. The Low Carbon Transition Plan said that emissions had fallen about 1% per year since 1990 and now needed to fall at a rate of 1.4% a year.[130] The analysis underpinning the Committee on Climate Change's recommendations on targets and budgets assumed global emissions would fall at 3-4% per annum after peaking sometime between 2015 and 2020 and then continue to fall until 2100. From this it derived a requirement for emissions in the UK to fall at 2-3% per annum (across all Kyoto greenhouse gases) in order to meet the 2050 target. This is slightly below the global 3-4% because the UK's reported emissions have actually fallen a little since 1990, whereas global emissions are still rising and will need to come down from a higher level before reaching 2050 targets.

55. In a paper in 2008 Kevin Anderson and Alice Bows argued that meeting the objective of avoiding dangerous climate change would require greenhouse gas emissions to be reduced by 4% per annum, with energy and process emissions falling at 6.5% per annum as part of that.[131] Their analysis indicated that if emissions were allowed to peak as late as 2020, emission from all sources of greenhouse gases would have to fall at about 10% per annum. But they noted that historically emissions reductions of greater than 1% had only ever been associated with 'economic recession or upheaval' and rates in excess of 3% were rarely considered viable.[132] For example, "the collapse of the former Soviet Union's economy brought about annual emission reductions of over 5% for a decade. By contrast, France's 40-fold increase in nuclear capacity in just 25 years and the UK's 'dash for gas' in the 1990s both corresponded, respectively, with annual CO2 and greenhouse gas emission reductions of only 1%".[133] But the Met Office suggested that the high rate of annual reductions in emissions recommended by Anderson and Bows was an artefact of their methodology and pointed to several other studies that were consistent with the findings of the Committee on Climate Change.[134]

56. The Committee on Climate Change's first annual report to Parliament concluded that a step change was required in the pace of UK emissions reduction to meet carbon budgets and that more action must be taken to deliver the Government's Low Carbon Transition Plan.[135] Lord Turner told us that the Committee on Climate Change did not believe that the carbon budgets needed to be changed as a result of anything it had said in its first progress report and said the Government should aim to outperform the first budget.[136] But he stressed that if the gap in delivery was allowed to grow too big at some point the carbon budgets would have to be adjusted.[137] The Government agreed that new scientific evidence strengthened the case for strong and early action on climate change,[138] and accepted the need for a step change.[139] The Government must deliver the carbon savings it has identified in the Low Carbon Transition Plan and then increase the rate at which emissions are falling to meet the 2-3% annual reduction recommended by the Committee on Climate Change. In doing so it must take account of the milestones that the Committee is using to monitor progress. The Committee on Climate Change must watch closely to see how the Government acts to close the gap in delivery it has identified. In its response to the Committee on Climate Change's progress report the Government should make clear how the Low Carbon Transition plan will be strengthened. Strengthening the policy framework and bringing forward new measures to get the UK to meet its existing targets and budgets are higher priorities than setting more stretching targets, even if new targets would be justified on the basis of science. Unless we are on track to meet current targets, increasing targets will only widen the shortfall in delivery.

57. We now turn to an examination of the levers of change over which the Government has direct influence.

The policy framework

58. The Low Carbon Transition Plan set out the steps to a permanent shift to a low-carbon economy including:

·  40% of electricity to come from low-carbon sources;

·  energy efficiency improvements in 7 million homes and 1.5 million households supported to produce their own clean energy;

·  20-30% less gas imported;

·  40% lower emissions from new cars; and

·  1.2 million people employed in green jobs.

59. In the evidence we took there was a great deal of concern that the policy framework would be unable to deliver the required reduction in emissions. Professor Allen, from the Department of Physics at the University of Oxford, for example, argued that the Government needed to have a flexible and adaptive policy framework given all the uncertainties in climate science.[140] Paul Ekins saw little evidence that:

    […] current policies will bring forward the mix of demand reduction, efficiency increase and low-carbon supply that will be necessary to meet the targets in the 2020 budget.[141]

His view was that the Government was not using carbon pricing in a systematic way and that improvements in energy efficiency were occurring too slowly and renewables were not being deployed quickly enough. He described continuing uncertainties about whether and when new nuclear and Carbon Capture and Storage (CCS) plant would come on stream, what they would cost, and whether CCS would even work. He believed that although many of the Government's policies were innovative they had not been implemented strongly enough.[142] Professor Anderson believed that social frameworks, political structures and policy framework to deliver the required reduction in emissions were missing,[143] saying that it was difficult to reconcile economic growth with decarbonisation on the scale that was needed.[144] The Institution of Mechanical Engineers believed that the tax system and public procurement systems could be used more effectively to reduce emissions.[145] For EEF current policies and incentives did not go far enough to ensure the economy would be decarbonised,[146] and they did not detect a policy framework to translate the Government's vision into reality and ensure the "UK is the number one destination for low-carbon business".[147] We made a similar point in our recent report on green jobs and skills.

60. David Kennedy explained that the Committee on Climate Change felt the policy framework needed to be tightened on energy efficiency, transport, renewable electricity and renewable heat[148] and that there were actions that must be taken in the first and second budget periods if the UK was to be on track in later budget periods.[149] The Committee felt that the Government should aim to over-achieve against its carbon budgets so that the UK made underlying progress on decarbonisation over the next few years. Any over-achievement of the budget in the first period should not be banked into the second budget period. The Secretary of State for Energy and Climate Change confirmed that the Low Carbon Transition Plan aimed to over-achieve in each budget period.[150] There is, however, a higher cost associated with over-engineering the targets and budgets and it is essentially a political decision as to whether this can be justified.[151]

61. The Government is right to try and over-achieve against its carbon budgets but it should not be banking any over-achievement from the first budget period into the second budget period. In responding to the call by the Committee on Climate Change for a 'step change' the Government must strengthen existing policies and bring forward new measures, which must be rigorously monitored. We understand the Government's desire to use market mechanisms to ensure that emissions reductions are delivered at least cost and in the most economically efficient way but it cannot rely solely on market forces and may need to support these by a regulatory approach and reforms to the fiscal framework.

62. The Government has recently changed its approach to carbon valuation within policy impact assessment from one based on costing the damage associated with climate change to one based on the cost of mitigating emissions. The new approach has been welcomed by economists and environmental groups. It is not clear whether any policy decisions will be reviewed in light of this new methodology although the Government has indicated that preliminary work on the decision to add capacity at Heathrow indicates that "the economic case for Heathrow's third runway is robust to the new carbon values".[152] The new approach sets out projected carbon values from 2009 to 2050 as follows:

·  A short term traded price of carbon of £25 in 2020, with a range of £14-£31.

·  A short term non-traded price of carbon of £60 per tonne CO2e in 2020, with a range of +/- 50% (i.e. central value of £60, with a range of £30-£90).

·  A long term traded price of carbon with a value of:

·  £70 per tonne of CO2e in 2030, with a range of +/- 50% (i.e. £70 central estimate, £105 high estimate and £35 low estimate).

·  £200 per tonne of CO2e in 2050, with a range of +/- 50% (i.e. £200 central estimate, £300 high estimate and £100 low estimate).[153]

It is not clear whether this change in the approach to carbon valuation will do enough to bring about the step-change needed for the transition to a low-carbon economy or whether it addresses the short-term risk of carbon lock-in as a result of fuel switching if investment decisions are taken in the near-term when the carbon price is relatively low. How the Government's new approach to carbon valuation within policy impact assessment is applied is as important as the values used and we believe that there is a case for the National Audit Office examining, in due course, what impact it is having on decision making within government.

63. Action on emissions costs money.[154] The Stern Review argued that reducing emissions could cost about 1% of global GDP every single year. Lord Stern pointed out that the costs of meeting a given temperature or stabilisation target will tend to rise for every month that policy action is delayed.[155] The Committee on Climate Change believes that the cost of meeting the 2020 targets would be less than 1% of GDP in 2020.[156] Its view was that this was acceptable given the consequences and costs of not acting. It estimated the costs of meeting the 2050 target as between 1 and 2% of GDP. Professor Ekins thought costs in this range were unlikely to be noticed by the general public.[157] Some of the increased costs to the consumer could be defrayed by energy efficiency savings.[158] In April 2009 Professor Sir David King, Director of the Smith School of Enterprise and the Environment at the University of Oxford, argued that the cost of reducing the UK's emissions would be much higher than the Government had indicated but also that the financial implications of not dealing with the climate change threat were far higher than Lord Stern had suggested.[159] Professor Anderson contrasted the money found to save the banks with his perception that "we cannot find a few measly millions or billions to deal with supposedly one of the greatest threats we face".[160] The issue for the nation is that only by investing now can we hope to avoid the enormous and ultimately unquantifiable costs of failing to avert dangerous climate change. The Government needs to present the cost of action on climate change more clearly and to make clear that this is not an additional cost but an alternative to the economic, social and environmental cost of inaction.

Energy policy

64. Historically, growing energy use correlates with economic growth, and emissions will grow unless energy is decarbonised.[161] Global consumption of energy derived from fossil fuels is rising and an unprecedented effort is needed to reduce energy consumption and decarbonise global energy if emissions are to peak in the coming decade.[162] The Low Carbon Transition Plan set out the Government's plans to get 40% of the UK's electricity from low-carbon sources by 2020.[163] The Committee on Climate Change identified decarbonising the power sector as the key to achieving emissions reductions targets.[164] It called for a review of the current set of market arrangements for power generation and a move beyond the current Supplier Obligation, new rules to strengthen the investment climate for low-carbon power generation, and more action on energy efficiency.[165] Professor David MacKay, Professor of Natural Philosophy in the Department of Physics at the University of Cambridge, believed that the UK needed to build low-carbon generating capacity at a much higher rate than it currently was if it was to decarbonise,[166] saying the UK needed to build new low-carbon and renewable generating capacity at the fastest rate possible.[167] Dr Cameron Hepburn said that the Government needed to invest in more low-carbon research and development.[168]

65. Targets for reducing emissions and carbon budgets cannot be met without investment in renewables and low-carbon generation. In the Trade and Industry Committee's report on new nuclear build all the energy companies who gave evidence made the point that a long-term stable carbon price was absolutely fundamental for new build.[169] There has been little progress on this issue since then. The UK cannot meet the 2020 target without a carbon price high enough to bring forward low-carbon investments.[170] The Committee on Climate Change identified a risk that investment might continue to flow predominantly to conventional fossil fuel power generation in the third budget period and beyond. It said that investors would be biased towards investment in conventional fossil fuels rather than low-carbon generation, with investors choosing to invest directly in gas-fired power stations despite their increasing cost.[171]

66. The Government is relying in part on the EU-ETS to drive a price for carbon that encourages investment in renewables and low-carbon generation. Our forthcoming report on carbon markets will examine this hypothesis in detail and the impact that carbon prices will have on low-carbon investment. It will be clear from that analysis that the Government cannot place too much reliance on the price of carbon to drive investment in low-carbon technologies as the current price is too low and too volatile. It must put the right regulatory framework in place to ensure that the right investment decisions are made. It is vital that we do not invest in the wrong high-carbon infrastructure. Through interventions in the market and complementary policy measures, using the full range fiscal and policy instruments available, the Government should drive up the price of carbon steadily to a level where renewable and low-carbon investments become economically viable.

Energy efficiency improvements

67. 14% of all carbon dioxide emissions currently come from commercial or public buildings[172] and the UK's 25 million homes account for around a quarter of carbon dioxide emissions.[173] The Low Carbon Transition Plan proposes that by 2030 all cost-effective energy-saving measures will have been fitted to all homes. It sets out a community-based approach to delivering energy efficient measures to low-income households and an extension of the supplier obligation. The Government plans to spend £3.2 billion to help households become more energy efficient by increasing and then extending the current programme. It intends to roll-out smart meters to every home by the end of 2020 and to pilot ways to help people make their whole house greener. It plans to encourage the use of low-carbon sources to generate heat or electricity through 'clean energy cash-back schemes'.[174]

68. The Progress Report from the Committee on Climate Change favoured a whole-house and street-by-street approach to energy efficiency improvements. It envisaged a 35% reduction in emissions from residential buildings in 2022 compared to 2007 figures, and a 27% reduction in non-residential buildings and industry. It suggested that policy should be strengthened in at least three areas to achieve the required emissions reductions:

·  energy efficiency improvement in homes;

·  energy efficiency improvement in the commercial sector (including SMEs); and

·  support for renewable heat.[175]

69. It will take time for emissions from power generation to be reduced given the lead time in building new infrastructure and in the next few years the UK will rely on energy efficiency measures to meet its carbon budgets. But current policy on energy efficiency is too weak and too reliant on energy suppliers. In our recent report on green jobs and skills we called for an increase in the scale and speed of the programme to improve energy efficiency in homes across the UK. If we are to have any chance of staying within our carbon budgets, the Government must strengthen the policy framework around energy efficiency as a matter of priority. It must set out how it intends to drive forward investment in energy efficiency to ensure that sufficient progress is made in the remainder of the first budget period.


70. The Committee on Climate Change has identified a risk that some investments, which could help the UK to meet its short-term targets, could lock it into an emissions pathway that meant it failed to meet the longer-term targets (see paragraph 36). Under the Planning Act 2008 the Infrastructure Planning Commission will have to decide whether to give consent to applications to develop infrastructure of national importance. These decisions have the potential to determine the UK's emissions pathway far into the future, and NPSs could have a major impact on the UK's carbon budgets.[176] It is the sum of all IPC decisions that will influence whether budgets are met. Each of the IPC's planning decisions will have to be made with the imperative in mind that we must keep within our carbon budgets and it is the sum of all its decisions that will shape our emissions pathway.[177] Friends of the Earth argued that the IPC should be required to base its decisions on the intended not interim carbon budget as decisions taken now would see infrastructure built that would remain in place for many years.[178] The Committee on Climate Change in contrast thought that it did not matter which budget was followed as what needed to be built under the two budgets was broadly similar.[179]

71. The guidance that has been issued with the energy NPSs said:

    Given that the Government policies that underlie NPSs have been set in accordance with the [Low Carbon] Transition Plan and carbon budgets, the IPC does not need to assess individual applications in terms of carbon emissions against the budgets.[180]

The NPSs on energy rely on the EU ETS to cap emissions from the power sector and the carbon price to make high-carbon power stations 'less and less attractive' and thus providing an incentive to invest in cleaner electricity generation.[181] It is crucial that all NPSs are properly assessed for their impact on the Low Carbon Transition Plan and carbon budgets. Any new fossil-fuel based generating capacity that is consented to will make it harder to meet carbon budgets in future years and will require higher rates of reduction from other sectors of the economy. The Government's approach does not address the danger identified by the Committee on Climate Change that investments made now, on the basis of a low current carbon price and projections that suggest it will not rise much, could lock us into a high level of emissions for years to come if investors favour coal and gas over low-carbon and renewable generation in the short- to medium-term. The Government must put in place a mechanism to ensure that the sum of the decisions taken by the IPC are consistent with the carbon budgets and the milestones that the Committee on Climate Change has set out to ensure the infrastructure needed to meet future budget periods is put in place in the next few years. The Energy and Climate Change Select Committee may wish to examine this issue more closely as part of its scrutiny of the National Policy Statements on energy.

Managing the budgets

Measuring emissions

72. Greenhouse gas emissions are not directly measured but are estimated from use of fossil fuels and other industrial and agricultural processes. It takes up to 15 months to produce final emissions estimates although provisional estimates are available at 3 months and near final estimates at 13 months. In their response to a consultation by the Department for Energy and Climate Change on carbon accounting the Environment Agency said:

    [the EU ETS and Carbon Reduction Commitment] […] currently include only carbon emissions, and do not include the full basket of six Greenhouse gases that are required for the carbon budget. The additional sources of data that the Government will be using to calculate the full carbon account need to be clearly identified.[182]

In March 2008, the NAO reviewed the measurement and reporting of UK greenhouse gas emissions. They found uncertainty in emissions of carbon dioxide was relatively low but was relatively high for other greenhouse gases. The National Physical Laboratory stressed the importance of being able to measure emissions accurately. They said:

    […] multiple and inconsistent measurements, calculations and estimation protocols for [greenhouse gas] emission and avoidance are a fragile basis for the present and are likely to be an inadequate basis for the future carbon market—and a burden for business.[183]

They called for the UK to become a world leader in carbon metrology.[184]

73. Accurate measurement of emissions is fundamental to understanding the impact of policy. The Government needs to address the issues with measuring and reporting on greenhouse gases, particularly the uncertainty around measures of gases other than carbon dioxide. The Government should look carefully at the case the National Physical Laboratory makes for the creation of a centre of excellence in carbon metrology in the UK.


74. In international emissions trading it is common to treat the purchase of each foreign credit as being equal to reducing domestic emissions by an equivalent amount. We have previously expressed reservations about this principle. In our 2007 report on the Draft Climate Change Bill, we observed: "Trading only guarantees global emissions reductions if each country has its own national emissions limits, set in harmony with others, at a level designed to achieve a global reduction target."[185] We will consider the role of offsets in carbon markets in detail in a forthcoming report. The key issue in the present context is the extent to which offsets should be counted against the achievement of our carbon budgets.

75. The Committee on Climate Change has said that the UK should aim to limit the use of offsets and meet the carbon budgets through domestic reductions. The Government also aims to meet the first three interim carbon budgets without purchase of overseas credits outside the EU ETS, but it does reserve possible credit purchase as a fallback option.[186] If the UK moved to a tougher budget as a result of a global deal on climate change the Government would expect to use offset credits to meet part of the additional effort required.

76. While the Secretary of State was clear that domestic action must be the backbone of what we do.[187] the Government has argued that there is a place for offsets because they encourage least-cost mitigation in helping developing countries to move to a low-carbon economy. But there are other ways of meeting this objective without the downsides associated with offsets.

77. Professor Kevin Anderson argued that buying an offset from a country with lower long-term ambitions than the UK was not the equivalent of reducing domestic emissions by the equivalent of a tonne of carbon, and suggested that there may be a need for an exchange rate or discount rate for offset credits.[188] In the USA there are proposals for a discount rate to be applied to international offset credits used within any federal cap and trade scheme, meaning that an American firm would need to buy and surrender five offset credits for every four tonnes carbon dioxide it emitted. The Government told us that current EU legislation would allow the EU ETS to apply such a discount rate to offset credits; simply the threat of applying it could help to improve the robustness of offset projects.[189] We recommend the Government explore the use of a discount rate on offset credits and that the Government work on proposals for discounting the carbon value of offset credits within the EU ETS.

78. A potential weakness of treating the purchase of EU ETS credits as being necessarily equivalent to reducing UK emissions comes from Phase I of the scheme. Throughout this period, the UK sectors included in the scheme as a whole emitted an excess of carbon dioxide above their allocations; in 2005 the UK was a net purchaser (i.e. from elsewhere in the EU) of 25.2 million credits; in 2006, 31.4 million; and in 2007, 25.7 million.[190] In its official publications, the Government has treated these purchases as though UK emissions were lower by the same amounts than they actually were in each of those years.[191] The Government's official emissions figures for 2005-2007, which incorporate the net purchase of EU ETS credits, are therefore somewhat misleading in suggesting that UK emissions were reduced. Simply making a purchase of EU ETS credits does not necessarily mean that the UK is funding real and equivalent emissions reductions elsewhere; it depends on how tight or loose the overall cap is. The Government should not score any EU ETS credits purchased from Phase I as having reduced emissions in the UK by an equivalent amount. We recommend that efforts should be made to determine what actual savings were in order to provide a sound basis for future budgets to deliver the necessary real savings in emissions.

79. In the carbon budgets the Government intends to count allocations rather than actual emissions for sectors covered by the EU ETS. The Government felt it would be misleading to count actual emissions without taking account of EU ETS trading.[192] Doing so could mean, for example, that the Government reported reduced emissions in the UK, when these might actually have been displaced by increased emissions elsewhere in the EU (or vice versa). The Department for Energy and Climate Change argued that the practice of counting allocated rather than actual emissions in the traded sector reflected the agreed international approach to measurement of emissions.[193] The Government pointed out that the approach had been agreed by most of those who had responded to the consultation on carbon accounting and was approved by both Houses of Parliament.[194] The Government's approach has been criticised by environmental groups. Friends of the Earth said:

    [The] EU ETS is just one policy which affects UK traded sector emissions—in that case, given that the Climate Change Act is about UK emissions, it surely is more appropriate to count actual emissions (i.e. judging the progress of ALL policies in the traded sector) rather than allocated emissions (i.e. solely counting the UK's initial allocation in the EUETS, just one policy) […] if this method of accounting continues, then for the purposes of assessing compliance with the legal requirements of the Act, it does not matter WHAT actually happens in 40% of the entire carbon budget.[195]

We recommend the UK should only accept emissions credits (whether from the EU ETS or any other scheme) for use within UK carbon budgets, if they have come from countries that have implemented equivalent national emissions targets and managed to cut emissions below them.


80. There needs to be a process to ensure that the totality of the machinery of Government delivers the UK's carbon budgets.[196] The Government told us a system of departmental carbon budgets would be introduced ahead of the second budget period with the intention of ensuring that every part of government can be held accountable for delivery of the UK's carbon budgets. Each department's budget is made up of two parts: one to reflect its share in each of the major sectors of the economy (based on its relative degree of influence over emissions in that sector) and the other reflecting emissions from the public sector it has responsibility for.[197] Initially schools, further and higher education establishments and the NHS fall on the Department for Energy and Climate Change's budget but will be transferred to the relevant departmental budgets by April next year.

81. The Low Carbon Transition Plan notes that the Treasury "will play a key role in the departmental carbon budget system".[198] The Department for Energy and Climate Change and the Treasury will manage the departmental budgets together. Mr James Hughes, the head of carbon budgets policy in the Department for Energy and Climate Change, described how senior staff in each department were being 'account managed' to oversee the work on their departmental budget and departmental carbon reduction delivery plans, and that the Department for Energy and Climate Change was working to build capacity in all departments to manage carbon budgets.[199] Departmental reduction delivery plans would ideally include indicators and milestones similar to those used by the Committee on Climate Change.[200] James Hughes also stressed the importance of having a rigorous process for monitoring progress.[201]

82. However, the process of setting budgets for departments has been essentially one of trial and error.[202] For example, the Treasury's departmental carbon budget is based solely on the carbon savings it expects to make on its own estate, but Friends of the Earth argue that it should have a sectoral share of the carbon budgets to reflect the control it has over spending and tax.[203] More widely, the Secretary of State assured us that the Treasury "institutionally understands the importance of meeting carbon budgets",[204] and that it would play an important role in the system, particular in the context of the spending reviews.[205] In our view the Low Carbon Transition Plan has probably under-estimated the importance of taxation as a lever to affect emissions. The Treasury has significant influence over the shape of the Government's climate change programme and the Low Carbon Transition Plan. Changes in taxation and spending could have a major impact on carbon emissions and on levels of investment in low-carbon industries. We believe that this influence should be acknowledged in departmental carbon budgets.

83. Ensuring that each department's carbon reduction plan is adequate and closely monitoring progress against departmental budgets will be key to ensuring that the whole of government is working towards meeting the UK's carbon budgets and its longer-term targets to reduce emissions. Clearly the Committee on Climate Change has a role to play in monitoring the overall delivery. It is not currently resourced to monitor and examine departmental budgets but is willing to do so if asked.[206] Our successors should consider how scrutiny of departmental budgets and departmental carbon reduction plans should be taken forward. The NAO could assist parliamentary scrutiny of departmental carbon reduction plans.

84. The Association for the Conservation of Energy said there was a risk that each sector could try to pass on responsibility for reducing emissions to other sectors and as a result little progress would be made.[207] But the Low Carbon Transition Plan made clear the expectation for each sector of the economy and each government department; the challenge now is to turn this into meaningful action that reduces emissions by at least 2-3% per annum. The Committee on Climate Change will next report on the progress towards meeting targets for reducing emissions and carbon budgets in June 2010. We recommend that our successors in the next Parliament should follow up progress on carbon budgets because of the cross-departmental nature of the Low Carbon Transition Plan.

85. The management of the carbon budget is as vital as the management of the fiscal budget. It requires the same level of political attention and civil service commitment, and the same degree of parliamentary scrutiny. Our successors should lead the way in rigorously monitoring the robustness of the carbon budgets and the progress the UK makes in meeting them.

122   Q 262 Back

123   HMT, Budget 2009: Building Britain's future, April 2009, para 7.11 Back

124   Ev 75 Back

125   Committee on Climate Change, Meeting Carbon Budgets-the need for a step change, progress report to Parliament, October 2009, Executive summary, p10.  Back

126   Q 226 [Turner] Back

127   Q 256 [Hughes] Back

128   Environmental Audit Committee, Seventh Report of Session 2006-07, Beyond Stern: From the Climate Change Programme Review to the Draft Climate Change Bill, HC (2006-07) 406, para 26 Back

129   Q 106 Back

130   DECC, The Low Carbon Transition Plan: National strategy for climate and energy, July 2009 Back

131   Kevin Anderson and Alice Bows, Reframing the climate change challenge in light of the post-2000 emission trends, Philosophical Transactions of the Royal Society A, 2008 Back

132   Tyndall Centre, Making a climate commitment: analysis of the first report (2008) of the UK Committee on Climate Change, March 2009 Back

133   Kevin Anderson and Alice Bows, Reframing the climate change challenge in light of the post-2000 emission trends, Philosophical Transactions of the Royal Society A, 2008 Back

134   Q 152 and Ev 53 Back

135   Q 223 [Turner] Back

136   Q 224 [Turner] Back

137   Q 226 [Turner] Back

138   Ev 103 Back

139   Q 252 Back

140   Q 154 [Allen] Back

141   Ev 75 Back

142   Q 185 Back

143   Q 73-74 Back

144   Q 77 Back

145   Ev 138 Back

146   Ev 130 Back

147   Ev 130 Back

148   Q 225 Back

149   Q 224 [Kennedy] Back

150   Q 255 Back

151   Q 122 Back

152   HC Deb, 9 September 2009, col 1901W Back

153   DECC, Carbon valuation in UK policy appraisal: a revised approach, July 2009 Back

154   Q 158 [King] Back

155   Stern, Key elements of a global deal on climate change, LSE, 2008 Back

156   Committee on Climate Change, Meeting Carbon Budgets-the need for a step change, progress report to Parliament, October 2009 Back

157   Q 241 [Turner] Back

158   Q 241 [Kennedy] Back

159   BBC News, Clash over ecological economics, 27 April 2009, Back

160   Q 105 Back

161   Q 186 Back

162   Anderson, Bows and Mander, From long-term targets to cumulative emission pathways: Reframing UK climate policy, Energy Policy, Vol 36, 2008, pp3714-3722 Back

163   DECC, The Low Carbon Transition Plan: National strategy for climate and energy, July 2009, Summary, p4 Back

164   Committee on Climate Change, Meeting Carbon Budgets-the need for a step change, progress report to Parliament, October 2009, Summary, p9-10 Back

165   Q 223 [Turner] Back

166   Q 209 Back

167   Q 210 Back

168   Q 166 [Hepburn] Back

169   Trade and Industry Committee, Fourth Report of Session 2005-06, New Nuclear? Examining the issues, HC (2005-06 1122 Back

170   Q 188 Back

171   Committee on Climate Change, Meeting Carbon Budgets-the need for a step change, progress report to Parliament, October 2009, p134-136 Back

172   The Committee on Climate change, Back

173   The Committee on Climate Change, Back

174   DECC, The Low Carbon Transition Plan: National strategy for climate and energy, July 2009, Summary, p4 Back

175   Committee on Climate Change, Meeting Carbon Budgets-the need for a step change, progress report to Parliament, October 2009 Back

176   Ev 133 Back

177   Ev 135 Back

178   Ev 135 Back

179   Ev 100 Back

180   DECC, Draft Overarching National Policy Statement for Energy (EN-1), November 2009, section 2.1.5 Back

181   DECC, Draft Overarching National Policy Statement for Energy (EN-1), November 2009, section 2.1.10 Back

182   Environment Agency, Response to DECC consultation, Carbon Units, the Net UK Carbon Account and Carbon Accounting, January 2009, Back

183   Ev 138 Back

184   Ev 138 Back

185   Environmental Audit Committee, Seventh Report of Session 2006-07, Beyond Stern: From the Climate Change Programme Review to the Draft Climate Change Bill, HC (2006-07) 460, para 108. Back

186   HMT, Building a low-carbon economy: implementing the Climate Change Act 2008, April 2009, Para 3.3 Back

187   Q 263 [Miliband] Back

188   Q 101 Back

189   Oral Evidence taken before the Environmental Audit Committee on 2 June 2009, HC (2008-09) 393-v, Qq 317-8 Back

190   DECC, 2007 UK Greenhouse Gas emissions, final figures, 3 February 2009 Annex C: UK Greenhouse Gas Emissions 1990-2007: progress towards the Kyoto and Domestic Targets, Back

191   DECC, UK Climate Change Sustainable Development Indicator: 2007 Greenhouse Gas Emissions, Final Figures, Feb 2099, Back

192   Ev 120 Back

193   Ev 120 Back

194   Ev 119 Back

195   Ev 136 Back

196   Oral evidence taken before the Environmental Audit Committee on 4 February 2009, HC (2008-09) 234, Q 19 [Turner] Back

197   Q 293 [Hughes] Back

198   DECC, The Low Carbon Transition Plan: National strategy for climate and energy, July 2009, p47. Back

199   Q 293 [Hughes] Back

200   Q 293 [Hughes] Back

201   Q 293 [Hughes] Back

202   Q 293 [Miliband] Back

203   Ev 133 Back

204   Q 292 Back

205   Q 291 Back

206   Ev 100 Back

207   Ev 128 Back

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