Supplementary memorandum submitted by
the Committee on Climate Change
1. The graphs in your progress report show
a gap between the "required path" for emissions and
"extrapolation" emissions projections out to 2022. Your
report acknowledges that you are only in the second year of the
first budget period. What is the range of the extrapolated projected
emissions in Figure 1 (page 14) for 2022? (What, for example,
is the range of projected emissions lying within a 95% confidence
interval around your central 2022 projection?)
There is no range for the extrapolation: this
simply takes the previous five years' performance and projects
forward at the same rate of progress. The point we were trying
to make was that, based on past experience and our analysis of
current incentives, there is a significant risk of policy failure.
An alternative approach is to set out a range of emissions projections
based on varying assumptions about fossil fuel prices, GDP growth,
policy delivery (eg as in the Low carbon transition plan or our
December 2008, report Building a Low Carbon Economy: the UK's
Contribution to Climate Change). However, this approach masks
the need for a step change given that it assumes policy is successful
at unlocking emissions-reduction potential.
2. What assessment have you made of the feasibility
of achieving the emissions reduction targets in terms of engineering
capacity, industrial capacity or the skills base available or
likely to be available in the engineering community?
Our focus has been the need to put in place a framework
to improve the low-carbon investment climate. Our assumption has
been that given such a framework, the supply chain will adjust,
possibly aided by an active industrial policy (eg to address any
skills shortages). Going forward, we will monitor supply chain
capability in our annual reports to Parliament. In our October
2009 progress report (ie Meeting Carbon Budgets: the Need for
a Step Change), we highlighted a particular need to focus on monitoring
of supply chain capability in wind and nuclear power generation
and solid wall insulation, and the need to set out an ultra low-carbon
vehicle industrial strategy if the UK is to become a major producer
in this market.
3. In its Progress Report, the Committee on
Climate Change's scenarios include a 35% reduction in emissions
in residential buildings by 2022 compared to 2007 figures. What
assessment of costs have you made of your recommendations on whole-house
and street-by-street approaches? To what extent are these approaches
different to what the Government set out in its Low Carbon Transition
Plan?
The assessment of costs for improving energy efficiency
of the residential stock is set out in our 2008 report and a supporting
technical paper available on the CCC website (Energy End Use Technical
Annex). Updated estimates of the cost associated with solid wall
insulation are set out in our 2009 report. This report includes
a range for annual investment costs for residential energy efficiency
improvement. Our analysis suggests that the range of energy efficiency
measures together save costs (ie energy bill reductions more than
outweigh up-front investment costs. See, for example, chapter
12 of our 2008 report).
4. In your progress report, you present projected
emissions which you compare with reductions needed to meet the
carbon budgets. To what extent do the figures you report take
account of offset credits?
Projected emissions are compared with the Interim/Intended
budget trajectories in the case of GHGs, and Extended/Stretch
Ambition scenarios in all other cases. The Interim budget is to
be achieved through domestic emissions reductions. The Extended
Ambition scenarios are consistent with meeting the Interim budget
through domestic action. Intended budgets could be achieved either
through implementation of measures in the Stretch Ambition scenario
or purchase of credits.
5. Have you done any research into the extent
to which price support subsidies for electric cars might simply
be absorbed in the profit margins of the car-makers, who perhaps
then would not try as hard to deliver new lower-cost technologies
(like batteries)?
Our assumption is that there are a sufficient number
of electric car models due to come to market in the UK and elsewhere
that competitive pressure will drive battery innovation/cost reduction.
We will monitor closely battery costs in our annual reports to
Parliament.
6. The Low Carbon Transition Plan includes
"departmental carbon budget" (p218), which include relatively
small budgets for the Treasury and HM Revenue & Customs. To
what extent do you think these Departments should shoulder a greater
share of the departmental carbon budgets, in view of their ability
to influence emissions performance across Whitehall through spending
and tax policies? How, if at all, would you like to see these
Departments have greater accountability for Government-wide emissions
performance?
We have not been asked to consider the governance
framework for budget delivery. We would be happy to consider departmental
budgets if requested via the process set out in our Framework
Document (ie governance agreement signed with the UK Government
and devolved administration governments).
7. In your Progress Report, you set out a
new ambition to track policy implementation and Government progress
against key milestones. Do you have the capacity and resources
to do this tracking work? To what extent will you be dependent
on external sources for data and analysis?
We currently have the resources to undertake required
monitoring together with other tasks requested by the UK Government
and the devolved administration governments. We have a very challenging
work programme over the next year (as set out at the back of the
2009 report—this will be our busiest year yet) and would
struggle to deliver this with a lower level of resourcing.
8. What in the Committee's view should the
Infrastructure Planning Commission do to ensure that National
Policy Statements reflect current overall UK emissions reductions
targets? To what extent should NPSs address the need to deliver
prospective new targets post-Copenhagen or other potentially required
emissions reductions goals in the future?
The Committee has not considered National Policy
Statements. With this caveat, our analysis suggests that the investment
profile is very similar to meet both Interim and Intended budgets
(eg the path towards power sector decarbonisation is the same
in either case). It is not clear, therefore, that National Policy
Statements should include a post-Copenhagen contingency.
4 November 2009
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