Energy and Climate Change CommitteeMemorandum submitted by Bio regional

1. Some data highlighting the growing carbon-gap between UK production and consumption of carbon emissions.

Suggest contrast the figures as set out by Defra, WWF and Christian Aid. The former (Defra) measures emissions within the UK. WWF (Counting Consumption, 2006)1 measured consumer emissions. Christian Aid (Coming Clean: Revealing the UK’s True Carbon Footprint, 2007)2 considered the impact of considering emissions which relate to UK economic growth, which includes repatriation of emissions associated with UK businesses that return profit to the UK. The UK’s overall consumption-based footprint is larger than the Defra measure of CO2 emitted in the UK, and is still increasing.

This is reflected in the Capital Consumption Report (BioRegional, 2009)3 which analyses how London could widen its climate change action plan from CO2 emissions in London (production) to the total CO2 footprint of Londoners (consumption). London’s consumption footprint is over twice as large, rising 19% to 330 Mt CO2 from 1990 to 2003, while the production of CO2 in London fell by 8.5% to 161 Mt CO2 over the same period.

In the same way as Richard Murphy's research indicates a £120 billion tax gap in the UK, the above figures set out a growing CO2 emissions reporting/responsibility gap. Globalisation of finance, but national/regional (EU) carbon pricing, legislation and other financial incentives make it cost-effective for the UK to relocate manufacturing overseas - saving money and tax, saving CO2 emissions and reporting - but returning financial and consumption benefits to the UK.

In 2002, under the implementation plan of the World Summit of Sustainable Development in Johannesburg, the UK and other developed countries committed to decouple carbon emissions from economic growth. This led to the formation of the Sustainable Production and Consumption Plan4 but this does not appear to have impacted upon energy and climate impact measurement or reconsidering how this might lead to a widening of actions in the pathway to a low carbon economy.5

We urge the Energy and Climate Change Committee to require the full consumption and economic-benefit carbon footprints of the UK to be reported and published alongside the current Defra production footprint, for the UK’s carbon reduction commitment to plan and take responsibility for these wider footprints to be reduced, and in doing show demonstrate leadership in the 2002 commitment made to decouple carbon emissions and other environmental impacts from economic growth.

2. The focus on consumption should include consumption (rather than just direct CO2 production) by corporations, including their procurement. This extends the consideration of a consumption-led approach beyond individuals.

The focus of carbon footprinting tends to be on personal emissions and direct emissions by corporations and the public sector. This is termed scope 1 and scope 2 emissions and tends to exclude scope 3 emissions,6 which is embodied carbon in products. This means that our current process tends to exclude procurement and supply-chain compliance (such as proposed by Sig Sixma7 in big businesses and by the flexible framework as best practice in the public sector,8 as set out in the Sustainable Procurement Task Force report to government in 2007).9

This has the effect that shared responsibility is rarely considered in corporate or public sector decision making with respect to carbon. For example, responsibility for carbon in the construction sector is disaggregated with product manufacturers responsible for their emissions, and construction firms for on-site energy use (but only through a voluntary agreement of the larger firms,10 and no action amongst SMEs). This means that at the point of decision making (planning decision, outline design, detailed design) and procurement carbon is not a consideration. Planning decisions may have an implicit requirement to minimise carbon (see climate change supplement to PPS1)11 but this is not reflected in decision making.

One way of doing this would be to require full scope 1, 2 and 3 reporting for all major emitters, and business sectors, so that these sectors are required to set out how they will reduce emissions by 80% by 2050 (to inform business strategy) and what public legislative/incentives are required to create the level playing fields to enable this to happen. One example is the construction industry. Although this is responsible for at least 10% of UK emissions,12 the government's current Strategy for Sustainable Construction13 has no targets for either measuring or reducing this total.

A much cited reason to avoid this approach, which is to focus on decision-making (which means that it is delegated up procurement supply chains, but the responsibility is retained by decision-making at all levels, is that this might lead to double counting. Instead it might make the disaggregation of carbon emission data easier. If all companies reported scope 1, scope 2 and scope 3 emissions then all could take full responsibility for their total emissions, and the ways in which these different categories of emissions computed would allow the total emissions, or cumulative build-up of emissions along a supply chain, or within a sector based on resource-based footprinting to be visible, so able to be planned to be reduced. Also, this avoids the tendency for emissions due to trading to be discounted in current approaches. International trade tends in goods tends to lead to disagreement (eg Copenhagen climate talks) as to whether emissions are the responsibility of the producer OR consumer, while ignoring the emissions due to transport of goods and people between countries. It is possible to share transport emissions between countries (eg 50% of emissions of each flight/shipping movement allocated to each airport/port). Likewise, it is possible to choose to share emissions between supplier and consumer. However, if carbon emissions reduction is to be targeted (see section 5 below) then consideration to a “consumer-pays” approach should be considered. Thus, if a product travels further and is produced in a less energy efficient manner (eg using coal-fired electricity in China rather than hydro-power in the UK) this should be reflected in the product carbon footprint. Locating the footprint with the consumer allows the consumer to choose based on carbon emissions. If it is located with the producer then the consumer relies on the carbon of production to be limited through global regulation, which does not exist (and was excluded from many resource extraction/global manufacturing companies in the Kyoto agreement, which limited curbs on climate emissions to Annex 1 countries).

We urge the Committee on Energy and Climate Change to consider how businesses and public sector/NGOs can take full account of their carbon emissions as consumers, including procurement and capital expenditure decisions.

3. Measurement of Embodied Carbon - source data needed to be validated and approved by government.

Most carbon calculators which extend from scope 1 and 2 to include product embodied carbon in the UK use data produced by Craig Jones at Bath University in his Inventory of Carbon and Energy.14 In comparison Defra only published figures which relate to direct (scope 1 and 2) emissions.15 This has been updated to take on board industry confirms, but is unregulated, is not rigorous with regard to LCA boundaries and international data/location of product. Neither does it consider the impact of depletion of ecosystems (eg deforestation, mining of rare earth metals) on climate change, or extend from materials to set out embodied carbon of the full range of consumer products used by individuals, public sector and business in the UK. As a result of the lack of data for bottom-up, resource-based calculations much carbon footprinting analysis relies on “input-output data” (such as by the REAP database produced by SEI), which breaks down overall emissions based on financial data. However, this approach directly “links” economic impact to carbon emissions, so does not enable any exploration of how these two might be decoupled, as we transition to a zero carbon future, with a sustainable economy. We need to remove commercial confidentiality constraints on sharing of carbon impacts on product data so we can better measure and therefore manage our carbon reduction plans nationally.

We urge the Energy and Climate Change Committee to commit the government to widen its conversion factors to include materials and a full range of consumer products to enable all consumption emissions to be calculated and compared with a common dataset, updated – and linked via input-output data to reflect overall UK consumer emissions.

4. Much embodied carbon in the UK is imported and traded, and is not currently counted in the UK production-based carbon footprinting. But as well as counting it, the relation between embodied carbon (scope 3) spend and subsequent (scope 1 and 2) direct/purchased energy consumption should be clearly explored. Examples of how increased capital consumption of embodied carbon leads to downstream/ongoing carbon emissions and energy use are as follows:

Spending 56-70 T CO2 to build a new house.

Spending 4-9 T CO2/m of new dual carriageway (not including associated structures) tends to encourage more transport movements, which have CO2 emissions).

Spending carbon on a new airport building or runway leads to more flights.

Spending on a new car manufactured in the UK is likely to increase miles driven.

Spending money on a larger TV, or additional ICT will increase electricity used.

There is a need to consider how the additional CO2 emissions of consumption over production (embodied CO2 of what we build and buy) is both considered in our planned responsibility carbon footprint that we need to reduce, and also how this currently tends to drive up operational emissions across all sectors (eg building heating, electricity, transport, waste through packaging and built-in-obsolescence).

Exceptions to do this could be termed “development towards sustainability” where scope 3 emissions lead to reduced scope 1 and 2. Home retrofit is an example where this could apply - by making improvements to existing housing stock, insulation is improved and home energy use falls. But in the past retrofit (such as the enveloping programmes of the 1980s)16 did not set out to reduce carbon emissions, but fuel poverty. In fact, since 1971 to 2007 carbon emissions in UK households have increased in line with housing numbers, with the total per house remaining around the same, instead leading to the average room in the average house in the UK being 7C warmer than in 1971. Therefore, retrofitting (previously called insulation, enveloping and introducing central heating) have supported increased consumption overall, rather than reduction in carbon emissions. This, together with the trend in hybrid car drivers travelling further, resulting in increase rather than reduction in overall CO2 emissions is called the Rebound Effect (see Sorrell, Energy Efficiency and Sustainable Consumption, 2008).17 This book also highlights how complete rebound has occurred with increased overall CO2 emissions due to lighting and computing, even as both have become more energy efficient: the increase in energy efficiency has driven economic growth rather than led to lower levels of energy consumption.

We urge the Energy and Climate Change Committee to propose an SEA is conducted on the way consumption drives up productive emissions.

5. Proposal - Introduction of a Legal Priority Order for Energy and Climate Change.

On 29 March 2011 the UK government enacted the EU Waste Framework Directive, which made the new waste hierarchy a legal priority order in the UK (http://www.legislation.gov.uk/ukdsi/2011/9780111506462/contents). There is currently no similar priority order for carbon emissions reduction. As described by Sorrell (2008) focuses on energy efficiency is likely to rebound and increase CO2 emissions unless consumer (demand) for carbon intensive living is not also curbed.

But UK investment on tackling climate change is increasingly focused on technology. In 2010 Defra’s funding was cut by 40%, while spending on the Technology Strategy Board was increased. Focus on low (eg nuclear) and zero-in-use (eg wind and other renewable) technologies, without associated value and behavior change is likely to drive economic growth and re-bound with higher carbon emissions (which will either partially offset efficiency savings through increased throughput, or generate increased throughput by expanding capital and consumer assets).

Energy and carbon emission reductions can be achieved with technology change. However, globally we are using 50% more resources each year than the planet can sustain (WWF, Living Planet Report, 2010).18 There is a need to ensure technology changes are linked to behavior changes, so both work together to reduce the carbon emissions of consumers (Common Cause, WWF, 2010).19

We urge the Energy and Climate Change Committee to propose a mechanism to introduce a carbon emissions and energy reduction hierarchy for the UK, and associated legislation and incentives so that measures drive down overall reductions, rather than rebound through increased consumption in the UK or overseas.

6. Review Renewable Energy and other incentives – to ensure they consider consumption impacts.

In light of the new Waste Hierarchy, and empirical evidence, that the government might consider reviewing the ROC and other subsidies to make sure that policies aim at increasing renewable energy tend to reduce climate emissions. In particular, generation of electricity from burning waste (and biomass) has an overall negative impact on CO2 emissions, when this displaces reduce/reuse/recycling and sustainable use of renewable resources (timber).

For example, burning timber looks like a good way of reducing the production emissions in the waste sector, but taking a wider consumption focused perspective will note the loss of carbon dioxide through:

Not retaining the benefits of the “already spent” (embodied) CO2 emissions in the forestry and sawmill process, kiln drying, product manufacture and distribution of a timber beam or wooden pallet to a construction site. Reuse saves this carbon dioxide from another product to be made from virgin resources.

Not retaining all of the sequestered carbon in the timber itself, as conversion efficiencies vary from as low as 14% for MSW incineration to 80% for CHP/biomass heating systems. The 20-86% loss is direct CO2 emissions. But reuse and recycling (and some composting) will retain all of this CO2.

Not retaining the resource value and financial value in the product. Focusing expenditure on plant and machinery (which produce CO2) rather than sorting, repair and remanufacture which are lower-carbon per person employed.

Importing timber from overseas means incurring CO2 emissions in forestry and transportation elsewhere and claiming a benefit for those emissions produced elsewhere when they are consumed in the UK. This is not only carbon offsetting, but can act as an increased driver for deforestation as it increases the overall level of timber exploitation globally, which creates a loss in ecosystem quality and global sequestration capacity. It is also increasing the market price for timber in the UK, which further disincentivises the less carbon and resource intensive alternatives of reuse and recycling set out above. This is meeting UK renewable energy targets in a way that increase CO2 emissions. Consumption based CO2 reporting, considering overall emissions is needed to avoid this perverse policy incentive.

The ROC review process undertaken by DECC20 is due to report in late 2011, and is likely to need parliamentary scrutiny. With this in mind the following abnormalities that increase overall (consumption) CO2 emissions are highlighted:

It is inappropriate for new waste incinerators (i.e.pyrolysis and gasification plants) to continue to receive double ROCs: the same level subsidy as offshore wind farms. This subsidy allows consumption impacts to be sustained, to cut production emissions. This is contrary to the new UK waste hierarchy, which argues that the waste hierarchy must be followed as a legal priority order. Therefore, this acts as a perverse incentive against waste reduction, reuse and recycling – which all reduce total consumption CO2 footprint. As a result the current ROC subsidy for domestic incineration (which is in effect a cross-subsidy on commercial incineration as many plants do not restrict their offtake market to MSW) backfires, and increases CO2 emissions in this area. Therefore, the current ROCs subsidies provide perverse incentives that tend to drive expenditure under some PFI agreements [which also receive government subsidy in the form of PFI credits] that go against both:

(i)delivering annual reductions on climate change emissions under the Climate Change Act; and

(ii)results in developments that are not the Best Practicable Environmental Option (BPEO) at the planning stage, which is against the addendum on climate change to Planning Policy Statement 1 and may also fall foul of EIA and/or SEA regulations.

So, it is inappropriate for construction waste that was previously reused and recycled to be incinerated. However, this is incentivized by both the ROC and proposed Renewable Heat Incentive (RHI) subsidies. It has resulted in a reduction of reuse of construction timber (and other products) with a negative carbon impact (See Pushing Reuse, BioRegional, 2009).21

The new EU Waste Framework Directive was transferred into UK legislation in the form of the Waste Regulations (29 March 2011). This requires waste prevention, reuse and recycling to be incentivized before recovery and disposal as a legal priority order. PFI, ROC and RHI subsidies should not lead to investment in energy recovery (eg biomass plant) or waste disposal (eg gasification plant) where material would otherwise be reused or recycled. As reuse does not currently receive any separate subsidy in the UK the level of reuse is generally affected by the market price for virgin material, as this is what it competes against (in contrast recycled aggregate has a small incentive over virgin aggregates due to the aggregate levy). If subsidy for burning biofuels or municipal waste or imported biomass distorts the market price for UK industries such as timber production it may impact our resilience in terms of supply of forestry wood for UK use in the UK, as well as reuse - because of an incentive designed to apply to timber (imports) for burning.

Therefore, as the costs of the forestry and waste sectors will not have changed this could provide greater subsidy for the forestry sector to produce a lower value outcome and reduce employment (energy rather than product from our forests, as well as energy rather than product from our wood waste streams). So, by subsidising the bottom of the waste hierarchy, we have paid money to reduce our sustainability and also to fail to correctly apply the waste hierarchy, which is legal priority order under EU law.

Therefore, we urge the Energy and Climate Change Committee to challenge perverse financial incentives that increase overall CO2 emissions, which seeking to improve waste treatment or generate renewable energy (particularly ROC, RHI and PFI credits). The wider point, is that environmental subsidies need to be looked at systemically rather than in isolation, with energy policy (DECC), industrial and business policy (BIS) and resource management policy (Defra) looked at together, rather than developed in parallel.

Annex

SUBMITTED BY DR. RUPERT READ, READER IN PHILOSOPHY AT THE UNIVERSITY OF EAST ANGLIA AND CHAIR OF THE GREEN HOUSE THINKTANK.

For a period of years, I pursued first David Miliband and then his brother Ed, in the relevant government Departments, seeking to get them to answer the questions that I outlined at the links just below, concerning the crucial issue of embodied emissions and related reasons why Britain’s seeming emissions reductions since 1990 have been delusive:

See http://rupertsread.blogspot.com/2007/10/who-will-lead-on-combatting-dangerous.html

& http://liberalconspiracy.org/2010/05/22/the-miliband-commitment-to-climate-change-is-mostly-just-rhetoric/

As I suggested in my more recent article on this at LeftFootForward (http://www.leftfootforward.org/2010/07/a-green-perspective-on-ed-miliband/ ), one possible way forward with this is for “emissions…to be counted where they originate, in the countries that can potentially control them.” However, I also noted that “Of course…it would…be perfectly possible to exercise significant control over them, if our country were willing, as I believe it should be, to control products’ entry into our borders partly on the basis of their emissions footprint.” (I would urge the Committee to consider this point: that it is not enough to assess emissions on a consumption basis… We should also control what products we import on the basis of those assessments.)

I received no answer from the Milibands to my queries as to the misrepresentation of Britain’s record of emissions-reduction under Labour, until finally I managed to button-hole Ed Miliband in person: as briefly outlined in the LeftFootForward piece referenced above. The Coalition government has a heavy responsibility upon it (1) To be honest in reporting Britain’s record on emissions, which is in reality one of growth, not of reductions, and (2) To change to a system of consumption-based emissions measurement.

My current philosophical work, done in part in co-operation with UEA’s environmental scientists, focuses on the needful effect of our reaching and breaching the social and ecological limits to growth (notably, the limits on the carbon-absorptive capacity of the atmosphere, without dangerous temperature-rise and chaotic climate effects) on our politics and our economy (See eg my recent published academic papers referenced at http://blog.talkingphilosophy.com/?p=3100 .) One crucial moral of this work of mine (and of the current work of my student, Ruth Makoff) is this: That it is disastrous for our chances of maintaining climatic ecological viability that we continue as a society to measure efficiency with reference to minimising labour costs rather than with reference to minimising material throughput (ie minimising ecological impact). This can be swiftly illustrated in a way that is directly relevant to the current inquiry of the Committee:

Very roughly, over the past 20 years Britain has exported a very large amount of greenhouse gas (GHG) emissions to China. These emissions, produced in China and consumed in Britain, are not counted at present in Britain’s GHG emissions figures. They are counted in China’s. When one studies China’s GHG emissions figures relative to China’s GDP and other economic indicators, one finds that the energy- and emissions- intensity of production in China is far greater than that in Britain. In simple terms: Production has moved to China, because of the cheapness of Chinese labour. But, viewed in terms of the global ecological economic efficiency, this is a crazy change to have made, because, though Chinese production is efficient relative to labour, it is inefficient relative to energy and emissions. It is only because the latter are not priced in any remotely-adequate way (to reflect the damage of climate-dangerous emissions, not to mention the using up of scarce hydrocarbon resources), and not rationed or capped at all, that production has moved to China in the first place. It would have been more rational, considered from the point of view of the global ecosystem and the political economy of the world in the context of that limited ecosystem, for much of this production to have remained in Britain (and in the US, etc.), and only for industries which are labour-intensive but NOT energy- or emissions- intensive to have migrated to China.

This massive global irrationality has been concealed from British voters and consumers because of the way in which emissions are counted (in the place of their production rather than of their consumption), because of the fact that they are barely if at all registered on products, because of the fact that they are not controlled at all at point of entry, and because it is convenient for British political elites to downplay this irrational inefficient exporting of emissions (See above for my account of the Milibands’ downplaying of this.) This must change.

October 2011

1 http://www.wwf.org.uk/filelibrary/pdf/countingconsumption.pdf

2 http://www.christianaid.org.uk/Images/coming-clean-uk-carbon-footprint.pdf

3 http://www.bioregional.com/files/publications/capital-consumption.pdf

4 For example see http://www.defra.gov.uk/publications/files/pb13513-ep-scp.pdf

5 http://www.decc.gov.uk/publications/basket.aspx?FilePath=White+Papers%2fUK+Low+Carbon+ Transition+Plan+WP09%2f1_20090724153238_e_%40%40_lowcarbontransitionplan.pdf&filetype=4#basket

6 http://www.ghgprotocol.org/calculation-tools/faq

7 http://en.wikipedia.org/wiki/Six_Sigma

8 http://www.actionsustainability.com/evaluation/flexible_framework

9 http://www.defra.gov.uk/publications/files/pb11710-procuring-the-future-060607.pdf

10 http://www.strategicforum.org.uk/targets.shtml

11 http://www.communities.gov.uk/publications/planningandbuilding/ppsclimatechange

12 http://www.bis.gov.uk/assets/biscore/business-sectors/docs/l/10-1266-low-carbon-construction-igt-final-report.pdf, Figure 2.3.

13 http://www.bis.gov.uk/files/file46535.pdf.

14 http://www.bath.ac.uk/mech-eng/sert/embodied/

15 For example, see http://archive.defra.gov.uk/environment/business/reporting/pdf/110707-guidelines-ghg-conversion-factors.pdf

16 For example, see e.g. http://openlibrary.org/works/OL10745340W/The_City_of_Birmingham_envelope_scheme

17 http://www.palgrave.com/products/title.aspx?pid=353285

18 http://wwf.panda.org/about_our_earth/all_publications/living_p lanet_report/2010_lpr/

19 http://www.wwf.org.uk/wwf_articles.cfm?unewsid=4224

20 http://www.decc.gov.uk/assets/decc/What%20we%20do/UK%20energy%20supply/Energy%20mix/
Renewable%20energy/policy/renew_obs/1_20100331174250_e_@@_RObandingreviewprocess.pdf

21 http://www.bioregional.com/news-views/publications/pushing-reuse/

Prepared 17th April 2012