4 The Carbon Plan |
39. The Carbon Plan was published initially as a
draft in March 2011, taking into account the first three carbon
budgets. The Government will publish an updated 'final' Carbon
Plan in November to fulfil its commitment under the Climate Change
Act to set out its policies and proposals for meeting the carbon
budgets. This will
take into account the fourth carbon budget and include details
of quantitative indicators against which progress will be monitored.
The Carbon Plan replaces the previous Government's UK Low Carbon
Transition Plan, published in 2009, which set out measures
to meet the first three carbon budgets.
The Committee on Climate Change plans to assess whether the Carbon
Plan provides adequate policies to meet the fourth carbon budget
and we have not sought to duplicate that work.
The Plan as an aid to managing
40. It is difficult to assess whether the policies
in the draft Carbon Plan are likely to deliver the carbon budgets.
The Plan pulls together existing policies in Departmental Business
Plans, including on electricity market reform, a carbon floor
price, funding and policies to support development of technologies
and new markets, together with a number of new initiatives (e.g.
a commitment to publish a strategy for electric car infrastructure).
The Committee on Climate Change's Third Progress Report,
published after the draft Carbon Plan was published, continues
to call for a 'step change' in the pace of emissions reduction.
The CCC explained that that would require new policies, including
'approaches to energy efficiency improvement in residential and
non-residential buildings, consumer behaviour change in transport,
and more widespread use of carbon-efficient practices on farms'.
In a similar vein, the Government noted that 'meeting the fourth
carbon budget will mean developing current and new policies and
measures to ensure a greener and more energy efficient economy
with better insulated homes, more power from low carbon sources,
and more of us driving electric and low carbon vehicles'.
However, the Government has concluded that 'meeting the fourth
carbon budget requires no new policies this Parliament.
We questioned the Secretary of State on how the Carbon Plan will
be updated. He told us: "I hope it is not going to be very
different from the draft Carbon Plan that is out there, but the
objectives will be agreed and signed up to with the deadlines
for each of the departments".
41. The Carbon Plan aims to 'enable the Government
to transparently and effectively manage the transformation of
the economy and our way of life' by setting out 'specific practical
actions across government, month by month, department by department'.
Some witnesses questioned whether enough information was provided
in the draft Carbon Plan to enable this. WWF believed that the
previous Low Carbon Transition Plan offered a more robust
basis for monitoring and evaluating progress than the draft Carbon
Plan, providing 'considerably more data and analysis' than the
draft Carbon Plan, including expected carbon savings each year
and from each broad sector of the economy and for the main policies
and measures involved.
EEF questioned whether the Carbon Plan should be called a 'Plan'
If we accept that the definition of a 'Plan' is a
detailed scheme for reaching an objective, then the Carbon "Plan"
fails to achieve this. It makes no effort to quantify what amount
of [greenhouse gases] each scheme, policy and regulation is predicated
to reduce. Neither does it set out whether Government has looked
at alternatives to achieve the [the UK's Climate Change targets].
42. Departments must consider the change in greenhouse
gas emissions from new policies as part of the Impact Assessment
process. The Committee
on Climate Change has developed a set of indicators and milestones
against which it monitors progress on particular initiatives for
reducing emissions; for example on cavity wall insulation, renewable
power generation, electricity market reform and residential energy
CCC's Third Progress Report in June 2011 noted that performance
so far against its indicators and policy milestones had been mixed.
The CCC plans to review the Government's strategy for delivering
the fourth carbon budget against its indicator framework in June
2012. When we
questioned the Secretary of State as to whether the final Carbon
Plan would include quantified impacts, he was very cautious:
The fourth carbon budget is meant to be a credible
response, so that will involve making stabs at numbers. Again,
I would caution ... about thinking that these things are more
precise or more accurate than they are, and when you are dealing
particularly with a period as far away as 2023 or 2027, when there
can be all sorts of major changes in technology, which we do not
know about as yet, these are the best guess we have at the time,
and I would certainly not want to put a lot of weight on them.
If you think back to 20 or 30 years ago and the enormous technological
changes that have taken place, the internet and so forth, I think
that makes sense.
43. As well as a lack of quantitative emissions data
in the Plan, the ambition underpinning the policies and expected
outcomes is not specified. For example, the Committee on Climate
Change recommended a 'radical' decarbonisation of the energy sector
by 2030 in order to put the UK on the path to meeting the 2050
target, with carbon intensity cut from today's level of around
to around 50 gCO2/kWh
in 2030. The Government's
plans to deliver this decarbonisation, however, models a carbon
intensity of 100 gCO2/kWh.
The Energy and Climate Change Committee made recommendations that
the Electricity Market Reform White Paper set out an indicative
carbon intensity pathway for the power sector to 2030, to deliver
a 40-60gCO2/kWh carbon intensity in electricity generation by
2030. The draft
Carbon Plan has provided no data on carbon intensity, and no
mention of the Government's ambition in this area.
44. There are uncertainties about the exact future
level of global warming and its consequences are inherently uncertain.
Coupled with uncertainties over future technological developments,
costs, the strength of the economy and the availability of capital
for investment in new low carbon technologies, it is impossible
to set out the precise mix of different technologies that will
deliver a particular carbon budget.
The Government acknowledged this uncertainty in its Impact
Assessment on the fourth carbon budget, stating that 'if the underlying
assumptions turn out to be significantly different from those
forecasted, emissions projections, abatement potential and costs
could be higher or lower than anticipated'.
The Grantham Institute were concerned that the draft Carbon Plan
did not reflect this acknowledged uncertainty by setting out a
risk management strategy to achieve the carbon budgets and called
for this to be addressed in the final Carbon Plan.
45. It is difficult
to assess whether the policies in the draft Carbon Plan are likely
to deliver the carbon budgets. Some
policies in the Plan are yet to begin to be implemented. The final
Plan should clearly identify where new policies, not currently
listed in the Plan, will need to be added to deliver the carbon
a baseline quantification of the emissions reductions expected
from each policy in the Carbon Plan, it is not possible to conclude
whether the Plan will deliver the necessary emissions reductions.
We accept that there are uncertainties associated with such quantifications,
but the Carbon Plan could be amended to include indicative emissions
reductions for each policy as impact assessments are undertaken.
The final Plan should include indicators, perhaps reflecting those
developed by the Committee on Climate Change, through which progress
in delivering the Plan, but also more importantly the scale of
emissions reduction required, can be monitored.
47. In the final
Carbon Plan the Government should set out its risk management
approach for ensuring policies deliver the overall emissions reduction
required to meet the carbon budgets. This should include how it
plans to monitor changing estimates of emissions reductions, utilising
the Committee on Climate Change's annual Progress Reviews
to focus its own review of those policies that are
not delivering the emissions reductions forecast.
Departmental incentives and accountability
48. Under the 2009 Low Carbon Transition Plan,
departments were each assigned a share of the carbon budgets based
on the economic sectors within their sphere of influence. These
Departmental Carbon Budgets were approximate, but were intended
to 'give departments a stake in reducing emissions from a given
sector' and encourage 'departments to recognise the range of economic
sectors their policies influence and encourage collaborative work
within the eight sectors [of the economy] to reduce emissions'.
Departments were to be required to produce a Departmental Carbon
Reduction Plan setting out the actions they planned to take to
reduce emissions in their sectors, as well as from their own estate
and use of transport.
49. In reviewing these arrangements after the election
in 2010, the Government found that departments were held accountable
for 'things that were not precisely measurable and that they could
When we questioned the Secretary of State about why Department
Carbon Budgets were abandoned, he told us:
... we have a view that getting excessively involved
in quantitative planning is really not very sensible given the
flexibility and uncertainty around technological solutions. ...
the idea that we literally divvy up the overall carbon budget
between Departments and local authorities, and say, "We want
you to meet this." A lot of the instruments are simply not
at that level because the uncertainties are very great ... I think
it is just not very sensible and the last time I came across a
system that was going to be that interventionist and pernickety
was when I visited the Soviet Union ...
DECC considered that Departmental Carbon Budgets
created a 'perverse incentive' that 'did not create the right
incentive for departments to come forward with policies and measures
aimed at reducing emissions, as doing so would increase a department's
level of accountability for emissions reductions'.
50. We find
the Government's reasons for abandoning the pilot Departmental
Carbon Budgets regime unconvincing, not least because the Government
has agreed an emissions monitoring role for local authorities
which appears to closely resemble the 'spheres of influence' approach
of the previous Departmental Budgets (paragraph
54). Any 'perverse incentives'
found by DECC, it seems to us, might be eliminated by explicitly
making departments responsible for emissions reduction outcomes
rather than delivering initiatives, and leaving it to them to
find the means to deliver those outcomes. Departmental Carbon
Budgets could provide a useful way of understanding the quantum
of effort required by each department and provide a way focusing
departments' policies in their sphere of influence on their emissions
reduction impacts. The risk of the approach taken in the draft
Carbon Plan is that there is no real incentive to seek out further
initiatives if those listed in the Plan do not deliver all that
is expected of them. The Government should consider how incentives
for departmental action could be built into the final Carbon Plan.
51. The draft Carbon Plan envisages departments being
held accountable for delivery of carbon budgets 'through a framework
of regular monitoring and reporting against their actions and
indicators of progress'.
The Government will publish quarterly online updates on progress
against the Carbon Plan which will show whether it has met the
milestones set, and if not what corrective action it will take.
The Government will also set out more detailed updates by sector
in its response to annual progress reports by the Committee on
The Aldersgate Group suggested that an independent body, such
as the CCC, monitoring progress against the Plan and linking the
achievement of targets to annual performance reviews of senior
civil servants would improve delivery.
We questioned the Secretary of State about the levers he had available
if departments were not delivering on the Carbon Plan. He told
There is no power to enforce. The whole system is
remarkably, surprisingly consensual ... Inevitably, when you get
disagreements, as you inevitably do, they tend to be resolved
by the centre, by the Cabinet Office, and the Prime Minister ultimately
has to get involved if it is important to get a resolution ...
I think the fact that the Prime Minister is committed, and the
Deputy Prime Minister is committed, is a really important guarantee
that we are going to deliver on this.
welcome the support for the Carbon Plan at the highest levels
of the Government. Nevertheless, given the importance of delivering
the carbon budgets, the final Carbon Plan should make it clear
exactly how departments will be accountable for their performance
against the Plan.
Role of local authorities and
53. The 2006 Local Government White Paper introduced
a new performance framework for local government, with National
Indicators supporting Local Area Agreements. Local authorities
were required to report their performance to Government annually
against 35 indicators selected locally (from the 196 available).
The two climate change National Indicators were selected by two-thirds
of local authorities.
In October 2010, DECC published data on emissions by local authority
area, assigned to them on an 'end-user basis',
to help track progress against the NIs.
Since 2007, emissions have decreased in 333 local authorities
(77%) and increased in 101 (23%). The Government has now abolished
Local Area Agreements and National Indicators in line with its
localism agenda. From April 2011, local authorities will provide
Government with a more 'streamlined' set of data.
54. The Minister for Climate Change told the House
in March 2011 that the Government had no plans to introduce carbon
budgets for local authorities; instead a voluntary approach would
be adopted. Later
that month, a voluntary and non-legally binding memorandum of
understanding (MOU) was signed by the Secretary of State for Energy
and Climate Change and the Local Government Association on how
they will work together to reduce carbon emissions at a local
level, including to meet climate change, fuel poverty and renewable
Progress against this MOU was to be reviewed annually and a report
produced jointly by DECC and the Local Government Group by the
end of May each year. In addition, the MOU will be reviewed
at the end of each national five-year carbon budget period - starting
in 2013 (for 2008-12) - to 'evaluate the success of the MOU in
making progress in meeting climate change mitigation and related
objectives'. Emissions from local authorities' own estate and
operations and local homes, businesses and transport within local
authority control and influence will be covered by the MOU. This
appears to contradict somewhat the approach now being followed
in Central Government where Departmental Carbon Budgets encompassing
departments' wider sphere of influence have been abandoned (paragraph
55. Friends of the Earth believed that a voluntary
approach to local action on climate change had not delivered the
action needed, noting that less than a third of councils had voluntarily
set any kind of medium-term target to cut emissions in their local
area. It recommended
that the Committee on Climate Change should advise local authorities
on what they need to do 'to play their full role in national carbon
budgets' and councils should be required to produce a local climate
The CCC has stated that it could advise local authorities on developing
local carbon budgets, if formally tasked by the Government to
do so, at a cost of £100,000.
The Government was against a top-down approach, however, favouring
local decision-making and accountability.
The Communities and Local Government Committee has concluded that
with the demise of the Audit Commission there will be a lack of
comprehensive and consistent data on
which authorities can be compared,
localism will require a strengthening of local
The Secretary of State highlighted a need for local authorities
to be able to influence emissions in their areas and be accountable
for their actions.
DECC officials told us that:
You have to align power with responsibility, and
if you take the key behaviour changes we wantwe want car
manufacturers to build different types of cars, builders to build
zero-carbon homes, energy companies to save energy and build low-carbon
plantswe should force the behaviour changes on those particular
actors, and that is what we are doing through
EU vehicle emissions standards
or the EU ETS or electricity market reform. What we want local
authorities to do is play a facilitative role to enable, to convene,
but I don't think we should hold them to account for things they
welcome the commitment to set out an approach for monitoring emissions
reductions at a local level, reflecting local circumstances and
potential for emission reductions. A voluntary approach will not
be enough, however, to ensure that all local authorities make
a full contribution to emissions reduction. Local authorities
should be required to set emission reductions targets. The Government
should task the Committee on Climate Change with supporting local
authorities in setting such targets, and the Committee should
be charged with monitoring progress against those targets.
57. An annual
review of performance by local authorities should be submitted
to Parliament by Ministers, to present as full a picture as possible
of emissions reduction performance.
58. Measuring and reporting emissions can enable
businesses to manage better the risks to their business and can
act as a tool for embedding sustainability in a company. Although
not enough to drive emissions reductions in itself, measuring
emissions is an important first step, providing an understanding
of the sources of emissions and then identifying where and what
to tackle. At
present, measuring and reporting emissions is not done consistently
by businesses. Some Government schemes already require some large
businesses to measure and submit details of their emissions.
Separately, some businesses report their emissions as part of
the environmental information in the directors' report in their
Annual Accounts. There are also voluntary initiatives that aim
to capture information on emissions from businesses, such as the
Carbon Disclosure Project. The Government
has produced guidance for businesses wishing to report their emissions.
59. The Climate Change Act requires the Government
to consider strengthening the reporting of emissions by businesses.
The Government must make regulations by 6 April 2012, under the
Companies Act 2006, requiring the directors' report of a company
to include information about greenhouse gas emissions, or else
to lay a report before Parliament explaining why no such regulations
have been made.
The Government consulted earlier this year on options to promote
more widespread and consistent emissions reporting. 
The Government is considering its response and will make an announcement
in the Autumn.
In order to aid transparency
and illustrate the contributions that businesses are making, and
need to make, to help tackle climate change, we recommend that
the Government should introduce mandatory reporting by businesses
at the earliest opportunity.
89 Climate Change Act 2008, sections 13 and 14; HC
Deb, 17 May 2011, col 176; Department of Energy and Climate Change,
Business Plan 2011-15. Back
Ev 26 Back
HM Government, The UK Low Carbon Transition Plan - National
strategy for climate and energy, July 2009. Back
Committee on Climate Change, Meeting Carbon Budgets - 3rd
Progress Report to Parliament, June 2011, page 32. Back
Committee on Climate Change, The Fourth Carbon Budget - Reducing
emissions through the 2020s, December 2010, page 146. Back
Ev 26 Back
HM Government, Implementing the Climate Change Act 2008: The
Government's proposal for setting the fourth carbon budget,
May 2011. Back
Q 27 Back
HM Government, Carbon Plan, March 2011, pages 10 and 11. Back
Ev w24 Back
Ev w1 Back
Committee on Climate Change, Meeting Carbon Budgets -
the need for a step change, October 2009. Back
Meeting Carbon Budgets - 3rd Progress Report to
Parliament, op cit, page 32. Back
Q 23 Back
The Fourth Carbon Budget - Reducing emissions through the 2020s,
op cit, page 33. Back
Electricity Market Reform White Paper 2011. Back
Energy and Climate Change Committee, Fourth Report of Session
2010-12, Electricity Market Reform, HC 742. Back
The Fourth Carbon Budget - Reducing emissions through the 2020s,
op cit, page 60. Back
ibid, page 22; Ev w31 Back
Ev 26 Back
Ev w31 Back
HM Government, The UK Low Carbon Transition Plan - National
strategy for climate and energy, July 2009; HM Government,
Climate Change: taking action, March 2010. Back
Ev 26 Back
Q 26 Back
Ev 26 Back
HM Government, Carbon Plan, March 2011. Back
Ev 26 Back
Ev w9 Back
Q 29 Back
See: http://www.idea.gov.uk/idk/core/page.do?pageId=9422191 Back
End user basis: emissions from energy production are allocated
according to where energy is actually consumed by householders
and businesses, rather than where the source of the energy produced
is located. The remaining emissions are assigned to local areas
on the basis of other local information such as traffic, population,
employment and data on household fuel types. Back
HC Deb, 13 October 2010, col 21WS. Back
HC Deb, 8 March 2011, col 970W. Back
Memorandum of Understanding between the Local Government Group
and the Department of Energy and Climate Change, 9 March 2011,
see http://www.lga.gov.uk/lga/aio/17310345; LGA website, see:
Ev w37 Back
Unpublished correspondence between Lord Turner and Chair. Back
HC Deb, 17 May 2011, col 187; Q 30. Back
Communities and Local Government Committee, Fourth Report of Session
2010-12, Audit and inspection of local authorities, HC
Communities and Local Government Committee, Third Report of Session
2010-12, Localism, HC 547; Q 30. Back
Qq 26, 50, 56 Back
Q 50 Back
Department for Environment, Food and Rural Affairs, The contribution
that reporting of greenhouse gas emissions makes to the UK meeting
its climate change objectives: A review of the current evidence,
November 2010. Back
EU Emissions Trading System, CRC Energy Efficiency Scheme, Climate
Change Levy agreements. Back
As required by section 83 of the Climate Change Act; Department
for Environment, Food and Rural Affairs, Guidance on how to
measure and report your greenhouse gas emissions, September
Climate Change Act 2008, section 85. Back
Department for Environment, Food and Rural Affairs, Measuring
and reporting of greenhouse gas emissions by UK companies: a consultation
on options, May 2011. Back
HC Deb, 6 September 2011, col 374W. Back