Progress on Carbon Budgets - Environmental Audit Committee Contents

2  The carbon budgets

6. The carbon budgets are intended to reflect a UK share of the emissions reduction needed to help reduce the risk of dangerous climate change. In this Part we explore whether there is a case for changing the level of the carbon budgets in the light of developments in climate change science and in the international context for action on cutting emissions.

Developments in climate change science

7. The CCC recommended in 2008 that the UK's objective should be to help keep the increase in average mean global temperature in 2100 "as close to 2°C above pre-industrial levels as possible", and the probability of an increase exceeding 2-4°C as low as possible.[14] In order to meet that climate objective, global emissions would have to peak by 2020 and then fall by 3-4% a year. Concentrations of greenhouse gases, measured in CO2-equivalent terms, "would peak at around 500 [parts per million (ppm)] by the end of the century before falling towards 450ppm". The Climate Change Act targets, and their associated carbon budgets, were designed to reflect the UK's contribution to that global climate change objective. [15]

8. We noted in our 2011 report that the UK carbon budgets reflected around a 50% chance of globally exceeding 2°C.[16] In this inquiry, Sandbag—an environmental NGO—argued that the UK's climate change targets were a "disingenuous application" of the international commitment[17] to limit global temperatures to below 2°C.[18] In a similar vein, Professor Kevin Anderson of University of Manchester and colleagues believed that two budgets were emerging—one consistent with the UK's position internationally (limiting the probability of exceeding 2°C to 10%) and the other consistent with domestic commitments (a 63% probability of exceeding 2°C)—each with radically different emission pathways.[19] David Kennedy, Chief Executive of the CCC, told us that the distribution of possible temperature rises needed to avoid dangerous climate change was focused very closely around an increase of 2°C. He was more concerned about keeping the probability of a "catastrophic" 4°C temperature rise, that we are currently on track to experience, to "very low levels".[20] Prof Hansen told us that limiting warming to 2°C should be regarded as "an upper bound" of acceptable warming.[21] Many countries advocate a 1.5°C target.[22] We also heard concerns that the carbon budgets had not been set on a globally equitable basis, and therefore that they were too generous for the UK and other developed countries.[23] Friends of the Earth believed that, reflecting an "acceptable level of risk" (as well as an "equal per capita share" of remaining emissions), the UK should seek to reduce emissions by 80% by 2030 rather than by 2050.[24]

9. When the CCC provided its advice to the Government in 2008, it noted uncertainties in climate change science[25] that could affect the level of the carbon budgets in future.[26] Using evidence from the Met Office, the Intergovernmental Panel on Climate Change and others, the CCC reviews any new research in developing its advice on setting each new carbon budget.[27] The Met Office is a major contributor to the IPCC's seven-yearly Assessment Reports on climate science. The Met Office noted that the modelling used in the forthcoming IPCC Fifth Assessment report[28] could be up to 10 years old, and it was therefore important that the latest modelling results and science were provided to Government "on a continuous basis".[29] The CCC is looking at changes in climate science as part of its review of the fourth carbon budget.[30]

10. There has recently been a heightened focus on two particular areas: climate 'feedback' effects and revised estimates of 'climate sensitivity', which we discuss below.


11. Feedback processes[31] will affect the extent and speed of future climate change.[32] In its 2008 advice on the Climate Change Act and carbon budgets, the CCC stated that some feedback processes, such as the release of natural methane stores from northern wetlands or from the oceans, are "less certain and so are not currently incorporated" into climate models, including those of the Met Office.[33] Aubrey Meyer from the Global Commons Institute was concerned that the Met Office had not included feedbacks in its climate modelling in 2008,[34] which he believed had contributed to the Climate Change Act targets being "inadequate, opaque, prescriptive and misleading". He believed also that more recently some feedback effects had been omitted from the Met Office modelling, including emissions released from warming permafrost[35], loss of albedo reflectivity from the Arctic and a "viral attack" on organisms that contribute to the 'carbon sink' effect of the ocean.[36] To improve transparency, he advocated measuring and budgeting for 'human' emissions separately from 'feedback' emissions.[37] He argued that the feedback effect from melting permafrost made it impossible to secure the eventual reduction in global emissions projected by the Met Office and the CCC.[38] He was unable to put values on all feedbacks,[39] but assessed that carbon budgets should be based on limiting greenhouse gases in the atmosphere to 200ppm.[40] This compared with CO2 levels already reaching 391ppm[41] in 2011 and continuing to grow at 2ppm over the past decade.[42] Earlier this year several monitoring stations measured concentrations of CO2 at 400ppm.

12. Professor Julia Slingo, Chief Scientist at the Met Office, told us that the Met Office had fed a "full earth system model that includes feedbacks associated with the terrestrial carbon cycle" into the IPCC's Fifth Assessment report. Careful judgements were needed about which feedbacks to include in climate models.[43] The Met Office was "very cautious" about the risk of introducing feedbacks processes that "we know are either not well constrained by observation or where the science is not mature enough" or else risk "going into fairyland".[44] The Met Office had not included possible feedbacks from melting permafrost in its climate models, but work was underway to estimate the possible range of emissions from this source.[45] As part of the CCC's review of the fourth carbon budget (paragraph 31), it would carry out some modelling on emissions from permafrost melting,[46] but it was too soon to assess whether the consequential impact on global temperatures would be significant.[47]

13. Aubrey Meyer also questioned the Met Office's modelling of the impact of 'carbon sinks' (which remove carbon from the atmosphere). He believed that adverse feedback effects would be so significant that they would not allow carbon sinks eventually to reduce the concentration of carbon dioxide in the atmosphere.[48] In a similar vein, Dr Mayer Hillman told us that the consequences of rising temperatures and the clearing of rainforests raised concerns about the loss of "sink function".[49] Dr Jason Lowe from the Met Office told us, however, that a "whole range of earth system models of different complexities" demonstrated that when carbon emissions were reduced it was plausible that atmospheric CO2 concentrations would peak before anthropogenic emissions reached zero because of the action of carbon sinks.[50] He told us:

    As we start to reduce the emissions, we have changed the sinks from the present-day value, and we have changed them in such a way that they are able to take up sufficient carbon that the CO2 concentration is able to peak and come down the other side.[51]

The Met Office thought it was prudent, nevertheless, to repeat the assessment of the carbon budgets as new understanding of how the Earth system works becomes available and can be quantified.[52]


14. In December 2012 the Met Office published its revised global decadal forecast,[53] predicting a slower rate of warming in the next 5 years than it did in 2011: average temperatures were likely to be 0.43°C (rather than of 0.54°C) above the long-term average by 2017. Decadal forecasts provide essential information about ocean 'weather' and how it will evolve in the next few years in the context of a globally warming world. They do not tell us anything about long-term climate sensitivity. The Met Office highlighted that the Earth was "expected to maintain the record warmth that has been observed over the last decade and new record global temperatures may be reached in the next 5 years".[54] It also concluded that temperatures will remain well above the long-term average and we will continue to see temperatures like those which resulted in 2000-2009 being the warmest decade in the instrumental record dating back to 1850.[55] The Committee on Climate Change has also commented on the surface temperature findings, noting that other lines of evidence continue to support the high end of the range for climate sensitivity.[56] In March 2013, a comparison of global temperature observations and model simulations[57] showed that increases in surface temperatures since 2005 had been at the low end of the range of projections derived from climate models.

15. Whilst the decadal forecasts are not an indication of climate sensitivity, and surface temperature is one of a several climate indicators (others include ocean heat, sea level, sea ice cover and mountain glaciers), some sections of the press used the publication of the revised decadal forecast to suggest that the sensitivity of the climate to increasing concentrations of greenhouse gas emissions had been exaggerated.[58] Professor Slingo from the Met Office thought that the decadal forecast was "being misrepresented in the media to try to make a story—the decadal forecast "[tells] us much more about natural variability in the climate system" and "very little that relates to climate change per se".[59] Ed Hawkins, who produced the chart of observed global temperatures against climate model outputs, has said that it is incorrect to interpret the result as evidence that forecasts are wrong. Whilst the most sensitive simulations may be less likely, observations have remained within the predicted range and the underlying temperature trend is still rising.[60] Professor Myles Allen of University of Oxford highlighted the high level of accuracy of one of the first forecasts based on climate models.[61] He told us:

    ... the assertion that temperatures have not risen as fast as predicted is simply wrong ... In fact the temperatures of the past decade have been pretty much exactly as was predicted for the decade back in the 1990s ...[62]

Professor Slingo told us that, because the science was complex, the challenge for scientists was to "find ways to make that science accessible without diminishing both the integrity and the importance of the science message".[63]

16. At the heart of the recent controversy is a perceived mismatch between rising greenhouse gas concentrations in the atmosphere—at 2 ppm per year over the past decade—and negligible temperature increases since 1998.[64] This could be explained partly by the lack of a full understanding of 'climate sensitivity'—how the climate responds to higher concentrations of carbon dioxide.[65] The model used in 2008 to provide information for the carbon budgets[66] had a climate sensitivity range of 2.4-5.4°C per trillion tonnes of CO2 emissions.[67] That model, along with others, was considered by the IPCC when it produced its 2007 Assessment Report, which found climate sensitivity was likely to be in the range 2°C to 4.5°C per trillion tonnes of CO2 emissions, with a best estimate of 3°C. It was "very unlikely" to be less than 1.5°C, and values higher than 4.5°C were "not ruled out".[68] There has been some speculation that the IPCC's next Assessment report might revise down its previous estimate of climate sensitivity,[69] although David Kennedy told us that he did not expect this to happen because there has not been a fundamental shift in the science around climate sensitivity.[70] Factors that might explain recent global temperature increases being at the lower end of the forecasts made by climate models include the role of aerosols (which reflect sunlight away), clouds and the oceans, and Sun activity.[71]

17. Professor Myles Allen told us that, while the climate models which predict sensitivity at the "extreme top of the range look less likely", most models were still "consistent with the observations".[72] The Met Office stated that the sensitivity range in its models "falls inside" the range of the newer estimates. Crucially, there was "significant overlap" between those newer climate sensitivity estimates and the range used in the earlier carbon budget analyses.[73] Similarly, Prof Allen did not see the slight revisions to the estimates of climate sensitivity as necessitating a change in the carbon budgets, nor did they "detract from the overall case for [carbon] mitigation":

    If we discover that ... we only get 1.5 degrees of warming per trillion tonnes instead of 2 degrees per trillion tonnes, then it means we have to reduce emissions on average by 1.5% per year instead of 2.5% ... But given that emissions are currently going up ... [at] the order of 2.5% per year, the difference between needing to reduce at 1.5% per year and needing to reduce at 2.5% per year is really neither here nor there as far as climate policy is concerned. They need to come down.[74]

David Kennedy from the CCC told us that there was "not any new evidence" that made the CCC "think differently about climate sensitivity".[75]

18. The carbon budgets are intended to reflect the UK's share of a global effort on emissions reduction with only around a 50% chance of global temperature rises not exceeding 2°C—the threshold widely accepted as a benchmark for dangerous climate change. We are, however, globally on course for temperature rises of 4°C. The default assumption should therefore be that the carbon budgets represent the minimum level of emissions reduction required by the climate change science. Climate models are not yet able to include some potentially significant feedback effects, but continue to be developed, improving our understanding. Since we last reported in 2011, there has been controversy about a mismatch between rising greenhouse gas concentrations in the atmosphere and negligible global temperature increases since the late 1990s, giving the false impression to some that the risk of climate change has been overstated. While the range of likely climate sensitivity may have slightly narrowed, most climate models are still consistent with observations and therefore do not lessen the imperative to take action to avoid dangerous climate change. The Committee on Climate Change should continue to keep the level of the carbon budgets under review to fully reflect the evolving climate change science, and the Government should be ready to tighten these budgets on advice from CCC.

19. The carbon budgets are, however, only in part a product of the climate science justification for emissions reduction by the UK. In practical terms, they are also inextricably linked to international agreement on the rate of emissions reduction needed globally and how that obligation will be shared between states, as we discuss below.

European and international efforts

20. The UK is seen as a world leader on climate change, having influenced other countries to take action.[76] The Government believed that because the "UK contributes only around 1.2% of global emissions", the UK "needs to encourage action from others".[77] Existing voluntary international emissions reduction commitments[78] would produce a trajectory "probably resulting in a 3-4°C rise in the global average temperature by 2100".[79] The Committee on Climate Change believed that an "ambitious and comprehensive global deal" was therefore needed to drive the new policies required to limit the global temperature rise to 2°C.[80] The Government told us that it was "continuing to press for increased action at the international level and considers that the best chance of securing that is through a legally binding global agreement under the UN Framework Convention on Climate Change".[81] At the Framework Convention conference in Durban in 2011, consensus was reached on drawing up a global emissions reduction agreement by 2015, which would come into force from 2020.[82] In 2012, the existing Kyoto protocol was extended to 2020 as a stop-gap.[83]

21. Professor James Hansen believed, however, that a "UN-type" approach to securing global action on climate change did "not have a chance of being effective". He favoured "limited and bilateral agreements" between groups of countries—such as the US and China—who had agreed to have a "working dialogue". This, he believed, would lead to other countries then being drawn in.[84] The Climate Change Minister thought that it was "too early" to look at alternatives to the admittedly "imperfect" UN process to secure a global deal: there was "a glimmer of hope" in current negotiations, which meant that "making a Plan B at this stage would not be helpful".[85]

22. The EU's policy on emissions is set against the backdrop of wider UN work on climate change. It has a long-standing European target to cut emissions by 20% in 2020, relative to 1990.[86] That is less than the effort needed to put the EU on the trajectory to deliver its longer-term objective of cutting emissions by 80-95% by 2050.[87] The EU has agreed, therefore, to raise the 2020 target to 30%, which would be consistent with the reductions needed by 2050,[88] if other developed countries and the more advanced developing nations committed to comparable emission reductions.[89] Similarly, the Government has said that it will tighten the second (2013-2017) and third (2018-2022) carbon budgets as part of any collective European action.[90] David Kennedy told us that such a tightening would address the risk that the Government "sailed along on a path that is not steep enough in terms of emissions cuts to meet the fourth carbon budget".[91]

23. The European Commission is consulting on the development of climate and energy targets for 2030 and intends to publish proposals at the end of 2013.[92] Friends of the Earth wanted the EU to set a target of an 80% reduction.[93] The Government wants the EU to adopt a 50% reduction target for 2030 in the context of a global deal, or 40% without a deal.[94] The Minister told us that the "UK continues to push for a greater ambition both in 2020 and 2030", although he did not want an "unconditional raising" of targets before the completion of international negotiations.[95] The CCC "strongly supported" the Government position because the proposed higher targets were "broadly in line with the ambition" it had suggested in its advice on setting the fourth carbon budget.[96] The Government, however, did not support a proposal for a separate EU renewable energy target because that would compromise member states' flexibility over how they secured a least-cost decarbonisation.[97]

24. We welcome the Government's support for the European Commission's proposal for a higher level of ambition on tackling climate change. The existing EU target of a 20% emissions reduction by 2020 needs to be tightened to 30% to put Europe on a trajectory more likely to avoid dangerous climate change. A 40% or 50% target for 2030 is essential for maintaining momentum across Europe. If the EU moves from a 20% to a 30% emissions reduction target for 2020, the Government must tighten its second and third carbon budgets to make them consistent with the Committee on Climate Change's intended budget levels.

25. Such a tightening would require more policy effort to meet the third carbon budget, as we discuss in paragraph 45. But, as we also discuss below, standing in the way of tighter budgets is a more fundamental barrier caused by the current weakness of the EU Emissions Trading System (EU ETS) and the potential consequences of a Government review of the fourth carbon budget that was triggered by that ETS weakness.

Review of the fourth carbon budget

26. Whilst the EU as a whole was on course to meet the existing 20% emissions reduction target by 2020,[98] a weak carbon price in the EU ETS was providing little incentive to reduce emissions.[99] The European Commission is reforming the EU ETS in two ways—delaying the auction of emissions allowances ('back-loading') and consulting on longer term changes in 2014.[100] The Government "strongly supported" urgent structural reform of the EU ETS[101] (although it was unable to agree with our recommendation in January 2013 that the large 'surplus' ETS allowances that many energy intensive industries had accrued should be offset against any compensation they would get for the impact of the scheme).[102]

27. When in 2011 the Government decided to accept the CCC's recommendation on the level of the fourth carbon budget—the "absolute minimum" level of ambition[103]—it also announced that there would be a review of that budget in 2014. This was "pragmatic", the Government argued, because the precise size of the emissions cap within the EU ETS (which forms the 'traded' part of the budget) was not known at that time. The Government stated in 2011 that the level of the fourth carbon budget was "conditional" on the EU moving to a 30% emissions reduction target for 2020 and that the Government would "revise up" (i.e. loosen) the budget if that would be necessary to align it with the actual EU emissions reduction trajectory.[104] If the UK achieved significant decarbonisation of the power sector, the emissions counted against the carbon budgets would not be the actual emissions but those consistent with the EU ETS cap, so the UK's ability to meet its unilateral carbon budgets would be dependent on the ambition implicit in the EU ETS.[105] The Government was concerned that a generous emissions cap would put pressure on the already challenging non-traded element of the budget. Similarly, Professor Anderson and colleagues believed that this would not be "economically efficient" because the non-traded sector was less carbon intensive.[106]

28. A laxer traded element of the carbon budget could make it necessary to find additional emissions reductions in the non-traded element of the budget, and the UK was already off-track to meet the non-traded element of the fourth carbon budget. David Kennedy contended that more policy effort was needed on energy efficiency improvement, renewable heat across all of the sectors, and transport.[107] The Government's projections of emissions in the December 2011 Carbon Plan show an expected shortfall of 205 MtCO2e in the fourth carbon budget period, "indicating the amount of additional policy effort that would be required to meet the budget", along with "scenarios for bridging an estimated 181 MtCO2e of the shortfall".[108]

29. The Minister told us that, because the fourth carbon budget period (2023-2027) was still a "fair time into the future", the Government would not at this stage set out its detailed policies or technologies to address that gap.[109] It was too early to predict how "two critical factors" might determine whether the targets are met—vehicle emissions and the uptake of low-carbon heat.[110] The Government was not, however, "complacent about the challenge" in addressing the shortfall,[111] and there was a "huge amount of policy work to do".[112] (In Part 3 we look in more detail at the need for new policies to meet the carbon budgets). DECC also noted that the fourth carbon budget period also lay beyond the current time-horizon of the EU ETS, with which the review would have to deal:

    The power sector and industry are capped under the EU ETS and we simply take our share of the EU Emissions Trading Scheme cap as our traded section of the carbon budget. If the EU decides to loosen it or tighten it that will simply be enshrined as our share. We all agree across Government that we need to align the fourth carbon budget traded sector with whatever the EU ETS cap is. The question is when to do that—to do that before we know what the picture is post-2020 or after.[113]

30. The Climate Change Act was "very tightly drafted" to prevent changes to the carbon budgets on "short-term political whim",[114] thereby providing "certainty within which policies and technologies could develop".[115] The carbon budgets can only be amended if there have been "significant changes" affecting the basis on which the budgets have previously been set. Any proposed amendment requires advice from the CCC to be considered and for Parliament to approve it.[116] The then Secretary of State for Energy and Climate Change told us in 2011 that changes to the cap would "automatically" feed through into the carbon budgets and therefore not count as a "significant change" under the provisions of the Climate Change Act.[117] To help bring some clarity, in our earlier report we recommended that the Government set out what sort of 'changes' could therefore sustain a lawfully compliant adjustment in the carbon budgets, but the Government failed to respond to that recommendation allowing confusion to persist.[118]

31. In this inquiry, David Kennedy told us that the EU moving to a 30% emissions reduction target for 2020 (paragraph 22) was "never a premise for the fourth carbon budget" and therefore the fact that it had not happened did not constitute a change in the basis upon which the fourth carbon budget was set.[119] The Government appeared to disagree with the CCC's view, having reached its own "internal position" on having a fourth carbon budget which took account of "European ambition" on emissions.[120] The CCC's review would consider, however, the EU's path for emissions reduction in the 2020s because that was one of the factors it considered in its advice on the fourth carbon budget.[121] David Kennedy told us that the "Climate Change Act is very clear": the review "is for the Committee on Climate Change; it is not for the Government". The CCC would advise the Government on "whether there is a reason or not to change the carbon budget and the Government has to make its deliberations".[122]

32. Regardless of whether the decision on the fourth carbon budget was predicated on the EU increasing its ambition, it appears that the challenge of meeting the traded sector element of the carbon budgets has eased. The UK was not "bumping up against" constraints imposed by the EU ETS;[123] rather the scheme was now too lax to drive adequate decarbonisation (we look at the need for a UK decarbonisation target for the energy sector in paragraphs 54-59). Ravi Gurumurthy from DECC told us:

    Since the last carbon budget was set, the context has changed quite a lot. In particular, given the economic slowdown in Europe, some of the targets have become easier to achieve .... When the CCC recommended [the traded sector component of the fourth carbon budget], that equated to a power sector decarbonisation level in 2030 of about 50 grams [per kilowatt hour]. When we set it, it equated to about 100 grams because already by then the economic slowdown had affected the emissions production. Now, that fourth carbon budget equates to about 200 grams emissions intensity, so ... achieving some of these carbon targets has become slightly easier.[124]

33. RWE npower believed that there were three options to address the issues related to the fourth carbon budget: strengthening the EU ETS cap, planning to deliver greater emissions in the non-traded sector, or moving energy use from the non-traded sector to the traded sector (for example through the electrification of heating and transport).[125] The UK could also choose not to auction a part of its allocation of EU ETS allowances, or remove surplus allowances from the scheme by buying and cancelling them.[126] Sandbag advocated new carbon accounting techniques to mitigate the impact of a weak EU ETS cap.[127]

34. The Government runs a number of risks in opening up the possibility of changing the already-set carbon budgets,[128] including undermining the UK's international negotiating position and working against efforts in Europe to agree an ambitious 2030 target (paragraph 22).[129] David Kennedy told us, nevertheless, that a review of the carbon budgets was "sensible" and would allow new information to be considered.[130] He thought that it was "helpful" to have the review as scheduled because it allowed the opportunity to take stock of what was happening under the auspices of the UN. The CCC will take stock of any knock-on implications for the other budgets of any global deal when it provides its advice on the fifth carbon budget in 2015.[131] Sandbag argued that the review of the fourth carbon budget was premature, being scheduled to take place before decisions were taken at EU level relating to the period covered by that budget.[132] The Government said that it was committed to a review in "early 2014" and it would "look at a full range of options, from preserving the existing budget to revising it".[133] The Minister argued that not going through with the announced review would "undermine confidence in Government policy".[134]

35. Whatever the timing of the review, DECC witnesses suggested that, if the fourth carbon budget were loosened, there would be no relaxation in the traded sector element of the budget because of the risk that that would entail for the prospects of meeting the longer-term decarbonisation targets:

    The fourth carbon budget, if we revise it upwards, would allow us to recapitalise the power sector and build coal in the 2020s, because it would allow us to have up to 300 grams. That is not consistent with our other targets like the 2050 target. You are not going to be able to start a big, aggressive roll-out of renewables, stop and then start again. We are already on a path to over-achieve against the fourth carbon budget in the traded sector.[135]

    ... whether the EU ETS discussions go well or badly, we need to do even more than that to be on a sensible cost-effective trajectory to 2050 because, even in the existing fourth carbon budget, it would assume a plateauing of decarbonisation in the 2020s, which is not sensible.[136]

36. A low carbon price—the result of structural weaknesses in the EU Emissions Trading System and the economic downturn of recent years—means that the traded sector of the UK's carbon budgets (power generation and heavy industry) will be met. But that may bring pressure to bear on the non-traded sector (road transport, agriculture, buildings, waste) which will have to produce further emissions reductions to cover the gap left by the traded sector. But there are too many uncertainties at the moment to justify reviewing and making any change to the 2023-2027 fourth carbon budget. The Government has yet to determine what emissions reductions may be possible from addressing policy initiatives in vehicle emissions, low-carbon heat and other key areas. And it is too soon to be confident about what EU ETS reforms might be possible beyond the scheme's current 2020 horizon. It is also far from clear in what circumstances a 'significant change', required under the Climate Change Act to make a change to previously agreed carbon budgets, can be identified. We recommend that the Government abandon its review of the fourth carbon budget. However, if it is unwilling to take such a step, it should use its response to this report, or its response in October to the Committee on Climate Change's fifth progress report, to (i) commit to not loosening the fourth carbon budget, (ii) identify when it will come forward with key policy initiatives to bridge the non-traded sector of the fourth carbon budget, (iii) state how it plans, through the discussions with the European Commission, to strengthen the EU ETS, and (iv) explain what would represent a 'significant change' to support an adjustment to the budgets under the provisions of the Climate Change Act.

Widening the budgets

Emissions from international aviation and shipping

37. At the time the Climate Change Act was passed, uncertainties about how aviation and shipping emissions would be allocated, measured and monitored meant that only domestic emissions from these sectors were included within the Act's targets. The Government was required to consider inclusion of international aviation and shipping emissions by December 2012, taking into account advice from the CCC.[137] In that advice the CCC recommended loosening the budgets to allow the inclusion of these emissions. This, they argued, would provide certainty and a "more transparent, comprehensive and flexible accounting framework under the Act".[138] The Government deferred a decision on including these emissions, citing uncertainty over the international framework for reducing aviation emissions and particularly their treatment within the EU Emissions Trading System. The European Commission has suspended including this sector into the EU ETS for a year to allow for the possibility of a global system being developed.[139]

38. Although not formally included, the Government argued that the existing carbon budgets (up to 2027) left headroom for these emissions and that the UK was still on a trajectory where the 2050 target included international aviation and shipping emissions. David Kennedy thought that the deferral of the decision on aviation and shipping emissions was "sensible". He said that the CCC would revisit this area when they advise on the fifth carbon budget in 2015.[140]


39. The carbon budgets reflect emissions produced in the UK, and exclude emissions embedded in goods imported from abroad. In 2011 we called on the Government to review the scope for measuring emissions on such a consumption basis,[141] and how that might be worked into the carbon budgets regime.[142] Since then, the Energy and Climate Change Committee and the CCC have looked at this issue.[143]

40. The CCC found that on a consumption basis the UK's carbon footprint had increased over the past two decades so that the UK now had one of the largest footprints in the world. Growth in imported emissions outweighed reductions in emissions produced in the UK. As a result of low-carbon policies, there had been very little emissions reduction from manufacturing moving abroad ('off-shoring'). Nonetheless, the CCC concluded that the size of the UK's footprint was "worrying and will need to be diminished", but continuing to measure emissions on a production only basis remained appropriate as a basis for a global deal and for the UK carbon budgets.[144] David Kennedy told us that the UK had "limited levers" to reduce consumption emissions, and a global climate change deal was the only way of reducing them. He believed it would be difficult to set a 'supplementary target' on these because of difficulties in measuring them accurately and deciding on the level of any targets.[145]

41. The Minister told us, similarly, that it was a "bit premature" to set a supplementary target. Unless the "world changed the way it counted emissions" there "was a huge opportunity for confusion" about who is responsible for reducing consumption emissions. The Government intended to monitor consumption-based emissions and publish outturn data annually. He did not believe that policies for reducing consumption emissions were any different to the policies for reducing production emissions.[146]

42. The UK has one of the largest carbon footprints in the world and the recent increase in emissions embedded in imports has more than offset reductions in domestic emissions. We welcome the Government's commitment to monitor the UK's carbon consumption footprint. In preparation for a global deal on climate change in 2015, inevitably couched in terms of the 'production' of emissions, the Government should re-examine with the Committee on Climate Change the possibility of introducing a supplementary target focused on emissions 'consumption' embedded in imports, and the potential implications of such a target for the industrial strategies recently published by BIS.[147]

14   The Committee on Climate Change noted at that time that "it is no longer possible with certainty, or even with high probability, to avoid this danger zone" and that adaptation strategies should be adopted for temperature rises of above 2°C. Back

15   Committee on Climate Change, Building a low-carbon economy-the UK's contribution to tackling climate change, December 2008 [];  Back

16   Carbon budgets, op citBack

17   2009 Copenhagen Accord. Back

18   Ev w45; see also Ev w36, Ev w19  Back

19   Ev w19 Back

20   Q 86  Back

21   Q1  Back

22   Ev w36 Back

23   Ev w45, Ev 64, Ev w36, Ev w19. We also heard views that the UK has the highest per capita historical responsibility for climate change: Ev w36; Q 18 [James Hansen]. Back

24   Ev w36 Back

25   There were different projections of global warming due to a number of factors, including the natural variability of the climate system and uncertainties in emissions of non-CO2 greenhouse gases and in feedback processes. Also, some 'feedback processes' were not yet incorporated into climate models because they were less certain (such as release of natural methane stores from northern wetlands or from oceans). Back

26   Building a low-carbon economy-the UK's contribution to tackling climate change, op cit. Back

27   The UK's carbon budgets must be set 12 years in advance. Back

28   Expected in October 2014. Back

29   Ev 62 Back

30   Q 131 Back

31   A climate feedback "happens when a change in our climate causes an impact which changes our climate further- a knock-on effect which feeds back into our climate". A negative feedback offsets the prevailing change in climate-i.e. where there is a global warming trend, this would create a cooling effect. A positive feedback increases the change in the climate-i.e. it would add to global warming by creating further heating. See: Back

32   Ev w54, Ev w53  Back

33   Building a low-carbon economy-the UK's contribution to tackling climate change, op citBack

34   Ev 64; see also Ev w39  Back

35   Methane and carbon dioxide. Back

36   Aubrey Meyer also claims that the Met Office's own disclosure of other feedback effects that "they had omitted only occurred after pressure was brought to bear" during the EAC's 2009 inquiry on carbon budgets. Qq 21-22; Ev 64, Ev 105  Back

37   Q 25 Back

38   Ev 64 Back

39   Qq 21-22 Back

40   Q 28; Committee on Climate Change's advise is predicated on emissions peaking at 500 parts per million by the end of the century before falling towards 450 parts per million. Back

41   40% higher than pre-industrial levels. Back

42   Several monitoring stations measured concentrations of CO2 at 400ppm:  Back

43   Q 68 Back

44   Q 68; For an overview of the feedback process that the Met Office believes are understood well, and those less so, see: Back

45   Q 66 Back

46   Q 133 Back

47   HC Deb, 3 June 2013, Col 944W; Q 134 [David Kennedy], Q 67 [Professor Slingo]. Back

48   Q 29 Back

49   Ev w54 Back

50   Ev 102 Back

51   Q 69 Back

52   Ev 102 Back

53   The Met Office publish a revised decadal climate prediction for global temperature at the end of the year. Back

54  Back

55  Back

56 Back

57   Ed Hawkins, NCAS-Climate at the Department of Meteorology, University of Reading. Back

58   "The crazy climate change obsession that's made the Met Office a menace", Mail online, 10 January 2013, []; See also: "The Great Green Con no.1: The hard proof that finally shows global warming forecasts that are costing you billions were wrong all along", Mail online, 16 March 2013, []. Back

59   Q 62 Back

60 Back

61   Met Office's HadCM2 model [Myles R. Allen, John F. B. Mitchell and Peter A. Stott, "Test of a decadal climate forecast", Nature Geoscience, vol 6 (2013)].  Back

62   Q 33  Back

63   Q 56 Back

64   WMO press release:; Hadley Centre/ Climatic Research Unit at the University of East Anglia; David R. Easterling and Michael F. Wehner, "Is the climate warming or cooling", Geophysical Research Letters, vol 36 (2009), L08706, []. Back

65   Q 63. A short term measure of climate sensitivity, assessing the impact of increased emissions over the next 20 years is called Transient Climate Response (TCR). Equilibrium Climate Sensitivity (ECS) is a longer term measure that includes longer term processes such as oceans absorbing heat from the atmosphere. TCR is more useful when looking for short term emissions projections and ECS when considering climate stabilisation. Back

66   First three carbon budgets. Back

67   Equilibrium Climate Sensitivity. Ev 105. Back

68   Equilibrium Climate Sensitivity. IPCC, Fourth Assessment report-Climate Change 2007: Synthesis Report, 2007, []. Back

69   "Sensitive information", The Economist, 20 July 2013, [].  Back

70   Q 131 Back

71   Qq 4,6 [Professor Hansen] Back

72   Qq 33, 40 Back

73   Q 63 Back

74   Q 42  Back

75   Q 131 Back

76   Ev w29, Ev w36, Ev w45  Back

77   Ev 57  Back

78   Under the Copenhagen and Cancun processes. Back

79   Energy and Climate Change Committee, Second Report of Session 2012-13, The road to UNFCCC COP 18 and beyond, HC 88, [].  Back

80   Committee on Climate Change, Reducing the UK's carbon footprint and managing competitiveness risk, April 2013, []. Back

81   Ev 57 Back

82   The United Nations Climate Change Conference, which included the 17thConference of the Parties to the UN Framework Convention on Climate Change. Back

83   At the 2012 Doha Climate Change Conference. Back

84   Q 18 Back

85   Q 162  Back

86   The Committee on Climate Change concluded that the UK's 'share' of the EU 2020 target is reflected in the UK's Climate Change Act target of a 34% cut by 2020. Back

87   Committee on Climate Change, Building a low-carbon economy-the UK's contribution to tackling climate change, December 2008, page 110, []. Back

88   ibid. Back

89   European Commission, Europe 2020: A strategy for smart, sustainable and inclusive growth, March 2010, page 9, []. Back

90   In its 2008 report, the CCC proposed an 'intended' carbon budgets (2008-2022) which corresponded to the UK share of an EU 30% 2020 target.  Back

91   Qq 140, 141; Moving from the third intended budget to the fourth budget "would entail a feasible reduction of 13% over a five-year period", but moving from the third Interim budget to the fourth budget would "require a much more challenging 23% reduction": Committee on Climate Change, The Fourth Carbon Budget: Reducing emissions through the 2020s, December 2010, []. Back

92   "On 27 March 2013, the European Commission adopted a Green Paper on a 2030 framework for climate and energy policies. This document launched a public consultation lasting until 2 July, allowing Member States, other EU institutions and stakeholders to express their views ... Those views will feed into the Commission's on-going preparations for more concrete proposals for the 2030 framework which will be tabled by the end of 2013":  Back

93   Ev w36 Back

94   Q 162 [Greg Barker] Back

95   Qq 151, 159 -160; UN Climate Change conference in November 2013 [] and run up to negotiations on a global deal.  Back

96   Committee on Climate Change, Meeting Carbon Budgets - 2013 Progress Report to Parliament, June 2013, []. Back

97   HC Deb, 4 June 2013, Col 91WS. Back

98   Q 151 [Greg Barker] Back

99   The Committee on Climate Change note that a strong EU ETS carbon price will help incentivise emissions reductions and lesson the competitiveness impacts of the UK's unilateral carbon price underpin.  Back

100  Back

101 Back

102   Department for Business, Innovation and Skills, Government Response to the Environmental Audit Committee's Report on the Energy Intensive Industries Compensation Scheme, Cm 8618, May 2013, [].  Back

103   Committee on Climate Change, The Fourth Carbon Budget: Reducing emissions through the 2020s, December 2010, []. Back

104   HM Government, Implementing the Climate Change Act 2008: The Government's proposal for setting the fourth carbon budget, May 2011, []. Back

105   Ev w13 Back

106   Ev w19  Back

107   Q 139 Back

108   DECC, Updated energy and emissions projections 2012, October 2012, []. Back

109   Q 182  Back

110   Q 182 [Ravi Gurumurthy] Back

111   Q 151 [Greg Barker] Back

112   Q 182 [Ravi Gurumurthy] Back

113   Q 170 [Ravi Gurumurthy] Back

114   Q 125 Back

115   The Fourth Carbon Budget: Reducing emissions through the 2020s, op citBack

116   Climate Change Act 2008, s21, s22 []. Back

117   Carbon budgets, paragraph 38. Back

118   Environmental Audit Committee, Fourth Special Report of Session 2010-2012, Carbon Budgets: Government Response to the Committee's Seventh Report of Session 2010-12, HC 1720, page 2, [].  Back

119   Qq 125, 127 Back

120   Q 230 [Ravi Gurumurthy] Back

121 Back

122   Q 124 Back

123   Q 176 [Greg Barker] Back

124   Q 169 [Ravi Gurumurthy] Back

125   Ev w13 Back

126   Ev w13, Ev w45  Back

127   Ev w45 Back

128   "The fourth carbon budget (as currently set) is regarded as an absolute minimum and any further acceleration in emissions reductions towards the end of the 2020s as a result of slackening the target would put the 2050 target at risk. Taking action later will cost much more than taking action now. Strong signal to investors provided by setting carbon budgets is undermined by the prospect of changes". [Carbon budgets, op cit.Back

129   Q 137 [David Kennedy]; See also Ev w4, Ev w36, Ev w19. The UK was seen as a leader in action on climate change, inspiring action in other countries.  Back

130   Q 124 Back

131   Q 138 Back

132   Ev w45 Back

133   Q 172 [Ravi Gurumurthy]  Back

134   Q 180 [Greg Barker] Back

135   Q 175 [Ravi Gurumurthy] Back

136   Q 180 [Ravi Gurumurthy] Back

137   Department of Energy and Climate Change, International aviation and shipping emissions and the UK's carbon budgets and 2050 target, December 2012, []. Back

138   Committee on Climate Change, Scope of carbon budgets: statutory advice on inclusion of international aviation and shipping, April 2012, []. Back

139   The Commission has said that progress must be made by September/October 2013 or the regulations will be applied in full []; Department of Energy and Climate Change, International aviation and shipping emissions and the UK's carbon budgets and 2050 target, December 2012, []. Back

140   Q 142; Back

141   A consumption-based approach to measuring emissions includes emissions embedded in goods imported into the UK and exclude emissions embedded in goods exported from the UK. Back

142   Environmental Audit Committee, Seventh Report of Session 2010-12, Carbon Budgets, HC 1080, []. Back

143   Energy and Climate Change Committee, Twelfth Report of Session 2010-12, Consumption-Based Emissions Reporting, HC 1646, []. Back

144   Committee on Climate Change, Reducing the UK's carbon footprint and managing competitiveness risks, April 2013, []. Back

145   Qq 143 - 147  Back

146   Qq 214 - 221. The first set of data was published in December 2012 relating to 2011. Back



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Prepared 8 October 2013