Environmental Audit CommitteeWritten evidence submitted by Friends of the Earth

Summary

Our response covers four points. All four should be seen in the context of extreme urgency on climate change—global concentrations of greenhouse gases are now 400ppmv and rising,i and nations’ current pledges, even if met, would likely only limit temperature rises to around 3.5 degreesii—which would be likely to have devastating consequences for humanity. Action from almost all nations needs to be ramped up; global emissions need to peak as soon as possible, and then fall rapidly.

The UK’s carbon budgets and Climate Change Act are seen internationally as a sign of collective cross-party political leadership, transcending day-to-day party politics, which has been a huge boost to British climate diplomacy, and a stimulus for climate legislation around the world. Attempts to weaken the carbon budgets or Act would have negative consequences internationally as well as nationally.iii We urge that the Review must strengthen, not weaken, the UK’s climate response.

The UK needs to tighten its territorial carbon budgets so that they are commensurate with the threat of climate change, and the UK’s fair share of responsibility for tackling it. Current budgets fall short of this on both counts.

UK 2030 target should be an 80% cut on 1990 levels at the least.

The UK’s policies are not adequate to tackle even current carbon budgets, and need substantial strengthening:

Power sector progress is hampered by Treasury refusal to allow a 2030 decarbonisation target, and its hostility to carbon budgets; this is damaging investor confidence.

The Government is overly focussed on energy supply and does not look adequately at tackling demand.

The UK needs a broader strategy for doing its part in tackling climate change, which goes beyond territorial emissions, and delivers a much greater leadership role internationally to tackle climate change.

We suggest that the Committee should launch a wide-ranging inquiry into the role of the UK financial sector in tackling climate change, particularly fossil-fuel finance, given the major role played by UK financial institutions in financing investments globally.

Support for fracking and tax breaks for new North Sea Oil and Gas exploration are at odds with climate change policy.iv It is adding to an already huge “unburnable carbon”v problem, and sending confusing signals to investors on the UK Government’s attitude towards tackling climate change.

The UK’s proposals for an EU 2030 target should be based on a fair share for the EU in keeping emissions below 2 degrees: this would be an 80% cut in greenhouse gas emissions on 1990 levels.

Main Response

1. The Review should seek to strengthen, not weaken, the Climate Change Act

It is damaging for the Treasury to be forcing a review of the 4th carbon budget, with a view to weakening it. The signals this sends to the investor community are poor, and will drive up the cost of capital and delay investment in the UK: the opposite of what Treasury should want. The National Audit Office’s 2013 report for Treasury on infrastructure said that: “Electricity generating companies and investors we spoke to were concerned by what they perceived as a lack of clarity over the types of electricity generation projects government wishes to promote, and the price support mechanisms and levels for different generation methods. As a result, the electricity generating companies were holding back on some potential investments”.vi It also sends a poor signal globally, when the UK’s Climate Change Act and carbon budget process has been described as “one of the main stimuli for climate legislation around the world”.vii

The only advantage of this review is that it offers the opportunity to tighten carbon budgets to the level required to tackle climate change adequately, rather than the Treasury’s seeming intention to weaken the carbon budgets. We hope that the EAC would invite the Chancellor to give evidence to the Committee on the Treasury’s views on carbon budgets.

2. Tightening UK carbon budgets:

The UK’s carbon budgets are based on a global carbon budget which has a greater than 50% chance of exceeding two degrees, and also a 10% chance of exceeding three degrees:

50% is very high risk for a temperature rise we “must…not exceed”.viii Reducing the risk to 33% (the IPCC definition of “unlikely”) would reduce the carbon budget considerably.

2 degrees is in any case already very risky—James Hansen in May 2013 evidence to the EAC describes it as “an upper bound” of what is acceptable; Tyndall Centre describe 2 degrees as “the boundary between dangerous and extremely dangerous”.ix Many countries advocate a 1.5 degree target.

Above 2 degrees increases risks of irreversible tipping points, as well as worse droughts, floods and other impacts. A 10% chance of exceeding three degrees seems an extremely risky course to accept.

They are based on an unreasonably large appropriation of that global carbon budget for the UK:

The CCC’s first report in 2008 discusses different countries’ responsibilities, and advocate that only by 2050, there should be equal per capita emissions.

This is an extremely pro-developed country position to take, appropriating far more than an equal share of the remaining global carbon budget to developed countries.

Developed countries no longer have the excuse that they need time to adjust—discussions on equitable approaches to climate change have been ongoing for two decades.

Other countries would give lower shares to developed countries, allowing developing countries greater “emissions space” to develop and make the transition to low-carbon economies.

The CCC also state that “it is not part of the Committee’s remit to propose a specific methodology for the purposes of international negotiations” and “nor do we make a judgement about which methodology is ethically preferable to another”.x

However, they have had to make such a choice, in setting the UK budget, and have explicitly chosen one which benefits the UK greatly at other countries’ expense. We hope that the Committee would look into the position the CCC and Government have taken regarding the UK’s responsibility on climate change as reflected in carbon budgets.

These two assumptions mean the UK’s carbon budgets are in our view far too lax at present. An equal per capita share of the remaining carbon budget for a likely chance of avoiding two degrees would mean UK cuts of 80% in greenhouse gas emissions by 2030, on 1990 levels. This focus solely on remaining carbon budgets also ignores all historical responsibility for climate change, so is still very generous to the UK.

The CCC’s budget analysis is also based on assumptions around dates for global peaking of emissions which now look unlikely to occur. If this is the case, this means greater global emissions cuts will be required in future. This, coupled with increased understanding of the science of climate change and the likely impacts of 2 degree warming, suggest that these are further reasons for tightening the UK’s carbon budget.

3. Stronger policies

Within the UK, we have major concerns over progress towards meeting even existing carbon budgets.

The Carbon Planxi notes that existing policies, even if implemented, are not sufficient to keep within the 4th Carbon Budget.

The CCC have repeatedly stated in their annual reviews that a policy “step change” is required.

There are weak institutional arrangements in the power sector. The National Policy Statements on energy infrastructure contain guidance that climate change mitigation cannot be considered in the final planning decision; and the Emissions Performance Standard is too weak to prevent new high carbon infrastructure. In this context, there is a strong risk that high carbon investment will crowd out low-carbon. A 2030 decarbonisation target in the Energy Billxii currently before Parliament would send a necessary signal to potential investors that the UK is genuinely committed to low-carbon investment in the power sector beyond 2020.

The attitude of the National Policy Statements to climate change is symptomatic of a broader concern that the overarching carbon budgets may be seen in some quarters of Government as a type of “carbon-magic”—whereby the impact of a particular decision on climate can be disregarded because policies elsewhere will ensure that carbon budgets will be adhered to.

We are very concerned that the Government’s attitude is to (grudgingly) support low-carbon infrastructure, but AT THE SAME TIME still support large amounts of high-carbon infrastructure—such as more roads, gas-fired power stations, oil and gas exploration and airports. This is not credible or consistent—it is akin to a healthy eating strategy promoting fruit and veg while also opening a chain of deep-fried-pie shops.

There is a heavy overemphasis on supply, and underemphasis on demand, right across the economy, most evident in the fossil fuel sector:

The Government’s fossil fuel strategy is “to continue maximising the recovery of indigenous hydrocarbon resources—on land and at sea”xiii

By contrast, the Government expects almost no progress at all in cutting oil or gas consumption between now and 2030. Its energy projections see oil consumption falling by 3%, and gas consumption falling by 0.3%.xiv

If the UK wants to reduce reliance on fossil fuel imports, a strategy to minimise use of fossil fuels, rather than maximising domestic extraction, would be far more suited to tackling climate change.

Carbon Tracker estimate that only 20% of current global fossil fuel reserves can be safely burned.xv The UK policy to add it to its own reserves—for example through fracking or through tax breaks to exploit North Sea heavy oils is simply adding to a vast quantity of already unburnable carbon.

New analysisxvi from Friends of the Earth argues that the UK has already extracted its fair share of safely burnable carbon.

Local carbon plans are needed to drive emissions reductions—there needs to be a strong relationship between national carbon budgeting and local action. The CCC have summarised the situation in their May 2012 report.xvii

Aviation and shipping should be included in carbon budgets, with much stronger policies to tackle their emissions. It is poor policy to make decisions about airport expansion without properly measuring and having a plan to reduce this sector’s emissions.

We repeat our concern expressed to the EAC’s previous carbon budget inquiry that the Government should adopt the CCC’s recommendation that the 4th carbon budget should be met within the UK, without credit purchase. The potential to use credit purchases has long been a gaping loophole in the Climate Change Act—the EUETS is not a capped system as it allows vast quantities of credits to be purchased from countries without emissions caps.

4. The UK’s global role

The purpose of the UK Climate Change Act is to ensure the UK plays its part in preventing dangerous climate change. The Act focuses on the UK’s territorial emissions. However, there are other major effects the UK can have on preventing climate change, beyond its territorial emissions. In keeping with the spirit and intention of the act, these other effects should be addressed as well. For example:

UK has a major role through its globally dominant financial sector: the FTSE 100 has a high-fossil fuel intensity; the UK has a $2 trillion pension sector; UK based banks have a major role in financing energy investments. We suggest that the Committee should conduct a wide-ranging inquiry looking at the UK financial sector’s role in preventing dangerous climate change, with a focus on fossil fuel investment.

The UK’s inputs to the forthcoming EU 2030 Greenhouse Gas targets—the UK is likely to propose around 40–50%, when again an EU wide target of 80% is more appropriate. The UK should be clear about what its proposal is assuming for emissions reductions for other countries, and what chance of exceeding 2 degrees.

UK’s consumption of products, for example from net imports such as agricultural produce and manufactured goods, makes us effective net imports of GHGs. These fall outside the scope of the Climate Change Act, but have real climate implications. The UK needs to implement a strategy to tackle these emissions.

Leadership role on core technologies –offshore wind is one example of an area where the UK is leading, and where there could be major, faster deployment in other countries, if the UK leads the way. The same applies for other marine technologies.

Leadership role on carbon budgeting. The UK’s Climate Change Act and its carbon budgeting process is a world first—this can be replicated elsewhere, so attempts to weaken it should be strongly resisted.

Leadership in international negotiations. We are heading for 3.5 degrees plus. As James Hansen argued in his May 2013 oral evidence to the EAC, the UK has the highest per capita historical responsibility for climate change—the UK must lead, and do this by advocating and implementing clear, fair positions and policies which would keep temperatures below 2 degrees.

24 May 2013

References

i See Keeling curve data at Scripps Institution of Oceanography

ii See http://www.climateactiontracker.org/

iii See John Ashton former special representative for climate change to the UK Government. Speech “Cometh the hour”, May 2013.

iv See Friends of the Earth, 2013. UK fossil fuel tax breaks. May.

v Carbon Tracker, 2013. Unburnable Carbon 2013.

vi NAO, 2013. Planning for economic infrastructure.

vii John Ashton speech “cometh the hour”, op.cit.

viii Eg, EU Council, 2007. Limiting Global Climate Change to 2 degrees Celsius The way ahead for 2020 and beyond. “The EU must adopt the necessary domestic measures and take the lead internationally to ensure that global average temperature increases do not exceed pre-industrial levels by more than 2°C.”

ix Tyndall Centre, 2011. Written evidence to Environmental Audit Committee on Carbon Budgets. 27 June

x CCC, 2008. Building a low-carbon economy. Page 30.

xi HM Govt, 2011. The Carbon Plan. Annex B.

xii See Friends of the Earth and Greenpeace, 2013. The need for a decarbonisation target. April

xiii Ed Davey, 2013. Green Growth, Green Jobs: The success of renewables in Scotland. 18 March.

xiv DECC, 2012. Energy and Emissions projections. Annex C.

xv Carbon Tracker, 2013. Unburnable Carbon 2013.

xvi Friends of the Earth, 2013 (forthcoming). Unburnable carbon – how much fossil fuel can the UK fairly extract?

xvii CCC, 2012. How local authorities can reduce emissions and manage climate risks.

Prepared 3rd October 2013