First Report Contents

First Report

Instruments drawn to the special attention of the House

Draft Carbon Budget Order 2021

Date laid: 21 April 2021

Parliamentary procedure: affirmative

This draft Order proposes to set the carbon budget for the sixth budgetary period (2033 to 2037) at 965 million tonnes of carbon dioxide equivalent, in line with the recommendation of the Climate Change Committee. The sixth carbon budget is a key element of the Government’s commitment to meeting the net zero carbon emissions target by 2050. While the Government intend to publish proposals and policies for meeting the sixth carbon budget in a Net Zero Strategy before the next UN Climate Change Conference of the Parties (COP 26) in November, the House may wish to consider the significant challenges that the Government have identified in relation to achieving the sixth carbon budget and net zero target.

The draft Order is drawn to the special attention of the House on the ground that it is politically or legally important and gives rise to issues of public policy likely to be of interest to the House.

1.This draft Order has been laid by the Department for Business, Enterprise and Industrial Strategy (BEIS) with an Explanatory Memorandum (EM) and Impact Assessment (IA). The Order proposes to set the carbon budget for the sixth budgetary period (2033 to 2037) at 965 million tonnes of carbon dioxide equivalent (MtCO2e).

Background

2.BEIS explains that the Climate Change Act 2008 (“the Act”) requires the Secretary of State to ensure that the net UK carbon account for 2050 is at least 100% lower than the 1990 baseline (“net zero”).1 With a view to meeting this 2050 target, the Secretary of State must set five-year carbon budgets which provide the maximum level of the net UK carbon account for these budgetary periods. The Act requires the sixth carbon budget, covering the five-year period 2033 to 2037, to be set by 30 June 2021. The previous, fifth carbon budget for the period 2028 to 2032 was set by the Carbon Budgets Order 2016,2 this was before the 2050 target for greenhouse gas (GHG) emissions was changed to net zero in 2019.

3.In setting the carbon budget, the Government must consider the advice of the Climate Change Committee (CCC). The CCC recommended that the sixth carbon budget should be set at 965 MtCO2e,3 implying that carbon emissions will be reduced by 78% in the period 1990 to 2035, compared to a 58% reduction under the fifth carbon budget.

Sixth carbon budget

4.This draft Order proposes to set the sixth carbon budget at 965 MtCO2e, the level recommended by the CCC. BEIS says that, as required by the Act, the Devolved Administrations were consulted, and that they agree with the proposal. The detailed analytical evidence that has informed the sixth carbon budget is provided in the IA which concludes that the CCC’s recommendation “best supports the UK’s policy objective to substantially reduce GHG emissions and brings significant benefits for society”.

International aviation and shipping

5.For the first time, the carbon budget will include emissions from international aviation and shipping. The CCC has welcomed this decision, saying that it will be “in line with the CCC’s long-held view that all UK carbon budgets should account for emissions from both sources”.4 Further regulations are needed to include international aviation and shipping formally which, according to BEIS, will be brought forward “in due course”.

Future policies and strategy

6.The draft Order does not provide for any of the policies that will be needed to implement the sixth carbon budget. The Act requires the Government to publish a report setting out proposals and policies for meeting the carbon budget “as soon as is reasonably practicable” after the carbon budget has been set. According to Defra, the Government intend to publish a Net Zero Strategy before the next UN Climate Change Conference of the Parties (COP 26) in November. This will set out the Government’s vision for transitioning to a net zero economy and will aim to demonstrate “how we will meet our emissions targets, including the proposed sixth carbon budget”.

Challenges

7.The IA identifies significant challenges, stating, for example, that meeting the sixth carbon budget will require “at least doubling current electricity generation by 2050” and “substantial hydrogen production and biomass use, although the final energy mix is highly sensitive to modelling assumptions”. The IA explains that if the UK were “to keep options open on the path to net zero by 2050, then by 2035 any option for the sixth carbon budget” would need to include:

8.The IA further states that “substantial additional effort” across the economy will be required “beyond existing government plans”, including consumers and producers having to change the technologies they use. According to BEIS, “in many cases the up-front costs of low carbon technologies, such as heat pumps, are currently higher than the technologies they replace”, so that “[s]upply chains for low carbon technologies will need to be significantly scaled up” and “Government intervention will be needed to overcome a broad range of barriers, including technical, market, behavioural and socio-political”, adding that “strengthening regulation is likely to be necessary in some cases”.

Conclusion

9.The sixth carbon budget proposed by this draft Order is a key element of the Government’s commitment to meeting the net zero carbon emissions target by 2050. While the Government intend to set out proposals and policies for meeting the carbon budget in a Net Zero Strategy ahead of COP 26 in November, the House may wish to consider the significant challenges that the Government have identified in relation to meeting the sixth carbon budget and net zero target. The draft Order is drawn to the special attention of the House on the ground that it is politically or legally important and gives rise to issues of public policy likely to be of interest to the House.


1 The net UK carbon account is the amount of net UK emissions of targeted greenhouse gases for a period reduced by the amount of carbon units credited to the net UK carbon account and increased by the amount of carbon units debited from the net UK carbon account for that period.

2 Carbon Budget Order 2016 (SI 2016/785).

3 CCC, Sixth Carbon Budget (9 December 2020): https://www.theccc.org.uk/publication/sixth-carbon-budget/ [accessed 6 May 2021].

4 CCC, Press Release: CCC lauds historic milestone on path to Net Zero UK on 20 April 2021: https://www.theccc.org.uk/2021/04/20/sixth-carbon-budget-ccc-lauds-historic-milestone-on-path-to-net-zero-uk/.




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