UK climate change policy. Presentation to the CTF Trust Fund Committee 11th May 2009

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1 UK climate change policy Presentation to the CTF Trust Fund Committee 11th May 2009

2 UK greenhouse gas emissions: progress towards targets and goals

3 Why do we want to reduce UK emissions? There are important additional benefits in reducing domestic emissions, including: Improved energy efficiency, reducing energy bills Helping to meet other policy objectives such as improving air quality Positioning the UK for the move to a low-carbon global economy Helping to meet our international obligations and demonstrating our commitment to act

4 Key elements of the Climate Change Act Legally binding targets Carbon budgets & accountability Cut GHG emissions by at least 80% by 2050 and (pending Parliamentary approval) by at least 34% by Five-year carbon budgets set three budget periods ahead; first ones will cover period Indicative annual ranges + progress reports to Parliament. Committee on Climate Change To advise Government on carbon budgets and targets and cost effective emissions saving; and to report on progress. Measures to reduce emissions Adaptation Requirement to developing and produce report on policies and proposals for meeting budgets. Powers to introduce domestic emissions trading schemes. Government to report at least every five years on impacts on UK of climate change and publish a programme to address them. Power to require public authorities to take action based on risk assessment.

5 The scale of the challenge Source: Building a low-carbon economy the UK's contribution to tackling climate change. Committee on Climate Change, 2008

6 What are carbon budgets and why do they matter? What are they? Fixed limits on greenhouse gas emissions over five-year periods What s new? They are legally binding and if we don t meet them by reducing domestic emissions, we will be compelled to buy credits to make up the difference Budget must balance over the five-year period if emissions go up in one sector, they will have to come down elsewhere Why do we need them? Need a framework to ensure that the carbon consequences of all policy decisions whether positive or negative are considered, and to manage emissions reductions efficiently across the economy UK has already reduced emissions significantly, but we now have more challenging targets to meet on the way to an 80% reduction by 2050

7 What budgets are we setting and why? At Budget 2009, we announced the level of the first three carbon budgets: 34% reduction in emissions from 1990 levels by the third budget period ( ), 28% by the second period ( ) and 22% by the first ( ) move to tighter budgets after a global deal in Copenhagen, expected to mean around a 42% reduction aiming to meet the budgets through domestic action alone, without buying credits (except under the EU Emissions Trading Scheme) reinforce this commitment by setting a zero limit on international credit purchase in the first budget period

8 The path to an 80% reduction by 2050 Committee on Climate Change view

9 Building a low carbon economy (1) 2006 Climate Change Programme 2007 Energy White Paper Low carbon industrial strategy Since then numerous consultations including on our Renewable Energy strategy and Heat and Energy Saving strategy

10 Building a low carbon economy (2) Decarbonising electricity generation EU Emissions Trading System putting a price on carbon emissions Renewables tenfold increase by 2020 Nuclear power Office for Nuclear Development established Carbon capture and storage up to four new demonstration projects

11 Building a low carbon economy (3) Reducing emissions from energy use in buildings Residential Home Energy Savings Programme Zero carbon homes Energy using products Non-residential Climate Change Levy/Agreements Zero carbon non-domestic buildings Carbon Reduction Commitment Carbon Trust, Salix, etc

12 Building a low carbon economy (4) Low carbon transport Vehicle emissions reductions Vehicle tax banding Renewable transport fuel obligation Low carbon vehicles Sustainable travel choices

13 Building a low carbon economy (5) Non-CO 2 Significant reduction in emissions since 1990 but further analysis of abatement potential is required. CCC identified further possible abatement potential through measures that would reduce emissions from crops and soils, livestock and through installing anaerobic digestion plants.

14 Next steps New UK energy and climate change strategy this summer. It will draw on recent, current and future publications and public consultations to: Set out a vision of a low-carbon future Respond to advice from CCC Meet the carbon budgets specified by the Climate Change Act Strong internal mechanism to ensure Government coordination.

15 Any questions, comments or suggestions?