Yet another round of cuts

The Government just can’t seem to stop announcing cuts! This week the Government has proposed a plan to cut GHG emissions by 50% from 1990 levels by 2025 en route to 80% cuts by 2050.

Under the Climate Change Act 2008 the government is committed to an 80% cut in GHG emissions by 2050. To realise these cuts the Government has to meet a series of interim targets. These targets cover 5 year periods and have to be set 3 periods ahead. We are reaching the end of the first period (2008-2012) and so they have now announced the proposed carbon budget for the 4th period (2023 – 2027).

The budgets for the 4 periods can be seen in Table 1. These budgets represent the sum of the amounts of GHG allowed to be emitted in each of the 5 years they span.

Table 1: UK interim carbon budgets.

Budget 1 

(2008 – 2012)

Budget 2 

(2013 – 2017)

Budget 3 

(2018 – 2022)

Budget 4 

(2023 – 2027)

MtCO2eq 3018 2782 2544 1950
% reduction from 1990 22.8 28.8 34.9 50.1

This leads to the question: Are we actually going to meet any of these targets? It is all well and good proposing strict targets if we don’t actually meet any of them. In 1997 the Government pledged to reduce CO2 emissions by 20% from 1990 levels by 2010. This hasn’t come to pass. Preliminary figures from DECC show that only a reduction of 16.5% was achieved.

Cambridge Econometrics suggest that we are going to narrowly miss the first 3 carbon budgets based on their projections, whilst the Government projected last year that we would meet them.

To meet the first 3 budgets requires that GHG emissions drop about 1.2% of 1990 levels per year. This is not too far off the slope of UK GHG emissions from 1990 – 2007 as estimated by a linear fit, so on the face of things, it doesn’t look too far out of the realms of possibility that we might meet at least the first budget. Indeed Cambridge Econometrics think it will only be narrowly missed, but that for subsequent targets the gap between performance and target will widen. Currently, GHG emission reductions seem to be on target (Figure 1).

UK GHG Emissions

Figure 1: Annual UK GHG Emissions 1990 – 2010

One issue could be to what extent it is possible to decouple economic growth from energy use. From the preliminary figures for 2010 it doesn’t look as if we are there yet, emissions rose again as the economy started to recover. Although, not above the point they might have been at anyway. Another issue is the sustainability of the historic rate of decrease. Part of the existing decrease is due to the migration from coal fired power stations to combined cycle gas turbines. The relative costs of coal and gas are an issue here, as CO2 emissions in the UK currently broadly follow the amount of coal utilised for energy generation. This means that as the market fluctuates so too do emissions. Another part is likely due to the reduction in manufacturing capacity in the UK and our reliance on imports from overseas. In order to maintain and eventually increase the rate of decarbonisation (required to meet the 4th carbon budget) it will be necessary to invest in large scale development of renewable energy technology as well as energy efficiency measures. This would reduce the influence of coal prices on emissions by reducing the proportion of energy generated in that way. A knock on effect could be economic growth in the renewables sector and the UK as a whole as companies such as Vestas invest in the UK.

The policy designed to meet the 4th carbon budget will be announced in October.

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