UK Climate Change Policy – An Outline

Anyone who has followed the news in the UK over the last year will have heard plenty about COP26 and Extinction Rebellion, and about extreme heat, forest fires and melting ice in various parts of the world.  UK policy on climate change, despite its implications for everyone’s lives in the decades ahead, has received rather less attention.  Here I present, in Q & A form, an outline of the legal framework, current policy, progress to date, and ideas which seem likely to influence future policy.

What is the UK’s long-term target for reducing its greenhouse gas emissions as a contribution to mitigating global climate change?

The government has adopted a target of reducing net emissions to zero by 2050.

Which gases count towards this target?

All significant greenhouse gases, including carbon dioxide, methane and others.

Which emissions are considered to be the UK’s emissions?

Its territorial emissions consisting, broadly, of those emissions generated within the UK.  These exclude emissions from production overseas of goods imported to the UK, sometimes termed “consumption emissions”.  Emissions from international shipping and aviation were initially excluded, but more recently the UK’s share of such emissions has been considered part of its territorial emissions.

What is the significance of “net” emissions?

Deductions against total emissions are allowed for removals of greenhouse gases from the atmosphere and funding emissions-reducing projects abroad.

Wasn’t there a target of reducing emissions by 80%?

That was the target set in the Climate Change Act 2008.  It was changed to 100% (ie reduction to zero) in 2019 (1).

What else did the Climate Change Act do?

It required the government to set “carbon budgets” for the UK covering all the main greenhouse gases  for 5 year periods starting from 2008-12, and to ensure that these budgets are not exceeded.  Budgets from 2023-27 were to be set at least 12 years in advance.  It also required the government to make 5-yearly assessments of the risks to the UK from climate change and to prepare adaptation policies to address those risks.  It established a Committee on Climate Change to advise the government on climate change matters including the setting of carbon budgets.

Where are we now in terms of the 5 year carbon budgets?

The first and second 5 year periods have been completed and we are now in the third (2018-22).  Carbon budgets for the fourth and fifth periods (2023-32) were set some years ago.  The carbon budget for the sixth period (2033-37) has a particular importance as it was the first to be set after the 2050 target had been amended to net zero. 

Are the UK’s carbon budgets consistent with international agreements on climate change?

The UK has generally set its carbon budgets to go beyond its commitments under international agreements:

  • For the Kyoto Protocol’s second commitment period (2013-20), the UK’s target reduction was 20% (all reductions quoted are relative to a 1990 baseline) (2).  Its carbon budget for 2018-22 is a reduction of 34% (3,4).
  • Following the Paris Conference (2015), countries were required by 2020 to submit their plans, known as nationally-determined contributions, for reaching the goal of limiting global warming to below 2 and preferably to 1.5 degrees Celsius above pre-industrial levels.  The UK’s submission committed it to a reduction in emissions of at least 68% by 2030 (5).  This did mean that its emissions would need to fall by more than the 57% that had previously been budgeted for the UK’s fifth period (2028-32), but for the sixth period (2033-37) its budgeted reduction was set at a much more challenging 78% (6,7) 

So the UK has been a good citizen internationally in respect of climate change?

That’s debatable. On the one hand:

  • The UK can reasonably claim to have exercised international leadership in its early adoption of a legally binding target via the Climate Change Act.

On the other hand:

  • In focusing on carbon budgets which exclude consumption emissions, the UK is arguably measuring its performance against inappropriate benchmarks.
  • Some argue for even faster emissions reductions by developed countries including the UK because of the risks climate change poses to life in the tropics and in low-lying islands.  They also point to the responsibility of developed countries, via their historic emissions, for the vast majority of climate change to date.
  • The Copenhagen agreement (2009) included a pledge by developed countries to transfer US$ 100 billion annually to poor countries by 2020 to help fund mitigation of and adaptation to climate change (8). The UK pledged to transfer £5.8 billion over the 5 years beginning April 2016 (9), equivalent to about US$ 1.5 billion annually, a very small contribution towards the US$ 100 billion target, although the contributions of other developed countries have also fallen well short. 

How have the UK’s actual emissions compared with its carbon budgets?

The budgets for the first two periods were comfortably met, that is, actual emissions were below the budgeted levels (10).  Results for the third period should be available in 2023.

So the UK has made a good start on the road to net zero emissions?

Again, that’s debatable.  Those budgets were set before the net zero target had been adopted.  The post-2008 recession helped to reduce emissions simply by reducing economic activity.  More fundamentally, it is much easier to reduce emissions from some sources than from others.  Much of the reduction was achieved by switching from coal to natural gas to generate electricity, but burning natural gas still produces about half the emissions of coal.  A net zero economy will need to generate very large quantities of zero-carbon electricity.

Where is it likely to be especially difficult to reduce emissions to zero?

Difficult sectors include:

  • Agriculture, especially livestock production (a major source of methane).
  • Shipping and aviation (unlike road and rail transport, these cannot be electrified to take advantage of electricity from renewable sources).
  • Cement production, for use in concrete (this currently involves burning limestone, a process which produces carbon dioxide even if the fuel source is zero-carbon).

What measures does the Climate Change Committee propose to reduce emissions by 78% as required by the sixth carbon budget (2033-37)?

The Committee proposes (11):

  • Conversion to low-carbon technologies in industry, transport and the home, to be achieved mainly by electrification or use of hydrogen fuel.
  • Expansion of low-carbon electricity from 50% now to 100% by 2035 using various renewable sources, the largest contribution coming from offshore wind.
  • Reduction of demand for carbon-intensive goods and services.
  • Changes in land use, with more woodland and biofuel crops, and restoration of peatlands.

Of these four areas, the first is projected to have the largest effect, but all are needed to achieve the budgeted 78% reduction.

Is it true that the UK already gets 50% of its electricity from low-carbon sources?

Yes, approximately.  Almost 50% of electricity in 2020 was from low-carbon sources, comprising wind (25%), nuclear (15%), solar (4%) and hydro (3%) (12).  But the low-carbon share of total energy, including not only electricity but also gas for home heating and oil for transport, is still much less than 50%.

Has the government accepted the Committee’s proposals on mitigation?

Yes, broadly.  Over the last two years the government has published a number of detailed documents setting out strategies and specific policies to reduce emissions:

There are also various policies which have been in place for some years which will continue with at most minor changes.  These strategies and policies to a large degree reflect the Committee’s proposals.  Most of them apply to the whole of the UK, although as the last two documents illustrate there are some exceptions in respect of matters devolved to Scotland, Wales and Northern Ireland.

What kinds of policy tools is the government using to reduce emissions?

A combination of project funding, taxes, regulation, and what might loosely be described as other financial incentives.

What funding is the government providing?

Funding commitments include (in rounded £ Million):

  • £2,500M over 2020-25 to help public sector bodies fund heat decarbonisation and energy efficiency measures.
  • £1,750M to fund energy efficiency upgrades in social housing and low-income households.
  • £2,000M over 5 years for schemes to facilitate cycling and walking (and so reduce car use).
  • £1,300M to accelerate the roll-out of electric vehicle charging infrastructure.
  • £1,000M to build an electric vehicle supply chain.
  • £600M to provide grants to help buy electric vehicles.
  • £300M to try to make electric vehicle batteries 95% recyclable by 2035.
  • £600M over 2020-22 for zero-emission buses (mainly electric but some powered by hydrogen).
  • £1,000M by 2025 for investment in carbon capture, utilization and storage (CCUS), a technology offering the promise of emissions-free use of fossil fuels and biofuels in electricity generation and industry.
  • £1,000M for the Net Zero Innovation Portfolio providing funding for low-carbon technologies and systems.
  • £450M over 3 years for the Boiler Upgrade Scheme to provide grants to help replace boilers by electric heat pumps (replacing the former Renewable Heat Incentive Scheme).
  • £240m to support hydrogen production projects.
  • £500M to increase planting of new woodland to over 100 square miles annually (13).
  • Numerous smaller sums, including funding for various competitions designed to stimulate innovation in low-carbon energy and emissions reduction.

What about taxes?

The government’s approach has been to use taxes to change business behaviour while avoiding climate-related taxes directly on households. Businesses can however pass on to households the costs of these taxes.  The main taxes are:

  • The Climate Change Levy, paid by electricity generators on their fossil fuel inputs and by other businesses on their electricity and fossil fuels, albeit with reduced rates for certain energy-intensive businesses (to mitigate loss of international competitiveness).
  • The Green Gas Levy, a tax on natural gas suppliers.  The money raised is used to fund the Green Gas Support Scheme providing incentives for the production of biomethane for injection into the gas grid.
  • The Landfill Tax, designed to discourage disposal of waste by landfill.  Introduced in 1996, this tax has contributed to an 80% reduction in landfill emissions (14).

There are also some tax breaks designed to encourage emissions reduction:

  • Exemption from vehicle excise duty (car tax) for electric cars and vans.
  • Electric vehicles are also exempt from fuel duty, a tax on petrol and other liquid fuels used in trasnport.
  • Enhanced capital allowances for businesses on the purchase of certain new energy-efficient or low-carbon equipment.

What regulation is in place or planned?

Regulations in place include:

  • The Renewable Transport Fuel Obligation requiring fuel suppliers to supply a certain percentage of renewable biofuels, currently 9.6% and planned to be increased to 14.6% by 2032. 

Among planned regulations are some which will have very direct effects on households and individuals:

  • The sale of new petrol and diesel cars and vans will be banned from 2030.  Sale of hybrid vehicles will be allowed until 2035, from which date all new cars and vans will have to be zero-emission.
  • All new heating systems will have to be net zero compatible by 2035, implying that the installation of new natural gas boilers will be banned.  In the meantime, policy will aim to ensure that electric heat pumps become an attractive and cost-effective alternative.
  • The sale of peat for garden use is likely to be banned, to help preserve peatlands.

What are the “other financial incentives”?

There are three large and complex schemes:

  • The UK Emissions Trading Scheme is a “cap and trade” scheme which replaced, following Brexit, the UK’s participation in the EU Emissions Trading Scheme. It applies to electricity generation, energy-intensive industries including steel and cement production, and aviation on some routes.  The government sets a cap on the total emissions allowed by businesses within the scheme, and issues emissions allowances to businesses to the amount of the cap. These allowances can be traded which encourages businesses to reduce emissions where this can be done at least cost. The cap will be gradually reduced as the UK moves towards net zero. For electricity generation only, the Scheme applies in conjunction with a Carbon Price Floor ensuring that the effective cost of emissions reaches a cerain rate, currently £18 per tonne of carbon dioxide. For other sectors the cost per tonne has at times been much lower.
  • The Contracts for Difference Scheme is designed to support low-carbon electricity generation from sources which, at a certain stage of development, are too expensive to compete with electricity from conventional sources.  Generators submitting successful bids for new low-carbon capacity are paid over a 15 year period at a rate calculated to reflect their extra cost over the average UK price of electricity. 
  • The Renewables Obligation closed to new renewable generating capacity in 2017, but continues to require electricity suppliers either to obtain a certain proportion of their electricity from certain renewable sources accredited prior to closure, or else suffer a financial penalty. 

What is the long-term vision for energy supply?

It is envisaged that the UK will need much more electricity than now, partly because of normal growth in demand, but also to meet new demands for electricity including heat pumps, electric vehicles and hydrogen production.  The  majority of electricity will be from renewables, mainly onshore and offshore wind and solar, also biomass, with energy storage in the form of hydrogen to overcome the intermittency problem of wind and solar.  There will also be significant contributions from nuclear, and from gas with carbon capture and storage.  Transport will be powered mainly by electricity or hydrogen, with some use of biofuels especially for shipping and aviation.

Is carbon capture and storage a proven and cost-effective technology?

Around the world, there are currently some 40 carbon capture facilities in operation (15).  However, some of these use the carbon (eg for enhanced oil recovery) rather than storing it. The effectiveness of storage – whether there is a long-term risk of leakage to the atmosphere – is hard to prove and may depend on the storage site.  It is probably fair to say that capture has been proven to be feasible, but that whether capture and effective long-term storage can be delivered at a cost comparable with other low-carbon technologies remains to be demonstrated.  It may be however that, as with wind and solar over the last decade, costs will fall as experience is gained.

How much will it cost to get to net zero?

The Climate Change Committee estimates that the annual investment needed to deliver its proposals will rise to about £50 billion by 2030 and remain fairly stable thereafter (16).  That’s a 12% increase on current total annual investment of about £400 billion.  The required investment can be delivered largely by the private sector provided that the government creates a stable long-term policy framework. The Committee also estimates that there will be a net decrease in annual running costs, largely due to fuel cost savings in industry, and that these savings will steadily rise, so that by around 2040 they will more than offset the required annual investment cost.

Households are being faced with large increases in energy costs right now.  How far is that due to climate change policies?

It is true that household energy costs are higher than they would be without policies to reduce emissions.  Several of these policies increase costs to energy suppliers, and some at least of these extra costs are passed on to households.  However, policies such as the Renewables Obligation and the Climate Change Levy have been in place for some years, and have not changed dramatically over the last year.  The main reason for the sudden increase in energy costs is the combination of:

  • The UK’s heavy reliance on gas which heats 85% of homes and is the source of 35% of its electricity.
  • An increase over the last year in world demand for gas.

Of these factors, the second is largely outside the UK’s control, but the first is partly due to UK policies over the past decades (although alternatives such as a slower removal of coal from the energy mix or greater investment in nuclear would also have had disadvantages).  In the long run, further expansion of wind and solar should make UK energy costs less dependent on world markets.

What is the UK’s long-term target for adaptation to climate change?

There is no clear target. Climate change presents many different risks, and the extent of future warming and other changes in climate is far from certain.  Unlike mitigation, adaptation is not usefully framed as working towards a single numerical target.  

What are the main conclusions of the Climate Change Committee’s latest assessment of the risks from climate change?

Its Independent Assessment of UK Climate Risk, published in 2021, states starkly that “adaptation action has failed to keep pace with the worsening reality of climate risk” (p 11) and that the government “has not heeded our past advice” on setting and adequately resourcing “a framework of targets, incentives and reporting” (p 23).  It identifies eight risk areas judged to require urgent action:

  • Risks to natural ecosystems from increased temperatures and extreme events such as droughts and wildfire.
  • Risks to soil health from increased flooding and drought.
  • Risks to natural carbon stores such as soil, trees, saltmarsh and underwater kelp forests.
  • Risks to crops, livestock and commercial trees from multiple hazards including heat stress, drought, flooding, fire, pests, diseases and invasive non-native species.
  • Risks to the supply of food, goods and vital services due to climate related impacts on supply chains and distribution networks.
  • Risks to electricity supply from climate-related hazards including flooding, water shortages, increased tenperatures and wildfire, sea level rise and storms.
  • Risks to human health, well-being and productivity from increased exposure to heat in homes and other buildings.
  • Multiple risks from climate change effects overseas which could lead to cascading impacts across sectors and countries.

What specifically does the Committee recommend?

Its most prominent recommendations take the form of principles for good adaptation. It asks the government to:

  • Set out a vision of a well-adapted UK.
  • Integrate adaptation to climate change into policies on a wide range of matters (rather than treating it as a self-contained topic).
  • Take early action where necessary, eg to prevent irreversible changes to ecosystems or avoid the need for expensive retrofitting of buildings.
  • Prepare for extreme weather events and not just for average temperature rises.
  • Assess interdependencies such as the human and economic effects of climate-related failure of electricity supply.
  • Address climate-related inequalities, eg low-income households being more exposed to flood risk.

What does the government see as its role in respect of adaptation?

The second National Adaptation Programme was published in 2018 (the government has not yet published a third programme responding to the Climate Change Committee’s latest assessment).  The Programme includes a very long list of actions, but it also includes passages which suggest that the government sees for itself a limited role. It states for example that infrastructure operators are private businesses responsible for their own business continuity measures, and that the government’s responsibility is to ensure that no policy or regulatory barriers prevent them from managing their climate risks (p 31).  Of the actions in the Programme, many refer vaguely to, for example, “supporting” or “encouraging” initiatives, “working with” partners, and “monitoring” progress. The only major  funding commitment highlighted in the Programme is £2,600 million over 6 years to reduce flood and coastal erosion risk. 

So the government is not actually doing all that much about adaptation?

That’s debatable.  There are a number of areas in which climate change adaptation has been integrated into broader policies.  To give a couple of examples:

  • Farmers and others can obtain funds via the Countryside Stewardship Scheme and similar schemes for projects to improve the rural environment.  Guidance includes climate change adaptation among the outcomes supported (p 7). 
  • The National Planning Policy Framework sets out law and guidance to be followed by local planning authorities in England in determining planning applications for new housing and other developments.  It states that plans should take a proactive approach to adaptation to climate change, “taking into account the long-term implications for flood risk, coastal change, water supply, biodiversity and landscapes, and the risk of overheating from rising temperatures” (p 45).

However, it is easy for the government to add wording about climate change adaptation into policy documents.  The Climate Change Committee clearly considers that there is much more to be done in terms of funding and delivery. 

This post is intended to be largely factual.  I plan in due course to post a critical analysis of UK climate change policy.

Notes and References

  1. The Climate Change Act 2008 (2050 Target Amendment) Order 2019 https://www.legislation.gov.uk/ukdsi/2019/9780111187654
  2. Wikipedia: Kyoto Protocol – Emissions Cuts https://en.wikipedia.org/wiki/Kyoto_Protocol#Emissions_cuts
  3. Climate Change Committee (2008) Building a Low Carbon Economy https://www.theccc.org.uk/publication/building-a-low-carbon-economy-the-uks-contribution-to-tackling-climate-change-2/  The 34% reduction in emissions in the 3rd carbon budget, implying a budget of 2,570 MtCO2e, is on p xix.
  4. The Carbon Budgets Order 2009 https://www.legislation.gov.uk/uksi/2009/1259/article/2/made  The Order shows that the 3rd budget was set at 2,544 MtCO2e, very close to the Committee’s recommendation.
  5. DBEIS The UK’s Nationally Determined Contribution under the Paris Agreement https://www.gov.uk/government/publications/the-uks-nationally-determined-contribution-communication-to-the-unfccc#:~:text=On%2012%20December%202020%2C%20the,2030%2C%20compared%20to%201990%20levels.
  6. Climate Change Committee (2020) The Sixth Carbon Budget  UK Carbon Budgets – Climate Change Committee (theccc.org.uk) The 78% reduction in emissions is on p 38, and can be seen from the chart on p 39 to imply a budget of c 1,000 MtCO2e.
  7. The Carbon Budget Order 2021 The Carbon Budget Order 2021 (legislation.gov.uk)  The Order shows that the 6th budget was set at 965 MtCO2e, very close to the Committee’s recommendation.
  8. House of Commons Library (2021): COP26: Delivering on $100 billion climate finance https://commonslibrary.parliament.uk/cop26-delivering-on-100-billion-climate-finance/
  9. HM Government UK International Climate Finance https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1029990/icf-brochure-2021.pdf  The £5.8 billion figure is on p 4.
  10. Cambridge Econometrics (2019) How the UK met its carbon budgets  https://www.theccc.org.uk/publication/how-the-uk-met-its-carbon-budgets/ p 5
  11. Climate Change Committee, as 6 above, p 25
  12. These percentages are derived from the following figures in the Digest of UK Energy Statistics Table 5.6 Electricity fuel use, generation and supply https://www.gov.uk/government/statistics/electricity-chapter-5-digest-of-united-kingdom-energy-statistics-dukes  In row 504 (All generating companies, supplied gross) (in GWh) Wind 75,380, Nuclear 45,668, Solar 13,158, Hydro 6,636 + 1,397, All Sources 297,683.
  13. HM Government (2021) The England Trees Action Plan 2021-24  https://www.gov.uk/government/publications/england-trees-action-plan-2021-to-2024  The figure given (p 3) is 30,000 hectares, equal to c 116 square miles (1 square mile = 259 hectares).
  14. DBEIS Final UK greenhouse gas emissions national statistics 1990 to 2019 https://www.gov.uk/government/collections/final-uk-greenhouse-gas-emissions-national-statistics  Table 5.1 Estimated territorial greenhouse gas emissions by end user category, UK, 1990=2019, row 111 Landfill.
  15. IEA (2021) About CCUS https://www.iea.org/reports/about-ccus
  16. Climate Change Committeem as 6 above, pp 20-1
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