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Ccc.Gsi.Gov.Uk Meeting Carbon Budgets - 2016 Progress Report to Parliament Committee on Climate Change Presented to Parliament pursuant to Section 36(1) of the Climate Change Act 2008 June 2016 3 © Committee on Climate Change 2016 The text of this document (this excludes, where present, the Royal Arms and all departmental or agency logos) may be reproduced free of charge in any format or medium provided that it is reproduced accurately and not in a misleading context. The material must be acknowledged as Committee on Climate Change copyright and the document title specified. Where third party material has been identified, permission from the respective copyright holder must be sought. Any enquiries related to this publication should be sent to us at [email protected] This publication is available at https://www.theccc.org.uk/publications/ 4 Acknowledgements The Committee would like to thank: The team that prepared the analysis for this report. This was led by Matthew Bell, Adrian Gault and Mike Thompson and included: Owen Bellamy, Taro Hallworth, Mike Hemsley, Jenny Hill, Gemma Holmes, David Joffe, Ewa Kmietowicz, Eric Ling, Stephen Smith, Jack Snape, Indra Thillainathan, Helen Tsang, Ladislav Tvaruzek and Emma Vause. Other members of the Secretariat who contributed to this report: Jo Barrett, Yogini Patel, Penny Seera, Sean Taylor, Steve Westlake and Stephanie Wildeshaus. A number of organisations and stakeholders for their support, including the Carbon Capture and Storage Association, Carbon Trust, The Crown Estate, DECC, Defra, DfT, Patrick Dixon, Element Energy, the Energy Technologies Institute, Energy UK, the Environment Agency, the Forestry Commission, NextGreenCar.com, the Northern Ireland Executive, Salix Finance Ltd, the Scottish Government, the Society of Motor Manufacturers and Traders, and the Welsh Government. A wide range of stakeholders who engaged with us or met with the Committee bilaterally. 5 Contents Foreword 7 ________________________________________________________________ The Committee 8 ________________________________________________________________ Executive Summary 11 ________________________________________________________________ Chapter 1: Economy-wide progress 20 ________________________________________________________________ Chapter 2: Power 50 ________________________________________________________________ Chapter 3: Buildings 82 ________________________________________________________________ Chapter 4: Industry 112 ________________________________________________________________ Chapter 5: Transport 134 ________________________________________________________________ Chapter 6: Agriculture and land use, land-use change and forestry 170 ________________________________________________________________ Chapter 7: Waste 200 ________________________________________________________________ Chapter 8: F-gases 216 ________________________________________________________________ Chapter 9: Devolved administrations 226 6 Foreword This report - reviewing progress towards meeting our carbon budgets and the 2050 emission reduction target - comes at a critical point in the development of climate policy in the UK. The Government is about to legislate the level of the fifth carbon budget (covering the years 2028- 2032). It has committed to publication of an emission reduction plan, setting out how it expects to meet the targets, towards the end of the year. Development of those plans takes place against the backdrop of the Paris Agreement in December last year, where the countries of the world agreed to increased ambition to tackle climate change. In particular, they agreed an aim to limit the rise in global temperature to well below 2°C, with efforts to hold it to 1.5°C. The Agreement demonstrates the need for countries to work together to meet mutually agreed ambitions. In that context, the result of the UK referendum, to leave the EU, requires serious consideration. The UK’s targets to reduce emissions - enshrined in legislated carbon budgets and the 2050 target - derive from UK legislation. We will still need to meet these targets. We will still need to find ways to reduce emissions. But some of our options for doing so may now be different. At this stage it is too early to say how the policy landscape will need to adapt, but we clearly need to come back to consider this further. Within the UK there has been progress in reducing emissions. In 2015, emissions fell by 3% and they are now 38% below 1990 levels. Much of the progress, however, has been in the power sector. To meet emission reduction targets going forward, reductions will need to be broadly based, across all sectors of the economy. The Government recognises this. It recognises that current policies are insufficient to meet the requirements of the fourth and fifth carbon budgets and keep us on a cost-effective path to the 2050 target. It has committed to producing its plans for how these budgets will be met before the end of the year. With that in mind, in this report we review recent progress, but we also set out requirements for the Government’s emission reduction plan if it is to succeed in its ambition. We hope this will be helpful to the Government as it develops its thinking. We will return to assess the plan against those requirements in our Progress Report next year. I am grateful to the Committee members for their help and guidance in producing this report, particularly to our new members - Nick Chater and Corinne Le Quéré - whose first report this is; and I am grateful to the Secretariat for their continued hard work. Lord Deben Chairman, Committee on Climate Change 7 The Committee The Rt. Hon John Gummer, Lord Deben, Chairman The Rt. Hon John Gummer, Lord Deben, was the Minister for Agriculture, Fisheries and Food between 1989 and 1993 and was the longest serving Secretary of State for the Environment the UK has ever had. His sixteen years of top-level ministerial experience also include Minister for London, Employment Minister and Paymaster General in HM Treasury. He has consistently championed an identity between environmental concerns and business sense. To that end, he set up and now runs Sancroft, a Corporate Responsibility consultancy working with blue-chip companies around the world on environmental, social and ethical issues. Lord Deben is Chairman of the Committee on Climate Change, Valpak Limited, and the Association of Professional Financial Advisors. Professor Nick Chater Professor Nick Chater FBA is Professor of Behavioural Science at Warwick Business School, having previously held chairs in Psychology at Warwick and University College London (UCL). He is particularly interested in the cognitive and social foundations of rationality, and in applying behavioural insights to public policy and business. He has served as Associate Editor for the journals Cognitive Science, Psychological Review, Psychological Science and Management Science. He co-founded and is a Director of the research consultancy Decision Technology Ltd. Professor Samuel Fankhauser Professor Samuel Fankhauser is Co-Director of the Grantham Research Institute on Climate Change and Deputy Director of the ESRC-funded Centre for Climate Change Economics and Policy, both at the London School of Economics, and a Director at Vivid Economics. He is a former Deputy Chief Economist of the European Bank for Reconstruction and Development. 8 Professor Sir Brian Hoskins Professor Sir Brian Hoskins CBE FRS is the Chair of the Grantham Institute for Climate Change and the Environment at Imperial College London and Professor of Meteorology at the University of Reading. His research expertise is in weather and climate processes. He is a member of the scientific academies of the UK, USA, and China. Paul Johnson Paul is the Director of the Institute for Fiscal Studies and is a visiting professor at UCL. He is widely published on the economics of public policy including tax, welfare, inequality and poverty, pensions, education, climate change and public finances. He is also one of the authors of the “Mirrlees review” of tax system design. Paul has previously worked at the Financial Services Authority and has been Chief Economist at the Department for Education and Director of Public Spending in HM Treasury, as well as Deputy Head of the UK Government Economic Service. He is a member of the council and executive committee of the Royal Economic Society and a member of the banking standards board. Paul has previously served on the council of the Economic and Social Research Council. He was a founder council member of the Pensions Policy Institute and in 2010 he led a review of the policy of auto-enrolment into pensions for the new Government. Julia King, The Baroness Brown of Cambridge Julia King DBE FREng, The Baroness Brown of Cambridge, is the Vice-Chancellor and Chief Executive of Aston University. After an academic career at Cambridge University, Julia held senior business and engineering posts at Rolls-Royce for eight years. She returned to academia as Principal of the Engineering Faculty at Imperial College, London, becoming Vice-Chancellor of Aston University in 2006. Julia advises Government as a member of the CCC, the Science and Technology Honours Committee and as the UK’s Low Carbon Business Ambassador. She is a member of the World Economic Forum Global Agenda Council on Decarbonizing Energy, and was an inaugural member of the European Institute of Innovation and Technology’s Governing Board. She is Chair of the Sir Henry Royce Centre for Advanced Materials,
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