The report forecasts that UK CO2 emissions will reduce to 500 million tonnes of CO2 in 2020, just 15% lower than they were in 1990. The draft Climate Change Bill has set a goal of cutting emissions by between 26% and 32% by 2020, which amounts to approximately 412 million tonnes of CO2.
In order to bridge this gap of reality verses target, the government may need to introduce further legislation to reduce emissions within the UK and currently has set its sights on requiring industry to meet these targets almost in isolation, even though emissions from industry have, historically, been declining, whilst transport and domestic emissions continue to rise.
The report indicates that measures in the recent Energy White Paper will be unlikely to bridge the gap. In addition to this, the forecasts also suggest that the UK will miss its renewable electricity targets for 2010 and 2015 by a wide margin.
Professor Paul Ekins, who co-edited the report, stated that “the government’s policies to promote a low carbon future are not yet sufficient to meet the carbon challenge set out in the energy white paper and draft climate change Bill.”
What it might mean for business
A conclusion could be reached that tougher targets for the UK can only mean tougher targets for industry, with tighter future caps for companies subjected to the EU Emissions Trading Scheme and new policy measures such as the proposed Carbon Reduction Commitment (CRC).
Interestingly, the government has already indicated that the proposed targets for the CRC might have to be increased by the forthcoming, government appointed, Climate Change Committee.
Tighter targets
This all indicates that EEF members will need to be aware that pressure may be applied to them to reduce their carbon footprint beyond that already envisaged. Some member could be put at a disadvantage because historical emissions reductions made by individual members might not be taken into account when setting future targets.
Further concern currently results from the race by opposition parties to push the government to increase its 60% CO2 reduction target for 2050, with the Liberal Democrats setting out plans to make Britain carbon neutral by 2050. In their recent report, Zero Carbon Britain – Taking a Global Lead, the Liberal Democrats call for Britain’s electricity supply to become carbon neutral, without any reliance on nuclear power.
Their proposals do also address housing, transport, in addition to industry and commercial emissions. The party believes that a ‘legal duty’ should be placed on Ministers to achieve carbon neutrality, by introducing incentive schemes for renewables and micro-generation, increasing taxes that make the polluter pay.
Worryingly, in EEF's opinion, they also call for a strengthening of the EU Emissions Trading Scheme, which currently is only applicable to EU businesses, which are often forced to pass on the cost increase to customers. This could lead to a loss of market share to competitors outside of the EU that are not currently carbon constrained.
The government is expected to publish its draft climate change Bill in the next few weeks, following the full consultation and much scrutiny by two Parliamentary Committees.