The UK’s future relationship with the EU is highly uncertain. Investors need certainty and so does the climate. The fifth carbon budget laid in Parliament today needs to be debated and adopted as soon as possible.

Amber Rudd, the UK Secretary of State for Energy and Climate Change assuring the public on Wednesday that the UK takes its climate commitments seriously. Picture used under Creative Commons Licence. 
After the referendum, it is crucial that the budget be set in line with the Committee on Climate Change’s (CCC) recommendation for a 57% emissions reductions by 2032 from 1990 levels.  This gives a clear signal to the world and investors that the Government continues to take its climate change commitments seriously and that more needs to be done to deliver emissions reductions in the UK.
It’s disappointing, however, that the budget was not formally adopted by Parliament today, as is required by the Climate Change Act (CCA), and this must happen as soon as possible.

Still a leader

The CCC estimates that the EU commitment of 40% emissions reductions by 2030 is equivalent for the UK to go 52% below 1990 levels. For the 5th Carbon Budget, the CCC has recommended a 57% reduction target, the minimum for the UK to stay in global leadership on tackling climate change. In February 2016, Sandbag called for the budget to be revised in line with the Paris Agreement.
Amber Rudd, the UK Secretary of State for Energy and Climate Change, stated during Business and Climate Summit 2016 this week: 

Our relationships with the United States, China, India, Japan and other European countries will stand us in strong stead as we deliver on the promises made in Paris. At the heart of that commitment is the Climate Change Act.

As a signatory of the Paris agreement, the UK has committed to “[h]olding the increase in the global average temperature to well below 2 °C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 °C above pre-industrial levels”.
Global emissions are not yet on target for 2 degrees. Different effort sharing methodologies suggest a range of different obligations for the UK within that commitment. The 2050 goal in the CCA was set with the view that the UK per capita emissions should, by 2050, be equivalent to the required global average. The Paris agreement implies a strengthening of that goal and a strengthening of carbon budgets along the road to meeting that goal.

Now, what about the UK commitments under EU ETS?

The fifth carbon budget helps guarantee that UK emissions will remain on track irrespective of the future relationship with the EU and whatever the political climate is in the UK.

The 5th carbon budget can serve as a “double lock” on the UK emissions reductions, especially in sectors currently accounted under the EU ETS. Picture used under Creative Commons Licence.
The UK will have no problem to over deliver against the EU targets and should keep influencing these targets through progressive negotiations. But for that the UK carbon budget should do what it says on its tin and limit emissions from the UK itself.
At present we don’t have this.  Power generation and large industry emissions covered by the EU ETS  are accounted for in the UK carbon budget on the basis of EU level ETS performance.  Actual emissions from these sectors in the UK don’t affect the calculation of whether the UK budget has been met.  This has always been inappropriate and is doubly so now that the UK’s positioning with respect to the EU, including the EU ETS, is uncertain.
The method of accounting for emissions needs to change. The carbon budget must refer to actual UK emissions.  In October 2015 we produced a detailed briefing advocating these changes.
Sandbag will continue to advocate for these changes calling on the UK government to:

  • Ensure the budget is turned into legislation as soon as possible;
  • Work to increase ambition of future budgets in line with the Paris agreement;
  • Change accounting rules so that the budget covers actual UK emissions.