UK unveils tough climate change bill

15 March 2007

Prime Minister Tony Blair has released the UK’s draft Climate Change Bill, which sets out a framework for moving the country to a low-carbon economy.

Key points of the draft bill include:

• Legally binding targets of a 26 to 32% reduction in carbon dioxide emissions by 2020 and a 60% reduction by 2050.

• Legally binding five year "carbon budgets", set at least 15 years ahead, to provide long-term clarity for investment in low-carbon technologies.

• New powers to enable the government to more easily implement emissions reduction policies.

• A new statutory body, the Committee on Climate Change, to provide independent advice to government.

• Annual reporting to parliament with a Climate Committee progress report to which the government must respond.

• A requirement for government report at least every five years on current and predicted impacts of climate change.

A strategy paper released alongside the bill sets out how it fits into the government's wider international strategy, as well as detailing a range of future domestic policies to achieve its aims. It argues that all sectors of society will have to contribute to the transition to a low-carbon economy and sets out proposals for investment in low-carbon fuels and technologies, significantly more efficient use of energy, a change in focus by suppliers on reducing demand rather than supplying as much energy as possible, and consumer self-generation.

Describing it as a “revolutionary step,” Blair was joined by environment secretary David Miliband who said: “This bill … will help us achieve the twin goals set out in the strategy - demonstrating leadership through action at home, while also continuing to work towards a strong international agreement post-2012.” Californian governor Arnold Schwarzenegger, meanwhile, praised Britain for being a “great inspiration,” describing Blair as a climate change “action hero.”

However, on the day before the climate bill was released, in a speech to the Green Economy Conference, Conservative opposition leader David Cameron, set out his party’s plans to address climate change. Cameron argued that in order to achieve real progress a series of measures must be met, including tightening permit levels within the EU Emissions Trading Scheme. Other measures include ensuring a long-term price for carbon, converting the Climate Change Levy into a carbon tax, and annual targets for carbon reduction. Cameron said: “The Climate Change Bill needs teeth and we will do all we can to improve the bill as it goes through parliament.” Conservative shadow environment secretary Peter Ainsworth added: “Any Bill should have three elements: annual emission reduction targets; an independent body to set as well as monitor these targets; and an annual carbon budget report from the Secretary of State.”

LibDem shadow environment secretary Chris Huhne also called for annual, rather than five-yearly, targets saying: “There are substantial points of detail in the draft bill that will need amendment. The carbon budget periods of five years may be too short and inflexible to take account of the business cycle. Annual targets which could explicitly allow for economic conditions and the weather would be more sensible.”

Nonetheless, business appears to back the bill, with the Confederation of British Industry welcoming the move. Richard Lambert, CBI director-general, said: “Setting legally binding targets for 2020 and 2050 shows the UK is serious in leading the global response to climate change. Five year carbon budgets support this by giving us scope to review how quickly we can move to those targets in the light of economic, scientific and international developments. At the same time, regular reporting to parliament will keep all players focused on action, without the impractical constraints that annual carbon targets would impose.”

However, a question mark over the possible success of such a bill has been raised by a recent report from Cambridge Econometrics containing detailed forecasts of energy demand and CO2 and SO2 emissions to the year 2020. The forecasts suggest that by 2010 renewables will account for only around 8% of UK electricity generation, short of the government’s earlier 10% target, in the face of a several green-lighted gas-fired stations planned till then. The report does conclude that, if electricity demand grows at around 1% pa from 2010-20 and fossil fuel prices remain relatively high, the share of renewables is expected to increase to around 14.5% by 2015, just short of the 15% target, and reach 20% by 2020, meeting the government’s aspirations.

More worryingly, the report also notes that the projected fall in carbon emissions over 2005-10 will not be enough to achieve the government’s existing 20% domestic goal.

Following a 3% decline in 2002, CO2 emissions rose by around 2% in 2003, and increased slightly over 2004-05, but rose by an estimated 1% in 2006 as high gas prices led to a shift from gas to coal in power generation, the report says.

Carbon dioxide emissions are now forecast to be 14.3%, below 1990 levels in 2010.

The draft bill will be subject to a full public consultation alongside pre-legislative scrutiny in parliament and may be found, along with the accompanying strategy paper at: http://www.defra.gov.uk/corporate/consult/climatechange-bill/


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