If you work in the field of climate change then you are probably aware that CO2 isn’t the only greenhouse gas, or GHG. And you may even know that methane is considered 21 times more powerful than CO2. But where does the number 21 come from, and what does it really mean?

Climate policies such as the Kyoto Protocol and the UK carbon budgets address emissions of many different GHGs which are traded and aggregated on a ‘CO2-equivalent’ basis. For this to work there needs to be a way of putting different GHGs on to this common CO2-equivalent scale.

I have been working on a new method for comparing emissions with help from colleagues at the Met Office, University of Oxford and the Centre for Ecology and Hydrology. After several months’ work it is nice to see the final results published in Nature Climate Change.

The current policy tool is the 100-year Global Warming Potential (GWP100) which compares the total radiative forcing for 100 years after emitting a tonne of one GHG to that from CO2.Radiative forcing is a measure of the heating imbalance in the atmosphere. But given the recent global agreement to limit climate change to 2°C, a temperature-based metric – rather than one based on radiative forcing – would now seem to be more helpful.

Our proposal is to separate GHGs into two groups, according to how they influence peak temperature (see Figure). For long-lived GHGs like CO2 it is the total emissions over time that counts. For short-lived GHGs like methane the emissions rate is a better guide to peak temperature. The long-lived GHGs can be traded together on a CO2-equivalent scale and short-lived GHGs can be traded separately in terms of a methane-equivalent.

Viewing the different GHGs this way, instead of using the traditional GWP100, highlights some key messages from the latest climate science that are relevant for tackling climate change:

• Today’s emissions of long-lived GHGs such as CO2 are just as important as those in future decades for determining the eventual peak temperature we reach.
• For short-lived GHGs, such as methane, today’s emissions have less of a direct influence. However, there are some good reasons to tackle these emissions now, because it would slow the rate of warming (helping ecosystems to adapt, for instance) and improve air quality.
• Staying below 2°C (or any other peak temperature limit) requires CO2 emissions to fall close to zero. In other words, the low-carbon economy will eventually need to become a zero-carbon economy.

I don’t know if our proposal will lead to a change in the official metrics, but I hope we have provided a simple framework for people to think clearly about the importance of different GHGs in preserving the 2°C limit. I am sure however that this won’t be the last word on comparing GHGs…

“Action to reduce emissions only makes sense if the world really is warming, and if our emissions are the main cause. How confident in these two propositions can we be? Many newspaper articles and internet blogs would suggest the jury is still out. But two new scientific studies provide fresh and independent evidence of the reality of human-induced warming.

“Warming of the climate system is unequivocal” and “most of the increase… is very likely due to the observed increase in anthropogenic greenhouse gas concentrations”. These are conclusions agreed by leading climate scientists in the latest assessment from the Intergovernmental Panel on Climate Change.

Outside of the expert community, public debate is as active as ever. Controversy tends to focus on the global average surface temperature record – the iconic indicator of climate change, but not the only one – estimated from thermometer readings around the world. Critics claim that the warming shown in estimates from three different research centres is simply an artefact of biased sampling, poor quality records, and growing Urban Heat Islands (UHIs).

Scientists counter that they have already accounted for these potential errors. Even so, the claims troubled Richard Muller, a physics professor from Berkeley, California, enough to assemble a team of eminent scientists to investigate for themselves. First results were released in October and cover the land surface only (not the ocean, where UHI bias is minimal). While only preliminary, they show remarkable agreement with the other existing estimates (Fig 1).

INSERT

Figure 1: Results from BEST compared to pre-existing datasets.

Source: http://berkeleyearth.org/analysis.php

The evidence for surface warming since the mid-20^th Century would seem robust. But what about the second proposition: are we to blame?

This is where the second new study comes in. Previous studies have attempted to answer the question by comparing observations against the warming patterns produced by climate models run with and without human factors. Instead of taking the same approach, this study employs the powerful principle of conservation of energy. Simply put, the heating power of all the different drivers of climate change (natural and human) must be balanced by energy going into the oceans and out of the atmosphere into space. Applying this constraint to a climate model, scientists have been able to show how much of the warming since the 1950s is due to each known factor (Fig 2).

Figure 2: Contributions of factors to surface warming since the 1950s; whiskers denote 5-95% uncertainty range. Bars on right show the sum of all anthropogenic and natural (solar and volcanic) drivers. Dashed lines show observed warming from the three datasets in Fig 1 (colour matched). Grey shaded region shows the 5-95% range of natural variability in climate models (i.e. undriven by human, solar or volcanic factors).

Source: modified from Huber & Knutti (2011) Anthropogenic and natural warming inferred from changes in Earth’s energy balance, Nature Geoscience

Their conclusions closely match those of previous attribution studies and add further detail: it is 95% likely that at least three quarters of the observed warming is due to human activity.

In science, conclusions become stronger when they are independently verified by other scientists, and when multiple different lines of evidence point to the same result. It seems unlikely this new evidence will change the minds of diehard critics. But proper scepticism is providing a clearer picture of human-induced warming.

Last week, we published our first comprehensive analysis of how household energy bills will be impacted by the costs of meeting carbon budgets.

Our aim on entering this debate was to fulfil our legal duties in this area (we have a statutory duty to report on fuel poverty under the Climate Change Act), and to add a dispassionate evidence-based analysis to an area where exaggerated claims are often made.

We found that over the past 5 years, bills have increased primarily as a result of the rising cost of wholesale gas. By 2020, our analysis suggests that paying for environmental policies to achieve a low-carbon economy will add around £100 to the typical household’s dual-fuel bill (gas & electric).

The £100 increase could be reduced down to zero if the Green Deal and Energy Company Obligation are successful in rolling-out better insulation to homes and if people replace their old appliances with energy efficient models.

Our assessment therefore disproves often made claims that low carbon policies have contributed significantly to energy bill increases to date, and will result in further increases of hundreds or even thousands of pounds.

So, were we successful in getting our point across?

Media coverage of the report was generally well balanced and reported our findings correctly.

The BBC, Daily Express, Financial Times, Guardian, Daily Mirror, Press Association, Reuters, Telegraph, and Times all reflected our key messages: that energy bill increases from meeting carbon budgets could be up to £100, with lower increases if we are successful at implementing energy efficiency measures. David Kennedy, our CEO explained the ins and outs of our report findings on Today (listen again here).

Whilst the Daily Mail reported our projected increase in electricity prices, its coverage focused on energy bill impacts for households using electricity for heat. We say in the report that for these households, accounting for around 8% of the total, bill impacts will be more pronounced. We urge that impacts for the fuel poor using electricity for heating are addressed through the Affordable Warmth element of the Green Deal.

Finally, an article in the Spectator suggested that we have not set out our assumptions on technology costs and electricity demand in a transparent manner. In fact, our assumptions are set out in great detail in our Renewable Energy Review, as referenced in the report:

We were generally happy with the coverage received, and hope that our report will form the basis for honest debate and discussion in this important area.

Tell us what you think of the report – send us your comments: enquiries@theccc.gsi.gov.uk

“There have been two sobering climate change statistics recently. First we learnt that despite a sluggish economy, global emissions of carbon dioxide grew by a whopping 6% between 2009 and 2010. This was followed by a report by the International Energy Agency (IEA), which last week warned that without a bold change of policy direction, the world will lock itself into an insecure, inefficient and high-carbon energy system.

This doesn’t bode well for world targets for avoiding dangerous climate change. What the IEA report tells us is that there is a danger that in the next five years we build so many fossil-fuel power stations, energy-sucking factories and  inefficient buildings the world-over that the chances of limiting global warming to 2^oC – a widely shared global ambition – greatly diminish.  Governments are due to meet in Durban, South Africa, at the end of this month at the United Nations climate change conference to discuss the targets that countries have set for reducing their emissions.

Source: World Energy Outlook 2011, Presentation to the press, London, 9 November 2011 © OECD/International Energy Agency 2011, page 17

So how does the situation in the UK look against this rather bleak global context? The UK is still in a better place than most other economies.  Our emissions went up in 2010 too, but that was due to one-off factors like two exceptionally cold winters that pushed up heating emissions in both the first and fourth quarter. Structurally, UK emissions have peaked and are on a downward trajectory.  Or at least this will be the case if the government sticks to its current intentions. The government is developing policy (such as Electricity Market Reform, the Green Deal and the Green Investment Bank) to drive decarbonisation, the first glimpses of which seem relatively sensible.

But what if things do not go to plan? Together with energy company Npower, researchers at the Grantham Research Institute recently looked at four different energy scenarios for the UK in the 2020s. Not all of them make for happy reading

Scenario 1: Current intent

If the Government sticks to its plan the UK is poised for two decades of aggressive de-carbonisation in the power sector and elsewhere, during which energy companies will invest heavily in renewable energy, particularly offshore and onshore wind. Nuclear power capacity will increase and some coal generators will be co-firing biomass. Solar photovoltaics will become more common as costs fall. Carbon capture and storage (CCS) for coal and gas will move to full commercial deployment from the 2020s. Marine power technologies will emerge. Investments in energy efficiency, a smart grid and other measures will start to roll out to keep the increase in costs as low as possible for consumers.

Scenario 2: New dash for gas

But what if the Government loses heart and goes for the easy option – a new dash for gas-fired power stations that the market knows how to finance and build, and which may become cheaper with the advent of shale gas? In the short term that may look cheaper, but there will be a price to pay later. If our statutory carbon budgets are allowed to be broken (which is highly likely under this scenario) there will be, at a minimum, political embarrassment and more likely NGOs will come together to force a judicial review. Either way, policy uncertainty is inevitable. Investors may find that their new gas-fired power stations require a costly retrofit with CCS, or can only be run (and earn revenue) for very limited periods of time, basically to provide back-up capacity to low-carbon plant.

Scenario 3: Investment shortfall

Perhaps the Government won’t lose heart. But what if investors think it might or if policy signals are so confused that the billions of pounds needed for low-carbon investment are not forthcoming. We may end up with an investment shortfall where outdated power plants are forced to remain in service just to keep the lights on. Never mind the environmental and economic consequences. We may end up with a creaking power sector stretched to its limits and correspondingly unreliable. A little bit like the transport systems of the 1990s and 2000s.  This will either mean black-outs or short-term price fluctuations to balance supply and demand at short notice.

Scenario 4: Spiraling costs

In the fourth scenario the Government sticks to its environmental targets but it turns out that the technology and cost forecast of the 2010s were overly optimistic and costs spiral.  CCS does not fulfill its promise. Nuclear is afflicted by cost-overruns or perhaps we follow Germany’s lead and give up on the technology altogether. The cost of off-shore wind remains stubbornly high.

The four scenarios make it plain that there is no credible alternative to the government’s current plans. So how do we get to where we (in,the UK) need and want to be?

It is easy to see why a new dash for gas may be tempting for the short-sighted. The UK has to make some decisions about what role shale gas has to play in the future energy mix. Whilst it can help us meet near term targets, there is the threat of “lock in” described by in the IEA’s World Energy Outlook. Going headlong for shale gas is also  likely to divert investment away from renewables, bringing down the costs of which must remain the priority for the government.

Clearly we need political leadership to make sure we make the right long-term decisions and end up in the right place. So far in the UK we still have the political intention to meet our targets. The ambitious fourth carbon budget was approved with an overwhelming Parliamentarian majority only this summer. Yet, investors could be forgiven for doubting our commitment if they read the wrong newspaper or listened to  George Osborne at this year’s Conservative party conference. So sending a clear, unambiguous policy signal to the market is essential. Otherwise the billions in low-carbon investment we need will not be forthcoming.

Now is not the time for us to wobble on our climate commitments.  It’s time for UK policy to show that there is strength in our conviction. As was argued in the Institute’s recent policy brief The Basic Economics of Low Carbon Growth in the UK, failing to show clarity and confidence by being shaky, or appearing to be shaky, now on our carbon budget commitments will damage private sector investment in low-carbon technologies, harm growth and create uncertainty that will ultimately raise the cost of future investment.

What is the point of the UK doing all this when total UK emissions are less than the increase in global emissions last year? Clearly, we cannot do this alone. But other countries are taking action too. Work carried out at the Institute shows 155 climate laws are now in place across the leading 16 countries. Australia recently voted in a carbon tax which is in many ways as significant as the EU Emissions Trading Scheme, and others including China, Korea and California are making positive steps towards their own carbon pricing schemes.  More work is still needed. We still need a global roadmap to put the world on-track to a green economy. But it is a start and it will allow a new global deal to be based on domestic action.

And as surprising as this may sound, many of the countries taking action now are looking to the UK for leadership and to learn from our experience. Behind the scenes UK experts, including our own at the Grantham Research Institute, are engaging with governments from around the world to compare notes, discuss policies and identify successes and failures. The UK has the chance here make a difference and to punch above its weight. Let’s seize it.

Sam Fankhauser is co-director of the Grantham Research Institute on Climate Change and the Environment and a member of the UK Committee on Climate Change, an independent body that advises the UK Government on carbon targets and on preparing for climate change.

CCC transport analysts had the opportunity to test-drive the latest low-carbon vehicles fast-approaching the UK market, at Ecovelocity, the low-carbon motor festival.

Improving the fuel-efficiency of conventional vehicles and promoting the development of electric vehicles are key to achieving the deep cuts in transport emissions required to meet the Government’s carbon budgets.

This year has seen the arrival of electric cars, such as the Nissan Leaf, Mitsubishi iMiev with a number of other models due to come to market in the near future, and for which a £5,000 plug-in car grant is available from Government.

The Nissan Leaf has had a particularly successful launch year, picking up a number of awards, such as the ‘2011 European car of the year’ and ‘2011 world car of the year.’

Low carbon vehicles on display and available to test drive at eco-velocity were:

• Prototype electric cars due to appear on the market in the near future (such as the Renualt Fluence).
• Electric vans currently on the market (such as the Renault Kangoo).
• Demo nstration hydrogen fuel cell vehicles (such as the Vauxhall Hydrogen4, Hyundai ix35 and the Honda FCX Clarity)

Vauxhall Ampera

Also on display was the award-winning Vauxhall Ampera which will deliver longer range than currently available with pure electric vehicles. This will be Europe’s first extended-range electric vehicle, meaning:

* The wheelsof the car are electrically driven at all times.

* The lithium-ion battery feeds an electric drive unit, delivering 50 miles of pure electric driving.

* Beyond this limit, a sm all petrol-fuelled engine kicks in, delivering a total range of 350 miles.

inside the Vauxhall Ampera

As a first-timer driving an electric vehicle, I was pleasantly surprised.  With an electric vehicle there is no mad revving of the engine.  Instead, a smooth, quiet and calm driving experience treats the driver without comprising the performance of the vehicle, which can deliver a remarkably quick and responsive acceleration.  Next step is for the costs to come down, so I can afford one.

CCC analysis suggests it is both feasible and desirable that there are up to 1.7 million electric cars on the road here in the UK, by 2020.

Members of the CCC Bioenergy team recently joined experts on bioenergy from the  National Farmers’ Union  to visit two miscanthus and short-rotation coppice (SRC) willow farms in Yorkshire. The farms supply woody biomass directly to Drax and other power stations for co-firing, as well as for local heat applications.

Miscanthus can be used as an energy crop

Miscanthus, known as elephant grass, and SRC willow, a woody perennial crop, have been identified as the more suitable perennial energy crops for growing in the UK. Both crops can grow on poorer quality land, require fewer inputs, and have been found to host higher levels of biodiversity relative to conventional crops.

The market for SRC willow and miscanthus has developed over the past ten years under the Energy Crop Scheme, which subsidises 50% of costs incurred over a five-year period. Currently there are 10-15,000 hectares of willow and miscanthus in the UK.

After touring both farms, the CCC met with energy crop growers, suppliers and advisers. All growers indicated that both miscanthus and willow had provided a solution for poorer quality arable land where they had struggled to produce consistent wheat yields or in areas where access for growing conventional crops proved difficult (e.g. steep banks and awkward corners).

CCC bioenergy team

To stimulate further market development, growers also called for longer term support (i.e. greater than five years), interest-free loans to aid in the purchase of equipment, and the potential for receiving funding under agri-environment schemes (payments currently made to conventional crop farmers for delivering environmental management). All emphasised the role that domestic energy crop production could play in securing a sustainable supply of bioenergy to meet the UK’s renewables targets.

The CCC’s Bioenergy review will be released at the end of 2011. This will include our detailed assessment of investment in biomass power generation, focusing on technical feasibility, economics and availability of sustainable biomass.

Members of the CCC bioenergy review team went to Yorkshire to visit Drax power station. Drax is Western Europe’s largest coal-fired power station and has a generating capacity of 4000 megawatts, producing 26 TWh of electricity in 2010 meeting approximately 7% of the UK’s electricity demand.  The plant consumes 10 million tonnes of coal each year and is the largest single source of CO₂ in the UK, with annual emissions are approximately 22 MtCO₂e,  broadly equivalent to all emissions from heating in the commercial and public sectors.  It also co-fires coal with biomass and is the largest generator of renewable power in the UK.

Drax power station

Biomass accounts for 15-20% of the plant’s annual fuel use. Drax uses a wide range of both domestic and internationally procured biomass (mainly wood pellets, straw and miscanthus) which is delivered to the site either by road or through Drax’s own dedicated rail wagons. All of the biomass used on site must first be converted to pellets suitable for use at the main power station.  While significant amounts of the plants imported biomass will already be pelletised, as part of a tour of the facility we saw the company’s off-site straw pelleting plant which converts locally sourced straw to pellets.

The actual processing of the biomass is through a “processing tower” whereby the biomass pellets are ground into dust, which is then directly injected into the plant’s boilers for combustion (we are not talking domestic boilers here, each boiler is 15 storeys high and weighs 4000 tonnes!).  As Drax looks to expand the use of biomass use in the future, it is undertaking R&D into greater boiler efficiencies through enhanced co-firing, with the aim to both reduce emissions and environmental impacts.

Sustainable sourcing of biomass is imperative to ensure significant life cycle emissions savings relative to fossil fuels and to encompass other wider sustainability issues (e.g. biodiversity and land use implications).  Drax has implemented its own sourcing criteria but from April 2013 the UK government will require all large generators to meet minimum sustainability criteria in order to receive Renewables Obligation Certificates.

The CCC’s Bioenergy review will be released at the end of 2011. This will include our detailed assessment of investment in biomass power generation, focusing on technical feasibility, economics and availability of sustainable biomass.

Indra Thillainathan

By Indra Thillainathan, Senior Analyst

With new European environmental legislation set to close many existing coal fired power stations by 2015, work is already underway by Tilbury power station to convert it into one of the world’s largest dedicated biomass generators . Ahead of its scheduled re-commissioning in November, a few members of the CCC made a visit to the Essex based plant earlier this month to see how work was progressing.

The 1,050MW coal fired Tilbury ‘B’ plant had been generating electricity since 1967. However, EU legislation to reduce emissions under the Large Combustion Plant Directive (LCPD) prompted the owner, RWE npower to look at options that could extend the life of the plant. Work for the first phase will see a switching of feedstock from coal to biomass, with a generating capacity of 750MW. Life cycle CO2 emissions are expected to be around 80% lower than for a similar sized coal fired power station. However, as Nigel Staves, the station manager pointed out, the plant will still be required to close under the LCPD unless a secondary more comprehensive and costlier programme of works is carried out in order to meet new plant regulations. Npower is currently looking at options to do this.

inside 55 metre high furnace

Located on the Thames Estuary, Tilbury will rely on imported sources of wood pellets that will be delivered to its own jetty.  The issue of sustainability was at the forefront of everyone’s minds, given the large volume of biomass feed that it expects to consume each year. But with feed derived from pine beetle damaged wood and timber residues from British Columbia and Georgia in the USA, npower are satisfied that the feedstock under the first phase will be sustainable.  Should the second phase proceed, npower is undertaking R&D into alternative feeds to forestry materials. These alternative feeds are not expected to become available until the next decade or two.

Although the plant was closed for the conversion, a tour of the site enabled us to see up close some of the technology involved in the process of generating electricity. This included standing inside one of the vast 55m high furnaces where temperatures can reach up to 1,100 degrees to heat re-circulating purified water to produce high pressure steam to drive the turbine.  Our tour ended in the control room of the plant.

control room at Tilbury Power Plant

The CCC’s Bioenergy review will be released at the end of 2011. This will include our detailed assessment of investment in biomass power generation, focussing on technical feasibility, economics and availability of biomass supply.

There is much talk at the moment about green growth – environmentally sustainable, biodiverse, low-carbon and climate-resilient growth in human prosperity. Policy makers are attracted by the fact that green growth allows environmental protection to be cast as a question of opportunity and reward instead of costly restraint.  Analysts like the green growth idea because it abandons the narrow focus on emission reduction costs for broader, more nuanced and richer strands of economics.

Green growth enriches the policy debate in four important ways.

First, green growth reconnects long-term environmental sustainability with the understandable concerns of politicians about short-term macroeconomic issues like debt, unemployment and the performance of the economy.  The calls for a green fiscal stimulus, which started at the height of the world economic crisis, draw on this perspective.  A continuing weak economy, low interest rates and high unemployment mean that this aspect of the agenda is still relevant.  Where government budgets allow, timely and targeted investment in environmental projects could boost GDP and ensure an environmentally sound recovery.

Second, green growth espouses a much wider view of how and why markets fail. The problem is not just that markets ignore the value of the environment. Markets also malfunction if there are information problems, if firms have monopolistic power or if innovation is not properly rewarded. These market failures can interact and reinforce each other.   Large welfare gains are possible from well-designed taxes, subsidies and regulatory measures that deal with them comprehensively. However, if green growth measures are ill thought out, they could also dent the effectiveness of policies.

Third, green growth recognises that the economic changes required are not mere meddling at the margin.  New inventions and social changes in response to environmental imperatives could trigger a new industrial revolution. This would open up huge opportunities for innovative new firms in areas like renewable energy, low-carbon transport and sustainable forestry management. However, it also imposes enormous challenges for established firms .

One can foresee other obstacles.  If there is to be a new green industrial revolution, novel, credible, strong and persistent policies will have to be implemented around the world.  Although modern economies depend heavily on energy, the energy sector itself may not be big enough to  trigger the same economy-wide transformation and wave of innovation as earlier economic revolutions, such as that in IT.

Fourth, green growth recognises the constraint that increasingly scarce resources may impose on growth in the very long run.  So far, human ingenuity and good governance have allowed humanity to escape the fate foretold by the Club of Rome and many others – that the world is running out of essential resources.  Economies have managed to generate new products and production techniques before resource constraints have begun to bite.  The challenge is for ‘green growth’ policies to repeat this feat, by replacing exhaustible resources like fossil fuels with renewable ones like solar energy.

How will all this affect economic policy?  Green growth requires both public policy and private initiative. It will be private entrepreneurs that start the new industrial revolution. But they need to be incentivised through well-designed – though not necessarily more – regulation.  Policies need to be applied within transparent, credible and ethically acceptable frameworks of governance, monitored and assessed by informed citizens. Perhaps most importantly, green growth  reinforces the need for collective action. The green industrial revolution will only happen if enough people decide this is the way to go.

Alex Bowen is principal research fellow at the Grantham Research Institute on Climate Change and the Environment at London School of Economics and Political Science. Sam Fankhauser is co-director of the Grantham Research Institute on Climate Change and the Environment and a member of the UK Committee on Climate Change, an independent body that advises the UK Government on carbon targets and on preparing for climate change.

The blog above is based on a technical article for Global Environmental Change.

On entering office, Secretary of State Chris Huhne asked our Committee to conduct a Review into Renewable Energy to provide advice on whether the renewables target for 2020 should be raised; and on the potential for renewable energy development beyond 2020 to 2030.

The need for a portfolio approach

In May 2011, we published the review, the headline recommendation of which was that renewable energy could make a major contribution to decarbonising the UK economy, providing between 30-45% of our energy by 2030, compared to around 3% today (see Figure 5.2 below). [AB1]

Based on an assessment of costs, resource constraints and technical considerations, we argued that in determining the precise balance of renewables versus other low carbon technologies in the power sector, a portfolio approach to technology development is appropriate.

Specifically, we proposed that there should be investment in various renewable forms of power generation over the next two decades, together with nuclear and CCS.

Nuclear, renewables and CCS are potentially cost competitive

Our cost assessment was based on new research and modelling by Mott Macdonald which built on a study they produced for DECC in 2010 and developed cost scenarios across the range of low carbon technologies.

The Mott Macdonald analysis showed that there is a wide range of potential costs for each of the low carbon technologies (e.g. 7.5-13.5p/kWh for offshore wind, and 4-10p/kWh for nuclear in 2030). This reflects uncertainty around key cost drivers, including construction and financing cost, and learning rates, (see Figures 1 & 2 below).

Source: CCC Renewables Review – Executive Summary

In the case of nuclear in particular, we modelled a range of construction costs that builds in experience from the two projects currently under construction in Finland and France, financing costs based on a review of the literature and a survey of market participants, and back end costs estimated using social rather than (higher) commercial discount rates.

In future, it will be important to learn lessons from the Fukishima incident, including any implications for costs (e.g. associated with design changes or increased financing costs).

Given the significant uncertainties, it is difficult to be definitive about the relative costs of low carbon technologies, particularly further out in time.

However, we concluded that it is likely that nuclear will be relatively cheap for the foreseeable future. In the longer term, there are plausible scenarios where the full range of low carbon technologies – nuclear, wind, marine, solar, CCS – are competitive.

The role of nuclear and renewables in achieving power sector decarbonisation and carbon budgets

Parliament recently legislated a fourth carbon budget which reflects almost full decarbonisation of the power sector over the next two decades (e.g. reducing average emissions from around 500 gCO₂ / kWH to less than 50 gCO₂ / kWh by 2030) .

In the Renewable Energy Review, we set out an illustrative scenario to achieve required decarbonisation, in which nuclear and renewables account for 40% of generation in 2030, with CCS contributing 15%, and 5% unabated gas fired generation.

We stressed that this should not be seen as a target, and recommended that the precise balance between technologies should be determined through new electricity market arrangements, based on consideration of relative costs and other factors.

However, it is clear that achieving sector decarbonisation will require significant investment in nuclear, wind and CCS. Trying to decarbonise without one or more of these options would raise costs and risks of meeting the carbon budget to which we are now legally committed. For example, taking nuclear out of the mix would result in increased investment in unabated gas fired generation and associated emissions above budgeted levels.

Therefore it will be important to ensure that new electricity market arrangements support investment in nuclear where this is cost effective, and provide additional support for less mature technologies such as offshore wind and CCS for a transitional period until these become competitive.

Given this approach, we will be well placed to achieve early power sector decarbonisation, which is a central pillar of wider economy decarbonisation required under the Climate Change Act.

• Read George Monbiot’s latest blog on the Guardian Environment
• Read Jonathan Porritt’s piece on Guardian Environment