Committee on Climate Change

The Climate Change Act 2008 establishes a new approach to managing and responding to climate change in the UK. The Act creates a legally binding target to reduce the UK’s emissions of greenhouse gases (GHGs) to at least 80% below 1990 levels by 2050. Emissions of greenhouse gases are instrumental in causing global warming and climate change. In order to reduce their levels and meet the 80% target, carbon budgets place legally binding ceilings on the level of allowed UK emissions over five year periods.

What is a carbon budget?

A 'carbon budget' is a cap on the total quantity of greenhouse gas emissions emitted in the UK (net of EUA purchase) over a specified time. Under a system of carbon budgets, every tonne of greenhouse gas emitted between now and 2050 will count. Where emissions rise in one sector, we will have to achieve corresponding falls in another.

Each carbon budget covers a five-year period, with three budgets set at a time. The first three carbon budgets run from 2008-2012, 2013-2017 and 2018-2022.

Legislated carbon budgets

In its December 2008 report the CCC advised on the level of the budgets for 2008-2012, 2013-2017, and 2018-2022. The Government accepted this advice. In April 2009 it announced carbon budgets (table below) and these passed into legislation in May 2009.

Legislated carbon budgets and split between traded and non-traded sectors

Source: DECC

In proposing levels of carbon budgets, the CCC followed the EU framework and produced two sets of budgets: the Interim budget, to apply before a global deal is reached; and the Intended budget which should apply following a global deal on climate change. Both sets of budgets apply to all greenhouse gases (GHGs) rather than just CO₂.

The Interim budgets require an emissions reduction of 34% in 2020 relative to 1990 levels (21% relative to 2005). This is the budget that has been legislated for. It will require an annual average emissions reduction of 1.7% over the first three budget periods.

Indicative annual percentage emissions reductions required to meet legislated carbon budgets

Source: CCC calculations

In line with the Committee’s advice, the Government does not intend to use offset credits to meet these legislated budgets. It has legally committed to this for the first budget in the Climate Change Act.