Good progress in some areas but much more needed to meet third and fourth carbon budgets – 26 June 2013

There has been good progress in 2012 implementing some of the measures required to meet carbon budgets said the Committee on Climate Change in its latest annual progress report to Parliament. Progress has been made on insulating lofts, cavity walls and boiler replacement in residential buildings. There have been record levels of new wind generation capacity, improvements in the efficiency of new cars and waste emissions reduction.

However, there are significant risks that progress will not be sustained, particularly as regards insulation and investment in renewable power generation. In order to ensure continued progress, incentives for uptake of insulation measures under the Green Deal should be strengthened. In the area of low-carbon power generation it is essential to provide more confidence to investors that the Government is committed to sector decarbonisation.

Progress in other areas was limited in 2012, with very low levels of solid wall insulation, low-carbon heat and energy efficiency improvement in non-residential and commercial sectors. New approaches are required to ensure increased uptake of these measures.

David Kennedy, Chief Executive of the CCC said:

“Although the first carbon budget has been comfortably achieved and the second budget is likely to be achieved, this is largely due to the impact of the economic downturn. There remains a very significant challenge delivering the 3% annual emissions reduction required to meet the third and fourth carbon budgets, particularly as the economy returns to growth. Government action is required over the next two years to develop and implement new policies. A failure to do this would raise the costs and risks associated with moving to a low-carbon economy.”

Greenhouse gas emissions across the economy increased by 3.5% last year, mainly due to the cold winter and a switch from gas to coal in power generation. After taking these temporary effects into account, emissions would have fallen by 1% – 1.5%, compared to 3% annual emission reductions required to meet the third and fourth carbon budgets (i.e. covering the periods 2018-22 and 2023-27).

The report includes assessments by sector and highlights specific challenges to be addressed in order that this increase in the pace of emissions reduction is achieved:

Power sector. Record levels of wind generation capacity (both onshore and offshore) were added to the system in 2012. However, the slow movement of offshore wind projects into construction suggests that investments are now being delayed until implementing arrangements for the Electricity Market Reform are finalised. Challenges remain in moving forward with demonstrations of Carbon Capture and Storage (CCS) and investments in nuclear new build, and putting in place arrangements to support ongoing investment programmes for each of the low-carbon technologies.

Buildings. Loft and cavity wall insulation rates increased in 2012 as energy companies aimed to meet their targets in the final year of the supplier obligation schemes (CERT and CESP). There is a significant risk around future delivery of these measures given weaker incentives under the new Green Deal and Energy Company Obligation. Solid wall insulation rates increased but remained low. While central government made good progress to meet emissions reduction targets for its own estate, there was very limited improvement in commercial sector energy efficiency. Low-carbon heat deployment remained very low, with inadequate levels of investment in heat pumps, which are an important option for meeting carbon budgets.

Industry. There is limited evidence of energy efficiency improvement in industry in 2012, and significant potential remains in this area. This should be addressed to reduce industry costs and emissions. An approach to developing industrial CCS compatible with deployment in the 2020s is also required.

Transport. Emissions of new cars and vans continued to improve, and are on track to meet EU targets for 2020. Take-up of electric vehicles is slow but the market is developing as new models become available. A stable framework of support must remain in place in this nascent market to boost consumer and producer confidence. The Local Sustainable Travel Fund is now fully committed and could reduce transport emissions through Smarter Choices programmes aimed at rationalising car travel. Further funding to support national roll-out should be provided if projects are successful in delivering emissions reductions at low cost. Uptake of eco-driving training remains very low; eco-driving should be actively encouraged through a combination of inclusion as a key element in the practical driving test, driver training, awareness raising and in-car information on fuel efficiency.

Agriculture. The evidence base on agriculture is highly uncertain. While estimated emissions were broadly flat, it is unclear what changes are occurring in farming practice and what impact these are having. In order to understand progress and develop policies accordingly, the evidence base needs to be improved through introduction of a smart emissions inventory, and systematic gathering and publication of information on farming practice.

Waste emissions. These emissions have been falling and are on track with our modelled trajectories to meet carbon budgets. However, further consideration should be given to banning specific types of biodegradable wastes, such as food waste, from landfill.

F-gas emissions. Emissions of F-gases arise primarily from leakage during their use as coolants in air conditioning and refrigeration, though they are also used in some industrial processes and other applications. Commercial companies are increasingly deploying low-carbon alternatives. Given significant scope for reduction of F-gas emissions, the Government should at a minimum fully support proposals from the EU to reduce emissions of F-gases by 70% in 2030, but should also consider pushing for a more ambitious agreement, for example, increasing the speed of phase out of some uses of these gases such that these emissions are zero or minimal by 2020.

Devolved administrations. Similar emissions changes have occurred in the devolved administrations as in the UK overall. In some areas of policy and delivery the devolved administrations are leading within the UK, but significant challenges remain in the transition to low-carbon economies.

  • Emissions. Emissions in the devolved administrations have broadly followed the whole UK trend, with a decrease in emissions during the economic downturn, and year-on-year fluctuations largely due to variations in temperature. In 2011 (the latest year for which data is available), Scottish emissions fell faster than the UK average (by 10% compared to 7%), while emissions in Wales and Northern Ireland fell by 5%.
  • Progress. The devolved administrations continue to lead the UK in some areas. For example Scotland is making very good progress in increasing its renewable energy capacity, while both Scotland and Wales have more ambitious waste targets than required under the EU Landfill Directive. All three devolved administrations have additional, government-funded fuel poverty reduction programmes, focusing on energy efficiency.
  • Challenges. Significant challenges remain, and will need to be addressed, such as increasing the rate of renewable power capacity deployment (especially in Wales), increasing low-carbon heat penetration, increasing rates of woodland planting (especially in Wales and Northern Ireland), encouraging more take up of electric vehicles, as well as reducing the very high rates of fuel poverty found in the devolved administrations.