Carbon Budgets and targets

The Climate Change Act established a target for the UK to reduce its emissions by at least 80% from 1990 levels by 2050. This target represents an appropriate UK contribution to global emission reductions consistent with limiting global temperature rise to as little as possible above 2°C

To ensure that regular progress is made towards this long-term target, the Act also established a system of five-yearly carbon budgets, to serve as stepping stones on the way.

The first five carbon budgets, leading to 2032, have been set in law. The UK is currently in the second carbon budget period (2013-17). Meeting the fourth carbon budget (2023-27) will require that emissions be reduced by 50% on 1990 levels in 2025, and meeting the fifth (2028-32) will require that emissions be reduced by 57% on 1990 levels in 2030.

BudgetCarbon budget level% reduction below base year
1st Carbon budget (2008-12)3,018 MtCO2e23%
2nd Carbon budget (2013-17)2,782 MtCO2e29%
3rd Carbon budget (2018-22)2,544 MtCO2e35% by 2020
4th Carbon budget (2023-27)1,950 MtCO2e50% by 2025
5th Carbon budget (2028-32)1,765 MtCO2e57% by 2030

Rationale for carbon budgets

By providing benchmarks towards the 2050 target, the carbon budgets ensure regular progress is being made and provide a level of predictability for UK firms and households to plan and invest for a low-carbon economy.

It’s important that action towards the 2050 target is not continually postponed. This would not be economically sensible, or even feasible given technical limits on the amount of low carbon investment that may be achievable in any single year. On the other hand, too rapid a shift would require costly scrappage of higher carbon investments before the end of their lives. Instead, it makes sense to plan now for the replacement of high carbon capital as opportunities arise.

Furthermore, it is not simply the level of emissions in a future target year that we should be concerned about. It is cumulative emissions over the whole period that matter. Under a system of carbon budgets, every tonne of GHG emitted between now and 2050 will count.

Basis for levels of carbon budgets

In providing its advice to Government on the level of carbon budgets the CCC uses criteria set out in the Climate Change Act. It has assessed, by sector, what can be achieved to reduce emissions at least cost, taking account of available technologies and government policy and recommended that:

  • energy efficiency improvements are a cost effective way to contribute to emission reductions whilst saving money for individuals and business;
  • fostering innovation in technology, although having some cost in the short term, will contribute substantially to emissions reductions and prove economical in future years
  • Other measures with a cost below the Government’s projected carbon price are available and should be taken as a cost effective option on the path to the long-term target.

The budgets must also be consistent with UK obligations towards EU targets, and as a contribution to required global emission reductions.