Will Britain exceed its carbon reduction targets? Post 2

This is the second of two posts that examine the UK's claims and efforts to reduce its carbon emissions.


Its conclusion: the UK must stop burning coal to win the battle to cut carbon emissions.

The Government claimed last week in its Carbon Plan that it is on track to meet its carbon reduction target, but this is contradicted by other independent evidence.

Emissions and carbon intensity are increasing

This evidence shows that the UK's greenhouse gas emissions actually increased last year by 3.5%; more than double the 1.3% growth in the economy, according to the PwC Low Carbon Economy Index published two weeks ago.

And this is a trend. The previous years' statistics from the UK government also show an increase in net carbon dioxide emissions of 3.8%.

If we carry on in this trend, the UK will undoubtedly miss its 34% reduction target.

Worse, the PWc report shows how, globally, national economies' carbon intensities are increasing everywhere.

Carbon intensity is a measure of how much Gross Domestic Product is produced per unit of energy generated from fossil fuels.

PWc's modelling shows that globally, the annual reduction in carbon intensity required to meet the 2° reduction target in carbon emissions by 2050, required to avoid climate chaos, has increased in the last year from 4.7% to 4.8%.

The UK's requirement is higher than this global average. The carbon intensity of its economy is actually increasing by 2.2% a year, and the annual decarbonisation rate now required to meet the 2° reduction target is 5.6%.

Much of the cause of the previous decarbonisation of the UK economy is actually due to the “dash for gas" which happened in the 1990s and resulted in a decarbonisation rate of 3%.

Its recent rise, correspondingly, is due to an increase in coal burning. The latest energy statistics show that in the last financial year, instead of renewables generating 10%, as is commonly believed, they provided 6.5% of our needs.

We are burning more coal

Coal provided 35.7% and natural gas 48.9%, with the shrinking contribution of nuclear power contributing 5.2%.

(The global warming potential of coal is nearly three times that of natural gas: 910gCO2/kWh compared to 360gCO2/kWh.)

This increase in the burning of fossil fuels to generate our electricity underscores how unfortunate it is that the U.K.'s carbon capture and storage programme is suffering delays.

PWc observe that “the longer the delay in significant action to tackle emissions growth, the steeper the path becomes to stay on track with a 2° reduction target," and the more it will cost us.

In industrialised countries, meeting this target will require massive emissions reductions in the order of 80-95% according to another annual report, the EU Climate Policy Tracker, out today from ECOFYS and WWF.

On the other hand, energy intensive industries have been complaining loudly about the cost to them of carbon reduction policies, and in his Autumn Statement, the Chancellor George Osborne promised to reduce this cost, which has the effect of reducing their incentives to save carbon.

PWc warn that there could be a large funding gap in the amount of investment which the UK needs not just to decarbonise the power sector (£89 billion) but to meet energy needs with coal and gas (hundred and £10 billion).

The big 6 utilities in the UK would have to triple their investment to meet the government's target, and in the current economic climate this does not seem likely.

The government suggested last week that pension and insurance funds could contribute to the sums required.

But for this to happen there must be a stable return with limited downsides risk.

Matthew Brown, the CBI's head of energy and climate change policy, has said that although the government's Carbon Plan gives investors a "clearer" picture of how the nation can transition to a low-carbon economy, "we now need this to be backed by consistent, long-term policies, avoiding any sudden changes of direction which put investors off."

What is the solution?

In an ideal world there would be plenty of funding available for low carbon technology, shale gas would not have been discovered, the Fukshima nuclear disaster would not have happened, and the European Emissions Trading Scheme would be operating perfectly to give a high price for carbon that would allow the necessary investments to take place.

Instead, we have to live with what we've got. Either you believe that there is an almost 100% certainty that we have to reduce emissions very fast in order to his avoid global disaster, or you believe that we should have other priorities, namely, our short-term national economies.

The Chancellor clearly believes the latter. The U.K.'s Energy and Climate Change Department believes the former.

The Chancellor believes that European legislation is holding back British business.

But half of the environmental performance of the average European member state is directly related to European legislation. Without it, the European natural environment and carbon emissions would be in a much worse state.

While the UK is one of the better performers in the European Union in legislation to fight climate change, we must not forget that under the Spending Review the Warm Front Scheme was cut, and the aspirations or funding for the Renewable Heat Incentive, Zero Carbon Homes and Carbon Trust were scaled back.

The Carbon Reduction Commitment Energy Efficiency Scheme has now been transformed into essentially a carbon tax with revenues going to the Treasury instead of scheme participants.

Back in June 2011, the UK Committee on Climate Change warned that UK policies are failing to achieve the needed step change.

Since then there have been many delays in policy decisions and changes of tack, which all impact on investor confidence.

In just one snapshot of the challenge ahead, The Centre for Low Carbon Futures and the Energy Saving Trust warned on Monday that "one building every minute must be retrofitted with carbon cutting solutions to meet 2050 energy targets".

Their report argues that the Government must invest in interdisciplinary research which brings together technical, social and economic expertise.

This is both a huge challenge and a huge opportunity, both for job creation and to save energy costs.

I firmly believe that the nation is hungry for this kind of action, for the sake of jobs, the economy and reduction of energy bills.

But the most important thing we can do is to stop burning coal.

Will UK will exceed its carbon reduction targets? Post 1

This is the first of two posts about the UK's climate emissions and its plans to reduce them.


This first one represents the Government's current view:

David Cameron and Nick Clegg last week launched a Carbon Plan setting out the Coalition Government's policies to meet its long term commitments to cut carbon emissions.

These must, by law, be cut by at least 80% of 1990 levels by 2050. They have already been cut by more than 25%.

The Carbon Plan states that with the policies already in place the economy will significantly exceed the 34% target set for the first 15 years under the Climate Change Act, and would have done so even if the recession had not occurred.

The plan looks to the future in the light of the carbon budgets set by the Committee for Climate Change running from 2008-2012, 2013-2017 and 2018-2022.

However, the Environmental Audit Committee has warned that any loosening of the budget following the 2014 review urged by the Treasury could jeopardise the 2050 goal.

And an independent assessment says that the UK's greenhouse gas emissions are actually increasing by 3.5%; more than double the 1.3% growth in the economy, according to a recent report from PricewaterhouseCoopers' Low Carbon Economy Index.

Decade by decade

The Carbon Plan says that in the next decade the focus will be on energy efficiency, utilising the Green Deal, EU ETS, Climate Change Agreements and the CRC Energy Efficiency Scheme, as well as the benefits of the smart grid, which will help to reduce and manage peak and overall demands.
The average emissions of motor vehicles are expected to fall by a third, mostly due to more efficient combustion engines and sustainable biofuels.

Emerging low carbon technologies will be piloted, examined and deployed as they reach commercial levels.

During the 2020s, the successful technologies will move towards mass rollout, and this will include cheaper electric cars. The plan hopes that this will help the UK to "gain a long-term competitive advantage" in these technologies.

In the following decade, after the quick wins have been achieved, then emissions from the “hard to treat sectors, such as industry, shipping and agriculture will have to be tackled", Energy Secretary Chris Huhne says in his ministerial statement accompanying the plan.

Negotiating advantage

He says that its publication is timed to coincide with the United Nations climate negotiations taking place in Durban, “to show that the UK is walking the walk, demonstrating that even in tough times it can be done".

Mr. Huhne is on his way to attend the talks next week.

The UK's 2020 target to reduce emissions by 34% is much less than the EU's 20% below 1990 levels by 2020 (rising to 30% if other nations commit to comparable efforts under a broader climate pact).

"Our national economic interest is to be found in a cost-effective transition to low carbon, to an economy that is more resilient, innovative and efficient,” Mr. Huhne added.

The picture in 2050

The plan envisages that by 2050, emissions from heating and powering buildings will be virtually zero, and the roads will be filled with ultra-low emission vehicles.

In a closed-loop society, waste will be a thing of the past, and materials will either be reused or become an energy source.

However, we will need much more electricity, perhaps as much as twice the amount, to deal with peak demand and power vehicles and provide heating, despite a projected reduction in demand per head of population due to energy efficiency measures by up to 50%.

The government says it does not wish to pick particular technology winners, instead helping academia, industry and the market to work together to do this.

But the plan does outline different possible scenarios: a “higher renewables, more energy efficiency" scenario; “higher carbon capture and storage, more bioenergy" scenario; and a “higher nuclear, less energy efficiency" scenario.

Nuclear power

Nuclear power is currently projected to be the cheapest low carbon technology in the future, and the most cost-effective power mix using traditional cost analysis (based on the 'MARKAL' model, which has certain disadvantages that work against renewable energy) is anticipated to be 33 gigawatts (GW) of nuclear, 45GW of renewables and 29GW of fossil fuels with CCS.

The Government says that this would result in energy costs to consumers being reduced by £84/person/year.

This would involve tripling the amount of nuclear power currently installed. But this week, EDF Energy, currently expected to build the U.K.'s first new plant in three decades, at Hinckley, Somerset, said that its schedule was being put backwards due to extra safety checks.

Energy Minister Charles Hendry also revealed yesterday that the Government wants to build a new plant for processing nuclear waste, four months after a similar plant costing the taxpayer £1.4 billion was closed.

It will convert the UK’s giant stockpile of used plutonium into a form of nuclear fuel.

He said: “converting the plutonium into mixed oxide fuel is the most credible and technologically mature option,” and “any remaining plutonium whose condition is such that it cannot be converted into MOX, will be immobilised and treated as a waste for disposal".

Investment shortfall

In the next 10 years decisions have to be taken which will affect the picture 30 years later: switching from coal to gas powered generation and renewable electricity, which will also help reduce exposure to volatile fossil fuel prices.

In the following decade, carbon capture and storage and nuclear power are expected to be deployed alongside more renewables. Around 60 to 80 GW of new capacity will need to be built by 2030.

The main barrier to this is lack of investment. The current electricity prices driven mainly by gas power stations. The reform of the electricity market is partly designed to address this problem.

The Green Investment Bank is expected to be lending money from 2015, when most funding for the construction of Round 3 offshore wind is required.

A calculator, based on the 'MARKAL' model, has been made available on DECC's website which attempts to explain the total costs associated with powering the entire economy, averaged over the four decades up to 2050.

It includes the costs of the infrastructure and technologies required across all sectors (everything from family cars, to gas boilers to power stations), the costs of financing that infrastructure investment over time, and the costs of fuel and maintenance to keep those infrastructure and technologies running.

A revised online 2050 calculator also allows users to compare the cost of their chosen future energy system compared to doing nothing, or to other low carbon pathways.

The Coalition's Carbon Plan is a rehash - what should it really say?

It certainly comes across as well-meaning and earnest. There are no less than 186 measures in the Excel spreadsheet accompanying The Carbon Plan launched jointly today by the leaders of the Conservative-Liberal Democrat coalition government.

But the Plan currently – it is a draft - is little more than a summary of already existing government policies. What it indicates is that the coalition is keen to regain the initiative after criticism that it is not meeting its promise to be the “greenest government ever".

Critics will be asking why, if the government wants to get us onto public transport, are so many bus services being cut across the country?

They will say, why are the revenues from the Carbon Reduction Commitment, and the forthcoming climate change levy (CCL) on all fossil fuels used in electricity generation, instead of being ploughed directly into low carbon activities, to go to the Treasury to fill the budget deficit?

Much of the commentary in the Plan will be familiar to long-term observers of government attempts to reduce the nation's environmental impact. One must ask: if governments have failed before, what are the real impediments to progress that this one must overcome in order to succeed? How can future drafts improve on this one?

Undoubtedly the Plan's signatories, David Cameron, Nick Clegg and Chris Huhne, need to lean on the Treasury. Its mandarins have been opposing Huhne's attempts to set up the Green Investment Bank as a proper bank.

They appear to have failed in this - it will be launched next year - but they have recently succeeded in blocking a source of finance for the bank by issuing green investment bonds for the public to buy. For the Treasury, such a solution is too messy - they prefer to stick with the big investors. And yet, if we could all invest in the green industrial revolution this would certainly galvanise a much greater proportion of the population.

Planning is another obstacle to be surmounted. The Carbon Plan acknowledges this by saying, for example “The Government is committed to reducing carbon emissions from new buildings through successive changes to The Building Regulations and to enabling new non-domestic buildings to be zero carbon from 2019."

But alongside this, it needs vigorously to retrain and motivate planning departments across the country to support low carbon designs, which all too often fall foul of petty objections. Furthermore, Building Controllers need to be retrained and motivated to properly police implementation of the environmental aspects of the Building Regulations and, if necessary prosecute offenders with the same rigour as is applied to Health and Safety breaches. No one has ever yet been prosecuted for a breach of Part L.

The use of passive solar architecture for heating and cooling of buildings has huge potential. The utilization of solar gain, and standards similar to the ‘Passivhaus’ standard, can help to curb the rate of growth in demand for electricity for these purposes.

Reducing demand is far more cost-effective than building new power stations. But if we are going to build new power stations, then "renewable energy technologies are the only ones to offer a reduction of price rather than an increase in the future" [Arnulf Jäger-Waldau, PV Status Report 2008, Renewable Energy Unit, European Commission].

So, in the long-term, we are undoubtedly shielding ourselves from future pricing insecurity by investing in renewable energy. The Government evades the criticism that politicians only make short-term decisions by acknowledging this.

What it needs to do however, is look more carefully at which technologies it should back - such as the extremely reliable and almost market-ready marine current turbines and anaerobic digestion.

For example, it wants us to “move away from gas boilers to low carbon alternatives, such as heat pumps". And yet in most cases replacing a gas boiler with a heat pump would not result in carbon savings. Has it looked at the carbon balance of this?

Why is it that yet again solar thermal heating hardly gets a mention? If the Government wants to get more carbon savings for its £££s it is far better spending its money on this than photovoltaics. A study [B. Croxford and K. Scott, Can PV or Solar Thermal Systems Be Cost Effective? London, 2008.] found that the costs of reducing overall carbon dioxide emissions using a solar photovoltaic roof are £196/tonne CO2, but for solar thermal individual systems are £65/tonne CO2 and for community solar thermal five times better at £38/tonne CO2.

The Plan is right to support distributed energy, whose benefits coincide with the ideology of the new Localism: local ownership, reduced transmission losses and greater efficiency. At too small a scale, however, the economy of scale is lost because of unnecessary duplication of system components such as inverters (house-by-house, instead of street-by-street).

Renewable energy and building refurbishment at village, street or town scale therefore have a part to play in community regeneration, as communities come together to take responsibility for their own energy consumption and learn what it means.

Consumers of energy also have a lot to learn about how their pattern of use affects overall demand, and how they can reduce their energy consumption. It is hoped as well that the rollout of the ‘smart grid’ can help to manage or smooth out peak loads and reduce overall requirements for generation capacity.

We are on a huge learning climb. The road to a low carbon future will be made up of a million incremental steps that we all must take. Undoubtedly there will be some trips along the way.