Domestic legislation – the Climate Change Act 2008 – commits the United Kingdom to an 80 percent emission reduction by 2050 on 1990 levels, and to a system of 5-year carbon budgets to progress toward that target. These carbon budgets require UK emission reductions on 1990 levels of 34 percent by 2020 and 50 percent by 2025. The Carbon Plan, published in December 2011, sets out the UK Government’s plans to keep within its carbon budgets. An independent body – the Committee on Climate Change – advises the government on the setting of carbon targets, and reports to Parliament annually on progress. The UK also has commitments under EU-wide emission reduction targets.
This report summarizes key UK policies already enacted and in development that are likely to reduce greenhouse gas (GHG) emissions across the UK, discusses the implications of the current policy scenario for the country’s GHG trajectory, and identifies issues to watch going forward. Policy measures currently in place to reduce UK GHG emissions include the EU Emissions Trading System (EU ETS), a key policy lever covering emissions from power generation and energy-intensive industry; the EU Renewable Energy Directive, under which the UK has a target to increase the share of renewables in final energy to 15 percent in 2020; and energy efficiency programs for residential buildings, requirements to reduce average new car and van emissions, and a range of other measures across the rest of the economy, not covered by the EU ETS.
Our analysis and the government’s own projections suggest the UK is on course to meet its carbon budgets out to 2022 – and, consequently, its share of the EU’s commitment under the UNFCCC. Meeting the fourth carbon budget (2023–27), however, will require a further acceleration of emission reduction, suggesting the need for emissions in the third budget period (2018–22) to be significantly below the legislated level. To secure such an outcome requires strong and timely implementation of additional measures, with quicker delivery than in the past.
If future carbon budgets are to be met, progress in emission reduction must accelerate. The government is moving forward with plans to reform the electricity market through a system of long-term contracts designed to give greater confidence in investment in low-carbon generation. A new flagship energy efficiency policy – the Green Deal and Energy Company Obligation – is being introduced. It is not clear whether this will deliver on the required scale. Looking forward, key issues will be around the strength of implementation of policies currently being developed (especially electricity market reform and the Green Deal) and the review of the fourth carbon budget (covering emissions in 2023–27), which the government plans to undertake in 2014.