Happy 5th Birthday Climate Change Act: Don’t forget the 4th Budget

By Catherine Mitchell

Happy 5th Birthday Climate Change Act. It would be great to say ‘I hope the next five years see you leading a stronger commitment to climate change mitigation’. But that, unfortunately, is not the situation we find ourselves in. Britain is in a political maelstrom when it comes to the future of climate change mitigation and energy policy, and how to pay for it.

At the moment, it would feel like a victory to have the 4th carbon budget – a stepping stone to cutting our emissions and maintaining ourselves on a pathway to an average 2 degree rise in global temperature – agreed relatively easily, and for the Act to continue in force if the Conservatives win the next general election. Both are questionable, although one hopes that both occur.

The Climate Change Act is quite clear that the government cannot just change the 4th budget on a whim. There has to be a significant change in circumstances. The Committee on Climate Change – the independent body which advises UK governments on tackling and preparing for climate change, established as part of the Act – has published part 1 of the 4th carbon budget review. There has been no significant change in the climate science, international and EU circumstances on which the fourth carbon budget (2023 – 2027) was set in 2011, so there is no legal or economic basis to change the budget. Furthermore, to not accept the 4th budget would damage investor confidence and the UK’s position in international negotiations. The CCC have made sure that the 4th budget embodies a set of measures that make economic sense, in many ways making it easier for the Government to say that they accept the 4th budget.

So why is the 4th budget under threat? Why is the Government beginning to question the CCC; their advisor on climate policy? The CCA came into being as a result of a number of factors (pdf), not least that climate change had to be taken seriously and institutionalised if the Government was to be able to put in place a framework to support nuclear power. The 2008 situation is very different.

The recession and austerity has hit.A continuing campaign against renewable energy technologies, combined with increasing concerns of rising energy prices has led to a battering of green issues.The Government, and EDF, now has a risk free policy in place for nuclear policy, so feels no continuing need to voice fears of climate change.Add in the Conservative Party trying to retain voters who might otherwise move to UKIP, and there is very little vocal and political support for environmental concerns.The importance of green and environmental issues is not high on society’s agenda – as shown by MORIs review of issues – and does not therefore exert much pressure on Government to do anything. Wider society, NGOs or even the IPCC seem unable to turn climate change into a big issue. Labour may have divided political parties by demanding a freeze in energy prices, but this does not equate to climate policies in the eyes of voters. All this comes together as a strong pressure to minimise costs of climate change mitigation, and that means that there is minimal pressure to meet the 4th budget, and if it has to be met then it has to be met at minimal cost.

A secondary worry for the CCA is the requirement for the Government to make sure that they don’t implement a policy by default which has the unintended consequence of greater carbon dioxide emissions.This requires the Government to remove biases in the current Energy Bill which support higher coal use.A recent study has shown that the complex outcome of the Emission Performance Standards and the Industrial Emissions Directive provide incentives for around 15-20GW of existing coal plants to opt-in to an agreement to upgrade their coal plants in exchange for operating for another decade or so.The report shows that this would not only be bad for the environment and potentially undermine energy security but it would also be very costly to customers. The confluence of low coal prices and high gas prices and the unintended consequences of regulations aimed to reduce coal use has led to higher coal use in the recent past. However, unless these changes to the Energy Bill are made, Britain could well see customers paying hundreds of millions of pounds to enable continuing electricity generation from coal plants, despite it being against the broad energy policy intent since the late 1980’s. This cost would be in addition to the very high costs of nuclear power already widely talked about.

Now is the time for Government to hold firm to a progressive climate change policy and support the 4th carbon budget. This is not just because it fits with the needs of the science set out in IPCC AR5 WG1, but because it would also fit with the technological and operational momentum of the global energy system. To not sign up to the 4th budget would reduce British attempts at climate change mitigation via renewable energy and energy efficiency measures and this would undermine Britain’s nascent sustainable energy industry. The last thing that is wanted is for the Government to push Britain into a worse economic and climate position than it currently is.

This article first appeared on The Guardian website.

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