Clouds over the UK's climate ambitions

The failure of the climate change negotiations in The Hague and the Deputy Prime Minister's subsequent tiff with the French Environment Minister provided plenty of talking-points in November, but came too late to be covered in this edition. For the moment, the UK's climate change programme (see pp 24-26 ) provides plenty to chew on.

The programme is the fruit of multiple consultations and more than two years' hard labour. In its broad sweep and ambition, it is probably the most comprehensive yet produced by any developed country. It also contains a generally unremarked pledge by the Government to begin a national debate on how the UK should make the transition to a low-carbon economy - quite probably reflecting the Prime Minister's recent engagement in the environmental debate. But the strategising is now almost over - bar a long-promised and much needed strategy on combined heat and power, and the interminable consultation on the new renewables obligation - and it is time to deliver.

The easy pickings have mostly been made. The UK's greenhouse gas emissions are expected to be 29 million tonnes of carbon lower this year than in 1990. Some 6.2 million tonnes of that reduction have come from abatement projects at just three chemical works, and another 11.8 million tonnes from the switch to gas in the electricity sector and improved nuclear output. There is very little such low-hanging fruit left in industry, and not a great deal more in the electricity sector. The hard work starts here.

Regrettably, the climate programme makes things appear easier than they will be - most notably because the Department of Trade and Industry's revised energy projections which underpin it make too many bullish assumptions about energy supply to command credibility.

Recent events in the nuclear industry, for instance, have made no mark on the projections. In March, the DTI was assuming a slow decline in nuclear output over the next ten years. But output crashed by 9% in 1999/2000 alone, and the sector has suffered further major problems since - so much so that the UK's carbon dioxide emissions are now predicted to increase this year rather than continuing their steady fall. With several nuclear plants now well into old age, it is erring on the side of optimism to assume, as the DTI has done, that things will simply soon revert to normal.

The Government has also failed to come clean about what the revised projections will require of the renewables sector. Electricity demand is now expected to grow significantly more strongly than projected in March - but there is no explicit recognition in the climate programme that this puts the target to generate 10% of electricity from renewable sources by 2010 even further out of reach. In fact, if renewables output continues to expand at its recent rate, the sector will have to spend the next two years or so simply making up the difference between the two sets of projections. The Government has recently allocated significant sums to help grow the two new renewables, offshore wind and energy crops - but this will not be nearly enough if it fails to do more to tackle rising electricity demand at its roots.

The climate programme also paints an unduly rosy prospect for combined heat and power in the face of rising gas input prices and falling electricity selling prices, as well as for the domestic sector, where a strategy to deliver the full identified potential for cost-effective energy savings is far from being in place.

Future energy prices hold the key to a great deal in the programme - not just for CHP, but also, for instance, to the nuclear sector's ability to compete in next year's liberalised electricity market and capacity to invest in improving the reliability of its power stations. But it may be macro-economic policy which determines the programme's success. The high value of sterling may yet persuade a Corus to pull the plug on a steel works, or a Rover to give up the ghost and take components businesses with it. A few such unpalatable events would take a healthy slice off the UK's greenhouse gas emissions - but may simply see them transferred elsewhere.

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