Trouble in store over CO2 target

The tough challenge facing the Government in meeting its commitment to cut carbon dioxide emissions has been set out in a report by the Socialist Environment and Resources Association (SERA).1 SERA says that the target could be met by energy taxes on business, a levy to fund a major domestic energy efficiency programme and a major reduction in road traffic - but it has taken an optimistic view of potential savings in several key areas.

Labour's promise to cut CO2 emissions by 20% by 2010 from a 1990 baseline is much tougher than that of the previous Government (ENDS Report 266, pp 4-6 ).

The Government's detailed plans for meeting the target will not be known until the Department of the Environment (DoE) publishes a revised climate change strategy early next year. In June, former Environment Secretary John Gummer urged it to give a "clear indication" of its plans before December's meeting in Kyoto to agree a new protocol to the UN Convention on Climate Change. "If we do this, we become a world leader," he said, "if we don't, merely a world poseur."

The analysis by SERA - a Labour-affiliated green pressure group which boasts six Cabinet ministers in its membership - is the first to explore how the target could be achieved.

According to official projections, energy-related CO2 emissions will be 4-8% below the 1990 level of 158.3 million tonnes of carbon in 2000 (ENDS Report 251, pp 19-22 ). But they are then projected to rise to 161.8mtC by 2010. The new Government therefore needs to plan for a reduction of 35.2mtC by then - unless it revises the projections.

SERA accepts that meeting the target "will not be easy", but maintains that it is achievable "using policies and measures which either already form part of Government policy, or which are clearly consistent with its aims."

However, SERA's view of potential savings in the transport and domestic energy sectors is optimistic - and leaves little room for slippage in any part of its overall package (see table ). Nick Eyre of SERA counters that "the uncertainties cut both ways - my underlying feeling is that the official projections for industry and transport emissions are still too high."

  • Transport: Under SERA's programme, nearly half of the necessary emission reductions come from the transport sector - but the mechanisms for delivery are particularly poorly defined.

    SERA urges the Government to pursue early agreement to make proposed EC standards for vehicle fuel efficiency effective from 2005 (ENDS Report 257, pp 39-41 ). The EC proposal would require all new cars to consume less than five litres per 100km, compared to the current average of 8litres/100km. SERA says that if half of the fleet met the standard in 2010, and fiscal incentives were used to reduce the average consumption of the remainder to 7litres/100km, savings of 8.5mtC could be delivered.

    SERA also believes that a further 7mtC reduction could be achieved by curbing traffic. Annual mileage per vehicle is 20% higher in the UK than in Germany or the Netherlands. SERA proposes that the Government should aim to reduce road transport mileage by 20% by 2010.

    Details of what Labour's integrated transport policy may mean in practice await the publication of a White Paper next spring. SERA's calculations suggest that a dramatic reversal in the long-term increase in traffic growth is essential if the Government is to stand a chance of meeting its CO2 targets.

  • Electricity supply: Energy Minister John Battle is reviewing "what would be necessary and practicable" to achieve Labour's plan to generate 10% of the UK's electricity from renewable sources by 2010. Meeting that goal would, says SERA, save an extra 3.5mtC, but it would require continued subsidy for renewables or obligations on suppliers in the liberalised energy markets.

    Labour's target of increasing combined heat and power capacity to 10GW by 2010 would give an additional reduction of 2mtC. In June, Environment Minister Angela Eagle suggested that there may be scope for a more ambitious target.

    SERA makes no mention of the Government's plans to subsidise new coal-fired power stations, which could lead to an increase in CO2 emissions (see p 33 ). No such plants feature in the existing emission projections for 2010.

  • Domestic energy efficiency: The DoE has indicated that cost-effective improvements of 30% are available in the UK housing stock. SERA assumes that one-third of this saving would be taken as improved warmth, leaving an emission reduction of 5.8mtC. "A very large programme" would be needed to deliver this by 2010.

    A recent working paper for the Energy Saving Trust concluded that similar CO2 reductions could be achieved by a scheme with a total annual funding building to £800 million. SERA says that a programme of this scale "can only realistically be funded by the energy companies" via a levy on gas and electricity suppliers. The Trust's initial plans for a major programme funded by an "E-factor" levy were blocked by gas regulator Ofgas - and any future levy would require forceful Government backing.

    Moreover, doubts remain over the scale of potential CO2 savings in the domestic sector. The Association for the Conservation of Energy has calculated that a 15-year programme to fit efficiency measures in 500,000 homes per year would reduce annual emissions by just 1.4mtC (ENDS Report 266, pp 28-29 ). Most of the energy savings would be used for greater warmth because the scheme is aimed at the fuel poor.

    Labour has promised a "major push to promote energy conservation". But this is likely to focus on the fuel poor on social and health grounds - so the environmental benefits may be lower than SERA has predicted.

  • Industry and commerce: Labour has published no detailed policies for reducing energy consumption by business. However, SERA looks to its election manifesto's comment that pollution should be discouraged through the tax system.

    Research for the Institute for Public Policy Research has suggested that a gradually introduced business energy tax of $9 per barrel, increasing prices by some 40%, would reduce emissions by 8mtC (ENDS Report 257, pp 18-21 ). Mr Eyre says that this is "well within what is achievable by technical measures which are cost-effective even at current prices."

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