Alarm bells ring louder on CO2 target

Carbon dioxide emissions increased by nearly 3% last year, according to an analysis of official energy statistics by Friends of the Earth. Mounting concern that the Government is badly adrift on its domestic CO2 reduction target looks set to come to a head this year, amid a welter of reviews of energy, transport and climate change policies.

Official statistics on last year's CO2 emissions are not yet available. However, the Department of Trade and Industry has released statistics on energy use which confirm that the Government has made little headway towards its target of cutting CO2 emissions by 20% between 1990 and 2010.

According to the DTI, total inland consumption of primary fuels increased by 2% in 2003. Correcting the data to allow for annual variations in temperature - arguably a better indicator of long-term trends - still showed an increase of 1.3%. Moreover, high-carbon fuels accounted for most of the increase, with temperature-corrected coal and oil consumption increasing by 6.2% and 3%, respectively.

According to calculations by FoE using officially recognised emission factors, the statistics suggest that CO2 emissions increased by 2.8% in 2003, or by about 2.2% on a temperature-adjusted basis. The DTI refused to comment on the detail of FoE's sums, but an official confirmed that "they're in the right ballpark".

The increase in emissions last year reverses the improvement recorded in 2002 - and means that CO2 emissions have hovered at about 5-8% below 1990 levels since Labour came to power in 1997.

Last year, Ministers hailed the 2002 data as "a real boost" showing that the UK was "on track" to meet its greenhouse gas targets (ENDS Report 339, pp 7-8 ). However, much of the improvement was attributable to warm weather and a temporary slump in emissions from the steel industry (ENDS Report 340, p 45 ).

The energy statistics add to a growing body of evidence that the climate change programme, launched in 2000, is in trouble. Last year, the Government's Sustainable Development Commission claimed that key elements of the programme were failing to deliver (ENDS Report 337, pp 6-7 ). Moreover, the DTI's work on revised energy forecasts suggests that even if the savings in the climate change programme are delivered in full, the CO2 target will be missed because coal burn and economic growth are both now likely to be higher than expected (ENDS Report 344, pp 7-8 ).

Another important snippet comes from the Carbon Trust, which recently told a parliamentary inquiry that CO2 emissions from the business and public sectors alone are likely to be six million tonnes higher than expected under the climate change programme.

The lack of progress towards the CO2 target is a growing embarrassment to Prime Minister Tony Blair, who has set out to make the UK a world leader on climate change (ENDS Report 338, pp 7-8 ).

One senior Whitehall source warned that "our capacity to influence other countries will be dramatically compromised if we miss our own fairly modest goals. There is a danger that we'll feed into the general Kyoto cynicism - and attract a lot of 'I told you so' comments from US economists."

Last autumn, a wide-ranging policy audit by the Prime Minister's Strategy Unit found "little room for comfort" on trends in CO2 emissions - and warned that sustaining the recent decoupling of emissions from economic growth will be "extremely difficult".

The Strategy Unit is now coordinating a cross-Whitehall initiative designed to focus on delivery of the CO2 target as part of a move to develop five-year departmental plans. The move reflects concern that although the Environment Department (DEFRA) has "ownership" of the target, most of the levers are controlled by the DTI, Treasury, Department for Transport and the Office of the Deputy Prime Minister.

A raft of other policy reviews is also due to take place in 2004 - making this a crunch year for climate policy. DEFRA is due to complete a review of the climate change programme by the end of the year, while the DTI is leading a one-year review of the implementation of the energy White Paper (ENDS Report 338, pp 26-32 ).

An energy efficiency implementation plan, promised in the White Paper, is now expected by the end of April. It will probably be accompanied by the much-delayed strategy on combined heat and power (CHP) and a consultation on increasing the use of biofuels for road transport.

ENDS understands that DEFRA has come under fire from other parts of Whitehall for failing to offer clear mechanisms to deliver the expected carbon savings from domestic and commercial buildings. One official told ENDS that "the plan has got better, but it's hard to see where the promised step change in energy efficiency is coming from. The main weaknesses are the lack of Government money, especially for advice and awareness campaigns, and the lack of action on fiscal policy."

Another key issue will be the completion of the national allocation plan for the EU emissions trading scheme (ENDS Report 348, pp 18-22 ). Significant emission reductions could still be achieved relatively easily if the Government sets tight caps on coal-fired power stations - provided concerns about security of supply can be overcome.

Other key milestones this year include ongoing work to finalise the DTI's revised energy forecasts; a review of the climate change agreements with energy-intensive sectors; a review of the 10-year transport plan, where the Government has already admitted that emissions will be higher than originally hoped (ENDS Report 338, p 15 ); consultation on a new energy efficiency commitment for domestic gas and electricity suppliers; and the start of work on a review of the renewables obligation.

One important issue for the review of the climate change programme is what the 20% CO2 target - originally conceived as a purely UK measure - means in the context of international emissions trading. Businesses will soon be able to import and export emission allowances under the EU trading scheme. So far, the Government has insisted it has no plans to follow other EU Member States by setting up a national fund to purchase emission credits from overseas - but the drift on the CO2 target may force a rethink.