Gummer’s Fifth Carbon Budget
By Paul Homewood
John Gummer’s Committee on Climate Change has published its recommendations for the UK’s Fifth Carbon Budget, for 2028-32.
Under the Climate Change Act, the Committee has a duty to advise the Government on such issues. My general understanding is that the latter has adopted previous budgets without much quibble. Certainly, if the Government were to make major changes, or just ignore it, there would be a big battle politically.
For this Fifth Budget, they are proposing that GHG emissions be cut by 57% from 1990 levels, to 1765 MtCO2e. The Fourth Carbon Budget, for 2023-27 already legislates for cut of 50%.
What needs to be borne in mind, however, is that the EU’s binding target is only for a 40% cut from 1990.
In other words, Gummer proposes that the UK pursues an ever more suicidal rush to decarbonise than our competitors in Europe, never mind the rest of the world, will do. One reason is the need to keep track with the overall aim, set out in the Climate Change Act, for a cut of 80% by 2050.
As can be seen, emissions in 2014 were already 36% less than 1990, largely because of reductions before 2008. Most of this is likely to have been due to a combination of the dash for gas in the 1990’s and closure of much heavy industry over the period.
Given EU targets of a 40% cut therefore, there is no need for the UK to do much more before 2030, which entitles one to ask why the Government should pay the slightest attention to what the CCC has to say.
Below are the basic scenarios that the Committee visualises:
I have already looked at the proposals for power here.
Much of the rest appears to be wishful thinking:
1) Industry has always looked for ways to save energy, and will continue to. But the idea of CCS clusters for industry seems positively barking. Are they really suggesting that heavy industry uproots so as to be part of a CCS cluster. Has it not occurred to Gummer that most of it is on its last legs anyway?
2) Energy savings from better insulation look to be limited, and govt plans to develop deployment of heat pumps, CHP networks etc have been in utter disarray for a while now.
3) Fuel economy for cars will also continue to improve, just as it has for decades. Indeed, continued improvements may leave hybrid cars largely irrelevant.
But much of this benefit will disappear as the number of cars on the roads also increases.
As the RAC pointed out in 2013, the number of vehicles on Britain’s roads has reached yet another all-time high. In fact the number of licensed vehicles has increased in every year since World War II except 1991.
Much of this increase has been fuelled by two car families, plus of course increasing population and wealth. This can be seen from the DVLA chart below.
As for electric/hybrid cars, a target of 60% of new car sales in 2030 is pure pie in the sky. Last year, only 15869 new ULEV’s were registered, out of a total of 2.97 million new vehicles, a princely total of 0.5%. This despite the £5000 subsidy offered by Government.
And then, of course, there’s the cost of all this.
The Budget gives a central scenario cost of 0.5%, about £8bn a year. Given the current trajectory of much lower fossil fuel prices, the figure of 0.8% or £13bn looks much more likely.
However, this table does not tell the whole truth, as the previous page makes clear:
“Costs would be lower to the extent that reduced carbon emissions mean UK firms can purchase fewer emissions allowances in the EU ETS”
This is like being asked whether you want to be burnt or scalded, and is another example of the utter dishonesty shown by Gummer in this document. Whether we opt for one of his scenarios or pay more for ETS, it is still going to cost the country much more than otherwise.
However, there is an even more significant example of Gummer’s deceit. His estimate of the costs is based on comparing low carbon technology with new gas-fired generation, which, crucially, includes a carbon floor price of £78/tonne by 2030. (See here for my previous analysis of this).
Without what is effectively a carbon tax, renewables and new nuclear would not be remotely competitive. The cost of this carbon floor price is estimated to be £6.8bn a year, thus bringing the real cost of Gummer’s plan to £14.8bn even on the central fossil fuel price assumption.
Intriguingly, the CCC say:
As there is no sign that Paris will come up with any meaningful agreement, does this mean Gummer will recommend relaxing his targets? I would not hold my breath!
Regardless of the outcome in Paris, the Government should immediately reject this Fifth Carbon Budget out of hand. Furthermore, it should also reduce the targets in the Fourth Carbon Budget to bring into line with a 40% cut in emissions from 1990 levels, as opposed to 50%.
This will bring us back into line with the rest of the EU.
Unless the rest of the world is prepared to make the same drastic cuts, we should also dismantle, or at least suspend, the Climate Change Act.
Finally, it should either wind up the CCC, or defund it. If they want to pay, say, £5000 a year for someone to write crappy reports, I’ll volunteer now. At least it would allow Mr Gummer to devote more time to his business interests, which still include Chairman of Sancroft International (consultants in corporate responsibility and environmental, social, ethical and planning issues), Director of Veolia Voda (continental water company) and Non-executive Chairman, Valpak Holdings Limited and Valpak Limited (leading provider of environmental compliance, recycling and sustainability solutions).