Committee on Climate Change

Independent advisors to the UK Government on tackling and preparing for climate change

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Carbon Budgets

Policies to meet carbon budgets
Policies set out in the Government’s UK Low Carbon Transition Plan provide a good foundation for cutting emissions and achieving budgets. There are risks however for meeting the second and third budgets under the existing framework and policy strengthening is required across the power, buildings and industry and transport sectors. A new policy approach may be required for the agricultural sector.

In the power sector this includes:
  • Electricity Market Reform – to ensure that incentives for investing in low-carbon generation are strengthened. There is also a strong case for a minimum price to be introduced on carbon (a carbon price underpin/ floor). Government’s Electricity Market Assessment acknowledged this need for reform, and the June 2010 Budget announced a consultation on reform of CCL to create a carbon price floor.
In buildings and industry:
  • Further clarity on how a national programme to encourage energy efficiency measures in the home will be funded, how householders will be incentivised to act, and the role of energy companies, businesses, local authorities and private landlords in helping to make buildings energy efficient.
In Transport:
  • Ambitious targets should be set for electric car deployment by 2020 (with around 1.7 million electric cars on UK roads). This will require funding so that the first electric cars are affordable, and to cover the cost of a national battery charging network. Fiscal incentives (e.g. differentiation in Vehicle Excise Duty) could be used to encourage the purchase of more fuel efficient cars.
In Agriculture:
  • The Committee has analysed the contribution that the agricultural sector could make to reducing emissions and has found this to be significant ( more than 3 MtCO2). The Committee has advised that the full range of policies to incentivise emissions reductions are now considered to reduce emissions from the ways livestock are fed, from soils and through anaerobic  digestion

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