Date post: | 19-Jan-2018 |
Category: |
Documents |
Upload: | allyson-short |
View: | 220 times |
Download: | 0 times |
Building a Low-Carbon Economy –The UK's Contribution to Tackling
Climate Change
www.theccc.org.uk
Structure of the presentation
1. The 2050 target
2. The first three budgets
3. Wider social and economic impacts of budgets
1. The 2050 target
(i) Required global emissions reduction
(ii) Appropriate UK contribution
(iii) Technologies for meeting required reductions
(i) Required global emissions reduction
Required global emissions reduction of 50%
• 20-24 GtCO2e emissions in 2050
• 8-10 GtCO2e in 2100
What’s changed?• Advances in science• Actual emissions higher
than forecast
Assessment of damageDecision rule• keep temperature
change close to 2°C• and probability of 4°C
increase at very low level (less than 1%)
Global trajectories considered
• Early or later peak (2015 vs. 2030)
• 3%/4% annual emissions reduction
(ii) Appropriate UK contribution
50% global reduction
Burden share• Alternative methodologies (contract and
converge, intensity convergence, triptych etc.)
• Equal per capita emissions:̶7 20-24 GtCO2e total at global level in
2050̶7 Implies 2.1-2.6 tCO2e per capita
All GHGsAviation and shipping included
2.1-2.6 CO2e per capita gives a UK reduction of at least 80% in 2050
2006 emissions
International aviation & shipping*
UK non-CO2 GHGs
Other CO2
Industry (heat & industrial processes)
Residential & Commercial heat
Domestic transport
Electricity Generation
* bunker fuels basis
2050 objective
159 Mt CO2e
695 Mt CO2e
77% cut (= 80% vs. 1990)
(ii) Appropriate UK contribution (cont.): the scale of the challenge
(iii) Meeting required reductions
Reducing power sector emissions: Renewables (wind, marine, biomass, solar), nuclear, CCS
Reducing heat emissions: • Electric heat (e.g. heat pumps,
storage heating)
Reducing transport emissions: • Electric/plug-in hybrids
Application of power to transport
and heat
Power generation to 2050
(iii) Meeting required reductions (cont.): power sector evolution
Emissions intensity to 2050
(iii) Meeting required reductions (cont): UK path to an 80% or more reduction in 2050
2050 2008
Wind and nuclear
Energy efficiency improvement
Renewable heat
Electric heat
Electric cars/plug in hybrids
20201-2% of GDP
in 2050
Other renewable and CCS
2. The first three budgets
(i) Level of budget (factors we have considered, CCC proposals)
(ii) Use of credits to meet budget
(iii) Feasible emissions reductions
(i) Level of budget: factors considered
PROPOSED BUDGETS
2008-122013-172018-22
The path to 2050
•2020 ambition needed to make path to 2050 technically feasible •Early action needed as contribution to global emission containment
European Union strategies
•30% reduction in GHG by 2020 versus 1990 if global deal at Copenhagen•20% unilateral cut
Bottom up sector by sector analysis
• Technical feasibility • Costs of achieving reductions• Policies in place or needed to drive emissions reductions
(i) Level of budget (cont.): CCC proposals
Intended budget• To apply once a global deal has been agreedInterim budget• To apply before there is a global deal• Should prepare for the Intended budget
Intended: 42% below 1990 in 2020 (31% % below 2005)
Interim: 34% below 1990 in 2020 (21% below 2005)
(i) Level of budget (cont.): Indicative emissions reductions to 2020 and 2050
2020 2050
Average annual reductions of 2.8% from 2007 – 2020
=> 42% below 1990 in 2020
Average annual reductions of 3.5% from 2020
=> 80% below 1990 in 2050
2030 2040
(i) Level of budget (cont.): scenarios for global aviation emissions
2050 emissions of up to 2.4 GtCO2 could account for around 10-12% of total allowed GHG emissions and 20% of total CO2 emissions
(i) Level of budget (cont.): treatment of aviation and shipping
Aviation Shipping
• Precise UK or even European share difficult to define
• Do not include in formal legal ‘budget’
• Committee to monitor progress and policies
• Global sectoral deal ideal way forward
• EU ETS allocation arbitrary, making reconciliation with national budget inclusion problematic
• Do not include in formal legal ‘budget’
• But allow for in budget setting • And Committee to monitor
progress and policies
(ii) Use of credits to meet targets
Pros• Minimise costs• Promise of finance flow may help in
global deal negotiations• Finance flow helps achieve low carbon
developing economies
Cons• Essential for developed economies to
drive domestic emissions reductions and illustrate feasibility of low carbon economy
• CDM type credits (versus notional BAU) can never be as robust as allowances within cap and trade system
Committee distinguishes between:• European Union Allowances (EUAs) in EU ETS • Offset credits (e.g. CDM)
Committee position• No restrictions on use of EUAs to meet budget• Restrictions on use of offset credits• No purchase by government to meet Interim budget• Purchase may be appropriate to transition between Interim and Intended
budgets • This strategy is consistent with meeting 2050 target
(iii) Feasible emissions reductions - Power
Power• Renewable and nuclear• Preparation for CCS• Required policies
EU ETS longer term extension
CCS demonstration Price/non-price policies
to drive renewables
Scenarios • 40% emission reduction by 2020
30% of electricity supply renewable, nuclear in 2020s Less renewables (e.g. 25%) and some nuclear by
2020• Costing 0.2% of GDP• Average carbon intensity in 2020 around 300g/kWh, from
current 500g/kWh
(iii) Feasible emissions reductions – Power (cont.): CCC position on coal generation
No role for conventional coal beyond early 2020s
CCS not proven at production scale
New coal investment only with full expectation of retrofit in early 2020s
Policy options:• Requirement for retrofit• Carbon price underpin• Carbon intensity limits (g/kWh)
(iii) Feasible emissions reductions – Energy use in buildings and industry
Commercial • Technical potential over 30
MtCO2 in energy efficiency and micro-generation
• Realistic potential 5-11MtCO2.
• 50% covered by caps• Need for wider policy
coverage
Our approach• Technical potential• Cost effective potential• Realistically achievable potential
Residential • Technical potential over 100
MtCO2
• Realistic potential Energy efficiency potential
22 MtCO2
Renewable heat potential 10 MtCO2
• Policy Supplier Obligation EPCs Appliance standards Renewable heat
Industrial • Technical potential 7 MtCO2
• Realistic potential 4-6 MtCO2
• 95% covered by caps
(iii) Feasible emissions reductions – Transport
Improved carbon efficiency of vehicles
Cars: Improved fuel efficiency, electric/plug in hybrids offer potential for 12 MtCO2 emission reduction by 2020
Vans : Fuel efficiency improvement, electric/plug in hybrids offer potential for at least 3 MtCO2 in 2020
HGVs: Fuel efficiency improvement offers potential for at least 1 MtCO2 in 2020
Need ambitious EU targets and domestic implementing mechanisms (information, fiscal levers)
Demand side measures: indicative
Eco driving: 3 MtCO2
Enforcing speed limit: 3 MtCO2
Journey planning and modal shift:
3 MtCO2
Demand Management:
• Eddington Review
Information and encouragement. Response is inherently uncertain
(iii) Feasible emissions reductions – Agriculture
• 7% of all UK GHG emissions: 44 MtCO2e
• Preliminary cost curve analysis suggests technical
potential of 15 MtCO2e: some controversial, some not
• No policies currently in place to drive emissions
reductions; no reductions included in budget calculations
• Further work needed to:
- Identify realistic potential
- Design policies
(iii) Feasible emissions reductions - scenarios
Criteria: • Cost per tonne of carbon saved• Measures required on the path to 80% in 2050• Practical given constraints on deliverability
Current detailed policies plus 30% renewable power generation
Existing policies plus policy intent
Includes measures where there is no current policy or commitment
• Extended Ambition delivers Interim Budget • Intended Budget requires either credit purchase or some Stretch Ambition actions
Current Ambition
Extended Ambition
Stretch Ambition
(iii) Feasible emissions reductions – resource cost of meeting the Intended budget
0.2%
0.1%
0.3%
Electricitydecarbonisation
Other measures(buildings,industry,
transport)
Purchase ofEUAs and
internationalcredits
0.0%
Totalresource
cost
“Resource costs”
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
Additional knock-on
and dynamic effects
Totalestimatedimpact on2020 GDP
2020
abat
emen
t cos
t as %
of 2
020
GDP
Cost from
macromodels0.3-0.8%
3. Wider social and economic impacts of budgets
Competitiveness • Risk in specific sectors accounting for less than
1% of UK GDP and employment • Risk can be mitigated by appropriate policy e.g. free allowance allocation , border carbon price
adjustments, sectoral agreements
Fuel Poverty 1.7 million increase in fuel poverty numbers but mitigation possible at manageable cost
• Technical: supply intermittency manageable • Geopolitical and economic volatility: positive impact of reduced dependence on imported oil and gas
Security of supply
Fiscal • Positive impacts from auctioning (£9 bn p.a.)• Negative VED and fuel duty effect (£4 bn p.a.)• £500 m p.a. to offset fuel poverty effects
Regional Significant difference in pattern of opportunities and challenges: important role for devolved administrations
Abatement opportunities in Wales – Extended Ambition Scenario
Sector UK abatement2020 (MtCO2e)
Wales abatement 2020 (MtCO2e)
Wales’s share of UK total
Buildings 35 2 6%
Industry 7 0.4 5%
Road Transport 19 0.9 5%
Agriculture & Forestry* 6 0.5 8%
Waste* 6 0.3 6%
* Not in Interim budget
In achieving required emissions reductions, there will be an important role for devolved policy measures in Wales, for example:
• Promotion of energy efficiency in buildings and industry
• Policy framework for microgeneration technologies
• Develop the policy framework for agriculture and land use
Wider economic and social impacts in Wales
Fuel poverty impactsEconomic impacts
• Potential risk of competitiveness loss resulting in output and employment impacts in Wales of up to 2.5% of GVA and 1.4% of employment
• Employment impacts may be localised given the concentration of certain sectors in Wales
• In practice, we do not expect these impacts to ensue as any risk can be mitigated by appropriate policy
• Opportunities for growth are likely to exist in low-carbon sectors
• Carbon budgets are likely to increase the number of households in fuel poverty in Wales by around 130,000 in 2022
• Energy efficiency measures could reduce this impact by around 30,000 households
• Mitigation of the impact is possible at a manageable cost
• Welsh Assembly Government has a role to play
Conclusion
• 80% cut in GHG emission by 2050 relative to 1990: all
GHGs, aviation and shipping included
• Unilateral 34% cut in GHGs by 2020 relative to 1990
(21% relative to 2005)
• 42% cut in GHGs by 2020 relative to 1990 (31%
relative to 2005) after global deal is achieved
• 34% cut predominantly through domestic emissions
reduction
• 42% through domestic emissions reduction and credit
purchase
• 2020 cost less than 1% of GDP