Climate Change Policy – A UK perspective

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Climate Change Policy A UK perspective. Jill Duggan Head of International Emissions Trading Climate and Energy Business and Transport UK Department for Environment, Food and Rural Affairs Jill.duggan @defra.gsi.gov.uk http://www.defra.gov.uk/. The problem and the case for action. - PowerPoint PPT Presentation

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  • Climate Change Policy A UK perspectiveJill DugganHead of International Emissions TradingClimate and Energy Business and TransportUK Department for Environment, Food and Rural AffairsJill.duggan@defra.gsi.gov.ukhttp://www.defra.gov.uk/

  • The problem and the case for action

  • There is consensus in the UK on the central scientific findings of global warming a problem that requires urgent actionGlobal warming is real: average surface temperature has increased by 0.74C over the last hundred years, a rate and scale likely to have been greater than at any time in at least the past 1000 years.Global warming is man-made: most of the warming over the last 50 years is attributable to greenhouse gases from human activities.2oC

    Even if mitigation was sufficient to contain annual emissions at todays level, the world is likely to experience a 2oC warming above pre-industrial levels by 2050

    5oC

    Without significant mitigation, on business as usual trends, there will be a 50:50 chance of exceeding a 5oC temperature increase by the end of the 21st Century

    There will be an increasing severity in the number of people dying from hunger, water shortages, heat-related stress and malariaThe risk of serious human impacts increases strongly without mitigation5oC is the difference between temperatures now and the last ice ageIPCC Fourth Assessment Report (2007). Stern Review (2006).

  • The challenge is to stabilise global greenhouse gas concentrations to avoid the worst of these climate change risks The Stern Review recommends a stabilisation goal of no more than 550ppm CO2eTo achieve this would require that global emissions peak in the next 10-20 yearsDelaying the peak in emissions by 10 years would double the rate of reduction requiredThe UK target of a 60% CO2 reduction by 2050 is consistent with the Stern goalStern Review (2006); ppm = parts per million concentrations in the atmosphere.Global emissions (GtCO2e)

    60% (2)

    17.623.150765790940.683257236240.748553979840.750765790941.5

    17.01428.783970931945.292398195645.234501303745.797970931948.4255486387

    13.57532.743102336132.209753396841.59161561646.318102336154.9450980615

    11.76529.379569425417.66058957231.369631178941.144569425461.4991374371

    9.502527.352697792313.814264849225.480312924636.855197792371.7128262428

    7.2425.76514015812.956516378220.821094239633.00514015883.9136773201

    Developed countries: 60% cut from 1990 levels by 2050

    550ppm CO2e

    500ppm CO2e

    450ppm CO2e

    Business as usual

    Developing countries: 25% growth on 1990 levels by 2050 (on 550ppm path)

    Annex I Emissions

    non-Annex I

    450ppm CO2e

    500ppm CO2e (falling to 450ppm)

    550ppm CO2e

    BAU

    Summary UPDATED (2)

    1990200020102020203020402050

    dE&M Stabilisation Emissions

    550ppm36.9240.7545.8046.3241.1436.8633.010.6066774665

    500ppm (450ppm stab)36.9440.7545.2341.5931.3725.4820.820.7518748444

    450ppm36.8940.6845.2932.2117.6613.8112.960.8455970851

    1990200020102020203020402050

    IEA Projections38.279483006841.58727568548.425548638754.945098061561.499137437171.712826242883.9136773201

    Total38.2841.5048.4354.9561.5071.7183.91

    Annex 118.1017.60

    Annex 1 growth relative to 1990-0.03-1.00-1.00-1.00-1.00-1.00

    Non-annex 120.5023.90

    Non-annex 1 growth relative to 19900.17-1.00-1.00-1.00-1.00-1.00

    Cuts required to meet 5500.752.638.6320.3534.8650.91

    Cuts required to meet 500ppm0.753.1913.3530.1346.2363.09

    Cuts required to meet 4500.823.1322.7443.8457.9070.96

    Emissions Path - 100% below 1990 in 20500.000.006.0025.0050.0075.00100.00

    Annex I18.1017.6017.0113.589.054.530.00

    Implied NAI Emissions to meet 550ppm23.1528.7832.7432.0932.3333.01

    % change from NA1 from 199013%40%60%57%58%61%

    Implied NAI Emissions to meet 500ppm23.1528.2228.0222.3220.9620.82

    % change from NA1 from 199013%38%37%9%2%2%

    Implied NAI Emissions to meet 450ppm23.0828.2818.638.619.2912.96

    % change from NA1 from 199013%38%-9%-58%-55%-37%

    Emissions Path - 90% below 1990 in 20500.000.006.0028.0049.0070.0090.00

    Annex I18.1017.6017.0113.039.235.431.81

    Implied NAI Emissions to meet 550ppm23.1528.7833.2931.9131.4331.20

    % change from NA1 from 199013%40%62%56%53%52%

    Implied NAI Emissions to meet 500ppm23.1528.2228.5622.1420.0519.01

    % change from NA1 from 199013%38%39%8%-2%-7%

    Implied NAI Emissions to meet 450ppm23.0828.2819.188.438.3811.15

    % change from NA1 from 199013%38%-6%-59%-59%-46%

    Emissions Path - 60% below 1990 in 20500.000.006.0025.0035.0047.5060.00

    Annex I18.1017.6017.0113.5811.779.507.24

    Implied NAI Emissions to meet 550ppm23.1528.7832.7429.3827.3525.77

    % change from NA1 from 199013%40%60%43%33%26%

    Implied NAI Emissions to meet 500ppm23.1528.2228.0219.6015.9813.58

    % change from NA1 from 199013%38%37%-4%-22%-34%

    Implied NAI Emissions to meet 450ppm23.0828.2818.635.904.315.72

    % change from NA1 from 199013%38%-9%-71%-79%-72%billion

    billion

    Emissions Path - 60% from 1990 in 20500.000.006.0025.0035.0047.5060.00

    Annex I18.1018.1017.0113.5811.779.507.24

    Global (no action NAI)38.6042.0017.0113.5811.779.507.24

    Addition cuts required to meet 550ppm1.25-28.78-32.74-29.38-27.35-25.77

    % reduction NA1 from 200510%-241%-274%-246%-229%-216%

    Addition cuts required to meet 500ppm1.25-28.22-28.02-19.60-15.98-13.58

    % reduction NA1 from 200510%-236%-234%-164%-134%-114%

    Addition cuts required to meet 450ppm1.32-28.28-18.63-5.90-4.31-5.72

    % reduction NA1 from 200511%-237%-156%-49%-36%-48%

    Suggested Emissions PathKyoto (-6%)-25%-35%-60%

    Annex I181817141297

    Annex I Cuts from 19900-0156911

    Annex I growth relative to 19902%-6%-25%-35%-48%-60%

    Global (no action from NAI)384217141297

    Global below BAU2%-65%-75%-81%-87%-91%

    Global below 199011%-55%-65%-69%-75%-81%

    Addition cuts required to meet 5502-28-19-6-4-6

    % reduction in non-Annex I from BAU

    Non-Annex I growth relative to 1990-72%-79%-73%

    New Non-Annex I GrowthPath21222819646

    Additional + Annex I cuts01-27-14045

    Addition cuts required to meet 4502-29-33-29-27-26

    % reduction in non-Annex I from BAU

    Non-Annex I growth relative to 199040%30%23%

    New Non-Annex I GrowthPath21222933292726

    CDM cost as $10 per tonne of CO2550ppm-$59.02-$43.17-$57.21

    450ppm-$293.86-$273.58-$257.69

    Kyoto OnlyKyoto (-6%)-25%-35%-60%

    Annex I18181717171717

    Global (no action from NAI)39421717171717

    Global below BAU-2%59%59%59%59%59%

    Global below 1990-10%56%56%56%56%56%

    Additional to 550ppm22-28-15-134

  • The poorest countries and people will suffer the most

    Many developing countries are likely to be particularly vulnerable to the impacts of climate change, due to their geography, their dependence on agriculture, and/or their lower incomes and access to resources.

    Poorest people in richer countries are vulnerable as they are most likely to live in marginal lands, have fewer financial resources to adapt to climate change (e.g. insurance), and are least likely to be aware of the risk of a severe weather event.Changes in cereal production for a doubling of carbon dioxide levels (roughly equivalent to 3C in the models used)The key relates to the three simulation models usedSource: Stern ReviewChange in cereal production in developed and developing countries for 3C warmingAgriculture in higher-latitude developed countries is likely to benefit from moderate warming (2-3 C), but even small amounts of climate change in tropical regions will lead to declines in yield.Stern Review (2006)

  • The costs of stabilising the climate are manageable delay would be dangerous and much more costly Stern Review (2006)

    Delay is a dangerous option because damages from climate change rise disproportionately with temperature.

    For example, a 25% increase in storm wind speeds is associated with an almost 7-fold increase in damages to buildings.

    Adaptation is crucial for responding to unavoidable climate change but there are limits to how much it is possible to adapt to the worst effects.

    For example, climate change could lead to floods, massive population shifts, and wars over natural resources; it would be very difficult to adapt to these changes. Also, ecosystems are unlikely to be able to adapt at the rapid rates of change expected.

    5% GDPIncome losses if we do nothing: market impacts only20% GDPIncome loss including non-market impacts, risk and equity1% GDPCosts of mitigation to stabilise emissions at 550ppm by 2050vs

  • UK Progress on tackling climate change

  • UK Progress against Kyoto target

    Chart1

    208.2179179183.312522

    209.4169.2156.9

    202.7173160

    197.3170153.4

    194.5

    191.6

    197.8

    191.6

    189.8

    180.1

    180.3

    182.4

    177

    178.7

    179

    History of emissions

    Business as usual

    Including 2006 policies and measures

    Kyoto target

    Year

    GHG emissions (MtCe)

    GHG emissions and projected emissions, from UK Climate Change Programme 2006

    Chart2

    208.2183.3125

    209.4

    202.7

    197.3

    194.5

    191.6

    197.8

    191.6

    189.8

    180.1

    180.3

    182.4

    177

    178.7

    179

    History of emissions

    Kyoto target

    Year

    GHG emissions (MtCe)

    GHG emissions and projected emissions, from UK Climate Change Programme 2006(The EU Emissions trading scheme will deliver between 3.0 MtC and 8.0 MtC, depending on where the cap from the second phase of the scheme is set)

    CO2 emissions and projections

    161.5152.5152.5152.5129.2

    163.3144.3137132

    158.7149141136

    154.6146.6137130

    152.5

    149.9

    155.8

    149.6

    150

    147.5

    149

    153.1

    148.6

    151.8

    152.5

    History of emissions

    Projection with existing measures

    Low ETS projection

    High ETS projection

    Domestic target

    Year

    CO2 emissions (MtC)

    CO2 emissions and projected emissions, from UK Climate Change Programme 2006(The EU Emissions trading scheme will deliver between 3.0 MtC and 8.0 MtC, depending on where the cap from the second phase of the scheme is set)

    Historical data

    Greenhouse gas emissions (million tonnes carbon equivalent), from 2004 UK GHG Inventory

    199019911992199319941995199619971998199920002001200220032004

    Net CO2 emissions (emissions minus removals)161.5163.3158.7154.6152.5149.9155.8149.6150147.5149153.1148.6151.8152.5

    Methane (CH4)25.124.924.523.821.921.821.220.219.117.216.314.814.212.912.5

    Nitrous Oxide (N2O)18.618.116.215.21615.51616.515.712.112.111.51110.911.1

    Hydrofluorocarbons (HFC)3.13.233.363.553.824.224.565.234.712.952.482.642.72.782.42

    Perfluorocarbons (PFC)0.380.320.160.130.130.130.130.110.110.110.140.120.090.080.1

    Sulphur hexafluoride (SF6)0.280.290.310.320.320.340.350.330.340.390.490.390.410.360.31

    Sum of F-gases3.763.843.8344.274.695.045.675.163.453.113.153.23.222.83

    Kyoto greenhouse gas basket208.2209.4202.7197.3194.5191.6197.8191.6189.8180.1180.3182.4177.0178.7179.0

    Percentage change for basket compared to baseline-0.60-3.2-5.8-7.2-8.5-5.6-8.6-9.4-14-13.9-12.9-15.5-14.7-14.6

    Percentage change for CO21.1-1.7-4.2-5.6-7.2-3.5-7.4-7.1-8.7-7.7-5.2-8-6-5.6

    Kyoto base year* (sum of all gases)209.5

    Notes:

    Kyoto basket total differs slightly from sum of individual pollutants above as the basket uses a narrower definition for the Land Use Change and Forestry sector, and includes emissions from UK Overseas Territories.

    * Kyoto base year consists of emissions of CO2, CH4 and N2O in 1990, and of HFCs, PFCs and SF6 in 1995. It includes estimated net emissions from deforestation in 1990.

    1989199019911992199319941995199619971998199920002001200220032004

    GDP00.7-0.7-0.426.49.31215.218.421.425.427.629.632.135.2

    19900.7

    1991-1.4

    19920.3

    19932.4

    19944.4

    19952.9

    19962.7

    19973.2

    19983.2

    19993

    20004

    20012.2

    20022

    20032.5

    20043.1

    20051.8

    Historical data

    00000

    00000

    00000

    00000

    00000

    00000

    00000

    00000

    00000

    00000

    00000

    00000

    00000

    00000

    00000

    Net CO2 emissions (emissions minus removals)

    Methane (CH4)

    Nitrous Oxide (N2O)

    Kyoto greenhouse gas basket

    "F-gases"

    Year

    CO2 Emissions / MtC

    Projection data

    00

    00

    00

    00

    00

    00

    00

    00

    00

    00

    00

    00

    00

    00

    00

    0

    Kyoto greenhouse gas basket

    CO2 emissions

    Projections from 2006 Climate Change Programme (MtC)

    GasBase year199019911992199319941995199619971998199920002001200220032004201020152020

    CO2 (existing measures)161.5161.5163.3158.7154.6152.5149.9155.8149.6150147.5149153.1148.6151.8152.5144.3149146.6

    Projected : Additional (low ETS)152.5137141137

    Projected : Additional (high ETS)152.5132136130

    Domestic target129.2

    GHG emissions

    GasBase year199019911992199319941995199619971998199920002001200220032004201020152020

    Kyoto GHG209.5208.2209.4202.7197.3194.5191.6197.8191.6189.8180.1180.3182.4177.0178.7179.0169.2173170

    Projected : Additional (low ETS)179.0161.9165160.4

    Projected : Additional (high ETS)179.0156.9160153.4

    Kyoto target183.3125

    000

    000

    000

    000

    0

    0

    0

    0

    0

    0

    0

    0

    0

    0

    0

    History of emissions

    Projection with existing measures

    High ETS projection

    Year

    GHG emissions (MtCe)

    GHG emissions and projected emissions, from UK Climate Change Programme 2006

  • Progress in tackling greenhouse gas emissions in the UK 15.3% reductionDefra Statistical Press Release (31 January 2007), 2005 UK climate change sustainable development indicator and greenhouse gas emissions final figuresCarbon dioxideMtCO2eMethaneNitrous oxideOther (F-gases)

  • Decarbonising our largest sources of emissions requires significant further effortIn the UK

    Emissions from electricity generation, buildings (heating) and transport account for around 70% of all greenhouse gas emissions (largely CO2)Greenhouse gas emissions by source (shares of total CO2e)Global: Stern Review (2006). UK: Fourth National Communication (2006). Different compilation methodologies mean that the global/UK sector comparisons are illustrative but not exact. UK land use has negative emissions.

  • 2000 Climate Change Programme and early action on climate changeUK Voluntary Emissions Trading ProgrammeClimate Change Levy Climate Change AgreementsEU Emissions Trading Phase I

  • UK Voluntary Emissions Trading Program 2002 2006

    6 greenhouse gasesPurpose learning by doingEmissions reductionsHelp City of London to become a centre for Carbon TradingDescending Clock AuctionMet 5 year target in 1st yearToughened targets

  • UK Emissions Trading Scheme33 participants committed to reduce emissions by 3.96 mtCO2e by the end of the scheme, received Government incentive money for meeting their annual targets

    So far UK ETS has delivered emissions reductions of over 15.9 mtCO2e. This includes an extra 8.9mtCO2e, pledged by 6 leading particpants in 2004, through tighter targets. 2006 figures not yet finalised.

    Enabled learning by doing for both participants and Government ahead of international emissions trading

  • Climate Change Levy

    Introduced in 2001Energy tax applied to industry, commerce, agriculture, and the public sectorAdds about 10-15% to fuel billsExemptions for renewable sources and CHPMost companies could save the cost of the Levy by simple better management, without investment in energy saving technology

  • Climate Change Levy Revenue Neutral

    Revenues from the Levy are returned to industry through a 0.3% reduction in the rate of employers National Insurance Contributionsfunding of the Carbon Trust (a public benefit fund) reductions for CCAs and exemptions for CHP and renewable energy sources

  • Climate Change Agreements

    Energy efficiency agreements80% discount on Levy for meeting targetsDuration: 2001 to 2013Projected carbon savings of 2.5MtC by 2010Ten times the estimated price effect of the Levy aloneActual savings

    2002 target - performance 13...

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