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Carbon Emissions

Volume 485: debated on Thursday 18 December 2008

To ask the Secretary of State for Energy and Climate Change what consultation with businesses his Department (a) has undertaken and (b) plans to undertake on the implementation of the carbon reduction commitment. (240879)

[holding answer 8 December 2008]: Two formal public consultations on the carbon reduction commitment were undertaken in November 2006 and June 2007 and a further consultation is planned before next spring.

Alongside the public consultations, the Government and the devolved Administrations held workshops attended by over 500 individuals, including those from businesses.

Further engagement with businesses, public sector organisations and other stakeholders is planned in the run up to the implementation of the scheme.

To ask the Secretary of State for Energy and Climate Change what carbon dioxide reductions are expected as a result of the carbon reduction commitment in its first five years; and how those targets have been calculated. (240960)

[holding answer 8 December 2008]: Analysis commissioned by the Government on the carbon dioxide emissions reductions achievable under the Carbon Reduction Commitment (CRC) conservatively estimates that the scheme could achieve cost effective savings of 0.5 million tonnes of carbon (MtC) per year by 2015 and 1.2MtC (or 4.4 MtCO2) per year by 2020. These figures were calculated by looking at the relative cost of abatement strategies for the participants of the CRC, to determine likely reductions under different carbon price scenarios.

Actual emissions reductions will ultimately depend on the cap on emissions set from 2013 onwards. The Committee on Climate Change will advise on the level of the cap for the CRC, taking into account the information established in the introductory phase, and the Government's overall emissions reductions targets.

To ask the Secretary of State for Energy and Climate Change what recent representations he has received from businesses about the effects on their cash-flow of the carbon reduction commitment. (240961)

[holding answer 8 December 2008]: The Government consulted in November 2006 and June 2007 with respect to the Carbon Reduction Commitment, and at these times some stakeholders expressed concern regarding cash flow implications.

The Carbon Reduction Commitment will be broadly revenue neutral to participants as a whole. All the money raised from the sale of allowances will be recycled back to participants. In response to concerns over cash flow the proposed length of time between the sale of allowances and recycling of auction revenues has been reduced from 18 months to six months. This change has been generally welcomed by stakeholders. In order to maintain the scheme's financial incentives, analysis has indicated that a gap of at least six months must be maintained between the sale of allowances and the return of participants' money. Participants will be able to further reduce the cash flow implications of buying allowances by reducing their carbon emissions, and therefore requiring fewer allowances.

To ask the Secretary of State for Energy and Climate Change what estimate he has made of the level of (a) UK and (b) global carbon dioxide emissions in each of the next three years; what plans he has to encourage other governments to achieve emissions reductions in the short term; and if he will make a statement. (242421)

Estimates of the projected annual emissions of carbon dioxide to 2011 are shown in the following tables for (a) the UK and (b) globally.

The UK projected reductions are shown relative to 1990 levels, both with and without the impact of the EU Emissions Trading Scheme.

Projections for 2008 to 2011 were published in November 2008, and represent an update on the “Central Scenario” projection published in the Energy White Paper in May 2007.

According to the International Energy Agency, global carbon dioxide emissions will rise on average by 1.6 per cent. between 2008 and 2011.

The UK Government will continue to work with other governments through the United Nations Climate Change process, the EU, G8, other forums and bilaterally to reach a global agreement that reduces global greenhouse emissions.

Table (a) UK carbon dioxide emissions projections 1990 to 2011

MtCO2

1990

2007

2008

2009

2010

2011

UK CO2 emissions, central assumption without ETS

592.4

543.7

541.3

534.2

528.2

528.5

Percentage CO2 emissions reduction without EU ETS relative to base year of 1990

n/a

-8.2

-8.6

-9.8

-10.8

-10.8

UK CO2 emissions, central assumption with ETS

592.4

518.1

508.9

506.0

504.2

503.8

Percentage CO2 emissions reduction with EU ETS relative to base year of 1990

n/a

-12.5

-14.1

-14.6

-14.9

-15.0

Source: UEP, DECC 2008.

Table (b) Global CO2 emissions 2008 to 2011

MtCO2

2008

2009

2010

2011

Global CO2 emissions, baseline (business as usual projection) 2008

28,906.0

29,368.5

29,838.3

30,315.8

Source: IEA, World Energy Outlook, 2008.