Britain surprises with carbon plan

The Saturday Age
21 May 2011, Page: 13

THE British cabinet debate is said to have been furious, pitching the Prime Minister, David Cameron, against his own Chancellor, George Osborne. But this week, the Tory led, Coalition government surprised itself and Europe by committing to a radical "carbon budget" to halve CO₂ emissions by 2025. While Australia continues to wrangle over a carbon tax and the possible effect on the price of Weet Bix Britain, led by the Conservatives, has become the first country to set legally binding commitments through into the 2020s.

Under the plan, the 50% cut in emissions to be averaged out across the years 2023 to 2027 and benchmarked against 1990 levels will be enshrined in law. The targets, described as the most ambitious on greenhouse gases of any developed nation, were outlined by the Energy and Climate Minister, Chris Huhne, in Parliament on Tuesday, delighting environmentalists and sparking dire warnings from British industry.

In fact, this is the UK's fourth so called carbon budget since 2008, with emission targets established on the advice of the International Committee on Climate Change. The original starting point for measurement was 1990, when Great Britain produced 783 million tonnes of greenhouse gases. Since then, big reductions have been achieved with emissions down to 603 million tonnes during the past, five year cycle a 23% cut on the benchmark.

This next target point is the toughest: "As advised by the Committee on Climate Change, the level we propose setting in law would mean that net emissions over the Fourth Carbon Budget period should not exceed 1950 million tonnes of CO₂ equivalent a 50% reduction from 1990 levels", Mr Huhne told the House of Commons. The cuts, he said, should be viewed as an economic stimulator, a boost and signal of confidence to the nation's green technology companies from wind power to electric cars to solar power placing them at the "leading edge of the global low carbon revolution".

Britain's environmental movement which had gloomily warned as late as last weekend that Mr Cameron would renege on the next round of targets appeared genuinely taken aback and quickly welcomed the move. However several key spokespeople have since pointedly highlighted the fact that the government's post credit crunch austerity drive has seen it slash funding for significant clean energy technologies, including solar power and carbon capture ventures.

As well, the new Green Bank proposed and pushed by the previous Labour government and seen as imperative to secure private investment in the renewal and replacement of Britain's ageing power stations will not be able to borrow for renewable energy projects for another four years. The bank is expected to raise money in the same way as regular banks but will use the profits to fund clean energy and low carbon projects.

It has been widely reported too that there was a concerted, backroom attempt by the UK Treasury to stymie the plan amid arguments that British industry would be curtailed and the frail first shoots of economic recovery stymied. The greatest fear is that other EU nations will not embrace such ambitious long term targets, dramatically reducing Britain's ability to compete.

Mr Cameron told the Parliament that that his Business Secretary, the Liberal Democrat Vince Cable, and others "had very legitimate concerns about energy intensive industries and how we should try to put together a package to help them, because they are being affected, not just by the carbon budget but by also changes to the electricity market and other costs.

"It doesn't actually help climate change if you simply drive an energy intensive industry to locate in Poland rather than Britain. That was one sticking point", he said. Some concessions were won for high energy consumption industries such as steel that provide special tax breaks to help compensate for the expected rise in electricity prices.

These arguments were ultimately overridden by the Department of Climate Change and Energy Efficiency, which crafted the rhetoric to push the boost to Britain's long term economic projects provided by investment in green technology. However, the British government has managed to sneak in an out clause for itself: in 2014, a review can be ordered of the targets to see just how the rest of the EU stacks up against Britain. However any move to lower them would need ICC consultation and according to Chris Huhne "it would be almost impossible to renege on the commitment". Just a year before an election, that might just be true.