Renewables

Today the Government laid before Parliament a draft statutory instrument entitled The Climate Change Act 2008 (2050 Target, International Aviation and International Shipping) Order 2019. Yes, this is rather opaque name given to the statutory instrument which will make the ‘net zero’ target legally binding. It is laid under the affirmative procedure, which means both Houses of Parliament must approve it, and will become law in 21 days. We live in extraordinary times, so never say never, but the last time a statutory instrument laid under the affirmative procedure was not passed is 1978.

These are the crucial words – “In section 1(1) of the Climate Change Act 2008, for “80%” substitute “100%”.” Sometimes the law can be simple.

Although of course deceptively simple – a target is one thing, delivering it, altogether a different thing. In applauding the new target it is worth taking a reality check.

First, the Committee on Climate Change say: “A net zero target is not credible unless policy is ramped up significantly.” Indeed, the last four years has seen the Government row back on many low carbon policies – for example, withdrawing contracts for difference from onshore wind and solar and the closure of the feed-in-tariff . Other policy areas stand still – policies on reducing emissions in the transport and heat sectors have yet to emerge.

Second, 2050 is a long way off. In practice, Government policy tends to respond to the 5-yearly carbon budgets set under the 2008 Act rather than the long-term goal. The fourth and fifth budgets (taking us up to 2032) have been set. However, the Committee on Climate Change specifically say that the fourth and fifth budgets are “likely to be too loose” to achieve the net zero target and they will consider whether to tighten them when they set the sixth budget in 2020. Any tightening of the 2027 and 2032 targets is likely to require a more immediate policy response from Government. Tightened fourth and fifth budgets could see a return to more positive low carbon policy-making over the next two years.

Third, it is not a gross zero target – it is net zero. This means that residual emissions will need to be “balanced with greenhouse gas removals” (page 207). The report forecasts residual positive emissions in 2050 of nearly 90MtCO2e.

Fourth, the Committee on Climate Change themselves say (on page 23) that the scenarios set out in Chapter 5 of its Net Zero Report only take us to “95-96%” of the 1990 baseline. The Report goes on to say: “Tackling the remaining 4-5% would require some use of options that currently appear more speculative”. Elsewhere the Report says (on page 16) that the scenarios would achieve a 97% reduction. This appears to reflect the need to balance residual emissions with greenhouse gas removals, technologies which don’t yet exist. It seems the carrot of a 100% target was just too enticing, even if we don’t actually know how to achieve the last 3-5%.

Fifth, and finally, I leave you with this. The BP Statistical Review of World Energy 2019 (released just yesterday) says that global emissions, far from reducing, are in fact rising at 2%, their fastest pace since 2011.

Keith Patterson

Partner at Brodies LLP
Keith is a Partner in the Energy & Infrastructure Team and Co-Head of the Renewables Group. He advises developers, investors, lenders and public sector bodies on developing and financing low carbon projects, as well as M&A deals in the sector.
Keith Patterson

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