CCC Communications Strategy

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CCC Communications Strategy Powered By Docstoc
					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


  What’s changed?
  • Advances in science
  • Actual emissions higher
    than forecast

  Assessment of damage
                                              Required global
  Decision rule
                                              emissions reduction
  • keep temperature                          of 50%
     change close to 2°C
                                          •   20-24 GtCO2e
  • and probability of 4°C                    emissions in 2050
     increase at very low
                                          •   8-10 GtCO2e in
     level (less than 1%)
                                              2100
      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:
                  ̶     20-24 GtCO2e total at global level in
                       2050
                    ̶  Implies 2.1-2.6 tCO2e per capita



                            2.1-2.6 CO2e per
                            capita gives a UK                   Aviation and
   All GHGs                                                     shipping included
                            reduction of at least
                            80% in 2050
(ii) Appropriate UK contribution (cont.): the scale of
the challenge

                            695 Mt CO2e

   International aviation
             & shipping*         42

    UK non-CO2 GHGs              98
             Other CO2

       Industry (heat &
   industrial processes)         108
                                                   77% cut
                                               (= 80% vs. 1990)
        Residential &            103
      Commercial heat


                                 134
    Domestic transport
                                                  159 Mt CO2e



                                 184
  Electricity Generation


                            2006 emissions       2050 objective
  * bunker fuels basis
  (iii) Meeting required reductions



                   Reducing power sector emissions:
           Renewables (wind, marine, biomass, solar), nuclear, CCS




                              Application of
                            power to transport
                                and heat




Reducing transport emissions:              Reducing heat emissions:
• Electric/plug-in hybrids                 • Electric heat (e.g. heat pumps,
                                              storage heating)
                       (iii) Meeting required reductions (cont.): power
                             sector evolution

                      Emissions intensity to 2050                                              Power generation to 2050

                600

                                                                                         600




                                                         TWh electricity generation per year
                500


                400                                                                      500
g/CO2 per kWh




                300
                                                                                         400

                200
                                                                                         300
                                                                                                                            90% path
                100

                                                                                         200
                 0                                                                          2000    2010   2020   2030    2040     2050
                      2006   2010   2020   2030   2050
       (iii) Meeting required reductions (cont): UK path to an
       80% or more reduction in 2050


                                                         Wind and nuclear

                                                         Other renewable
                                                         and CCS
                                                         Energy efficiency
                                                         improvement

                                                         Renewable heat


                                                         Electric heat

                                                         Electric cars/plug in
                                                         hybrids


                                                                 1-2% of GDP
2008         2020                                 2050              in 2050
       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



    The path to 2050               PROPOSED                     European Union
                                    BUDGETS                        strategies
• 2020 ambition needed to
  make path to 2050                                         • 30% reduction in GHG by
                                     2008-12                  2020 versus 1990 if
  technically feasible
                                     2013-17                  global deal at
• Early action needed as
  contribution to global             2018-22                  Copenhagen
  emission containment                                      • 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 agreed
      Interim 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


                                   700
Annual UK GHG Emissions (MtCO2e)




                                                      Average annual reductions of 2.8%
                                   600                from 2007 – 2020
                                                           => 42% below 1990 in 2020
                                   500

                                   400                                             Average annual reductions of 3.5%
                                                                                   from 2020
                                                                                        => 80% below 1990 in 2050
                                   300

                                   200

                                   100

                                     0
                                         2007           2020            2030              2040        2050
        (i) Level of budget (cont.): scenarios for global
        aviation emissions


        3

    2.5

        2
GtCO2




    1.5

        1

    0.5

        0
             1990     2000      2010      2020       2030       2040       2050


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




•   EU ETS allocation arbitrary,          •   Precise UK or even European share
    making reconciliation with national       difficult to define
    budget inclusion problematic


                                          •   Do not include in formal legal
•   Do not include in formal legal            ‘budget’
    ‘budget’
                                          •   Committee to monitor progress and
•   But allow for in budget setting           policies
•   And Committee to monitor              •   Global sectoral deal ideal way
    progress and policies                     forward
     (ii) Use of credits to meet targets


    Pros                                              Cons
•   Minimise costs                                •   Essential for developed economies to
•   Promise of finance flow may help in               drive domestic emissions reductions
    global deal negotiations                          and illustrate feasibility of low carbon
                                                      economy
•   Finance flow helps achieve low carbon
    developing economies                          •   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


                                                                600
   Power
                                                                500
 •   Renewable and nuclear




                                                g/CO2 per kWh
 •   Preparation for CCS                                        400
 •   Required policies                                          300
      - EU ETS longer term
          extension                                             200

      - CCS demonstration                                       100
      - Price/non-price policies
                                                                 0
          to drive renewables                                         2006   2010   2020   2030   2050


            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
                                                CCS not proven at
      coal beyond early
                                                production scale
      2020s




                           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


Our approach
                                             Commercial
•       Technical potential
                                             •   Technical potential over 30
•       Cost effective potential
                                                 MtCO2 in energy efficiency
•       Realistically achievable potential       and micro-generation
                                             •   Realistic potential 5-
    Residential                                  11MtCO2.
    •    Technical potential over 100        •   50% covered by caps
         MtCO2                               •   Need for wider policy
    •    Realistic potential                     coverage
          - Energy efficiency potential
               22 MtCO2
          - Renewable heat potential 10
               MtCO2                         Industrial
    •    Policy                              •   Technical potential 7 MtCO2
          - Supplier Obligation              •   Realistic potential 4-6 MtCO2
          - EPCs                             •   95% covered by caps
          - Appliance standards
          - Renewable heat
       (iii) Feasible emissions reductions – Transport


 Improved carbon efficiency of vehicles            Demand side measures: indicative

Cars: Improved fuel efficiency,
electric/plug in hybrids offer potential for   Eco driving: 3 MtCO2
12 MtCO2 emission reduction by 2020            Enforcing speed limit: 3 MtCO2


Vans : Fuel efficiency improvement,            Journey planning and modal shift:
electric/plug in hybrids offer potential for
at least 3 MtCO2 in 2020                       3 MtCO2


HGVs: Fuel efficiency improvement              Demand Management:
offers potential for at least 1 MtCO2 in
                                               •   Eddington Review
2020

Need ambitious EU targets and domestic         Information and encouragement.
implementing mechanisms (information,          Response is inherently uncertain
fiscal levers)
(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 Ambition                    Current detailed policies plus 30%
                                     renewable power generation


 Extended Ambition                   Existing policies plus policy intent


 Stretch Ambition                     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
                     (iii) Feasible emissions reductions – resource cost of
                     meeting the Intended budget


                                       0.8

                                       0.7
2020 abatement cost as % of 2020 GDP




                                       0.6                                                                            Cost
                                                                                                                      from
                                                                                                                     macro
                                       0.5                                                            Additional    models
                                                                                                      knock-on      0.3-0.8%
                                                                 “Resource costs”                        and
                                       0.4
                                                                                                       dynamic
                                                                                                        effects
                                       0.3
                                                                               0.1%
                                                                0.0%
                                       0.2
                                                                                            0.3%
                                       0.1        0.2%


                                                Electricity Other measures Purchase of       Total                   Total
                                             decarbonisation (buildings,     EUAs and      resource                estimated
                                                               industry,   international     cost                  impact on
                                                              transport)      credits                              2020 GDP
 3. Wider social and economic impacts of
 budgets

                          •        Risk in specific sectors accounting for less than
Competitiveness                    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
Security of supply        •         Geopolitical and economic volatility: positive
                                    impact of reduced dependence on imported oil
                                    and gas


                              •     Positive impacts from auctioning (£9 bn p.a.)
      Fiscal                  •     Negative VED and fuel duty effect (£4 bn p.a.)
                              •     £500 m p.a. to offset fuel poverty effects


                              Significant difference in pattern of opportunities and
    Regional                  challenges: important role for devolved
                              administrations
Abatement opportunities in Wales –
Extended Ambition Scenario

                            UK abatement    Wales abatement    Wales’s share of
  Sector
                            2020 (MtCO2e)    2020 (MtCO2e)        UK total

  Buildings                      35                2                 6%

  Industry                       7                0.4                5%

  Road Transport                 19               0.9                5%
  Agriculture &
                                 6                0.5                8%
  Forestry*
  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


          Economic impacts                            Fuel poverty impacts

•    Potential risk of competitiveness
     loss resulting in output and             •   Carbon budgets are likely to
     employment impacts in Wales of up            increase the number of households
     to 2.5% of GVA and 1.4% of                   in fuel poverty in Wales by around
     employment                                   130,000 in 2022


•    Employment impacts may be                •   Energy efficiency measures could
     localised given the concentration of         reduce this impact by around 30,000
     certain sectors in Wales                     households

•    In practice, we do not expect these
     impacts to ensue as any risk can be      •   Mitigation of the impact is possible at
     mitigated by appropriate policy              a manageable cost


•    Opportunities for growth are likely to   •   Welsh Assembly Government has a
     exist in low-carbon sectors                  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

				
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