Market News

 April 29, 2013
Why Britain is failing to cut its carbon footprint

 Successive governments have made much of the fact that Britain's CO2 emissions have come down sharply in the past two decades. But a government advisory committee has laid bare these pretensions, revealing that when emissions generated by the production of the UK's imports are factored in, the country's carbon footprint is actually 10 per cent higher than in 1993.

In a study of the impact of the UK's imports on its carbon output, the Committee on Climate Change (CCC) reported a 40 per cent jump in import-generated emissions between 1993 and 2010, as the winding down of manufacturing industry pushed up purchases from abroad by 90 per cent.

The colossal rise in imports, mostly from developing countries with rapidly expanding carbon footprints, has made Britain the world's second biggest net importer of emissions, behind Japan, and casts a shadow over its claim of global leadership in reducing CO2 output.

The CCC argues that the rise in consumption-based emissions underlines the need for the UK -- and the world as a whole -- to step up its action against climate change to ensure that temperatures don't rise by more than the 2C beyond which many believe the consequences would be devastating.

But while the CCC's chief executive, David Kennedy, says "there needs to be a reversal of the increase in imported emissions over time", for now he believes that the UK needs to concentrate on reducing its own CO2 output first. He warns that the UK was likely to miss its target of reducing emissions by 50 per cent by 2025 compared to 1990 -- a target purely for gases generated in the UK. The reduction so far is just 20 per cent, even after the recession has cut economic output -- while last year emissions increased by 3.5 per cent as the cold weather pushed up residential gas use.

The CCC was set up under the 2008 Climate Change Act to advise on the best way of meeting the act's requirement for an 80 per cent cut in emissions from 1990 levels by 2050. Its report found that, contrary to opponents' claims, the impact of carbon policies on jobs and the economy was "negligible" and has had "at most a minor impact in reducing production emissions".

Instead, the 19 per cent drop in UK CO2 emissions in the past two decades is the result of a switch from coal to relatively clean gas energy generation, other policies such as EU rules on reducing landfill, and, in the past four years, the weak economy.

The committee said that while additional low-carbon taxes could push up energy costs by as much as a quarter this decade for industrial users such as steel and aluminium plants, gas and electricity account for just 3 per cent of total industry costs, meaning these green actions are unlikely to affect the economy much.

Despite the finding, the CBI's director for business environment policy, Rhian Kelly, is concerned about the danger of hitting energy-intensive companies with rising green tariffs. "The Government has the building blocks in place, but it must follow through on its commitments to shield energy-intensive industries from new energy costs," she says.

Kennedy says Britain should concentrate on cutting its own emissions because it is "unrealistic that it can transform the energy systems of other countries not on a low-carbon path". However, he argues that in the absence of a global deal to drive down CO2 the UK may eventually have to think about taxing imported goods from countries with weaker environmental laws as an interim measure.

Joss Garman, Greenpeace UK's political director, says: "To prevent serious climate change the transition to a cleaner economy based on new industries and technologies can't only happen in the UK. That's why it's essential we and the rest of Europe work to deepen partnerships with other countries -- both in the developed and the developing world -- who are also committed to cutting carbon emissions."

While securing a global agreement in 2015 -- as planned -- is likely to prove extremely challenging, the UK has its work cut out just tending to its own affairs, Kennedy warns.

He says the Government needs to give a clear signal to potential investors in low-carbon technology that there will be a market for their energy if they are to be persuaded to plough tens of billions of pounds into clean power projects over the next decade. But Kennedy says the Government is being "half-hearted" in its support of low carbon technologies and is putting off potential clean energy backers as a result.

"To move to a low-carbon power system you need investors to put money into the supply chain -- turbines, blades, poles and so on -- and people to develop projects such as wind farms and nuclear.

"The Government should be giving more clarity, but it won't commit. That uncertainty is stopping investment," he says.