Are the UK's carbon targets too low?

I chased up further comment from the aluminium industry, after their comments today seemed to contradict the findings of the CCC on competitiveness.

The CCC said:

Our conclusion is that there has been no significant industry relocation to date as a result of low-carbon policies and there is no reason to expect this in future.

Will Savage, chief executive of the Aluminium Federation (Alfed) said:

“Alfed disagrees strongly with the assertion of the Committee on Climate Change that the UK’s climate change policies have not led to closures of important aluminium production facilities in the UK, and is not convinced that the conditions are yet in place to prevent more closures in the future.

 “We look forward to discussions with ministers in the coming months to ensure that the competitiveness of the UK’s aluminium industry can be safeguarded.

During questioning from the Environmental Audit Committee (EAC), energy minister Michael Fallon admitted that not only had he not had a chance to look at the CCC report released today, he had not looked at the first part of the report released in November. In fact, he appeared unaware of its existence.

When told that the first section of the report had been available for review for over a month, Fallon replied, "Right. I'm sorry, I'm behind in my reading of their reports."

When told by Alan Whitehead MP that he was "quite seriously" behind in his reading, Fallon said: "There are lots of reports I should be reading. Every day there are reports I should be reading." Before the committe chair, Joan Walley ended the meeting so Fallon could catch up on his "bedtime reading".

Fallon told the committee that a quick decision was necessary to provide certainty to industry. Whitehead said that Fallon's disinterest in the findings of the CCC was a concern and shed light on the government's level of priority for this issue.

"The Climate Change Committee is centrally enshrined in statute and it is more than a committee just giving advice. It's really the central committee that guides the government and indeed the country on what happens with the climate change act. And [Fallon's response] does seem to betray rather a cavalier disregard for the centrality of that information and those considerations. So I think that's genuinely pretty worrying. And if the government is minded to ensure that the forth carbon budget carries on intact as it should do, it just needs to get that clear as soon as possible, but that doesn't appear to be what's on Michael Fallon's mind."

Whitehead said that Fallon, and other government ministers, had been notified of the contents of the upcoming CCC report in October by the CCC chair Lord Deben in a letter. Whitehead said it was further indicative of the government's lack of initiative on this issue that it refused to respond to questions on the issue when it had been notified of the findings of the Committee two months hence.

Deben said in the letter:

The assumptions regarding EU circumstances upon which the fourth carbon budget decision was made have not changed, and therefore there is no legal or economic justification to change the budget in this respect at this time. Rather, the budget remains cost-effective, with manageable costs and impacts, given our assessment of EU developments.

David Steven, from Global Dashboard picked up on an ambiguity in my intro today. I said that the government was bound by the advice of the CCC. 

The chairman of the CCC said in the foreword to the report that there was no legal basis on which the carbon budget could be changed.

When it set the budget, the Government also committed to a Review, for which it must again obtain Committee advice. The budget can then only be changed if there has been a significant change affecting the basis upon which it was set, with the relevant circumstances clearly specified in the Climate Change Act.

Last month we provided the first part of that advice, in which we considered the evidence on climate science and international and EU circumstances.

We concluded that there had been no significant change in relation to these issues since we provided our original advice in December 2010. Based on those criteria, therefore, there is no legal or economic basis for a change in the budget at this time.

Robin Webster wrote in Carbon Brief yesterday that the government could face legal challenges if it ignored the advice of the CCC.

If the CCC does advise the government to stick to the fourth carbon budget, couldn't the government just go ahead and weaken the budget anyway? Theoretically, it could. But it's legally obliged to take the committee's advice into account. If it doesn't do so, or it just ignores the committee's advice without having a sound reason for doing so, that could be illegal.

If the government wanted to wriggle out of the climate change act - which Prime Minister David Cameron originally campaigned to be introduced - it could find itself in a tricky situation.

The decision could be open to judicial review, for example from green groups. The government has lost judicial reviews on energy issues in the past. Ministers will be concerned about the cost and embarrassment of defending a shaky decision in a review which might eventually mean the government is forced to reverse its position anyway.

Sharon Turner, head of climate and energy at ClientEarth, told me the key phrase was "significant changes". The CCC has told the government that these changes have not occurred. If the government was to press on with amending the carbon budget, it would have to justify the decision before parliament.

The UK government can lawfully depart from the 4th carbon budget, provided it complies with the procedures set out in sections 21 and 22 of the Climate Change Act. However the government may only deviate from an adopted budget when there are significant changes that make this necessary, and it must justify its decision before parliament. To disregard the advice of the independent expert Climate Change Committee would set a worrying precedent. While the UK’s statutory carbon budgets can be revised in certain circumstances, its long term decarbonisation target under the Act cannot. By reducing ambition now, the government is ignoring independent expert advice on the pace of decarbonisation that is economically feasible and necessary to avoid dangerous climate change. In addition, delaying action now, is simply creating a carbon debt that the UK’s economy will have to pay at some point between now and 2050.

The CCC has revised the 'cost-effective path', which models the cheapest way to meet the UK's 2050 carbon targets.

Our updated abatement scenario results in emissions cuts of 56% in 2025 and 63% in 2030 on 1990 levels, compared to the scenario underpinning the budget which resulted in a 50% cut in 2025 and a 60% cut in 2030 on 1990 levels. 

The CCC also amended the contributions from various industries after assessing progress over the past three years. It noted slower than expected uptake on the building sector initiatives, such as insulation and heat pump installation. This accounts for the increased tonnage of CO2 from the building sector.

The report says:

Our updated abatement scenario suggests emissions of 1,690 MtCO2e across the fourth budget period, compared to the currently legislated limit of 1,950 MtCO2e. This is our best estimate, based on the latest evidence. It implies that if all measures that we have identified as being cost-effective were to be implemented, then emissions across the economy would be 260 MtCO2e (13%) below the level of the budget. 

Given these gaps there is the question of whether the budget should be tightened, thereby committing to full implementation of cost-effective measures, or whether to maintain the budget at the present level (with the possibility to outperform by full implementation of measures). In answering this question, it is important to recognise the inherent uncertainties and the flexibility that exists in the budget.

The report splits the carbon economy in the traded and non-traded sectors. These relate to whether the industry falls into the EU ETS. The traded sector's carbon reductions are controlled by the levels set by EU legislation, which is under review. The non-traded sector is less certain, and while it appears likely to be more economical to make further cuts in the 2020s, the results are within the margin of error. These two factors led the CCC to conclude that tightening the carbon budget was not justified at this time.

"Furthermore," said the report, "keeping the budget at its current level would provide a degree of certainty that would be welcomed by investors." 

One of the major concerns raised by opponents to the UK's carbon budgets is that they put the country 'out in front' of the rest of the world and in particular, the EU. This leads to concerns about competitiveness and the migration of industry towards less stringent carbon regimes (see the earlier reaction from the manufacturing industry).

The CCC report addresses these concerns, saying it found no evidence to support these concerns if the budget stayed the same.

Our assessment of the competitiveness risks to energy-intensive sectors suggests there is no evidence of significant industry relocation due to low-carbon policies to date and no reason to expect this in the future. Costs continue to be manageable given policies currently in place to limit competitiveness risks. Further detail on policy implementation to 2020 and beyond is desirable to ensure this remains the case and to provide confidence to investors. The circumstances relating to competitiveness have not changed since the fourth carbon budget, and there is no rationale to change the budget on this basis. 

According to my colleague Fiona Harvey:

The EEF [manufactruring organisation] was unable, when asked, to provide examples of investment going abroad as a result of the UK's carbon policies, or research on how the UK's carbon targets would affect productivity.

The report says the 2023-2027 carbon budget is in line with the current EU legislation which designates a 20% reduction target by 2020. However the UK has been prominent in the push to amend the target to 30%. If this were to happen, says the CCC, tightening of the budget might be justified.

Bob Ward, from the London School of Economics, said:

The point about the most cost-effective path is that it minimises the cost of the investment required to achieve the target reduction in emissions, based on current understanding of likely policy and technology developments. This implicitly should reduce competitiveness issues if one assumes that every country will eventually contribute appropriately to the overall reduction in annual global emissions that is required to have a reasonable chance of avoiding dangerous global warming by more than 2 centigrade degrees.

The CCC found that other major emitters were also making considerable strides forward in cutting emissions - despite slow progress on global talks and some nations (namely Australia, Canada and Japan) making retrograde steps.

• The United States (16% of global CO2 emissions) has a good chance of delivering its Copenhagen Accord commitment to reduce 2020 emissions by 17% on 2005 levels. Going beyond this, there is a major challenge to develop and implement approaches to drive further cuts required through the 2020s.

• Commitments comparable to the UK’s have been made by a range of developed and developing countries: Germany in terms of medium-term emissions reduction; China and the US against a 2005 baseline on the basis of carbon-intensity; the US, Japan, the EU and Mexico in terms of 2050 commitments. 

• Coverage of low-carbon laws and policies has increased internationally. Legally-binding legislation requiring emissions reduction has been passed in South Korea and Mexico; global coverage of carbon pricing is now 20% of non-transport emissions and rising (e.g. this has been introduced in parts of China and the US); vehicle standards now cover around 80% of global emissions from road transport. 

WWF UK's head of climate & energy policy Nicholas Molho said:

“The Committee’s rationale that this is not the right time for a tightening is understandable given that the Fourth Carbon budget will have to be reviewed once an EU deal has been agreed in 2016/17.”

David Steven from Global Dashboard has written an interesting blog taking issue with the assertion that the world in surging ahead of the UK.

So the US has some reasonable targets, but no legislation or long-term policy commitments. Chinese emissions are over-shooting the UK’s and ‘may’ peak sometime in the future. And the European Union has a binding legal framework but only until 2020, not 2050.

Hard to understand how this meets any reasonable definition of comparability of effort.

Aluminium manufacturers told a parliamentary breakfast this morning that EU carbon policy had made the British industry the least competitive on earth. A release from the Aluminium Federation (Alfed) said:

Alfed CEO Will Savage said the sector was within reach of a bright future due to the explosion in demand in the automotive industry and other sectors.

But he warned: “We really need Government to get behind British aluminium manufacturers and suppliers.

“Since 2007 we have lost 85 per cent of our primary production capacity and what remains is not being helped by EU rules which place smelters inside the union at an 11 per cent cost disadvantage compared to those outside.

A recent report by the Centre for European Policy Studies said plants fully exposed to EU climate and energy policies have seen an 11 per cent increase in production costs, making [the EU industry] the least competitive globally.

The Times is reporting that the chair of the CCC said shale gas should be part of the UK's energy mix. He said concerns about the environmental safety of fracking were unfounded. Gas has been earmarked as a less carbon intensive alternative to replace coal in the short term.

The Times said:

Lord Deben, who as John Gummer served as Environment Secretary in John Major’s Government, told The Times: “It just isn’t true that fracking is going to destroy the environment and the world is going to come to an end if you frack. And yet to listen to some people on the green end, that’s what they say.”

Lord Deben said that shale gas, which has helped the US to cut emissions because it is cleaner than coal, could give Britain greater energy security and should be exploited as quickly as possible. “I’m in favour of it. The carbon budgets have already assumed that we are going to use gas well on through the 2020s and into the 30s. There will be a need for gas [and] much better to have it from us and as soon as we can because I do genuinely think people ought to be worried about the security of our energy supplies.”

Carbon Brief reported last week that the 'dash for gas' would lead to a breach of the UK's carbon budgets. It quoted the CCC's chief executive saying: "Early decarbonisation of the power sector should be plan A - and the dash for gas Plan Z."

The argument is not whether or not the UK should use gas in its energy production, but how much and what type?

The point Gummer is making, is that Britain should rely less on imported gas and concentrate on its own, abundant supply of shale. This, he says, will create a more independent, cheaper energy sector.

As for how much gas should contribute to the overall energy mix. The graph below, from the government's new gas strategy, contrasts three different levels of gas intensity within the UK's energy production.

Carbon Brief says:

Different amounts of new gas are constructed in the three scenarios. In the 50g scenario, 19GW of new gas power stations would be built between now and 2030. In the 100g scenario, 26GW, or about 30 new power stations would be built. In the 200g scenario, 37GW, or about 40 new power stations would be constructed between now and 2030.
But the CCC says the high gas scenario would break the UK's carbon budgets as well as creating new energy costs and price increases.

Roger Pielke, a climate scientist at the University of Colorado wrote earlier this year that the UK's targets looked easier to achieve because the economic slowdown had masked the necessity for deep structural changes that have not occurred.

The scale of the decarbonization challenge implied under the UK Climate Change Act is huge. The additional experience gained since the Act was passed indicates that the magnitude of that challenge has increased as progress is not being made at a rate necessary to hit the targets. Slow, even negative, economic growth in recent years has masked the lack of progress.

Of course it is possible that targets could be met via creative strategies such as the use of offsets or the counting of emissions reductions in gases other than carbon dioxide. However, such strategies, irrespective of their inherent merits, would only postpone the decarbonization needed in the power sector if deep emissions reductions proposed to 2050 are to be met. Of course, the main consequence of adopting a decarbonization target for 2030 might be to simply move the goal posts further into the future to reset the emissions challenge, as it appears that the shorter-term targets are likely to be missed.

Andy Atkins, executive director, Friends of the Earth:

"There's no justification for watering down the fourth carbon budget - doing so would drive up emissions, drive away jobs and send Britain's international credibility on this crucial issue into reverse. Our over-reliance on increasingly costly fossil fuels has sent bills soaring and heightened the risk of extreme weather battering Britain. Switching to clean energy will help tackle this.

"Leading businesses are crying out to invest in the nation's huge renewable energy potential, but they need the confidence to do so, which is why they are backing ambitious cuts in UK carbon pollution. If Ministers are serious about safeguarding Britain's interests they should strengthen our climate targets, not weaken them."

Nick Molho, head of Climate & Energy Policy, WWF UK

“The Government must confirm its commitment to the emission reduction objectives set out in the Fourth Carbon Budget.As made clear in the statement issued today by over 100 organisations calling on the Government to uphold the Fourth Carbon Budget, ambitious and stable climate policies make business sense. Rather than stop and go politics, the UK needs stable policies and long-term objectives to attract the investment required to accelerate the cost reduction of new technologies and trigger potentially significant economic growth opportunities in areas where the UK is currently a leader such as in the development of offshore wind, wave and tidal power, carbon capture and storage and electric car technology. We shouldn’t forget that according to the Department of Business, the UK’s low carbon environmental goods and services sector already employs close to a million people and generated sales of over £128bn in 2011/12, an almost 5% increase on the previous year.

"That’s not to say there aren’t challenges that need to be carefully addressed in moving towards a low-carbon economy. Climate and energy policies might have impacts on the profitability of some energy intensive firms in the short to medium term as the UK makes the transition to a low-carbon economy. These impacts can and should be addressed through transparent and proportionate financial support policies but they should not be used as a reason not to make the move towards a low-carbon economy and deprive the UK of the long-term gains that such a transition could entail. In fact, if the UK builds on its position of leadership in the development of some low-carbon technologies, this could have positive growth impacts in several energy intensive firms in the supply chain such as in the cement, chemicals, electronics, heavy engineering and construction sectors.

"From an environmental perspective, the UK represents much more than just 2% of the world’s emissions. It was the first country in the world to adopt a Climate Change Act and has exerted significant influence internationally through the development of similar legislation in countries like Mexico and the development of important environmental policies and initiatives in countries like China (where the UK, through the FCO and the British Council, has helped support the development of the emission trading schemes being trialled in China). As the country that has suggested that the EU should be ready to cut its emissions of greenhouse gases by 50% by 2030 compared to 1990 levels (the most ambitious target put forward by any member state), diluting the Fourth Carbon budget now would undermine the UK’s credibility in European and international climate negotiations, just at a time where positive momentum is required to agree an ambitious European commitment in 2014 and a global agreement on greenhouse gas emission reductions at the United Nations summit in Paris in November 2015.”

Healthy Air released a statement which says:

Analysis carried out to evaluate the health and environmental impacts associated with the fourth carbon budget measures finds that the monetised benefits almost negate the resource costs associated with implementation.

Air quality is one of the areas where there would be major positive impacts, as well as congestion and physical activity. For example energy saving measures and a shift to renewables and nuclear would reduce fossil fuel emissions from power generation and buildings; smarter choices and HGV logistics would reduce vehicle km and electric vehicles and hydrogen buses would reduce emissions intensity.

The reaction from the business community has been mixed. The government has been intensively lobbied by the carbon-intensive and renewable industries, who are seeking to influence the UK's carbon policy to their advantage. Both argue that supporting their sector will be good for the economy. While there is disagreement about the means to reach carbon targets, there is strong agreement that government must establish policy that provides certainty for investment.

Steve Radley, director of policy at manufacturers' association EEF:

"Industry will be deeply concerned that the Committee on Climate Change is advising that the UK remains on a unilateral trajectory towards a 50 per cent reduction in emissions. With other EU members showing little appetite to match our ambitions, this will continue to push electricity prices above our competitors and risks pushing investment abroad.

"This move will this do nothing to reduce EU or global emissions or strengthen our claims to global leadership. By signing up to cost increases that are out of line with our competition, the committee risks weakening our manufacturing base and undermining its policy of "leading by example". Government must now demonstrate it understands the competitiveness issues at stake by undertaking a hard-edged review of the Committee's evidence." 

Terence Watson, UK President, Alstom:

"We're a manufacturing company. We need policy stability in order to make long term investments, as do our customers & supply chain. 'Stop-Go' politics threatens that investment and raises costs for everyone. That is why changing the 4th Carbon Budget now would be a strategic mistake - with consequences. And let's not forget the great opportunity here: hundreds of thousands of jobs all over the country in new growth areas where the UK can take a significant market share."

Stephanie Pfeifer, chief executive of the Institutional Investors Group on Climate Change, which represents over 85 of Europe’s largest investors worth a combined €7.5trillion said:

“The UK desperately needs investment in its energy infrastructure to secure its future power supply. Independent estimates have put this investment need at £330bn by 2030.

“This investment will only happen if investors are confident in the UK government’s commitment to a low-carbon energy future. Changing course on emissions reduction objectives now would undermine this confidence and damage investment prospects.

“By putting in place ambitious policies, the UK can be a leader in the development of a low-carbon economy which creates jobs and boosts growth. The government can reassure investors and signal its commitment to a low-carbon future by sticking to the emissions reduction objectives outlined in the fourth carbon budget." 

Peter Young, Chairman of the Aldersgate Group:

"It is refreshing to see the internationally respected Committee on Climate Change deliver such clarity in its review of the fourth carbon budget. The only reasonable course of action is for the Government to fully accept the recommendations, as the evidence clearly states that the core objectives remain unchanged for 2023-2027. This will provide businesses with vital confidence to invest now, delivering the optimum trajectory for decarbonising the economy and meeting the statutory targets set by the Climate Change Act."

Dr Nina Skorupska, chief executive, Renewable Energy Association:

"It is vital the Government plans for the long-term. Energy investment cycles are long-term by nature and so too are climate change impacts. The clearer the long-term policy framework, the more jobs and investment UK plc will secure both today and in the future in the growing global markets for renewable power, heat and transport. The best framework would combine carbon budgets based on the CCC's advice with renewable energy targets to provide certainty for investors on the direction of travel."

Paul King, chief executive of the UK Green Building Council:

"The advice is unequivocal - Government must stick to the targets it has set. Not only is this vital to ensure leadership on the international stage, but it's essential to provide business with the confidence it needs to invest in a low carbon future. Nowhere is this more evident than the construction and property sector, which offers by far the most cost effective carbon cutting potential of any sector of the economy yet has been plagued by Government constantly moving the goalposts on key policies."

Dr Keith MacLean, Policy & Research Director at SSE:

"What the industry needs more than anything is certainty over the medium to long term. The carbon budgets set a clear trajectory and are a key part of a framework against which the industry can make much-needed investment decisions; they are an important signal of political intent and this is therefore an opportunity to help create a more stable investment climate which ultimately helps keep costs down for consumers."

Dr Luke Warren, Chief Executive of the Carbon Capture and Storage Association said:

“It is great to see the emphasis on CCS in the Fourth Carbon Budget Review. The report estimates that CCS could reduce the cost of meeting emissions by £15 billion – yet another piece in the growing body of evidence that shows CCS is not an option – it is essential.

We have also signed on to a joint statement with 100 other businesses calling for the Government to back the advice of the Committee and stick to its current emissions reduction trajectory – this is vital to maintain investor confidence across all low-carbon technologies, including CCS."

Neil Sachdev, Sainsbury’s property director, said:

“If businesses are to increase their reliance on clean technologies they need certainty in order to make long term investments. We continue to invest heavily in low carbon technologies as we strive to achieve our stretching carbon reduction targets. We are doing this because it makes commercial sense, is supporting job creation in the low-carbon energy sector, is better for the environment, and is the right thing to do.”

Bob Ward, policy and communications director at the Grantham Research Institute on Climate Change and the Environment at London School of Economics and Political Science, said the government should make its decisions based on economic arguments, rather than lobbying.

“The updated analysis by the Committee on Climate Change indicates that the most cost-effective pathway for the UK to reduce its annual emissions by at least 80 per cent by 2050 compared with 1990 is consistent with a smaller carbon budget for the period between 2023 and 2027 than was legislated by Parliament in 2011. The Government is currently undertaking a review of the budget with a view to weakening it, but the Committee’s expert independent analysis indicates that this would be a mistake, and indeed, would contravene the terms of the Climate Change Act. It is essential that the Government’s decisions about the UK’s carbon budgets are driven by evidence rather than ideology or lobbying from vested interest groups. It should acknowledge, the benefits of investing more in low-carbon energy infrastructure today while interest rates are low.”

Business Green have provided a round up of reaction to the report.

Lord Deben, Chairman of the CCC:

"This report shows the clear economic benefits of acting to cut emissions through the 2020s. This provides insurance against the increased costs and risks of climate-related damage and rising energy bills that would result from an alternative approach to reduce and delay action.

While it is essential to understand affordability and competitiveness impacts associated with the budget, the evidence suggests that these are relatively small and manageable. The Government should confirm the budget as a matter of urgency. This would remove the current uncertainly and poor investment climate. It would provide a boost to the wide range of investors who stand ready to invest in low-carbon technologies." 

David Kennedy, chief executive of the CCC:

"There is no reason to drag this out because the evidence is so clear. Because that's the case, because there is a benefit in providing a signal of commitment to industry, all of whom stand ready to invest but are worried about uncertainty, that's why we say the government should confirm the budget as a matter of urgency."

Department of Energy and Climate Change (DECC) spokesman:

"It is important to make a final decision as quickly as possible... We will consider the CCC's advice carefully as part of our work on the review, which will be published in the new year."

Statement from group of 100 businesses and NGOs:

"The Committee's recommendations show the minimum action that the UK should be taking to meet its obligations as part of a global effort to tackle climate change. If rapidly implemented and supported by stable policies, these recommendations should also make the UK a global leader in the low-carbon sector and create significant growth for the economy, including much needed new green jobs across the regions.

"As a range of businesses, investors, faith groups and NGOs representing a wide spectrum of the UK economy and society, we jointly urge the Government to stick to ambitious emission reduction objectives for the 2020s to give business the certainty it needs to commit significant investments to the UK's promising low-carbon economy and in so doing, maintain our energy security."

Lord Adair Turner, senior fellow of the Institute of New Economic Thinking:

"The majority of the business world is clear that ambitious and stable action to tackle climate change makes business sense. A stable policy environment is critical to attracting investment in the low-carbon sector, reducing the costs of new technologies like offshore wind and creating significant growth opportunities for the UK economy in areas where we currently lead the clean energy race. The time has come to give to the decarbonisation agenda the importance and stability it deserves."

Carbon Brief has produced a media round up.

The UK has committed to reducing its carbon emissions by 80% on 1990 levels by 2050. But how it goes about achieving these reductions are a matter of much conjecture. In 2011 the government created a series of five year carbon budgets, essentially a series of mini-targets, designed to provide a roadmap to achieving the overall target. The first four budgets are set in law and cover the period 2008-2027. The government has reserved the right to review the 2023-2027 budget. The CCC has been asked to advise on this review, the government must follow the committee's advice.

The Guardian's Fiona Harvey reported today:

The Committee on Climate Change, the statutory body set up to advise the government on meeting long-term carbon goals, said firmly on Wednesday that there was no reason to revise the UK's carbon budgets,which require a halving of carbon emissions in the 2020s, compared with 1990 levels.

"This is clearly the most cost-effective way to proceed," said Lord Deben, chairman of the committee and former Conservative environment minister. He said the study had shown no evidence that businesses would fail to invest in the UK because of carbon reduction policies, and that the evidence suggested sticking to the carbon budgets would save money in the longer term.

The committee's review of the carbon budgets was at the behest of George Osborne, chancellor of the exchequer, who has spoken out strongly against what he sees as the "burden" of green regulations on business. He suggested that the UK was in danger of losing competitive advantage by going further and faster on carbon cuts than rival countries.

But the committee told journalists the UK was "not out in front" compared with other EU member states and major trading nations such as China, which are also putting in place measures to curb greenhouse gases. Its study found that there was no impact on the UK's energy-intensive industries from the fourth carbon budget, which will run from 2023 to 2027, because they are already protected from carbon prices and rising energy costs.

The CCC would not release the full report to journalists until Wednesday morning, meaning much of the reaction has been based on an eight page executive summary. The summary lead with the statement:

Our overall advice is that there has been no significant change in circumstances as specified in the Climate Change Act and therefore the budget should not and cannot be changed under the terms of the Act. 

Therefore the budget should not and cannot be changed under the terms of the Climate Change Act. If anything, changed circumstances point towards a tightening of the budget. However, the Committee advises that it would be premature to do so until uncertainties at the EU level have been resolved.

The full report says tightening the budget would be premature at this stage. But its predictions indicate further cuts during the 2020s would keep the UK closest to the most cost-effective model. Uncertainty over the final levels of EU emissions targets and domestic energy policy meant the CCC could not be sure about this recommendation. 

Our updated best estimate of the cost-effective path to the 2050 target implies a larger reduction in emissions in the 2020s than required by the budget. This could imply that a tighter budget (i.e. requiring a larger emissions reduction) is appropriate. However, it would be premature to tighten the budget now, given uncertainties over the cost-effective path, EU emissions targets for the 2020s and the precise path for UK power sector decarbonisation under the Electricity Market Reform. Any change now would require a further change later, once these issues are resolved, and frequent budget changes would undermine the certainty that they are meant to provide. 

The report said because the UK's power generation and energy-intensive industry pollution was covered by the EU Emissions Trading Scheme, EU targets control the UK's own carbon budgets. The UK is currently pushing for the EU to revise its emissions cuts up from 20% to 30% by 2020.

While current discussions in the EU suggest a tightening of the budget may be required, the negotiations are ongoing and further decisions are required before the budget can be aligned.

The CCC said the UK's standing in the EU could be undermined if it chose to ease its own carbon ambitions during the 2020s.

Any proposal to loosen the budget would undermine credibility of the UK in EU and international negotiations and further undermine already fragile investment conditions, particularly as such a proposal would be counter to the available evidence.