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Review of the UK Climate Change programme

Issue date

February 2005

Review of the UK Climate Change programme

A TUSDAC response to the Government’s Consultation paper

The Trade Union Sustainable Development Advisory Committee (TUSDAC) welcomes the Government’s commitment to move beyond the Kyoto Protocol targets, by aiming to reduce UK carbon dioxide (CO2) emissions by 20% below 1990 levels by 2010. This is a significant advance on the standard Kyoto target of a 12.5% reduction in CO2 by 2008-12.

TUSDAC was set up in 1998 as the main forum for consultation between Government and trade unions on sustainable development and environmental issues. It is currently chaired by Paul Noon, a member of the TUC General Council and General Secretary of Prospect; and Lord Larry Whitty, Minister for Food, Farming and Sustainable Energy. The views in this response are submitted on behalf of the trade union members of TUSDAC.

In its response to Taking it on (2004), the Government’s revised sustainable development strategy, TUSDAC commented that: 'Surprisingly, the strategy lacks a workplace dimension and with it, measures to encourage the participation of employee stakeholders.' The workplace is a key locus of behavioural change towards a sustainable future. We argued that Taking it on should encourage joint union-employer workplace initiatives in technology and process efficiency and the integration of energy services. So

TUSDAC recommended a new priority area - Developing sustainable workplaces.

Our principle response to the Government’s climate change review reaches a similar conclusion:

  • TUSDAC is concerned that the Government’s Climate Change review lacks a coherent sectoral vision, explaining how the social partners are to work together successfully in key sectors to achieve the Government’s challenging climate change targets.

TUSDAC also recommends:

  • That the DTI develops a Climate Change Partnership Fund, looking for best practice projects in each sector capable of being readily and widely adopted, perhaps supported through the work of the Carbon Trust.
  • TUSDAC believes that the Government should develop a coherent identity and strategy for the growth of the green manufacturing sector, engaging the social partners in an urgent assessment of the investment, training and re-skilling challenges the sector faces.
  • The further promotion of green travel plans through innovative subsidies to participating employers.
  • The Government should further stimulate markets for eco-innovations through greening public procurement and appropriate investment strategies.
  • TUSDAC urges the Government to urgently review its grant programme for cleaner vehicle technologies to ensure that every opportunity is taken to ensure 'first mover' advantage for the UK motor industry.
  • A high priority for the UK’s EU presidency must be moves to ensure the inclusion of intra-EU aviation emissions within the ETS by 2008. The ETS approach itself is not inconsistent with our continued support for aviation employment growth.
  • TUSDAC is concerned that a number of proposals in the Government’s railways Bill may lead to reductions in regional and branch routes to the detriment of the government’s environmental targets.
  • It is essential that the environmental case for rail is made more forcefully by Government, and that the cost of any proposals for rail replacement take full account of the social cost of carbon.
  • TUSDAC is concerned that the DfT seems reluctant to provide funds for both new light rail schemes and conversion of heavy rail into light rail in cities and urban. Light rail provides a range on new employment opportunities and skills, encouraging modal shift from car, while reducing emissions, regenerating both town centres and in outer urban estates.
  • TUSDAC recommends that the Government urgently reviews the further potential for rail expansion, especially in its planned growth areas; and that environmental costs are fully taken into account in any reviews of current rail services.
  • TUSDAC is concerned that the Government may fall short of its 10% renewable energy, and urges Government to take further urgent steps (R&D investment; financial support for innovation) to achieve this aim. TUSDAC is also concerned that if there is shortfall that that this should not be made up from imported gas at the expense of UK coal or nuclear generation.
  • TUSDAC believes that the Regional Development Agencies and administrations should be encouraged to develop renewable energy strategies suited to exploit their geographical advantages.
  • TUSDAC reaffirms its commitment to a balanced energy policy. All existing energy options must be kept open.
  • TUSDAC urges the Government to establish a joint industry working group on how best to achieve the agreed emissions limits by utilising the already proven and available clean coal technology, and to provide further funding for its development and construction of a working plant.
  • It is also vital that there is an adequate supply of skilled staff to maintain the resilience of energy networks and to respond to technical challenges from new and existing sources of generation.

Q4. What are the advantages and disadvantages of sectoral targets?

On the positive side, sectoral targets provide a clear focus for action and existing approaches, for example Climate Change Agreements, have had some measure of success in changing behaviour. However, there are also some valid criticisms about bureaucracy and lack of transparency. TUSDAC also has some broader concerns that too heavy an emphasis on sectoral action could adversely impact on the perceived purpose and coherence of the climate change programme. If anything, there is a case for rationalisation and greater clarity in relation to overall objectives and in connecting these to the importance and impact of individual action.

Nevertheless, TUSDAC is concerned that the Government’s Climate Change review lacks a coherent vision of how the social partners are to work together successfully to achieve the Government’s challenging climate change targets.

UK emissions were 209 million tonnes of carbon (MtC) in 1990, the base year against which forecasts are made. In any assessment of the challenge ahead, it is important not to lose sight of the fact that in the 15 years since the base year of 1990, the UK has emitted in excess 3 billion MtC into the atmosphere.

Government commitments mean that the UK is faced with the massive challenge of cutting emissions to 183 MtC, averaged over the five-years of the protocol period. The first major international initiative designed to curtail emissions to safer levels is the EU Emissions Trading Scheme (ETS). This is a crucial initiative.

While TUSDAC recognises the UK’s commitment to a successful ETS, more than half of UK carbon emissions (54%: para. 5.10) in a diverse range of sectors will fall outside its scope - transport, much of the 'lighter' industrial and services sectors, domestic consumption and other areas are not covered by the ETS.

End user GHG emissions as % of national total

Business

28.8

Agriculture

7.8

Other

7.6

Road Transport

21.9

Residential

24.3

Domestic air transport

3.6

Industrial process

5.5

Public

0.5

Source: Climate change review, page 20.

  • TUSDAC recommends that sectoral climate change task groups should form a central part of the next stage of the Government’s climate change strategy. This initiative is aimed at the central issue of stakeholder participation.

If, through this strategy, Kyoto is seen to work well, this will give all stakeholders greater confidence that global approaches work.

Engaging the skills, knowledge and experience of the social partners and other experts in each sector, these new groups should identify the necessary measures required to achieve the Government’s sector-specific targets for reductions in each of the six greenhouse gases identified in the Kyoto protocol: CO2, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and hexafluoride).

It is clear from the consultation document that major challenges lie ahead in many sectors other than electricity generation and supply:

  • In the energy sector, major questions arise over the respective contributions of gas, clean coal technologies, renewables, nuclear energy and micro generation, and the long-term security of supplies and these also need equal consideration to that of price and competition.
  • In transport, vehicle emissions appear to be running out of control; 'green' vehicle manufacture has much potential if properly resourced; while in aviation TUSDAC argues (below) for the inclusion of aviation CO2 emissions within the ETS by 2008.
  • There is a case for extending the climate change levy to more sectors, such as retail.
  • The agricultural sector has much to offer in terms of biofuel production.
  • Meanwhile, cutting across these and other sectoral considerations are the major challenges of workforce transition and re-skilling.

Each sector strategy is likely to identify a differing mix of policies and practical initiatives, many of which will, in the end, need to be adopted in the workplace. In its submission to Taking it on, the Government’s review of its sustainable development strategy, TUSDAC argued that developing sustainable workplaces should form a key part of the Government’s involving people strategy. There needs to be a better sense of integrating the climate change review and sustainable development in the workplace. This link could be forged through a sectoral strategy.

  • TUSDAC also recommends that the DTI develops a Climate Change Partnership Fund, looking for best practice projects in each sector capable of being readily and widely adopted, perhaps supported through the work of the Carbon Trust.

Q8. What new measures for reducing carbon emissions might be considered?

TUSDAC questions whether the UK Government is deploying a sufficient proportion of GDP towards reducing emissions to achieve the 60% cut envisaged by 2050. The document suggests that, if the UK acts with other international partners, the cost of achieving this target could be in the range of 0.5% to 2.0% of GDP (para. 2.18). If this refers to total costs, this amounts to a few months, or less than a whole year’s worth of GDP growth over a 50-year period.

Environmental taxes are running at about 3.1% of GDP, or significantly less than the recent peak of 3.6% in 1998-99 (see table).

Environmental taxes as % GDP 1994-2003

£ million

Year

Environmental tax revenues

GDP

Environmental taxes as % GDP

1994

21.7

680441

3.2%

1995

23.6

718383

3.3%

1996

25.4

762610

3.3%

1997

27.1

810138

3.3%

1998

30.6

858616

3.6%

1999

32.6

903167

3.6%

2000

33.1

950561

3.5%

2001

32.0

994309

3.2%

2002

32.9

1044145

3.2%

2003

33.7

1099896

3.1%

Sources: Industrial analysis of environmental taxes, E.Lin and P. Francis, Economic Trends August 2004, ONS; and ONS national accounts.

Environmental taxes:

Energy products:

  • Climate Change Levy (1 April 2001) on supply of energy to industry and commerce.
  • Fossil Fuel Levy (1 April 1990) on sales of electricity from fossil fuels (currently zero-rated; taxes on hydrocarbons (45.8p a litre).
  • VAT.

Taxes on transport:

  • Air Passenger duty (eg £10 a person to EEA countries).
  • Vehicle Excise Duty (now graduated by level of CO2 emissions) aka motor vehicle licenses.

Pollution taxes:

  • Landfill tax (1 October 1996) now £15 a tonne.

Taxes on resources used:

  • Aggregates Levy - £1.60 a tonne of rock, sand and gravel.

UK’s green manufacturing sector

TUSDAC believes that the Government should develop a coherent strategy for the growth of the green manufacturing sector, engaging the social partners in an urgent assessment of the investment, training and re-skilling challenges the sector faces.

The Government should further stimulate markets for eco-innovations through greening public procurement and appropriate investment strategies.

The climate change review recognises the employment potential of the environmental technology industries, as employing 400,000 people in industries with an annual turnover exceeding £25 billion (para. 2.21).

This figure reveals only part of the picture. A recent scoping study for the RDAs estimates that there are now around 690,000 jobs in the "environment economy", much of it well distributed regionally. The regions are increasingly being looked to by central government to deliver strategic policy objectives around the sustainable consumption and production (SCP) agenda of de-coupling economic growth from its environmental impacts. The environment economy is seen as 'a dynamic and buoyant sector that is fast becoming comparable in size to important sectors such as telecommunications, energy and water supply, wholesale and transport.'

'Future industries' sectors include:

  • Renewable energy - from the R&D, manufacture and installation of devices generating energy from wind, wave, tidal, solar and clean coal power. Estimates suggest employment growth of 45,000 jobs from wind-related technologies. In Scotland, an estimated 7,000 jobs may develop in wave and tidal power systems by 2010, contributing 10% of Scottish energy. However, it is important that this technology is not only developed, but manufactured and applied in the UK.

  • Energy efficiency - from the development, manufacture, installation and servicing of environmental monitoring and control systems, combined heat and power systems, and fuel-efficient vehicles.

  • Recycling - with potentially 40,000 to 78,000 jobs, re-manufacture (50,000 jobs), 'green chemistry' and other environmentally friendly industries.

However, there will undoubtedly be losers as well as winners and there is no doubt that workers in some sectors will be expected to pay the heavy price of losing their job. If government is serious about its commitment to sustainable development, it cannot simply shrug off the human cost of changing the market in this way. TUSDAC believes that the Government should lead an objective, forward looking analysis of the balance between positive employment impacts of moving to a low carbon economy, for example through growth of R&D and employment associated with renewables, against negative consequences of contraction in other energy sectors. This should include indirect effects, such as employment implications in the UK in the sectors from which output is traded in return for energy imports.

It is noteworthy that Denmark’s policy of supporting the development of the wind industry has, according to the Danish Wind Industry Association, led to the country’s dominance of the wind energy market and the creation of over 20,000 jobs. A similar approach needs to be adopted for renewable energy especially wave and tide systems were the UK is a global leader today and other green manufacturing opportunities in the UK.

Transport

Q.30 What new measures might we consider at the EU level and national levels to develop cleaner, greener transport and reduce reliance on fossil fuels?

Aviation

The aviation industry is a major and expanding sector. This is recognised Air Transport White Paper (December 2003), which also acknowledged the increasing impact that aviation emissions are making towards total emissions. As the current review suggests, forecasts point to aviation CO2 emissions approaching 18 MtC by 2030, of which 97% would be from international flights, or possibly one quarter of all UK’s contribution to global warming by that date (para. 8.20).

TUSDAC believes that a high priority for the UK’s EU presidency must be moves to ensure the inclusion of intra-EU aviation emissions within the ETS by 2008.

TUC Congress (2003) supported aviation’s expansion, with the environmental caveat set out in the report to Congress, that: 'expansion must meet tough rules to make it environmentally sustainable . . . the General Council's support for new aviation capacity is given on the condition that growth is firmly linked to the pursuit of environmental best practice.' This particularly refers to the environment and air quality at airports. The ETS approach itself is not inconsistent with our continued support for aviation employment growth.

Burning fuel in flight generates CO2, oxides of nitrogen (NOx), water vapour and particles. On the ground, passenger and vehicle movements also contribute to global warming. Clearly, other measures will be needed to control NOx and the high altitude effects of vapour and particles.

Rail transport and the environmental challenge

Government forecasts predict that highway congestion is set to worsen by up to one-third if the Government’s 10-year plan for transport is not implemented. A Trafficmaster study in 2002 forecast 30% to 40% road journey time increases between many cities. An RAC Foundation study has suggested that even a road-building programme 50% larger than the maximum planned in the 10-year plan would still be insufficient to contain congestion and would create traffic-flows in towns beyond the capacity of their road systems to cope.

If road building cannot solve congestion and prevent the consequences of gridlock on major road arteries, then rail is the main alternative. Since 1994-95 there has been a 33% increase in rail passenger journeys and a 38% increase in rail passenger kilometres. In 2001 rail moved 20% more people into London during the morning peak than a decade earlier, while in 2004 nationally more people travelled by rail last year than at anytime since 1959 which has relieve road congestion.

But rail capacity is approaching saturation point: in parts of Britain it is full at peak times and in other parts this situation will soon beckon. According to Transit magazine (26 November 2004), unless rail capacity is improved a ‘re-evaluation of ticket prices’ to deal with ‘an emerging problem of full trains’ (ie a strategy to price commuters off trains) could become a reality. This policy is socially exclusive and would be strongly opposed by the TUC. Taken together with road-user charging, the negative impact upon quality of life and economic prosperity could be severe.

Many of the government’s planned regeneration areas (eg the Northern Way) or substantial housing developments, especially in the southeast, will be built in areas where rail links are currently inadequate (eg South Midlands) or full to capacity (eg Cambridge). It is vital that the Government ensures that rail capacity matches population growth. The risk will be that road congestion and vehicle emissions will massively worsen as more commuters take to their cars for lack of an adequate alternative.

TUSDAC is concerned that a number of proposals in the Government’s railways Bill may lead to reductions in regional and branch routes to the detriment of the government’s environmental targets. 'Bustitution' measures include arrangements making it easier for bus quality contracts to be introduced if this is part of a wider strategy which includes reductions in rail services. We do not accept that improved bus services should be linked to rail cuts.

The Bill will make it easier for funding authorities (funding authorities are the government, PTA’s TFL, Welsh Assembly, Scottish Executive and TFL) to close railway lines. And the Bill appears to weaken safeguards against line closures. Whereas previously the criteria were whether closure would increase passenger hardship, the new guidelines (which will be provided by the Secretary of State) will also cover 'economical, financial, environmental and social factors'.

It is essential that the environmental cost of rail replacement takes full account of the social cost of carbon. A recent Treasury study [1] concluded: 'The most sophisticated of the published studies reviewed here produces an estimate of marginal damage figure of approximately £70 per tonne of carbon for carbon emissions in 2000. This increases by approximately £1/tC per year in real terms for each subsequent year to account for the increasing damage costs over time.

Apparently, 'This figure is subject to significant levels of uncertainty. [It] excludes any consideration of the probability of climate catastrophes. (i.e. melting of the West Antarctic ice sheet) and socially contingent impacts of climate change that could, potentially increase the size of damages considerably.' Hence the study recommends a pragmatic approach that uses £70/tC as an illustrative estimate, within a range of £35 to 140/tC.

  • TUSDAC recommends that the Government urgently reviews the further potential for rail expansion, especially in its planned growth areas; and that environmental costs are fully taken into account in any reviews of current rail services.
  • TUSDAC is also concerned that DfT does not have plans for further electrification of the rail network. Electrified railways produce fewer emissions and can use a proportion of their power from renewable resources, as does Croydon Tramlink, which uses 15% of its energy from renewable sources.
  • TUSDAC is concerned that the DfT seems reluctant to provide funds for both new light rail schemes and conversion of heavy rail into light rail in cities and urban. Light rail provides a range on new employment opportunities and skills, encouraging modal shift from car, while reducing emissions, regenerating both town centres and in outer urban estates.
  • The existing UK light rail systems have carried over 155m passenger in 2004 and have created over 2,500 direct jobs and in at least half as many indirect jobs. System such as Sheffield have 22% modal shift from car and Croydon, Manchester and Nottingham have also seen a reduction of some 2m car journeys along the rail corridors.

Motor industry

Carbon emissions from road transport are growing year on year, and now amount to 24% of UK GHG emissions. The UK’s manufacturing sector stands to make significant gains from the successful development of new vehicle technologies.

With new car sales in excess of 2 million vehicles a year, the development and take-up of new vehicle technologies and fuels has consider employment potential, at a time when UK manufacturing is shedding some 100,000 jobs a year.

· TUSDAC urges the Government to urgently review its grant programme for cleaner vehicle technologies to ensure that every opportunity is taken to ensure 'first mover' advantage for the UK motor industry.

Q.33 How can we encourage and help people to make smarter choices about the way they travel?

TUSDAC recommends a proper co-ordinated and integrated approach to local public transport. The further promotion of green travel plans through innovative subsidies to participating employers, for example, through NI contribution rebates. These initiatives should be supported by information campaigns aimed at the travelling public to increase awareness of the social costs of carbon, and its consumption via different modes of transport.

Energy supply

Q.18 What scope is there for additional emissions reductions from the energy supply sector to 2010 and to 2020?

TUSDAC reaffirms its commitment to a balanced energy policy. All existing energy options must be kept open. TUSDAC is concerned with the statement on page 41 6.7 'Emissions from coal extraction is further expected to further decline to 2010 as the remaining coal mines reach the end of their working life.' The would seem to indicate that the Government is willing to see the end of deep coal mining in the UK without taking into consideration of issues such as security of supply.

Further reduction in emissions requires practical action, including further assistance for the development of renewables and increased support for the development of R&D and demonstration, especially for sources that have yet to be adequately supported by the private sector.

TUSDAC fully supports the Government’s target of sourcing 10% of electricity supply from renewables by 2010, through initiatives such as the renewables obligation, saving some 2.5MtC annually by that date. But, two years after the introduction of the renewables obligation, renewables supplied 2.4% of electricity, against a quota of 4.3% (DTI: 11 February 2005).

TUSDAC is concerned that the Government may fall short of its 10% renewable energy, and urges Government to take further urgent steps (R&D investment; financial support for innovation) to achieve this aim. However if this target is not reached TUSDAC is concerned that if there is shortfall that that this should not be made up from imported gas at the expense of UK coal or nuclear generation. As far as nuclear is concerned, we welcome the Government’s confirmation that the nuclear option needs to be kept open but believe that urgent attention is now needed to ensure that this statement of intent can actually be realisedThe UK’s Atlantic coastline places the UK in a unique position to develop and install wind and wave technologies. Once this technology is proven we must invest in installation and manufacture in the UK to ensure we are the market leaders as Denmark is with wind power. We must use this base to develop industries with a strong export potential. The renewable energy sector provides a major opportunity for well-distributed employment growth in most UK regions and devolved administrations.

TUSDAC believes that the Regional Development Agencies and administrations should be encouraged to develop renewable energy strategies suited to exploit their geographical advantages.

TUSDAC believes that there must be an ongoing role for coal within the energy mix, but that as the current fleet of coal-fired power stations age, the market is not capable of providing sufficient incentive to new clean-coal power stations. TUSDAC believes that investment by the Government in a new generation of power stations is essential if its objective of fuel diversity and security of supply are to be assured.

TUSDAC urges the Government to establish a joint industry working group on how best to achieve the agreed emissions limits by utilising the already proven and available clean coal technology and to provide further funding for its development There must also be a public debate about the possible further construction and use of nuclear power on existing sites in the UK.

It is also vital that there is an adequate supply of skilled staff to maintain the resilience of energy networks and to respond to technical challenges from new and existing sources of generation.

TUSDAC Secretariat
Zone 6/E8
Ashdown House
123 Victoria Street
London SW1E 6DE

tusdac@defra.gsi.gov.uk

www.defra.gov.uk/environment/tusdac

[1] Estimating the Social Cost of Carbon Emissions, Government Economic Service Working Paper 140, Richard Clarkson and Kathryn Deyes.

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