Carbon reduction in the real world: how the UK will surpass its Kyoto obligations

Abstract

Carbon dioxide emissions from UK energy use have fallen by more than 20% over the last 30 years, and carbon intensity — carbon emissions per unit of GDP — has halved. These reductions have been achieved by a combination of decarbonisation of the energy system and substantial improvements in energy efficiency. Use of natural gas in power generation has been a big factor in recent years, but energy efficiency improvements in households and particularly industry have been more important over a longer period. Government policies designed primarily to address climate change have not been important contributors, until recently. Future reductions in emissions will require more proactive policies. However, they are possible without any economic difficulties, notably by adopting cost-effective energy efficiency measures, using new renewable energy sources and reducing dependence on private cars. These policies will improve economic efficiency. The new UK Climate Change Programme includes policies that combine regulation, investment, fiscal measures and other economic instruments. By working with the grain of other social, environmental and economic policies, they can achieve far more than a carbon tax alone, set at any politically acceptable level. Modelling the costs of emission reductions using a carbon tax as the only instrument would not only massively over-estimate costs, it would bear little resemblance to real world politics. The paper demonstrates that a more diverse set of policy instruments is likely to be an effective and politically acceptable approach in a mature industrial economy. It is concluded that the UK’s Kyoto target of a 12.5% reduction in greenhouse gas emissions is not challenging. The UK Government’s target of reducing carbon dioxide emissions by 20% between 1990 and 2010 is also achievable. By 2010 per capita emissions from the UK will be well below 2.5 tC per year. Claims that some countries, notably the USA, could not reduce per capita emissions below 6 tC per year seem inconsistent with this experience.