Emissions targets could harm competitiveness, warns CBI

The UK needs to cut emissions of greenhouse gases by 60% by 2050, according to a report by the Royal Commission on Environmental Pollution – but industry groups said the target could make UK industry less competitive. Large increases in renewable energy and combined heat and power, changes to the National Grid to cope with […]

The UK needs to cut emissions of greenhouse gases by 60% by 2050, according to a report by the Royal Commission on Environmental Pollution – but industry groups said the target could make UK industry less competitive.

Large increases in renewable energy and combined heat and power, changes to the National Grid to cope with small-scale distributed power generation, and measures to reduce demand are key ways in which the target could be met, according to the report.

The Engineering Employers’ Federation and the Confederation of British Industry expressed concern that the commission had glossed over the effect of cutting emissions on competitiveness.

Senior policy adviser for the CBI, Richard Jackson, this week warned of the likely effects of the UK going beyond the Kyoto agreement, when many other governments were not putting in place policies to meet even this target.

He welcomed the proposal for a carbon tax rather than the government’s proposed climate change levy, but added: `We believe some sort of emissions trading scheme would be more effective than a tax in reducing emissions.’

Although the UK is on course to reduce greenhouse gas emissions by 12.5% from their 1990 level by 2010, the commission said much of the progress so far had been fortuitous.

The report questions whether the measures set out in the government’s draft climate change programme will be sufficient to achieve the voluntary goal of reducing carbon dioxide emissions by 20% by the year 2010.

Environment minister Michael Meacher welcomed the report, and the government has said that it will take it into account in finalising the climate change programme, expected this winter.

The report’s key recommendations include:

* A carbon tax based on the quantity of CO2 emitted per unit of energy supplied to replace the climate change levy. This would provide an incentive to switch to sources which produce fewer emissions. Revenues to go into combating `fuel poverty’ and subsidising energy efficiency measures.

* Expenditure on energy-related R&D to be quadrupled as a proportion of GDP over the next decade.

* Regulatory and planning policies to encourage `the widest possible adoption of CHP’.

* A Sustainable Energy Agency should be created to promote renewables and energy efficiency.

* The National Grid must be transformed to deal with a greater number of small-scale, local generators often with intermittent output, and to deal with generation from renewable sources in remote locations.

Power struggle: coal or gas-fired power stations would need carbon-dioxide recovery and disposal under the new proposals

NO EASY OPTION

Fuels cells for cars, wind farms, solar power, nuclear energy … the report runs four scenarios to meet the target.

Scenario 1: No increase on 1998 fuel demand, which would be met from renewable energy and either nuclear power or large fossil fuels power stations with carbon dioxide recovery and disposal. This would involve a fourfold increase in nuclear power – equivalent to 46 new Sizewell Bs. A 20-fold increase in renewables would include 200 offshore wind farms generating 11.4GW, a Severn Estuary barrage, 10GW of photovoltaic cells, and 6.5GW of onshore wind power. Thousands of CHP plants would be fuelled by short rotation coppice and municipal waste. Most cars would be powered by fuel cells.

Scenario 2: Fuel demand reduced by 36% from 1998, met from renewables and fossil fuels. No nuclear power. Most cars would be powered by fuel cells and public transport would be increased. An 18-fold increase in renewables similar to scenario 1, but only 5GW of photovoltaics and 3.3GW of onshore wind.

Scenario 3: Fuel demand reduced by 36% from 1998 – roughly half met from renewables and either nuclear power or fossil fuel with carbon dioxide disposal. Would need 19 new Sizewell Bs, or equivalent fossil fuel generation with carbon dioxide recovery, plus additional renewable energy.

Scenario 4: Fuel demand reduced by 47% from 1998, requiring no nuclear power or carbon dioxide recovery. 3.3GW would be generated from onshore wind, 5.7GW from offshore wind, 0.5GW from photovoltaics, river barrages and CHP. But report says it is `difficult to see’ how energy demand reduction on this scale could be achieved.

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