Described by some commentators as a ground-breaking piece of legislation, the Climate Change Act hit the statute books on 26 November 2008 following extensive public consultation and parliamentary scrutiny. Its aims are certainly bold - to improve carbon management and help the transition towards a low carbon economy. The Act is also intended to demonstrate UK leadership internationally in the fight to reduce greenhouse gas emissions.

A number of the tools used to achieve those aims are innovative. Some are very broad ranging, others very specific. However, the Act will impact on the vast majority of companies, public bodies and individuals in the UK in some way. Key provisions in the Act include:

  • A legally-binding target for UK Government to reduce UK greenhouse gas emissions by at least 80% by 2050.
  • A system which requires emissions to be capped over five-year periods against budgets with a view to achieving the target.
  • The creation of an independent Committee on Climate Change to advise Government on various matters including setting carbon budgets and reporting to Parliament on progress towards achieving the overall target and individual budgets; and a requirement for the establishment of an Adaptation Sub-Committee to provide advice on and scrutiny of the Government's work on the UK's adaptation to climate change.
  • An obligation on the Government to report at least every five years on the risk of climate change to the UK and to publish a programme detailing how impacts will be addressed. And powers for the Government to require public bodies and statutory undertakers to carry out their own risk assessment and make plans to address the risk of climate change.
  • A requirement that the Government issues guidance on the way companies should report greenhouse gas emissions and, by April 2012, an obligation to use Companies Act powers to mandate reporting or explain to Parliament why it has not done so.
  • Powers to introduce national emissions trading schemes through secondary legislation, to make waste reduction schemes (financial incentive schemes to encourage production of less and the recycling of more household waste) and to introduce minimum charges for single-use carrier bags.

In a number of cases, the Act imposes obligations on the Government to undertake further work in assessing the benefits of some of the policies included. But the direction of travel is clear and the legal framework now in place to ensure current and future policies targeting climate change can be implemented.

Carbon target and budgeting

The target

Understandably, the overall emissions target has received most press. The Act imposes a legal duty on the Secretary of State to ensure that the UK cuts its greenhouse gas emissions by 80% (from 1990 levels) by 2050. The figure is significantly higher than the 60% figure which was contemplated in the early stages of the Act's development and reflects one of the early recommendations of the Climate Change Committee.

The target can be amended by the Secretary of State but only in limited circumstances. For example, if there are significant developments in scientific knowledge about climate change or European or national law or policy that make it appropriate to do so. Any amendment must take into account the advice of the Committee on Climate Change and representations made by other national authorities.

Budgeting

The Secretary of State is required to set five-year "carbon budgets" capping emissions with three budgets being set at a time (the budgets covering the periods 2008-12, 2013- 17 and 2018-22 are to be set by 1 June 2009). The budgets set the trajectory for meeting the 2050 target. Again individual budgets can be amended but only in similar circumstances to the overall target, and having taken into account the advice of the Climate Change Committee and representations of other national authorities.

Climate Change Committee

Consisting of independent experts, the Committee will play a key role in both advising and supporting the Government in meeting its obligations under the Act and monitoring and reporting on its performance.

Its role includes advising on the overall 2050 target (and whether it should be amended) as well as advising on each carbon budget. The Committee will also report annually on progress made towards meeting individual carbon budgets and advise on the consequences of including emissions from international shipping and aviation in the targets and budgets (the Government is committed to including those emissions in the Act by 31 December 2012 or explain why it has not done so). In addition, its role includes advising the Government on the appropriate action at domestic, European and international level (through the use of international carbon credits) in achieving budgets.

The Committee has already shown its mettle. In its report of 1 December it suggests the need for a 34% cut in emissions by 2020 relative to 1990 levels, and makes a number of recommendations as to how those cuts might be achieved. It also recommends that the Government should not purchase international credits to help meet the 34% target but should achieve the cuts through domestic action.

The extent of the Government's acceptance of the recommendations will provide a strong indication of the level of its commitment to implementing actual (and potentially unpopular) policies to achieve bold targets.

Emissions Trading Schemes and Waste Reduction Schemes

The Act contains a number of provisions facilitating the introduction of specific policy measures aimed at reducing greenhouse gas emissions. In particular it includes powers:

  • for the introduction by secondary legislation of trading schemes aimed at either limiting activities that cause or contribute to emissions or encouraging activities that cause or contribute to emissions reductions or the removal of greenhouse gases from the atmosphere (the Carbon Reduction Commitment, a mandatory emissions trading scheme which is expected to cover some 5,000 public and private sector organisations is to be introduced in 2010 using the powers in the Act);
  • for the Secretary of State by order to permit schemes put forward by waste collection authorities which provide financial incentives (for example by way of rebates from council tax/ charges for waste collection which themselves can be included under a scheme ) to produce less domestic waste or recycle more of what is produced; and
  • to require minimum charges for single-use carrier bags.

Conclusion

The Act is broad ranging in both its aims and its scope - from a legally-binding commitment on the Government to ensure emissions reduction targets are met to provisions aimed at reducing the use of carrier bags.

The intent behind the Act must be applauded. However, its impact in real terms will depend how seriously current and future Governments take their obligations under it and the extent to which the tools provided by it are used to deliver policies which make a real difference in the fight against climate change.

For more information on climate change from Wragge & Co's energy and climate change experts, read their in-depth analysis on climate change law.