The UK will be the first country in the world to bring into force a legally binding framework to tackle climate change. The Climate Change Act 2008 sets headline targets for reducing net carbon dioxide emissions across the UK but does not comprehensively prescribe how Scotland should contribute to achieving them. Emissions reductions will particularly impact on projects related to heat and electricity, renewable energy, transport, land use and waste, the regulation of all of which is devolved to the Scottish Government. Accordingly, to complement the UK Act, the Climate Change (Scotland) Bill was introduced in December 2008. The Bill is currently being progressed in the Scottish Parliament and the next stage of amendments will be completed by 12 June 2009.

Emissions reduction targets

The Bill introduces limits to the levels of emissions of 6 greenhouse gases, including carbon dioxide, over prescribed periods of time. Although the periods during which targets will apply are likely to be the same north and south of the border, Scotland aims to achieve more ambitious reductions than the rest of UK. The Bill presently provides for a reduction in emissions (against a 1990 baseline) of at least 80% by 2050, with an interim target of 50% by 2030. Annual targets will apply from 2010, and increase year on year until 2019, after which minimum cuts of 3% per year must be achieved.

Targets will be based on emissions from sources in Scotland (which the Scottish Parliamentary Information Centre distinguishes from goods and services consumed in Scotland) and will include international aviation and shipping.

The Scottish Ministers are empowered by the UK Act to establish an emissions trading scheme to help achieve Scottish targets. Whether this power will be exercised is not certain, particularly given the EU Emissions Trading Scheme and Carbon Reduction Commitment provided under the UK Act will apply in Scotland. These existing schemes will apply to qualifying organizations in Scotland in the same way as they do to the rest of the UK and can be used to help meet Scottish targets as well as those set at EU and UK levels. The Bill allows international credits to count towards Scottish targets and, unlike the UK Act, prescribes no limit on the extent to which these can be used

Advisory functions

The Scottish Government must consult on annual targets. Consultation will be with the UK Committee on Climate Change at first but there is provision for another body to assume this role. SEPA would be an appropriate candidate for such functions in the medium term and the establishment of a Scottish Committee on Climate Change has been suggested to provide advice in the long term.

Reporting duties

The Bill requires that reports on the annual, interim and 2050 targets be made to the Scottish Parliament, together with reports on how excess emissions can be compensated in subsequent years. It is not clear to what extent information provided by industry about its own emissions would be made publicly available.

Duties of public bodies relating to climate change

Among other actions, Scottish Ministers must publish a programme to address climate change risks, publish an energy efficiency action plan, extend the role of Energy Performance Certificates in non-domestic buildings, promote the use of heat from renewable sources and will be empowered to make waste regulations. As local authorities are "relevant public bodies" through the functions of which these changes will be applied, there will be consequential impacts on how planning applications are decided in future.

Measures to adapt to climate change and achieve targets

Specific provision is made for adaptation programmes, including muirburn, forestry, energy efficiency and waste reduction and recycling. Further details of these will be released as the Bill continues to progress through Parliament.

Future Legislative Developments

Parliamentary committees have made several recommendations, notably to encourage greater specificity in annual and interim targets and a pro-active approach to adaptation. The proposed treatment of climate change mitigation as an over-riding policy objective could imply that a formal requirement to take into account climate change in all regulatory decisions may be introduced. Further information about these issues will emerge over coming months as the substance of the Bill is finalised.

The impact of the Bill on existing and emerging planning and environmental regulation and its interaction with BREEAM ratings and Building Regulations should also be considered against the background of green initiatives being brought forward in the wider political context, such as the phasing in of the Directive on Energy Performance.

Commercial Implications of the Bill

The most direct impacts on industry will be from the increased regulation and reporting requirements. Given the devolved matters to which the Scottish targets will apply, the property industry in particular should be alert to the imminent changes.

No sector-specific targets are provided in the Bill, although the UK Act imposes reporting requirements on how carbon budgets affect different sectors. This ostensibly "one target fits all" approach may give rise to some debate.

Specific provision to make waste regulations in the Bill could also indicate tighter control and monitoring of this area in future.

Although the current economic downturn may initially make it easier for emissions targets to be achieved, a return to higher levels of growth would precipitate a corresponding growth in emissions levels. The timing of any such increases could coincide with the application of increasingly stringent targets so there may be impetus to include climate change mitigation measures in business strategies sooner rather than later.

To access the Climate Change (Scotland) Bill as introduced click here.