UK sets formal carbon budgets

The government has published details of how it plans to meet the cut in emissions set out in the budget of 34 per cent on 1990 levels by 2020.

The government claims the impact of its plans – both existing and new – will be to add eight per cent, or £92, to today's household bills, despite a recent McKinsey study for the CBI estimating this figure at more than 30 per cent.

The transition plan sets a carbon budget for each of the main emitting sectors – power, homes, workplaces, transport and agriculture.

"This is a transition plan for Britain, a route-map to 2020, with carbon savings expected across every sector and a carbon budget assigned to every government department alongside its financial budget," said energy and climate change secretary Ed Miliband.

Every government department has today been allocated its own carbon budget, as the government pilots a new system to run alongside financial budgets.

To facilitate the meeting of budgets In the power sector, DECC will invest £6m in the development of a smart grid, take over responsibility from Ofgem for establishing a new grid access regime, provide £11.2m to help local authorities speed planning decisions, and will consult on extending the Renewables Obligation. All these measures will contribute to approximately 50 per cent of the carbon savings needed by 2020, according to the government.

In the homes sector, "pay as you save" schemes will use the savings made on energy bills to repay the upfront costs to consumers, a feed-in tariff for microgeneration will be introduced by April next year, and the CERT energy efficiency programme will be extended by a year to 2012, saving 15 per cent of the total reduction needed by 2020.

In the workplace sector, where 10 per cent of cuts will be delivered, more than £200m has been awarded to support renewables schemes as part of the Low carbon Industrial Strategy, also announced today.

And in the Transport Sector, expected to deliver 20 per cent of cuts, money will be towards developing an electric charging infrastructure and consumer incentive schemes will be introduced from 2011 for hybrid vehicles.

Agriculture will deliver five per cent of cuts through changes to farming techniques, and support for anaerobic digestion.