Climate Committee recommendations – at a glance

Today's first annual report from the UK's Committee on Climate Change pulls off the rare feat of being both shocking and unsurprising at the same time.

Shocking, because we are still a long way off track for meeting carbon emission targets that many scientists believe are too undemanding. Unsurprising, because anyone with even a passing interest in the UK's climate change policy already knows we are not moving fast enough.

To hit the first three carbon budgets, Lord Adair Turner's committee reckons we need a "step change" from cutting emissions 0.5 per cent a year during the five years up to 2007 to cutting them between two and three per cent from now on – a task made all the more difficult by a recession that may have temporarily cut emissions but that has also undermined investment in low carbon technologies.

To deliver that step change, the committee calls for an acceleration of the government's low carbon transition plan that delivers detailed low carbon policy measures. BusinessGreen.com runs the rule over the committee's recommendations and assesses the chances of them being implemented.

Power

Review options for strengthening low carbon generation incentives – The committee says that by 2020 the UK will need 27GW of wind capacity, three new nuclear power stations and four carbon capture and storage demonstration plants. But the price of carbon is likely to remain low for several years as a consequence of the recession, meaning that the financial incentives for investing in this low carbon infrastructure are too small. The committee wants government to address the poor investment climate and is urging it to either manipulate the European emissions trading scheme to drive up the price of carbon or introduce new, more generous incentives, through either an expanded feed in tariff or other mechanisms.

Chances: Poor – the government has long resisted calls to put a floor or ceiling price on carbon, arguing that to do so would distort the market. It is unlikely to start messing with the Emissions Trading System (ETS) now, despite clear signs that prices are too low to stimulate investment in clean technologies. New incentives are also unlikely given the dire state of public finances and recent warnings that energy bills are already set to increase considerably over the next decade.

Increase support for CCS – The committee recommends that the government accelerate its plans for carbon capture and storage (CCS), calling on it to launch a second demonstration competition in 2010 and announce the winners in 2011.

Chances: Poor/Moderate – Both Labour and the Conservatives want four CCS plants built, and the Tories have even said they will grant approval to 5GW of clean coal capacity within weeks of taking office. But there are big questions over where the money will come from. E.ON's decision to put plans for a new coal plant for Kingsnorth into cold storage proves that energy firms will not build CCS without substantial financial support from government.

Implementation of new regime for grid access – The committee wants increased investment in the grid to ensure new low carbon capacity can be supported, as well as a new grid access regime to make it easier for renewable energy projects to connect.

Chances: Moderate/Good – National Grid is working on wide-ranging plans to bolster the grid to support low carbon energy, and is confident it can deliver by 2020. All main political parties are in favour of a smart grid and a number of recent reforms have been announced that are designed to make it easier for wind farms to connect to the grid.

Buildings

Rollout of new domestic energy efficiency programme - The Committee reckons that to hit targets for domestic carbon emissions, loft and cavity wall insulation will need to be installed in 10 and 7.5 million homes respectively, while 12 million old boilers will need to be replaced by 2022. Current measures such as the CERT funding for low-income households are far too small to meet those targets, and as a result the committee is recommending a " government-led transformation" of domestic housing stock. It argues that responsibility for energy efficiency improvements should be taken from the energy companies, and a new framework should be introduced that delivers whole house green makeovers through a street-by-street approach reminiscent of the switch to natural gas in the 1970s.

Chances: Good for whole-house makeovers, poor for street-by-street rollout – Both the government and the opposition are committed to delivering a new funding mechanism for whole-house green makeovers that would remove all up-front costs through a loan scheme where repayments are covered by energy bill savings. However, precise details on how such schemes would be rolled out have been sketchy, and the government has to date resisted calls from local government to allow councils to organise street-by-street upgrades designed to accelerate the installation of energy efficiency measures.

New energy efficiency rules for landlords – The Committee's report highlights that new rules may be required to force landlords to undertake energy efficiency improvements.

Chances: Moderate – the government has signalled that it is well aware of the potential problem of landlords being reluctant to invest in energy efficiency measures when they will not benefit directly from the resulting lower energy bills. Energy Performance Certificates may help tackle the problem by making it easier for landlords to charge higher rents for greener buildings, and there appears to be nothing to stop tenants organising improvements through the proposed green home loan schemes.

Accelerate rollout of Energy Performance Certificates – The report calls for a 38 per cent reduction in emissions from non-domestic buildings by 2022 and recommends that Display Energy Certificates and Energy Performance Certificates (EPCs) be rolled out more widely to encourag improvements.

Chaces: Good – EPCs are already being rolled out and the government has made it clear that it wants them to become standard for a large number of buildings

New rules for public sector buildings covered by the CRC – Echoing the complaints of many businesses, the Committee is unconvinced that the Carbon Reduction Commitment alone will drive big improvements in energy efficiency, and is calling for the government to commit to ensuring all cost-effective measures are implemented at public sector buildings covered by the CRC by 2018.

Chances: Poor – the CRC is the government's flagship energy efficiency scheme and it also has targets in place for energy use across the public sector. An acceleration of energy efficiency efforts is unlikely regardless of who wins the next election, particularly given the budget deficit.

SMBs must hit "F" rating by 2020 – The Committee reckons that smaller businesses are falling for through the gaps of the government's energy efficiency policy and wants a new policy that would require all small and medium sized businesses to achieve a minimum EPC rating of "F" or higher by 2020.

Chances: Poor – This should be a no-brainer: an "F" rating is hardly demanding, 2020 is 10 years away, and there are already incentives in place to help SMBs improve energy efficiency. But governments of every stripe are wary of any legislation that can be characterised as red tape for small businesses, and this government has clearly chosen to focus on tackling emissions from larger organisations. Any new policy for SMBs would be both extremely welcome and extremely surprising.

Transport

Cut average vehicle carbon emissions – The committee reckons average car carbon emissions need to fall from over 160g/km now to 95g/km by 2020.

Chances: Good – the government agrees and has said that it will support EU efforts to impose more demanding fuel efficiency standards.

Accelerated rollout of electric cars – The Committee wants 1.7 million electric and plug-in hybrid cars on the roads by 2020 supported by incentives and a charging infrastructure built around on- and off=street recharging points and potentially, battery exchanges. It recommends that a £250 million pilot project targeting up to 240,000 electric cars be put in place by 2015.

Chances: Moderate/Good – The government has already announced plans for a £5,000 incentive scheme for electric cars, which the Committee said should be sufficient to address the premium on electric cars. Both the government and the opposition have also signalled their support for the roll-out of recharging infrastructure, but whether or not the £250 million price tag will be seen as too steep in the current climate remains to be seen.

Road Pricing – There is a "good economic rationale" for road pricing schemes, according to the Committee, and a strong case for pressing ahead with trial schemes.

Chances: Very Poor – There is a very strong political rationale for axing road pricing schemes with the motoring lobby vehemently opposed to any such measures. The government's road pricing strategy remains in tatters following Manchester's referendum vote against a congestion charge scheme, and there are few signs it will be reinvigorated any time soon.

Wider roll out of Smart Choices initiative – The committee singled out the Smarter Choices initiative for praise, arguing that its goal of encouraging people to make better use of public transport is a cost-effective means of curbing carbon emissions.

Chances: Good – low-cost and effective, just the type of measure the government is looking for.

Wider roll out of Eco-Driving classes – The committee reckons simply teaching people to drive more efficiently could reduce carbon emissions by 0.3 mega tonnes by 2020.

Chances: Moderate – the government has supported a number of eco-driving trial schemes and likes the idea, but training four million drivers might be seen as too large a project.

Better Transport Planning – the report includes a thinly veiled criticism of the government's already under fire Eco-towns policy, arguing that locating the bulk of the three million new homes planned for the UK by 2020 in urban areas will help deliver significant cuts in transport-related carbon emissions.

Chances: Moderate – there is a growing acceptance that cities are more carbon efficient than rural developments and the Conservatives are no fans of the government's eco-town plans.

Conclusion

You get the sense that political parties of almost every colour would love to roll out the vast majority of the Committee's recommendations, but the current state of the nation's finances and battle of political virility over public sector cuts will make some of them unfeasible.

Expect any measure that can be undertaken at low cost or by the private sector to be supported, but those calling for direct government funding will have to fight extremely hard for backing.