Climate Change Act 2008
The Climate Change Act became law on 26 November 2008. The act aims to facilitate moves towards a low-carbon economy for the UK and to provide a new legal framework for the reduction of carbon emissions.
Target reductions
The act sets targets for reducing emissions with the ultimate aim of achieving at least an 80% reduction of greenhouse gas emissions by 2050 measured against a 1990 baseline. It introduces legally binding five yearly “carbon budgets” to promote moves toward a low carbon economy. The first period will be 2008-2012. Once the budget is set the Government must then report to Parliament advising on its policies and proposals for how it intends to meet the target reduction. This takes the battle against climate change to a new level as whilst aspirational targets for greenhouse gas emissions have been around for years, this is the world’s first legally binding framework.
Committee on Climate Change
A Committee on Climate Change was established on 1 December 2008. It is an independent expert body with the role of advising the Government on emissions reduction across the UK economy. It will advise on the appropriate balance between action at domestic, European and international level for each carbon budget. The Committee will submit annual reports to Parliament on the UK’s progress towards meeting the target reductions and the carbon budget. The Government will then have to respond to that report which should ensure transparency and accountability on an annual basis. The first report “Building a Low Carbon Economy” was published on 1 December 2008.
Domestic Trading Schemes
The act contains new enabling powers for the introduction of domestic trading schemes for reduced emissions. This has the potential to impact significantly on commercial property occupancy and use, by limiting high-emission activity and/or increasing business costs through emissions trading permits. Trading schemes can apply to activities related to the consumption of energy, the use of materials in whose production energy was consumed, the disposal of materials (other than for recycling) which it took energy to produce or the production or supply of anything whose subsequent use directly causes or contributes to greenhouse gas emissions.
It is expected that the first use of the trading scheme powers will be the implementation of the Carbon Reduction Commitment which will impose a mandatory cap and trade scheme in relation to energy use by large non-energy intensive organisations, the ultimate aim being to improve energy efficiency. The scheme is intended to place an emissions cap on up to 5,000 large business and public sector organisations responsible for around 14 million tonnes of carbon (MtC) emissions each year. It affects all businesses using half hourly metering which used more than 6,000 megawatt hours in 2008. The emission of the highest parent organisation is targeted so the parent company has to consider the electricity use of all of its subsidiaries.
Climate Change Risk Assessment
The Government has to carry out a climate change risk assessment at least every five years and recommend measures to be taken and report on this to Parliament. It also has the power to require public bodies and statutory undertakers to carry out their own risk assessment and make plans to address that risk. The Government will issue guidance in 2009 on the way in which companies should report their greenhouse gas emissions. The Government will then use its powers under the Companies Act to make reporting of greenhouse gas emissions mandatory by 6 April 2012.
Pilot Waste Reduction Schemes
The act provides for the making of waste reduction schemes with financial incentives which could be rebates or charges for reduced domestic waste and greater recycling. The intention is to allow five areas to pilot the schemes and if they are successful they may then be rolled out to all local authorities.
International Aviation and Shipping
There was much debate during the passage of the Bill as to whether international aviation and shipping emissions should be included in the Act. The Committee will explain to the Government the consequences of including emissions from both sources in the targets and budgets and the Government must then include them or else explain to Parliament why not by 31 December 2012.
This article was first published in the Property Law Journal on 2 February 2009.
