Climate Change Bill: consultation

Section 2: Proposals on updating target ambition

A more ambitious 2050 target

Since 2007, this Government's central purpose has been to create a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth. Scotland's Economic Strategy sets out an overarching framework for how we aim to achieve a more productive, cohesive and fairer Scotland. ^[4] It forms the strategic plan for existing and all future Scottish Government policy. It prioritises boosting investment and innovation, supporting inclusive growth and maintaining our focus on increasing internationalisation. This ambition underpins the proposals for a new Climate Change Bill.

The Climate Change (Scotland) Act 2009, which was set in the context of our Economic Strategy and established Scotland as a world leader on tackling climate change, is structured around a 2050 target to reduce greenhouse gas emissions by at least 80% from baseline levels (see Box 1), while simultaneously boosting productivity, competitiveness and growth.

The 80% level of the 2050 target was considered at the time of the 2009 Act to represent an appropriate contribution to global efforts to limit global temperature rise above pre-industrial levels to near 2°C. The 2015 UNFCCC Paris Agreement has strengthened global climate change ambition and aims to keep global temperature rise this century well below 2°C, and to pursue efforts to limit this to 1.5°C.

Advice from the CCC received in March this year is that a 90% reduction in greenhouse gas emissions by 2050 would be more consistent with limiting temperature rise to 1.5°C than the current 80% target. The CCC also presents an option to maintain the 2050 target at 80% for now and create review points at which the target ambition could be increased.

The Scottish Government proposes to increase the ambition of the 2050 target to 90% greenhouse gas emission reduction from the baseline, focused on the social, environmental and economic benefits this will deliver.

Analysis conducted using the TIMES model (see Box 3) indicates that a 90% target could be achieved for an estimated cost equivalent to just under 3% of cumulative Scottish GDP. In comparison, the current 80% target could be achieved for around 2% cumulative Scottish GDP. ^[5] These estimates are consistent with those from other published studies, including the Stern Review (2006) ^[6] , which estimated the global cost of climate change mitigation to be in the range -1.0 to +3.5% of GDP.

The Stern Review estimated that business as usual emissions (in the absence of climate change policies) and the resulting impact of climate change, taking into account the risk of catastrophic events on populations' welfare, would be equivalent to permanently losing 5% of cumulative global GDP. This estimate did not include other potential social and environmental impacts of climate change, such as flooding or the impact on wellbeing. If these were included, the impact on population welfare would be equivalent to a permanent loss of nearly 11% of global GDP - with an upper estimate of 20%.

These figures show that global effort to tackle climate change will deliver economic and social advantages for Scotland and indeed all countries. There is also evidence that businesses in Scotland can capitalise on a range of economic opportunities arising from innovative, low carbon approaches.

TIMES (The Integrated Markal EFOM System) model, is an international standard for modelling greenhouse gas emission reductions and energy issues. It has been calibrated with Scottish data and sector intelligence to analyse the cost implications of the proposed Climate Change Bill.

TIMES takes into account the whole energy system and the interlinkages within it. This is useful for understanding the strategic choices that are required to decarbonise an economy. Models like this are widely used internationally in modelling climate and energy choices, and incorporate non-energy sectors too, such as Agriculture, Land Use, Land Use Change and Forestry, and Waste.

The model can be used to compare the effectiveness and cost of different carbon reduction measures and help develop the optimal pathway for meeting climate change targets. It has been used here, in combination with projections of Gross Domestic Product ( GDP), to estimate the total cost between now and 2050 of achieving a 90% emission reduction target.

The commitments set by the Paris Agreement create a worldwide market for low carbon goods and services, which is an opportunity for Scottish businesses, and will make low carbon business practices more cost competitive and attractive on an international setting. We are seeing this already, for example in sectors such as low carbon heating where the combination of ambitious targets and high consumption in Scotland, coupled with the supportive policy environment, has allowed Scottish based companies to compete globally.

In 2015, the low carbon and renewable energy economy supported 58,500 jobs in Scotland (43,500 in 2014). This accounts for 14% of the total UK employment in this sector (higher than population share). It also generated £10.5 billion in turnover (£10.7 billion in 2014), 14% of the total UK turnover in this sector (again higher than population share).

The CCC state that a 90% target for 2050 is at the "very limit of feasibility" and the Scottish Government recognise that meeting the targets will be very challenging. Scotland is already at the forefront of international ambition in tackling climate change and increasing our targets further will strengthen that leadership position. This will send a clear signal to the world that Scotland is the best place for business, particularly the types of low carbon businesses that the future economy will depend upon.

Question 1:

Do you agree that the 2050 target should be made more ambitious by increasing it to 90% greenhouse gas emission reduction from baseline levels?

Yes / No (please explain your answer)

A future target for net-zero emissions

The UNFCCC Paris Agreement sets a goal of reaching net-zero global greenhouse gas emissions during the latter half of the century, and the Scottish Government supports this aspiration.

Highly ambitious, stretching targets are important to drive action, but equally it is important for targets to be credible and achievable. The CCC advise that the evidence is not available to set a domestic net-zero emissions target at the present time. None of the CCC's modelling scenarios were able to reach such an outcome given current understanding of the relevant technologies. Likewise, TIMES cannot provide a scenario that would allow for net-zero GHG target for 2050 to be met, based on the 2014 greenhouse gas inventory and available technology.

This demonstrates that it is too early to set a target for net-zero greenhouse gas emissions now. The Scottish Government propose, in line with advice from the CCC, to include provisions in the Climate Change Bill to allow Ministers to set a net-zero emissions target for the second half of the century, subject to regular reviews of the evidence.

Question 2:

Do you agree that the Climate Change Bill should contain provisions that allow for a net-zero greenhouse gas emission target to be set at a later date?

Yes / No (please explain your answer)

A complete set of interim targets

To provide a key milestone on the path to the 2050 target, the 2009 Act set a single interim target, for emission reduction of at least 42% by 2020. The Scottish Government asked the CCC for advice on the 2020 target and whether more interim targets should be considered, and what those targets should be.

The CCC advise that an appropriate level for an updated interim 2020 target, based on actual Scottish emissions (see following section), would be for a reduction of at least 56% from baseline levels; and that additional interim targets for 2030 and 2040 should be set at 66% and 78% respectively. ^[7]

The Scottish Government proposes, in line with the CCC's advice, to update the interim target for 2020 to at least 56%, and to set new interim targets for at least 66% in 2030 and at least 78% in 2040.

Question 3:

a) Do you agree that the 2020 target should be for greenhouse gas emissions to be at least 56% lower than baseline levels?

Yes / No (please explain your answer)

b) Do you agree that a target should be set for greenhouse gas emissions to be at least 66% lower than baseline levels by 2030?

Yes / No (please explain your answer)

c) Do you agree that a target should be set for greenhouse gas emissions to be at least 78% lower than baseline levels by 2040?

Yes / No (please explain your answer)

Consistent annual targets

In addition to the 2050 and interim 2020 targets, the 2009 Act also makes provision for annual emission reduction targets to be set every year up to 2050. These annual targets are currently specified as fixed amounts of greenhouse gas emissions, measured in tonnes of carbon dioxide equivalent, and are set in five year batches through secondary legislation (see Box 4).

The situation in which the 2020 and 2050 targets are given in the form of percentage reductions from the baseline, and annual targets are given in the form of amounts of emissions (in tonnes) has created confusion. For example, there are currently two targets for 2020: an interim target to reduce emissions by at least 42% from baseline levels, and an annual target of 40.717 megatonnes of carbon dioxide equivalent.

The annual target for 2020 was set, in 2010, on the basis that 40.717 megatonnes would equal a 42% reduction from baseline levels. This was calculated using the greenhouse gas inventory that was current at the time. However, the inventory has been updated seven times since then with more accurate data. Using the most recent, 2015, inventory, it is estimated that a 42% reduction from the baseline would be equivalent to 44.713 megatonnes.

Setting all of the emission reduction targets in the Bill in the same form, i.e. as percentage reductions or fixed amounts, but not both, would help ensure that the annual and interim targets remain consistent with one another. Whilst the fixed amount form has advantages in terms of providing links to global and domestic carbon budgets, the percentage reduction form is much less sensitive to changes in the greenhouse gas inventory and easier to understand.

The CCC advise that all emission reduction targets in the Bill, including annual targets, are specified as percentage reductions on baseline levels.

The Scottish Government proposes, in line with the CCC's advice, to specify the annual targets in the Bill in the form of percentage reductions from baseline levels.

Question 4:

Do you agree that annual emission reduction targets should be in the form of percentage reductions from baseline levels?

Yes / No (please explain your answer)

The 2009 Act requires annual targets to be set through secondary legislation (for information on secondary legislation see Box 4 below). Specifically, it requires the Scottish Government to seek advice from the CCC on the appropriate levels for future annual targets, which are then set in five year batches at least 12 years in advance. Every annual target from 2020 onwards must also be at least 3% lower (more ambitious) than the last.

Legislation falls into two categories - primary and secondary legislation. Primary legislation comprises Acts of Parliament that set out broad outlines and principles. Much of the detail of an Act (for example concerning timing, implementation or the mechanism for updating) is often left to subordinate legislation (often also called secondary legislation).

Subordinate legislation is law that is made by executive bodies or individuals - most often by Ministers - under powers granted to them by primary legislation (Acts). The Scottish Parliament's role is to scrutinise subordinate legislation and, where applicable, approve or reject it. Unlike primary legislation, it is extremely rare for Parliament to have any scope to amend or change subordinate legislation.

There have been three rounds of secondary legislation setting annual targets to date:

The Climate Change (Annual Targets) (Scotland) Order 2010 set the targets for 2010 to 2022 ^[8]
The Climate Change (Annual Targets) (Scotland) Order 2011 set the targets for 2023 to 2027 ^[9]
The Climate Change (Annual Targets) (Scotland) Order 2016 set the targets for 2028 to 2032 ^[10]

As set out in Section 2, the Scottish Government propose to set interim targets for 2030 and 2040 (in addition to the 2020 interim target and the 2050 target). This raises the possibility that the levels of annual targets could be set as a direct consequence of these long-term targets, rather than through separate secondary legislation ^[11] (see Box 4).

Under a direct approach, the annual targets over the period 2021 to 2050 would be calculated as a simple linear path between the 2020, 2030, 2040 and 2050 targets. These targets would then be updated automatically if the interim and/or 2050 targets were updated (see Section 4). Advice on targets would continue to be sought from the CCC on a regular basis, but only for the long-term targets, rather than specific batches of annual targets. Further consideration relating to the regular advice from the CCC is set out in Section 4.

The benefits of a direct approach would include guaranteed consistency between the annual and long-term targets and full transparency on how the annual targets are set and what they are all the way to the final target. However, the potential to set an annual target pathway between interim targets that is more complicated than a simple linear one would be lost. The setting of interim targets every ten years means that there is little practical scope to do this in any case.

Table 1 summarises the types and levels of targets under the current and proposed target frameworks. It is important to note that the two sets of figures are under different emissions accounting bases (see Section 3) and should not be directly compared to one another.

Question 5:

Do you agree that annual targets should be set as a direct consequence of interim and 2050 targets?

Yes / No (please explain your answer)

The proposed Bill is expected to become legislation in early 2019. As the greenhouse gas inventory statistics are always published two years in arrears, statistics reporting on the 2017 target will be published that year. Progress against the new 2020 target will be reported in 2022. In order to avoid a situation where out of date targets are being reported on for three years, the 2017, 2018 and 2019 annual targets will be revised to 52.4, 54.0 and 55.0% reductions from the baseline. These target levels are as advised by the CCC.

Table 1: Current and proposed targets

	Current (emissions adjusted for the EU- ETS)		Bill proposals (actual emissions)
Year	Interim / 2050 Targets	Annual Targets	Interim / 2050 Targets	Annual Targets
2015		45,928,000 tCO 2e (40.4%)
2016		44,933,000 tCO 2e (41.7%)
2017		43,946,000 tCO 2e (43.0%)		52.4%
2018		42,966,000 tCO 2e (44.3%)		54.0%
2019		41,976,000 tCO 2e (45.6%)		55.0%
2020	42%	40,717,000 tCO 2e (47.2%)	56%
2021		39,495,000 tCO 2e (48.8%)		57.0%
2022		38,310,000 tCO 2e (50.3%)		58.0%
2023		37,161,000 tCO 2e (51.8%)		59.0%
2024		35,787,000 tCO 2e (53.6%)		60.0%
2025		34,117,000 tCO 2e (55.7%)		61.0%
2026		32,446,000 tCO 2e (57.9%)		62.0%
2027		30,777,000 tCO 2e (60.1%)		63.0%
2028		29,854,000 tCO 2e (61.3%)		64.0%
2029		28,958,000 tCO 2e (62.4%)		65.0%
2030		28,089,000 tCO 2e (63.6%)	66%
2031		27,247,000 tCO 2e (64.7%)		67.2%
2032		26,429,000 tCO 2e (65.7%)		68.4%
2033				69.6%
2034				70.8%
2035				72.0%
2036				73.2%
2037				74.4%
2038				75.6%
2039				76.8%
2040			78%
2041				79.2%
2042				80.4%
2043				81.6%
2044				82.8%
2045				84.0%
2046				85.2%
2047				86.4%
2048				87.6%
2049				88.8%
2050	80%		90%

All targets are given as % reductions from baseline levels, other than current annual targets which are set as fixed amounts of emissions. The figures in brackets after the current annual targets are the equivalent % reductions from baseline levels on the most recent (2015) greenhouse gas inventory.