UK Climate Change Bill released

By Paul O'Donnell and Felicity Cuthbertson.

Key Points:
The draft Climate Change Bill is being hailed as the first of its kind in any country and although states such as South Australia and California have introduced similar state based legislation, the UK initiative is said to be the first national legislation to be introduced.

The UK Government released the draft Climate Change Bill for pre-legislative scrutiny in the UK Parliament and for public consultation on 13 March 2007, and it's hoped that the final Climate Change Bill will be introduced to Parliament in the northern autumn of 2007 with the target date for Royal Assent as spring 2008.

The urgent timetable adopted by the UK Government demonstrates the importance politically of being seen as a leader in the field of climate change and also continues the UK's attempt to portray itself as being one of the main drivers in establishing the post-Kyoto framework.

The UK Government claims that the draft Climate Change Bill provides a legal framework through which carbon emissions can be managed and controlled and that will provide a sense of certainty and clarity for businesses and individuals.

Key elements

The main features of the draft Climate Change Bill include:

• A series of targets for reducing carbon dioxide emissions, including "legally binding" targets of a 60 percent reduction from 1990 base levels by 2050, with an intermediate target of at least a 26 percent reduction from 1990 base levels by 2020 (although the legislation contains a mechanism for this to be raised to 32 percent).

Currently emissions from international aviation and shipping will not count as emissions from sources in the UK. This will be subject to any regulations made once the Bill has been enacted.

• The draft Climate Change Bill establishes a system of five year "carbon budgets" that will be set by the Secretary of State 15 years in advance. The carbon budgets will be set so far in advance in order to provide certainty for businesses and investment so as to reduce the impact of moving to a low carbon economy. The draft Climate Change Bill also provides annual reporting requirements that require the Secretary of State to lay before Parliament a statement regarding the net amount of UK carbon emissions for each year of the carbon budget.

At the end of the five year period of each carbon budget, the Secretary of State will be required to report to Parliament on the net level of emissions for that period which, when compared with the levels allowed under the carbon budget set 15 years previously, will determine whether the budget has been met by the Government.

• The Government is given new powers to enable it to more policies to cut emissions easily implement, such as making provision for trading schemes to be put in place through regulations made under the Act resulting from the Climate Change Bill. The regulations may include details of the emissions trading scheme, to appoint a body to administer it and set fees and penalties for users of the scheme.

Activities to which the trading scheme may apply include the consumption of energy that directly causes or contributes to greenhouse gas, the use or disposal of materials that consume such energy in production and the production or supply of anything that subsequently directly causes or contributes to greenhouse gases.

• A new statutory body, the Committee on Climate Change, will provide independent advice and guidance to the UK Government on achieving targets and staying within its carbon budgets. The Committee on Climate Change will also be required to report to Parliament on the progress made towards meeting carbon budgets.

The Committee on Climate Change will provide an independent progress report to the Government on an annual basis to which the Government must respond. This new system of annual reporting will ensure that the Government is accountable for its progress, both towards the 2020 and 2050 targets and also each five year carbon budget.

• The Government will also be required to report at least every five years on the current and predicted impacts of climate change and any proposals for adapting climate change policies and legislation to new developments.

How is the draft Climate Change Bill different from Australian initiatives?

In December 2006, South Australia introduced the Climate Change and Greenhouse Emissions Reduction Bill 2006 (the "SA Bill") into the South Australian Parliament. The SA Bill was the first attempt nationally, and at that stage only the third attempt internationally, to enforce the reduction of greenhouse gas emissions.

Specifically, the SA Bill has the primary objectives of:

• setting a target to reduce by 2050 greenhouse gas emissions within South Australia by at least 60 percent to an amount that is equal to 40 percent of 1990 levels (the "SA target"); and
• setting a related target to increase the use of renewable electricity so that it comprises 20 percent of total electricity consumption within South Australia by 2014.

The SA Bill will also establish the Premier's Climate Change Council, which will consist of five members from different sectors including the Government, business or scientific community for terms of three years. The function of the Council will be to address the balance of costs associated with reducing or limiting climate change or greenhouse emissions with those of failing to take such action.

Similarly, the UK Government has announced that it intends to develop the draft Climate Change Bill in line with the Better Regulation Commission's agenda that aims to minimise bureaucracy, simplify the legislative framework and reduce business costs. However, as one feature of the draft Climate Change Bill is the creation of another statutory body to administer, advise and report on carbon budgets, it remains to be seen whether the intention will become a reality.

Though the SA Bill seeks to make the 60 percent reduction in greenhouse gases legally binding, it does not provide the framework and processes for achieving this such as those included in the draft Climate Change Bill. The SA Bill sets out general objectives while failing to impose any specific obligations, aside from those that are voluntary in nature, such as the voluntary sectoral agreements.

Criticism levelled at the draft Climate Change Bill include that it does not go far enough in committing to tackling climate change and that it lacks measures to ensure government accountability, particularly as failure to meet the five year carbon budgets may be passed down to Government successors.

The UK Government is calling for public consultation on the draft Climate Change Bill with a closing date for comments of 12 June 2007.

For further information, please contact Paul O'Donnell.