UK set to miss emissions target unless energy efficiency is strengthened

This was the message presented by Cambridge Econometrics, on the release of its latest UK energy forecasts, which now predicts an extra four million tonnes (MT) carbon emissions for 2001, compared with previous estimates six months earlier.

The forecasters believe that lower energy prices are beginning to fuel energy growth and further increase carbon emissions, which were already expected to have risen sharply in 2001 due to the shift back to coal-power generation from gas. This follows a substantial rise in 2000, which reflected the beginning of a shift back to coal as gas prices began to rise.

There were hopes that energy efficiency measures in households and industry would counteract this rise, but new electricity trading arrangements, combined with increased competition have reduced energy prices, and fuelled a growth in energy consumption. As a result, carbon emissions by households are now forecast to be 19% higher in 2010 than in 1990, and emissions from commerce 5% higher.

Road transport should be broadly unchanged from 1990, but this depends heavily on the effective delivery of the government’s integrated transport policy. The only sector that is confidently expected to make a significant contribution to carbon savings in the long run is industry. This includes reductions in energy intensive industries (-21%); water transport (-33%); rail transport (-20%) and power generation (-16%).

Cambridge Econometrics now predicts that by 2010 total carbon emissions will be 1.5 mt higher than was forecast six months ago, at 6½% below their 1990 levels, compared with nearly 7½% below in the July 2001 forecast.

However, the UK’s target under the Kyoto Protocol – a 12½% reduction in the emissions of six greenhouse gases – may be achievable. It is possible that there will be proportionately larger reductions in the other greenhouse gases, and there are also some CO2 measures in the government’s Climate Change Programme – such as the emissions trading scheme – which have not been included in the current forecast.

Commenting on the results, Professor Paul Ekins, Senior Consultant to Cambridge Econometrics and co-editor of its UK Energy and the Environment Report, said that recent energy statistics are starting to reflect an inherent contradiction in UK energy policy. Government policy is providing cheaper energy, which encourages greater consumption, while trying to achieve energy and carbon savings. He welcomed measures to encourage greater efficiency in the generation and trading of electricity, but warned that unless they are accompanied by fiscal measures which at least maintain the incentive to make prudent use of energy, they are likely, to be accompanied by increased energy demand in response to falling prices.