Readers of Counsel do not need to be told about the impact of climate change – our festive periods were coloured by the numerous reports and images of the deadly wildfires in Australia; and the rising sea level is an immediate existential threat for those living on islands in the Pacific, to provide a couple of international examples. The direct climate risks to the United Kingdom are also well known and include the increasing risks of flooding, extreme heat and coastal erosion. The winter floods of 2013/14, for instance, caused an estimated £450 million in insured losses.
The scientific consensus is that the main cause of human-induced climate change is the cumulative total emissions of CO₂ (as well as non-CO₂ greenhouse gases (GHG), particularly those with long lifetimes, such as nitrous oxide) (see, for example, Committee
on Climate Change, Net Zero: The UK’s contribution to stopping global warming, May 2019, pp 58-59).
Climate change seems now to be at the forefront of many agendas – personal, political and commercial. For instance:
- In the run up to the 50th World Economic Forum which took place between 21 and 24 January 2020, Greta Thunberg, along with other climate activists, issued a plea to halt investments in the fossil fuel industry.
- In is annual letter to CEOs published on 14 January 2020, Larry Fink, Chief Executive of BlackRock, explains that the evidence on climate risk is compelling investors to reassess core assumptions about modern finance. Why? Climate risk is investment
risk. He observes that: ‘We are on the edge of a fundamental reshaping of finance.’
- The President of the European Commission, Ursula von der Leyen, also announced on 14 January 2020 that the European Union plans to dedicate a quarter of its budget to tackling climate change through its Europe Investment Plan and to become the world’s
first carbon-neutral continent by 2050.
What is the UK’s contribution?
Whilst there is growing political will across the sectors to combat climate change, what legal mechanisms are in place in the UK to ensure that substantive change actually occurs?
The UK has ratified a number of international treaties, including the Paris Agreement, which was adopted at the 21st conference of parties to the United Nations Framework Convention on Climate Change (UNFCCC) in December 2015. That agreement contains
a long-term temperature goal of ‘holding the increase in the global average temperature to well below 2°c above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°c above pre-industrial levels’ (see Article 2(1)(a)). One way identified to reach that goal is to ‘reach global peaking of greenhouse gas emissions as soon as possible’ (Article 4(1)). Given our dualist legal system, the international treaties alone
do not create obligations enforceable domestically.
The Climate Change Act 2008 (CCA 2008) is the principal legislation, which was enacted, in part, to make the reduction of GHG emissions legally binding and to provide for a system of carbon budgeting. The Act applies to the whole of the UK (but there
are certain exceptions – see CCA 2008, s 99).
Regarding the reduction of GHG emissions, s 1 of the CCA 2008 was amended in June 2019 to place a statutory duty on the Secretary of State to ensure that the ‘net UK carbon account’ for the year 2050 is at least 100% lower than the
1990 baseline. Where the ‘1990 baseline’ is defined as the aggregate amount of both:
- the net UK emissions of carbon dioxide for that year; and
- net UK emissions of each of the other targeted GHG for the year that is the base year for that gas.
The UK government claims that this constitutes the ‘legally binding target of net zero emissions by 2050’ (which is the wording from a press statement dated 27 June 2019 on the gov.uk website).
Drilling down into the Act
The ‘net UK carbon account’ for a period means the net UK emissions of a targeted GHG for the relevant period that is reduced or increased by the carbon units respectively credited or debited to the account for the period (CCA 2008,
A ‘carbon unit’ is a unit defined by the Secretary of State, which represents either:
- a reduction in an amount of GHG emissions;
- the removal of an amount of GHG from the atmosphere; or
- an amount of GHG emissions allowed under a scheme or arrangement imposing a limit on such emissions.
Pursuant to s 11, the Secretary of State is required to set a limit on the net amount of carbon units that may be credited to the net UK carbon account for each budgetary period. It also, however, empowers the Secretary of State to specify that carbon
units of a particular description do not count towards the limit.
The Secretary of State has set the limit at 55,000,000 carbon units for 2018-2022, but at the same time, excluded those carbon units credited or debited under the scheme for GHG allowance trading established under the Emissions Trading Directive (‘EU
ETS’, The Climate Change Act 2008 (Credit Limit) Order 2016 No.786).
The EU ETS is described by the UK government as the ‘largest multi-country, multi-sector greenhouse gas emissions trading scheme in the world’. The scheme covers 11,000 power stations and industrial plants of which 1,000 are based
in the UK, which includes oil refineries, offshore platforms and industries that produce iron and steel, cement and lime, paper, glass ceramics and chemicals – seemingly those industries that would contribute most to GHG emissions.
Moreover, s 30 of CCA 2008 expressly excludes GHG emissions from international aviation and international shipping. This exclusion not only means that the impacts of international supply chains cannot be adequately accounted for by the legal obligations
within the CCA 2008, but the provision also empowers the Secretary of State to define those terms at his or her discretion. The definition of ‘international aviation’ is broad enough to include those flights that have one or more
interim stops in the UK (see Climate Change Act 2008 (2020 Target, Credit Limit and Definitions) Order 2009/1258, Article 4(2)).
Overall, the CCA 2008 places a statutory duty on the Secretary of State to reach net zero emissions by 2050 – a breach of which could be challenged by even anticipatory judicial review proceedings. The effectiveness of such proceedings in certain
circumstances should not be understated (see the ClientEarth litigation on air quality). Yet, the Act also:
- expressly excludes international aviation and shipping; and
- allows net zero to be achieved by trading international carbon credits rather than necessarily making the investments in UK infrastructure to achieve that target.
© Marc Francis Prints 2020: This image has been produced to raise money for Adelaide Koala Rescue (AKR), which operates a free 24/7 koala rescue service in South Australia (for further info see: akr.org.au/our-story). Prints can be purchased here: bit.ly/marcfrancisprints – with 80% of proceeds going to AKR.