Jeremy's Blog 23rd April 2021: Increased Climate Change Target
This article by Jeremy Moody first appeared in the CAAV e-Briefing of 22nd April 2021.
While the long-awaited DEFRA consultation on the lump sum option and delinking for Basic Payment has been twice delayed by the “purdah” periods for mourning and the Scottish, Welsh and local elections, the Prime Minister has this week announced a significantly more demanding target for reducing greenhouse gas emissions. Its potentially radical effects are described by the Financial Times as laying:
“the foundations for some wrenching changes to public policy … paving the way for rapid behavioural changes from households and businesses”.
Changing asset values will be part of that process.
The new target, in line with the Climate Change Committee’s recommendation, is that:
- the total from which cuts are to be made is increased to include the UK’s share of international aviation and shipping emissions
- with net zero for 2050 in mind, the target now set for 2035 is a reduction of 78 per cent in emissions compared to 1990.
Until two years ago, the legal target was an 80 per cent cut by 2050 from a smaller total. In effect, that is now to be achieved by 2035, just fourteen years hence.
The substantial progress so far has been by largely decarbonising existing electricity production. Each extra percentage point reduction gets harder, needing much more electricity and changes to domestic and business life but seen as required to sustain economic growth. Achieving those reductions will require a clearer focus on what steps will actually help do that. EPCs are too imperfect a tool while many carbon offsetting schemes do not actually buy additional emissions cuts but rather cuts that would happen anyway and sometimes actions that fail.
While the Climate Change Committee’s forecast for the overall cost of this has now come down to 0.5 per cent of GDP by 2050, analysis shows these costs are particularly borne by land management and buildings. For these sectors, whatever the wider gains might be, the costs would outweigh the benefits, pointing to policy interventions. The practical implications of this will become steadily more evident with the issues posed for rural land use considered in the new CAAV Discussion Paper Future Rural Land Uses in the United Kingdom - A Review of Pressures and Opportunities.
However, one lesson of the last year is the scale of change that can be managed by society and the economy when it is required. When necessary, we have more capacity for a resilient adaptation than we, liking a quiet life, might usually suggest.