Can the British Decarbonize?

If the United Kingdom is going to hit its short-term targets for the emissions of carbon dioxide, then it is going to have to accelerate its rates of decarbonization observed since the passage of its 2008 Climate Change Act by a factor of four. Since the passage of that Act the rate of decarbonization in the UK has slowed dramatically from the rate observed during the pervious decade. The enormous magnitude of the task called for in the Act has been overshadowed by a debate of the setting of targets for the decarbonization of energy supply, targets which are already implied by the 2008 legislation and thus unnecessary.

Earlier this month the UK parliament debated an amendment to an energy bill which would establish quantitative targets for the decarbonization of the nation’s energy sector by 2030. The amendment was defeated in a close vote, prompting strong reactions. Tim Yeo, the Conservative chair of the Energy and Climate Change Select Committee who introduced the amendment, said that the “failure to introduce a clean energy target now could make it harder for the UK to meet its long-term carbon reduction targets.” Caroline Flint, Labor’s shadow minister for energy and climate change called the vote “a humiliating failure.”

However, lost in the debate before and after the vote is that the UK has already committed itself to the decarbonization of its energy supply. This commitment results from the combination of an expectation of future economic growth and the passage 2008 Climate Change Act that mandates targets and timetables for emissions reductions. Growth in GDP coupled with reduced emissions is decarbonization.

Consequently, adopting formal legislation for decarbonization would be largely redundant. The UK government estimated that in 2012, 40 percent of emission came from the power supply sector. If the Climate Change Act is to succeed in its goal of achieving a 34 percent from 1990 emissions by 2022, then a substantial decarbonization of the power sector must occur.

The rate of decarbonization of the power sector implied by the targets and timetables of the Climate Change Act could be a bit more or less than the overall decarbonization rate. In the following discussion I assume that the rate of decarbonization of the power sector occurs at the overall implied rate and explore what that would imply.

Before jumping into the numbers it will be useful to precisely explain what “decarbonization” actually means. In discussing policies related to carbon it can be very useful to start with an appreciation for the Kaya Identity, which posits that carbon dioxide emissions are a function of economic activity and technologies of energy production and consumption. It looks like this:

carbon emissions = GDP * energy intensity * carbon intensity

Or more precisely:

carbon emissions = GDP * energy consumption/GDP * carbon/energy consumption

The decarbonization of energy supply refers to the final term in that equation, that is, a reduction in the amount of carbon emitted per unit of energy consumption, called carbon intensity. (Note that the second term, energy consumption/GDP, refers to energy intensity — very important and distinct.) Historically, decarbonization of energy supply has been the result of the substitution of less carbon intensive sources of energy for more carbon intense sources — such as when gas replaces coal, or solar, wind or nuclear replace any type fossil fuel.

How fast would the decarbonization of energy supply have to occur to meet the targets of the 2008 Climate Change Act?

We can answer this precisely using the Kaya Identity. First, let’s move GDP to the other side of the equation:

carbon emissions/GDP = energy intensity * carbon intensity

In this exercise I have equated the rate of decarbonization of economic activity (carbon emissions/GDP) with the implied rate of decarbonization of energy supply. Different assumptions can of course be made, but the conclusions reached below are not particularly sensitive to these assumptions.

While the level of emissions in 2022 is established in the legislation at a level 34 percent below 1990 emissions, the rate of future GDP growth is unknowable, though policy makers would clearly like it to be higher rather than lower. In the exercise below I consider three annual rates of UK GDP growth to 2022, 1 percent, 2 percent, and 3 percent. It could of course turn out to be higher or lower.

If the UK is to hit its 2022 emissions target, then assuming a 2 percent annual GDP growth implies a rate of decarbonization of the economy of 4.4 percent per year over the next 9 years (for 1 percent annual GDP growth it is 3.3 percent and for 3 percent GDP growth it is 5.4 percent). Since the Climate Change Act was passed in 2008 the UK economy has actually decarbonized at a rate of 1.1 percent per year (data on GDP is here and emissions here), reflecting almost no change in emissions and a small amount of economic growth. The implication is thus that at a modest rate of economic growth to 2020 the rate of decarbonization will have to quadruple from that observed over the past 3 years. Over the decade prior to the passage of the act the UK economy decarbonized at a rate of 2.6 percent annually.

What would a 4.4 percent rate of decarbonization mean in terms of more readily understandable concepts of energy supply?

To achieve a 34 percent reduction in carbon dioxide emissions by 2022 implies a reduction of some 90 million metric tonnes (MMT) of carbon dioxide emission from 2012 levels. In 2012 according to the UK government, “There was a 31 per cent decrease in gas use for generation, alongside a 31 per cent increase in the use of coal. Together, these changes resulted in an increase of around 8 per cent in emissions from electricity generation.”

That substitution implies an increase of about 11.6 MMT of carbon dioxide and further implies that replacing all coal with gas would lead to a reduction of about 45 MMT of carbon dioxide (calculated as approximately 4 * 11.6). That means that if energy supply is responsible for half of the required emissions reductions to 2022 (with energy efficiency accounting for the reminder), then all coal would have to be replaced by gas in order to achieve the implied decarbonization target, roughly reflecting a tripling of gas consumption. Similar exercises could be calculated with other technologies such as wind or nuclear.

No matter what units of technological substitution are used, the scale of the decarbonization challenge implied under the UK Climate Change Act is huge. The additional experience gained since the Act was passed indicates that the magnitude of that challenge has increased as progress is not being made at a rate necessary to hit the targets. Slow, even negative, economic growth in recent years has masked the lack of progress.

Of course it is possible that targets could be met via creative strategies such as the use of offsets or the counting of emissions reductions in gases other than carbon dioxide. However, such strategies, irrespective of their inherent merits, would only postpone the decarbonization needed in the power sector if deep emissions reductions proposed to 2050 are to be met. Of course, the main consequence of adopting a decarbonization target for 2030 might be to simply move the goal posts further into the future to reset the emissions challenge, as it appears that the shorter-term targets are likely to be missed.

The UK government is planning to revisit its commitment to carbon targets next year. Such a review will be far more effective with a commitment to understanding what the government has already committed to and its actual performance with respect to those ambitions, even if the resulting data is inconvenient or uncomfortable.

Photo Credit: Flickr User Department of Business, Innovation and Skills (UK)