Power Engineering - UK announces measures to move to Low Carbon Economy

29 June 2006 - The UK's proposal for the next period of the European Union's Emissions Trading Scheme (EU ETS) was announced by Environment Secretary David Miliband today.

The proposal provides business with additional certainty on the contribution it needs to make to help tackle climate change and is expected to deliver additional savings of 8 million tonnes of carbon each year, roughly equivalent to the emissions of 4 1/2 million households.

The Government has today also announced the creation of a new joint Defra/DTI Environmental Transformation Fund that will provide a boost to investment in renewable energies and other green technologies aimed at reducing carbon emissions.

Emissions trading sets a cap on carbon dioxide emissions from European industries. Under the scheme, installations that emit less carbon dioxide than their allocation are able to sell allowances on the newly established carbon market to installations which need to buy allowances to cover extra emissions. Putting a price on carbon creates an incentive for industry to invest in low carbon technology.

Urgent action is needed now to stabilize the emissions of carbon dioxide. The UK is at the forefront of tackling climate change, both internationally and at home. The UK is projected to cut emissions of greenhouse gases by 23-25 per cent by 2010 - nearly double the target set by the Kyoto treaty.

Environment Secretary David Miliband said: "Climate change is probably the greatest threat to our way of life. Cutting the emissions of carbon dioxide from all sectors of society is vital to avoid dangerous climate change. The more carbon that is released into the atmosphere, the greater the potential for millions of people to suffer from famine, disease and water shortage through increased temperatures and rising sea levels.

"Every sector of society has to play its part in combating climate change, as every part of society will be affected by its impact. That means that Government, businesses and individuals have to take action and work together.
"Today's announcement will help create greater certainty for business and sends a clear message that emissions trading is here to stay and that the Government is committed to making it work. The scheme provides industry with the flexibility to decide whether to make emissions reductions themselves, or to buy reductions from others.

"We believe there is a major opportunity for the UK not just to invest in renewable energy, other non nuclear low carbon technologies and energy efficiency, but also to build successful businesses in these fields. The new Environmental Transformation Fund will grasp this opportunity.
"We are determined to show that a move towards a low carbon global economy need not be at the expense of our economic or social objectives. Failure to tackle climate change would have much greater economic and social cost.
"Therefore, we will support the Commission in its efforts to enforce tough caps, to provide greater long-term certainty in this scheme. "I will be meeting tomorrow leaders from business and NGOs to discuss the NAP for Phase II of the EU ETS."

Alistair Darling, Secretary of State for Trade and Industry, said:
"I welcome the setting up of the Environment Transformation Fund. Climate change is a threat to business and emissions trading is key in helping business to reduce its impact on our climate. It helps provide the framework in which long term investment decisions can be made, leading to clean and greener investment decisions. Demanding targets are necessary in order to stimulate innovation in low carbon technologies. Emissions trading is here to stay."

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