1 SDC Climate Change Event Dr Keith MacLean Head of Policy and Public Affairs

Delivering the 2050 carbon reduction targets Scope for Scotland in the traded and non- traded sectors Main policy levers for –Demand reduction –Decarbonising supply Economic and Employment benefit

The traded sector Emissions covered by European Emissions Trading Scheme (EU ETS) Level preset by cap Allowances issued to UK/Scottish installations (to 2013) Auctions within caps (2013 – 2020+) Overall cap to 2020 = 20 – 30% reduction on 1990 levels

Scope in the traded and non-traded sectors Traded (EU ETS)Non-traded Areas covered Electricity (in a GB market) Heat Transport Main Scope to influence Limited other than through planning Planning + local markets and policies Examples of influence Renewables: Generation & Infrastructure If and how it happens Energy Efficiency: Building standards SPP6 approach Infrastructure investment

Heat 1% Electricity (19%) Transport 0.44%

Heat 10% Electricity 50% Transport 10%

Decarbonising energy supply Overall reduction needed for 80% by 2050 equivalent to > 3% reduction each year Scotland electricity target = 50% < 1% carbon emission reduction per annum > 2% must come from heat and transport

Energy demand reduction Management and reduction essential Transfer between sectors likely with electricity (low/zero carbon) for –Heat (eg heat pumps, emersion heating) –Transport (electric or electric/hybrid vehicles) Domestic energy efficiency most significant for space heating

Potential impact of energy efficiency

Infrastructure - Strategic approach NPF2 shows integrated approach with transmission, generation, regulation and planning

Summary messages Energy investment can provide economic and employment benefits Investment opportunities in all areas Supporting infrastructure is essential for –Electricity, heat and transport –May become increasingly interlinked How much investment and how many jobs are in Scotland will depend on policy framework, especially planning