1. Managing our Carbon Emissionsor
How can we be made to do so?
Dr Bill Kyte OBE
Talk given to GEF 26 April 2017

2. Scope of Presentation Targets International scene
What do they mean?
What is the scale of the problem?
Some options to illustrate scale
International scene
Intergovernmental Panel on Climate Change (IPCC)
UN Framework Convention on Climate Change (UNFCCC)
Tools for governments
Voluntary, Command & Control, Economic Instruments
EU Emissions Trading Scheme (EU-ETS)
Past, present & future
Brexit

3. Assumptions For this talk I will assume that:
Enhanced Global Warming (Climate change) is real
Climate change is caused by mankind’s actions
There is a need to restrict temp rise to 2o C (1.5oC)
There is a need for local, national, regional & global action
The Paris agreement will hold

4. What is the Target 2o C has been identified as a ‘threshold’ above
which there is a significant increase in
‘dangerous’ impacts and therefore has been adopted as a political target.
Many would argue that 1.5o C is more appropriate.

5. What does 2oC imply? International EU UK
1,000 Gt C total carbon budget
Emissions peak by 2020
Only 50% of 1990 global emissions by 2050 EU
40% by 2030 of 1990 emissions – legally binding
80-95% by aspiration UK
57% by 2030 of 1990 emissions – legally binding
80% by legally binding

6. Different ways of ranking emissions
% of global emissions
Emissions per capita
Carbon intensity per GDP
Cumulative
Estimated Gt CO2e
China 24.0
Qatar 51.7
Iraq 3.21
US 366
China 15.4
US 17.7
Kuwait 34.1
Uzbekistan 2.01
EU 329
India 7.2
EU 12.1
Net Antilles 32.3
Qatar 1.67
China 150
US 7.1
India 5.4
UAE 30.8
Mongolia 1.63
Russia 103
EU 4.3
Russia 5.2
Bahrain 29.7
N Korea 1.56
Germany 85
Russia 2.7
Japan 3.8
Trin/Tob 27.9
Net Antilles 1.53
UK 70
Japan 1.2
Germany 2.6
Aruba 23.1
Kazakhstan 1.49
Japan 51
Brazil 0.7
Canada 1.8
Luxemb’g 22.7
Trin/Tob 1.43
India 38
S Africa 0.5
UK 1.8
Brunei 19.4
Bahrain 1.32
UK 0.4
S Korea 1.6
Falkands 19.4
Jamaica 1.32
Mexico 1.5
US 19.1
Turkm’n 1.19
Australia 17.6
UAE 1.15
TOP 4 – 59%
TOP 6 – 68%
TOP 15 – 81%

7. Carbon Flows through trade

8. The heart of the Paris Agreement
Parties to the Paris text agree :
To hold increase in global average temperature to “well below” 2°C and “pursue efforts” to limit increase to 1.5°C
National Commitmrnts to limit temperature increase. “The efforts of all parties will represent a progression over time.” New NDCs every five years
To aim to reach a global peaking of emissions “as soon as possible.” Aim for balance between emissions and sinks post
Developed countries to lead emission reduction efforts Compliance committee reports on countries’ progress annually Progress check : “global stocktake” every 5 years from 2023

9. INDCs - The landscape of regulation : references to carbon tax, ETS
and International market mechanisms
Domestic ETS and carbon taxes
Planned / possible use of int'al market mechanisms No specific references or no INDC yet

10. International, EU & UK Tools
Voluntary measures
Education/labels
Voluntary agreements
Command & Control
Efficiency standards
Emission limits
Economic instruments
Subsidies/Penalties
Carbon tax
Emissions trading

11. trading scheme deliver the same result
Economic Instruments
Subsidies
Kick-starting technologies, should be short term
Carbon Tax
Carbon price known but emissions reduction unknown
Emissions trading
Emissions reduction known but price unknown
In theory, a carbon tax and an emissions
trading scheme deliver the same result
In practice, there are significant differences

12. Comparison of Carbon Tax & ETS
Emission Reduction
Unknown
Known
Carbon Price
Cost Effectiveness
Low
High
Simplicity
Low/Medium
Medium
Scope
All emitting sectors
Best for large sources
Impact
Company
Site
International
Unlikely
Can be linked
Revenue recycling
Yes
TAX - ETS -
Pay to continue polluting
Pay to continue polluting but the total cap has to be met

13. The EU Emissions Trading Scheme
EU ETS is a ‘cap & trade’ scheme
Phase
‘Learning by doing’
Phase
Cap of -6.5% from 2005
Phase
Cap decreases by -1.74% annually
Backloading
Market Stability Reserve (2019 onwards)
Phase
Cap decreases by -2.4% annually

14. The EU ETS Has performed well: Perceived to have not performed well:
Has put carbon on the boardroom and installation agenda
Emissions have been reduced & cap met
Single carbon price eliminating competition issues within EU
Market has functioned well
Nearly 100% compliance (even airlines)
Perceived to have not performed well:
Investment (low carbon) not incentivised
Carbon price is too low
System is too complex
Windfall profits from free allocation

15. Other Domestic Industry Transport UK Climate & Energy Policies
Actions to meet Government Target (-20% CO2)
Projects Avoidance of emissions
International Emissions Trading
Domestic
Actions to meet Kyoto (-12.5% GHG)
Home Energy Efficiency
Scheme (HEES)
£330m DETR
EU Emissions Trading Scheme
EESoPs Energy Eff
Stndrd Perform.
Actions involving only Energy Industry
Electricity Association Fuel poverty task force
Emissions Trading Scheme
Flare Consents Scheme
Fuel Poverty
Aviation Emissions Scheme
Affordable Warmth Scheme
DTI & Trans Co £20m
Green Trading International
Market Trans. Measures Investment energy eff.
CCL
Agreements Fuel efficiency or emission targets for CCL reduction
Green Certificate Trading
Meet supplier obligation
Branding Perceptions
FFL
Income
Industry
Supplier Renewable Obligation
Climate Change Levy
Build CHP?
Promote Energy Efficiency Revenue from CCL for energy efficiency in business
NFFO PES
obligation
10%
supply from renewables
CCL
Exemption Renewables & CHP
Enhanced Capital Allowances
Energy efficiency measures
IPPC BAT
& energy
efficiency EU
22-23%
renewable supply directive
10GW(e)
Installed CHP capacity
Assumed Power Station Mix
DTI projections
Promote Renewables & CHP
Use revenue from CCL
Green Tariff Endorsement by Energy Savings Trust
Areas Not Tackled Directly
•Agriculture
•Landfill
•Electricity Production
•Oil industry
•Aviation
Export Credit Guarantee Application must include environmental assessment
CHP and Renewables
Transport
Car Tax Relate to
car emissions
Local Agenda 21 Public sector
energy efficiency
Integrated Transport Strategy
UK Climate & Energy Policies
New Deal for Transport DETR on transport
Tax on Work Parking
To encourage use of public transport
Company Cars
Tax relief related to emissions
Voluntary Agreement Reduce emissions
Transport Fuel Duty May be increased
Other

16. Thank You