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Explanatory Notes

Climate Change Act 2008

2008 CHAPTER 27

Contents

  1. Introduction

  2. Summary

  3. Background

  4. The Act

    1. Part 1: Carbon Target and Budgeting

    2. Part 2: The Committee on Climate Change

    3. Part 3: Trading Schemes

    4. Part 4: Impact of and adaptation to climate change

    5. Part 5: Other provisions

    6. Part 6: General supplementary provisions

  5. Territorial Extent

  6. Territorial Application: Wales

  7. Commentary on Sections

    1. Part 1: Carbon Target and Budgeting

      1. The target for 2050

        1. Section 1: The target for 2050

        2. Section 2: Amendment of 2050 target or baseline year

        3. Section 3: Consultation on order amending 2050 target or baseline year

      2. Carbon budgeting

        1. Section 4: Carbon budgets

        2. Section 5: Level of carbon budgets

        3. Section 6: Amendment of target percentages

        4. Section 7: Consultation on order setting or amending target percentages

        5. Section 8: Setting of carbon budgets for budgetary periods

        6. Section 9: Consultation on carbon budgets

        7. Section 10: Matters to be taken into account in connection with carbon budgets

      3. Limit on the use of carbon units

        1. Section 11: Limit on the use of carbon units

      4. Indicative annual ranges

        1. Section 12: Duty to provide indicative annual ranges for net UK carbon account

      5. Proposals and policies for meeting carbon budgets

        1. Section 13: Duty to prepare proposals and policies for meeting carbon budgets

        2. Section 14: Duty to report on proposals and policies for meeting carbon budgets

        3. Section 15: Duty to have regard to need for UK domestic action on climate change

      6. Determination whether objectives met

        1. Section 16: Annual statement of UK emissions

        2. Section 17: Powers to carry amounts from one budgetary period to another

        3. Section 18: Final statement for budgetary period

        4. Section 19: Duty to report on proposals and policies for compensating for budget excess

        5. Section 20: Final statement for 2050

      7. Alteration of budgets or budgetary periods

        1. Section 21: Alteration of carbon budgets

        2. Section 22: Consultation on alteration of carbon budgets

        3. Section 23: Alteration of budgetary periods

      8. Targeted greenhouse gases

        1. Section 24: Targeted greenhouse gases

        2. Section 25: Base years for targeted greenhouse gases other than CO2

      9. Carbon units, carbon accounting and the net UK carbon account

        1. Section 26: Carbon units and carbon accounting

        2. Section 27: Net UK carbon account

        3. Section 28: Procedure for regulations under section 26 or 27

      10. Other supplementary provisions

        1. Section 29: UK emissions and removals of greenhouse gases

        2. Section 30: Emissions from international aviation or international shipping

        3. Section 31: Procedure for regulations under section 30

    2. Part 2: The Committee on Climate Change

      1. The Committee

        1. Section 32 and Schedule 1: The Committee on Climate Change

        2. Schedule 1: The Committee on Climate Change

      2. Functions of the Committee

        1. Section 33: Advice on level of 2050 target

        2. Section 34: Advice in connection with carbon budgets

        3. Section 35: Advice on emissions from international aviation and international shipping

        4. Section 36: Reports on progress

        5. Section 37: Response to Committee’s reports on progress

        6. Section 38: Duty to provide advice or other assistance on request

      3. Supplementary provisions

        1. Section 39: General ancillary powers

        2. Section 40: Grants to the Committee

        3. Section 41: Powers to give guidance

        4. Section 42: Powers to give directions

    3. Part 3: Trading Schemes

      1. Trading schemes

        1. Section 44: Trading schemes

        2. Section 45: Activities to which trading schemes may apply

        3. Section 46 and Schedule 2: Matters that may or must be provided for in trading schemes

        4. Schedule 2: Trading schemes

      2. Authorities and regulations

        1. Section 47: Relevant national authorities

        2. Section 48: Procedure for making regulations

        3. Section 49 and Schedule 3: Further provisions about regulations

        4. Schedule 3: Trading schemes regulations: further provisions

      3. Other supplementary provisions

        1. Section 50 and Schedule 4: Information

        2. Schedule 4: Trading schemes: powers to require information

        3. Section 51: Powers to give guidance

        4. Section 52: Powers to give directions

        5. Section 53: Grants to administrators and participants

        6. Section 54: Power to make consequential provision

      4. Interpretation

        1. Section 55: Interpretation of Part 3

    4. Part 4: Impact of and adaptation to climate change

      1. National reports and programmes

        1. Section 56: Report on impact of climate change

        2. Section 57: Advice of Committee on Climate Change on impact report

        3. Section 58: Programme for adaptation to climate change

        4. Section 59: Reporting on progress in connection with adaptation

        5. Section 60: Programme for adaptation to climate change: Northern Ireland

      2. Reporting authorities: non-devolved functions

        1. Section 61: Guidance by Secretary of State to reporting authorities

        2. Section 62: Directions by Secretary of State to prepare reports

        3. Section 63: Compliance with Secretary of State’s directions

        4. Section 64: Consent of, or consultation with, devolved authorities

        5. Section 65: Report on exercise of power to give directions

      3. Reporting authorities: devolved Welsh functions

        1. Section 66: Guidance by Welsh Ministers to reporting authorities

        2. Section 67: Directions by Welsh Ministers to prepare reports

        3. Section 68: Compliance with Welsh Ministers’ directions

        4. Section 69: Consent of, or consultation with, Secretary of State

      4. Interpretation

        1. Section 70: Interpretation

    5. Part 5: Other provisions

      1. Waste reduction schemes

        1. Section 71 and Schedule 5: Waste reduction schemes

        2. Schedule 5: Waste reduction schemes

        3. Section 72: Waste reduction provisions: piloting

        4. Section 73: Waste reduction provisions: report and review

        5. Section 74: Waste reduction provisions: interim report

        6. Section 75: Waste reduction provisions: roll-out or repeal

      2. Collection of household waste

        1. Section 76: Collection of household waste

      3. Charges for single use carrier bags

        1. Section 77 and Schedule 6: Charges for single use carrier bags

        2. Schedule 6: Charges for single use carrier bags

      4. Renewable transport fuel obligations

        1. Section 78 and Schedule 7: Renewable transport fuel obligations

      5. Carbon emissions reduction targets

        1. Section 79 and Schedule 8: Carbon emissions reduction targets

        2. Schedule 8: Carbon emissions reduction targets

      6. Miscellaneous

        1. Section 80: Report on climate change: Wales

        2. Section 81: Climate change measures reports in Wales

        3. Section 82: Repeal of previous reporting obligation

        4. Section 83: Guidance on reporting

        5. Section 84: Report on contribution of reporting to climate change objectives

        6. Section 85: Regulations about reporting by companies

        7. Section 86: Report on the civil estate

        8. Section 87: Power of Ministers and departments to offset greenhouse gas emissions

        9. Section 88: Fines for offences relating to pollution

    6. Part 6: General supplementary provisions

      1. Territorial scope of provisions relating to greenhouse gas emissions

        1. Section 89: Territorial scope of provisions relating to greenhouse gas emissions

      2. Orders and regulations

        1. Section 90: Orders and regulations

        2. Section 91: Affirmative and negative resolution procedure

      3. Interpretation

        1. Section 92: Meaning of “greenhouse gas”

        2. Section 93: Measurement of emissions etc by reference to carbon dioxide equivalent

        3. Section 94: Meaning of “international carbon reporting practice”

        4. Section 95: Meaning of “national authority”

        5. Section 96: Meaning of “relevant Northern Ireland department”

        6. Section 97: Minor definitions

        7. Section 98: Index of defined expressions

      4. Final Provisions

        1. Section 99: Extent

        2. Section 100: Commencement

  8. Commencement Date

  9. Hansard References

26th November 2008

Introduction

1.These explanatory notes relate to the Climate Change Act 2008 which received Royal Assent on 26th November 2008. They have been prepared by the Department of Energy and Climate Change, the Department for Environment, Food and Rural Affairs and the Department for Transport in order to assist the reader in understanding the Act. They do not form part of the Act and have not been endorsed by Parliament.

2.The notes need to be read in conjunction with the Act. They are not, and are not meant to be, a comprehensive description of the Act. So where a section or part of a section does not seem to require any explanation or comment, none is given.

Summary

3.The Act sets up a framework for the UK to achieve its long-term goals of reducing greenhouse gas emissions and to ensure steps are taken towards adapting to the impact of climate change. Its main elements are as follows:

  • Setting emissions reduction targets in statute and carbon budgeting. The Act establishes an economically credible emissions reduction pathway to 2050 and beyond by putting into statute medium and long-term targets. In addition, the Act introduces a system of carbon budgeting which constrains the total amount of emissions in a given time period. Carbon budget periods will last five years, beginning with the period 2008–2012, and must be set three periods ahead. The Secretary of State is required to give indicative ranges for the net UK carbon account in each year of a budgetary period, to set a limit on use that can be made of international carbon credits in each budgetary period and to develop and report on his proposals and policies for meeting carbon budgets.

  • A new reporting framework. The Act provides for a system of annual reporting by the Government on the UK’s greenhouse gas emissions. The new Committee on Climate Change will have a specific role in reporting annually on progress, with the Government required to lay before Parliament a response to this progress report.

  • The creation of an independent advisory body. The Act creates a new independent body, “the Committee on Climate Change”, to advise the Government and devolved administrations on how to reduce emissions over time and across the economy and, on request, on any other matter relating to climate change, including adaptation to climate change. This expert body will advise on the optimum trajectory to 2050, the level of carbon budgets, and on how much effort should be made by the part of the economy covered by trading schemes and by the rest of the economy, as well as reporting on progress.

  • Trading scheme powers. The Act includes powers to enable the Government and the devolved administrations to introduce new domestic trading schemes to reduce emissions through secondary legislation. This increases the policy options which the Government could use to meet the medium and long-term targets in the Act.

  • Adaptation. The Act sets out a procedure for assessing the risks of the impact of climate change for the UK, and a requirement on the Government to develop an adaptation programme on matters for which it is responsible. The programme must contribute to sustainable development. The Act also gives powers to direct other bodies to prepare risk analyses and programmes of action, and advisory and progress-reporting functions to the Committee on Climate Change.

  • Policy measures which reduce emissions. The Act will be used to support emissions reductions through several specific policy measures: amendments to improve the operation of the Renewable Transport Fuel Obligations; a power to introduce charges for single use carrier bags; a power to pilot local authority incentive schemes to encourage household waste minimisation and recycling; amendments relating to the Certified Emissions Reductions Scheme; powers and duties relating to the reporting of emissions by companies and other persons; a duty to make annual reports on the efficiency and contribution to sustainability of buildings on the civil estate.

Background

4.It is widely accepted that urgent action is required to address the causes and consequences of climate change. The 2006 Stern Review set out the economic case for action on climate change, and concluded that the cost of inaction will be far higher than tackling climate change now. It also made it clear that the costs are lowest in the context of multilateral action.

5.In October 2006 the Government announced its intention to publish legislation on Climate Change, and a draft Climate Change Bill was published for public consultation and pre-legislative scrutiny in March 2007. The revised Bill was introduced into the House of Lords on 14th November 2007 after taking into account findings from the parliamentary scrutiny and public consultation processes.

The Act

Part 1: Carbon Target and Budgeting

6.This Part of the Act gives the Secretary of State a duty to reduce the net UK carbon account for the year 2050 to at least 80% below the level of net UK emissions of targeted greenhouse gases in 1990. The term “targeted greenhouse gas” is defined in section 24, the term “net UK carbon account” is defined in section 27 and the term “net UK emissions” is defined in section 29.

7.It also requires the Secretary of State to set “carbon budgets” representing UK emissions for five year periods beginning with the period 2008–2012, taking account of any “carbon units” which are credited or debited to the net UK carbon account under a system of “carbon accounting”. Part 1 of the Act includes a duty on the Secretary of State to report UK emissions levels to Parliament, and to report on the measures the Government will take to meet the carbon budgets in Part 1.

8.Part 1 makes further provision relating to the target and to budgets, including provision on how to calculate whether the target for 2050 has been met and how carbon budgets are to be set. It requires that the carbon budget for 2018–2022 is set in a way that is consistent with the Government’s target to reduce emissions of carbon dioxide by at least 26% by 2020, against 1990 levels. It requires the Secretary of State to have regard to the need for UK domestic action on climate change when considering how to meet the 2050 target and each carbon budget. It also makes provision for the amendment of certain aspects of Part 1 of the Act in certain circumstances, and imposes a duty to make regulations about how carbon units are to be used to ensure that the net UK carbon account is within budget.

Part 2: The Committee on Climate Change

9.Part 2 and Schedule 1 establish a new independent non-departmental public body, the Committee on Climate Change (“the Committee”).

10.Part 2 gives the Committee duties to advise the Secretary of State on a review of the 2050 target, on the levels of carbon budgets and on the apportionment of effort between reductions in domestic emissions levels and the use of carbon units. The Committee must also advise on emissions from international aviation and international shipping and on the amount of effort to be made by sectors of the economy in trading schemes, and other sectors of the economy. The Committee is required to publish this advice as soon as reasonably practicable after giving it.

11.The Committee is also given a function of making an annual report to Parliament and the devolved legislatures on the progress that is being made towards meeting the objectives in Part 1 of the Act. After the end of each budget period, the Committee must include in its annual report its views on the way in which the budget for the period was or was not met and action taken during the period to reduce net UK emissions of targeted greenhouse gases.

12.Part 2 also gives the Committee the powers it needs to deliver its advisory and reporting functions, and the Secretary of State and the devolved administrations are given powers to make grants to the Committee and to issue guidance and directions to the Committee. Schedule 1 sets out the Committee’s constitution.

Part 3: Trading Schemes

13.Part 3 and Schedules 2, 3 and 4 provide the Secretary of State and the devolved administrations with powers to set up trading schemes relating to greenhouse gas emissions though secondary legislation. Trading schemes may limit activities that lead, directly or indirectly, to emissions of greenhouse gases (for example, by capping emissions from a particular set of activities and allow trading of emissions within the cap), or they may encourage activities that directly or indirectly lead to a reduction in greenhouse gas emissions or the removal of greenhouse gases from the atmosphere.

14.Before making regulations to establish a trading scheme the Secretary of State and/or devolved administration concerned must seek and take into account the advice of the Committee on Climate Change, and must consult those likely to be affected by the regulations.

Part 4: Impact of and adaptation to climate change

15.Part 4 places a duty on the Secretary of State to carry out an assessment of the risks to the UK from the impact of climate change; the first report must be made within three years, with subsequent reports at least every five years. Each risk assessment must be followed by the publication of a Government programme of adaptation measures. There is a parallel requirement on the relevant Northern Ireland department to publish an adaptation programme in Northern Ireland.

16.The Committee on Climate Change is given two functions under Part 4. First, it must advise the Secretary of State on his report on the risks to the UK from the impact of climate change. Secondly, it must report to Parliament on the progress being made in implementing the programme of adaptation measures.

17.Part 4 also gives the Secretary of State and the Welsh Ministers the power to issue guidance and directions to persons or bodies with functions of a public nature and statutory undertakers on: assessing the risks of climate change, the preparation of reports setting out policies and proposals for addressing those risks and assessing the progress made towards implementing those proposals and policies.

Part 5: Other provisions

18.Part 5 contains the following measures to reduce emissions:

  • Waste reduction schemes: the provisions amend the Environmental Protection Act 1990, allowing waste collection authorities designated by the Secretary of State to introduce pilot waste reduction schemes. Following the operation of pilot schemes, the Secretary of State must carry out a review and report to Parliament. After the review of and report on the pilot schemes, the provisions allow the Secretary of State to extend provisions for use by other waste collection authorities (with any necessary amendments) or to repeal the provisions. Provision is also made about receptacles for the collection of household waste;

  • Charges for single use carrier bags: the provisions introduce enabling powers to make regulations about charging by sellers of goods for the supply of single use carrier bags. The regulations may also require records relating to the charges to be kept and made publicly available. The provisions also include powers to create civil sanctions in the form of fixed monetary penalties and discretionary requirements for breaches of the regulations;

  • Renewable Transport Fuel Obligations: the provisions amend Chapter 5 of Part 2 of the Energy Act 2004 which provides for the Secretary of State by order to set up a renewable transport fuel obligations scheme. The amendments will introduce a new power to replace the Administrator with a new Administrator, who may be the Secretary of State, and to transfer functions accordingly; amend the provisions which determine how sums received by the Administrator are to be dealt with; give the Secretary of State a power to issue written directions to the Administrator; impose a duty on the Administrator to promote the supply of sustainable fuel which has a beneficial environmental effect; and set up an information gateway to allow disclosure of information by Her Majesty’s Revenue and Customs to the Administrator;

  • Carbon emissions reduction targets: the provisions amend the Gas Act 1986, the Electricity Act 1989 and the Utilities Act 2000 to allow for the introduction of a community energy saving programme;

  • Reporting requirements in Wales: the Welsh Ministers are to publish from time to time a report on their objectives, actions and priorities in relation to greenhouse gas emissions and the impact of climate change in Wales. The provisions also make amendments to the Climate Change and Sustainable Energy Act 2006, transferring to Welsh Ministers the responsibility for publishing guidance for local authorities in Wales on climate change (currently a UK Government responsibility);

  • Reporting of emissions: the provisions require the Secretary of State to issue guidance to companies and other persons wishing to report their emissions, in order to increase the consistency and comparability of reported figures. The Secretary of State is also required to conduct a review of the contribution that reporting can make to achieving the Government’s objectives in relation to climate change. Finally, the Secretary of State is required to introduce mandatory reporting of emissions by companies by 6th December 2012 or to lay a report before Parliament explaining why he has chosen not to do so;

  • Report on the civil estate: the Treasury is placed under an obligation to make annual reports to Parliament on the progress that has been made towards improving the efficiency and contribution to sustainability of buildings on the civil estate;

  • Offsetting: the provisions give the Government and the devolved administrations the power to offset greenhouse gas emissions by acquiring units representing emissions reductions, units representing removals of greenhouse gases from the atmosphere, or units in schemes which cap emissions levels. Those bodies are also allowed to acquire interests in units;

  • Making a minor amendment to section 105(2) of the Clean Neighbourhoods and Environment Act 2005 to enable an increase in fines for pollution offences.

Part 6: General supplementary provisions

19.This part defines the territorial scope of provisions in the Act, sets out requirements for making orders or regulations under the Act, and defines terms used in the Act.

Territorial Extent

20.Sections 71 to 75 (and Schedule 5), 76, 81 and 88 of the Act extend only to England and Wales. Section 77 and Schedule 6 extend to England and Wales and Northern Ireland only. Section 79 and Schedule 8 extend to England and Wales and Scotland only. All other sections and Schedules extend to the whole of the United Kingdom.

21.The Scottish Parliament’s consent was sought and obtained for the provisions in the Act that trigger the Sewel convention. The provisions relate to the establishment of the Committee on Climate Change under Part 2 of the Act, the conferral of powers on the Scottish Ministers under Part 3 of the Act, the preparation by the Secretary of State of a UK-wide report on the impact of climate change under section 56 and the power to acquire units relating to greenhouse gas emissions under section 87. Part 1 of the Act, although it imposes duties only on the Secretary of State, may also be viewed as affecting devolved matters in relation to setting targets and carbon budgets for Scotland. The Sewel convention provides that Westminster will not normally legislate with regard to devolved matters in Scotland without the consent of the Scottish Parliament; the Scottish Parliament granted its approval on 20th December 2007. If there are amendments relating to such matters which trigger the Convention, the consent of the Scottish Parliament will be sought for them.

22.By similar convention, the consent of the Northern Ireland Assembly was sought in relation to the same aspects of the Act and also the duty on the relevant Northern Ireland department to prepare a programme on adaptation to climate change under section 60 in Part 4 of the Act; the Northern Ireland Assembly granted its approval on 10th December 2007.

Territorial Application: Wales

23.The Act confers the following functions on the Welsh Ministers:

  • Part 2 and Schedule 1: powers to seek advice from the Committee on Climate Change and functions in relation to its joint sponsorship;

  • Part 3 and Schedules 2, 3 and 4: the power to make trading schemes covering certain activities in Wales, and to require information from electricity suppliers and distributors and potential participants in a trading scheme;

  • Part 4, sections 66 and 67: powers to issue guidance and directions to reporting authorities in relation to adaptation;

  • Part 5, section 77 and Schedule 6: the power to make regulations introducing charges for single use carrier bags;

  • Part 5, section 80: the duty to draw up a report on climate change in Wales and to lay it before the National Assembly for Wales;

  • Part 5, section 81: the function of preparing a climate change measures report in Wales; this section inserts a new, Wales-specific section 3A into the Climate Change and Sustainable Energy Act 2006 (c.19);

  • Part 5, section 87: the power to acquire units to offset emissions.

24.Sections 71 to 75 and Schedule 5 (waste reduction schemes) extend to England and Wales but apply to England only.

Commentary on Sections

Part 1: Carbon Target and Budgeting

The target for 2050

Section 1: The target for 2050

25.Subsection (1) of this section imposes a duty on the Secretary of State to ensure that “the net UK carbon account” for 2050 is at least 80% lower than the “1990 baseline”.

26.Subsection (2) defines “the 1990 baseline” to mean the aggregate amount of: net UK emissions of carbon dioxide in 1990; and net UK emissions of the other targeted greenhouse gases in the “base year” for each gas.

27.The term “targeted greenhouse gas” refers to the gases which are covered by the targets and budgets in the Act as set out in section 24(1); the “base year” for each targeted greenhouse gas other than carbon dioxide is set out in section 25(1). The targeted greenhouse gases, and their base years, are: carbon dioxide (1990), methane (1990), nitrous oxide (1990), hydrofluorocarbons (1995), perfluorocarbons (1995) and sulphur hexafluoride (1995). Under section 24, the Secretary of State is given the power to add more gases – the commentary on that section provides details of the process. The commentary on section 25 provides more details on base years.

28.The term “the net UK carbon account” is defined in section 27. For 2050, it means the level of net UK emissions of targeted greenhouse gases in 2050 after numbers of “carbon units” have been added and subtracted in accordance with carbon accounting regulations. The commentary on sections 26 and 27 provides a more detailed explanation of carbon accounting and the net UK carbon account.

29.The target for 2050 is set by reference to a 1990 baseline rather than a particular quantum of emissions because the baseline emissions are subject to revision as understanding of historic emissions improves. 1990 is the baseline year used for emissions of carbon dioxide under the Kyoto Protocol, an international agreement to limit emissions of greenhouse gases, to which the UK is party; where a gas has a different base year, emissions of the gas in the base year are treated as being emissions of the gas in 1990.

Section 2: Amendment of 2050 target or baseline year

30.Subsection (1) allows the Secretary of State, by order, to amend the 2050 target and to amend the baseline year.

31.Subsection (2) sets out the circumstances in which the Secretary of State can amend the 2050 target:

  • paragraph (a) allows an amendment if there have been significant developments in scientific knowledge about climate change, in European Community law or policy or in international law or policy. For example, this power might be used in the event of a new international treaty on climate change;

  • paragraph (b) allows an amendment if a change is made to the range of greenhouse gases covered by the target (see section 24) or if emissions from international aviation or international shipping are added to the target (see section 30).

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