Climate Change

Posted on: 6 July 2021

Counting down to Net Zero?

Posted by: Noémi Byrd

The Sixth Carbon Budget covering 2033-2037 was brought into force on 24th June 2021. In line with the Climate Change Committee’s (CCC) advice, it places a 965 million tonne cap on the emission of targeted greenhouse gases for the period, representing a 73% reduction relative to the 1990 baseline and including – for the first time – the UK’s contribution to international aviation and shipping emissions. This cap equates to 193MtCO2e emissions annually. In 2019 annual emissions stood at 522MtCO2e. The reduction needed is steep.

On the face of legislation already in place, and in the light of having achieved a 40% reduction in territorial greenhouse gas emissions during the period 1990-2019 (1) (more than any other G20 member) the United Kingdom can, credibly, call itself a climate leader. Section 1 of the Climate Change Act 2008 (CCA) requires the Secretary of State to “ensure” that the 2050 target for targeted greenhouse gas emissions reductions is met. This Net Zero target, i.e. 100% reduction relative to the 1990 baseline, has been in force since June 2019. Section 4 CCA requires the Secretary of State to set five-yearly carbon budgets leading up to 2050, and, again “ensure” that the UK’s net carbon account for a budgetary period does not exceed the carbon budget. The UK’s carbon account for the first and second carbon budget periods remained within the statutory limit, and is on track to do so for the current (third) budget ending in 2022.

However, according to the CCC, the UK is not on track to remain within the fourth and fifth climate budgets which have been set – let alone the sixth (2). The consequence – given that the budgets are intended to function as steps down to Net Zero – is that the 2050 target will not be met, unless action is urgently taken to steepen the downwards trajectory. The CCC’s annual Progress Report to Parliament on emissions reductions (June 2021) makes very plain that an absence of targets is not the problem. The requisite legislation is in place. Yet “the willingness to set emissions targets of genuine ambition contrasts with a reluctance to implement the realistic policies necessary to achieve them”. So what legal impact is the Sixth Carbon Budget, the most ambitious target so far, likely to have?

To date, no legal challenge relying on the 2050 target duty and the carbon budgets, or indeed the Secretary of State’s duty to prepare policies and proposals which he considers will enable the carbon budgets to be met (ss. 13-15 CCA), has succeeded. This is due principally to the extent of the Secretary of State’s discretion in how the target and budgets are to be met, as explained by the observations of the Court of Appeal in R (Packham) v SST [2020] EWCA Civ 1004 at [87]:

As [counsel for the Secretary of State] submitted, the statutory and policy arrangements we have described, while providing a clear strategy for meeting carbon budgets and achieving the target of net zero emissions, leave the Government a good deal of latitude in the action it takes to attain those objectives—in [counsel’s] words, “as part of an economy-wide transition”. Likely increases in emissions resulting from the construction and operation of major new infrastructure are considered under that strategy. But—again as [counsel] put it—“it is the role of Government to determine how best to make that transition””.

If a quick look back at the fate of recent challenges relying on the provisions of the CCA is the best indicator of what legal impact the sixth carbon budget will have, the answer is: probably not much. For example, major energy infrastructure projects are likely to have a significant emissions impact. Yet, there is no requirement in the (currently under review) Energy National Policy Statements (ENPS) governing the grant of development consent under the Planning Act 2008 for such projects, either to assess the need for a particular project or its likely impact on carbon budgets. The absence of this requirement to assess impact quantitatively is made explicit in the ENPSs, as confirmed by the Court of Appeal in R (ClientEarth) v SSBEIS [2021] EWCA Civ 43. The government has since agreed to review the ENPSs following a separate legal challenge(3), but there is no clear indication that a quantitative assessment of GHG emissions will be required as part of the revised policies, or if the Sixth Carbon Budget will have any impact here at all.

In R (Finch) v Surrey County Council & Ors [2020] EWHC 3559] the assessment of GHG emissions against the carbon budget is directly in issue. The GHGs in question are those generated offsite, by the combustion – i.e. the end use – of refined oil to be extracted onsite. The argument that end-user GHG emissions should be included in an environmental statement is innovative, and as the claimant acknowledges, represents “a difficult and uncertain exercise”. Nevertheless, these emissions occur and need to be counted somewhere.

A separate but contingent ground in Finch is that an estimate of the GHG emissions from the operation of the development on the site, and from the combustion of refined products emanating from the site, should have been compared to a “metric” for carbon reduction, notably the net zero target at national level, national carbon budgets, and sectoral allowances. Holgate J rejected the principal ground, and so the contingent ground fell away and the “metric” argument was not explicitly addressed. Permission to appeal has been granted.

The difficult question of whether, how, and where GHG emissions should be counted against the statutory carbon budget has yet to be explicitly addressed. The UK Emissions Trading Scheme (ETS) does provide a framework for counting (and trading) emissions within sector allowances, but it “does not necessarily have to achieve a reduction in the activities consisting of greenhouse gas emissions or causing or contributing such emissions: it is sufficient that the design of the scheme limits or encourages the limitation of those emissions” (Elliott-Smith v SSBEIS [2021] EWHC 1633 (Admin) per Dove J at [66]). In any event, the ETS covers energy intensive industries, power generation and aviation, which represent one third of the UK’s total emissions. What about the other two thirds?

The difficulty this lack of a metric poses for local planning authorities (and Inspectors) is illustrated by the grant of permission for a gas-fired power plant East Devon last year (4). The proposal fell well below the nationally significant infrastructure project threshold and so fell to be determined under the TCPA 1990. Nevertheless, emissions from the scheme were credibly estimated by objectors to amount to 28.5% of 2019 baseline emissions in the local authority’s area. The Inspector found that the emissions would be “substantial”, but that there was “no way of meaningfully relating the resultant GHG emissions from the proposed development, either by itself, or cumulatively with other similar schemes, quantitatively with the national 2050 outcome duty or its associated five-yearly budgets”. The Inspector therefore turned to support in the Energy National Policy Statements for an ‘energy mix’ including (unquantified) fossil fuel back-up for renewable energy generation, and found that this high level policy support tipped the balance in favour of granting permission – despite imminent review of the ENPSs by the government. In its latest report the CCC advises that economy-wide reductions are necessary and “any new source of emissions could put the Net Zero path at risk”, but as long as the 2050 statutory target and the carbon budgets remain a material consideration, rather than providing the basis for calculable limits to emissions from proposed development, they will remain “legally binding” in theory only.

There may be the beginnings of a shift towards making the numbers count. In Transport Action Network’s (TAN) current challenge to the second Road Investment Strategy (RIS2) ([2021] EWHC 568 (Admin)), TAN argues that the Secretary of State erred in law by failing to take account of the 2050 target and the carbon budgets in exercising its powers under the Infrastructure Act 2015. The government argues that the budget and targets were not express material considerations under the IA 2015, nor ‘so obviously material’ that there was an obligation to take them into account, and further that RIS2 emissions will be “an extremely small component” of all UK road transport emissions. Significantly, TAN has obtained permission to adduce expert evidence on alleged inaccuracies in the government’s calculations. There is potential for this claim to be the first in which the court may, if rejecting it, have to reject explicitly the argument that a project threatening the achievement of a “legally binding” carbon budget is unlawful.

The CCC emphasises that climate change “must be a key consideration in the government’s planning reforms” and that “the current Planning Bill does not ensure that developments and infrastructure are compliant with Net Zero […] it would be serious were this opportunity to be missed.” This is a clear signal that the climate impacts of development need to be assessed quantitatively, in relation to the carbon budgets, as well as qualitatively. The question is: how ? Yet more broad provisions like those in the Planning Act 2008 and the Infrastructure Act 2015 requiring (respectively and in summary) consideration to be given to government policy on climate change, or the effect of projects on the environment, will lead to yet more irrationality challenges which ultimately fail. A fixed legislative emissions threshold in line with Net Zero is one answer, but political realities will no doubt determine what appears in the final draft of the Bill.

(1) CCC Progress Report to Parliament, June 2021, page 8. (The reduction in emissions from imported goods and services is not nearly as impressive).
(4) PINS Appeal Ref 3247638

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