Carbon crunch: Slowdown in UK emissions reductions raises fresh questions

UK emissions may be on their longest falling streak in modern history, but signs are growing that a new wave of climate policies and investments are urgently needed

First the good news. A new analysis from Carbon Brief has today confirmed that UK greenhouse gas emissions fell again last year, meaning emissions dropped for the sixth consecutive year - the longest run of falling annual emissions on record.

Despite the 'Beast from the East', continued economic recovery, and fears coal generation could stage a modest revival, 2018 emissions are thought to have fallen 1.5 per cent compared to 2017, to 361 million tonnes of CO2. The results mean UK emissions are now 39 per cent below 1990 levels, with 2018 taking the title as the year with the lowest emissions since 1888, outside the three years in the late 19th and early 20th century when general strikes led to plummeting emissions. As Carbon Brief noted, outside of those anomalous years 2018's emissions were at the lowest level since the year when "the first-ever Football League match was played and Tower Bridge was being built in London".

Per-capita emissions in the UK fell to 5.4tCO2 in 2018, the lowest level since 1858. It puts the country on a par with France, which has long been hailed as the large industrialised economy with the lowest per capita emissions thanks in large part to its reliance on nuclear power.

Carbon Brief's analysis draws on the government's provisional energy use figures for the year, which are subject to revision. However, the site's calculations have a good track record of broadly matching the government's official emissions data, which is due to be published later this year. It seems the UK's much-heralded position as the G7 country that is delivering the deepest and most sustained emissions reductions will remain unchallenged for another year.  

And yet, celebration has been muted, because the new analysis contains a sting in the tail. Yes, emissions were down again, but the rate of their decline seems to be slowing and it is unclear whether the steep emissions reductions that are required to deliver on the UK's carbon targets can be sustained. The estimated 1.5 per cent fall in emissions seen in 2018 was the smallest drop recorded over the past six years. It was less than half the 3.2 per cent fall recorded in 2017 and was dwarfed by the 8.7 per cent recorded in 2014 and the 5.9 per cent seen in 2016. As Carbon Brief observed, "continued cuts cannot be taken for granted".

There are two main causes for concern. Firstly, last year's emissions reductions were driven almost entirely by a 16 per cent fall in emissions from coal generation. In contrast, emissions from gas were flat and emissions from oil actually rose. Coal now accounts for just seven per cent of total emissions and five per cent of UK power generation. This means the emissions savings that have resulted from the coal phase out will soon be banked. If the UK is repeat the kind of steep emissions reductions seen between 2014 and 2017 then the cuts are going to have to come from another source.

That is where the other cause for concern comes in. Carbon Brief's analysis echoes recent warnings from the Committee on Climate Change detailing how emission reductions outside the power sector range from the modest to the non-existent. As a striking new chart shows, transport is now the largest source of UK greenhouse gas emissions and no other sector has got anywhere close to matching the emissions reduction trajectory achieved by the power sector.

For years the CCC, green businesses, and environmental campaigners have warned the UK's impressive emission reduction track record could grind to a halt in the 2020s without a new wave of policies. Much of this criticism has risked looking churlish as the UK's emissions reduction trajectory has continued to outperform its peers and Ministers were once again quick to highlight the UK's impressive progress.

But Carbon Brief's new analysis suggests the many warnings about the slow decarbonisation rate in the transport, building, industry, and agricultural sectors had some merit. 

There are still plenty of reasons for optimism. The UK's coal phase out means several more years of emissions reductions are all but assured. Confirmation the Cottam plant is to become the latest UK coal power plant to close suggests another chunk will be taken out of UK power emissions before the end of 2019. 

It's also worth noting that last year's Beast from the East and record-breaking summer could have slowed 2018's decarbonisation rate slightly. Meanwhile, the wave of new offshore wind farms, renewed momentum in the unsubsidised onshore wind and solar sector, battery innovations, and Hinkley Point C should all start to drive reductions in gas power emissions throughout the 2020s. The growing market for electric vehicles (EVs), government plans for charging infrastructure, and new EU vehicle emissions standards should eventually start to bend the stubborn transport emissions curve downwards. Rising carbon prices will increase pressure on industry to curb emissions. The government will continue to face calls to strengthen energy efficiency policies.

But as the CCC recently warned, across 18 areas of the economy that are not covered by the EU emissions trading scheme UK decarbonisation policies are sufficiently ambitious in just three. The UK will continue to cut emissions into the 2020s, but the fact remains they are currently not expected to fall at the required rate for the country to meet its binding emissions targets, let alone the more ambitious net zero emission goals that are currently being considered by the CCC and the government. Calls from the likes of Caroline Lucas for the government to declare a "climate emergency" and deliver a UK Green New Deal will only grow in the coming months and years.

All of which means businesses and investors have two important considerations to weigh. Firstly, if they are serious about their support for the UK's carbon targets they need to step up their own calls for the government to deliver an ambitious new wave of decarbonisation measures that extend beyond the power sector.

And secondly, regardless of their stance on climate policy they need to recognise that a new wide-ranging package of decarbonisation policies will almost certainly emerge at some point in either this parliament or the next, as Ministers recognise that the CCC and the green business community were right to raise the alarm about the slowing pace of the UK's decarbonisation. The only question is how long will it take for Westminster to recognise that the UK's admirable position as world-leading low carbon economy is under threat?