Reforming the Climate Change Act

Summary

We should be researching changes to the Climate Change Act because it may not enjoy political support after the next election.

One possible avenue of change is to make the UK’s commitment to reducing its greenhouse gases contingent on decarbonisation commitments by other major powers (in particular the US) whilst strengthening the legal framework supporting decarbonisation at a sectoral level.

This may make our framework more consistent with promoting global mitigation at a low cost to the UK.

It would in any case be helpful if a new UK government in 2029 had other options to consider apart from sticking with the Act or scrapping all climate change policy. Someone should be spending more resources researching such alternatives now.

The UK context

Decisions about the best climate change policy for the UK would be easier if any one of the following statements were true:

· The Climate Change Act and pursuing UK Net Zero are no regrets policies which have minimal costs for the UK regardless of their impact on global temperatures;

· Global warming doesn’t matter very much;

· There is nothing that can be done about global warming.

None of them is true.

Global warming is a serious issue which could be tackled. The current UK policy mix based on the commitment to UK Net Zero by 2050 has costs for the UK. The costs – which run into the tens of billions annually (see my previous essay on the cost of UK net zero – HERE ) would be a reasonable price to pay if the policy was delivering lower global temperatures. However they will be incurred in the context of tight government and household finances, with the UK finding it difficult to meet the costs of its existing public service promises and of new requirements to spend significant resources on defence.

In this context one might expect greater focus on whether current policy commitments are actually delivering global mitigation, and discussion of how they might be revised. In practice, most of the political and media debate about the Climate Change Act and UK Net Zero offers a binary choice; keep it, or scrap it.

Most of those advocating scrapping the Climate Change Act are arguing that the UK gives up on all climate change policy. In their view, the UK government should devote little attention to managing greenhouse gas emissions.

Most of those defending the current policy framework see all the main provisions of the Climate Change Act and UK net zero by 2050 as a non-negotiable article of faith. There is debate on that side of the room about how the UK’s targets might be complied with and some resistance to adopting measures (a 2035 ban on gas boilers, tax subsidies for electricity) which the CCC sess as essential to complying with the Act, but which have political or fiscal costs. But while these commentators do not always will the means to get to Net Zero, they are clear that we should not change this as a target for the UK.

There is less discussion anywhere of possible ways to change the Climate Change Act in ways which would reduce the UK’s commitment to decarbonisation[1]. This would have its own disadvantages, but merits more thought and analysis.

A theory of global change

A theory of global change is embedded in the logic of the Climate Change Act and UK Net Zero. When these were adopted they were thought to have a significance beyond the few hundredths of a degree by which UK emissions affect long term temperatures.

First, it was envisaged that the Climate Change Act commitments would set a framework for investment and development of decarbonised technologies within the UK, and that this in turn would affect the global costs and incentives for businesses and states to decarbonise. This part of the theory is relatively simple and is sector specific. It will be more relevant to sectors where the UK is a significant market (eg – the UK is the third largest global importer of cars and the third largest passenger market for aviation) or the leader in deploying a given technology (eg offshore wind), and less so where UK decarbonisation involves UK based labour tackling more specific UK issues (eg the insulation and decarbonisation of the UK’s housing stock).

Second, it was envisaged that the UK’s emissions commitments were important because of the way they would interact with the commitments and policy choices of other states. The theory of change here is more complicated and continues to evolve.

I summarise below the key tenets of this part of the theory.

1 Mitigation of climate change is dependent on the actions of a group of large current emitters, and of some other large economies which are likely to grow considerably over the coming decades. This includes China, the US, India, the EU, Indonesia, Russia and Brazil.

2 Security and economic growth are higher priorities for these countries than mitigating global warming, even though some of them are particularly vulnerable to its effects. Some low carbon technologies will make sense to these countries on economic or security grounds, but this is unlikely in itself to be sufficient to lead to a rapid decline in global emissions.

3 Even for these large emitters, mitigation action only makes sense if others will also take steps to reduce their emissions. So the climate change policies of geopolitical competitors and trading partners are an important determinant of each country’s own policy choices in relation to decarbonisation.

4 In itself the UK has little influence on the policy choices of most of these large emitters.

5 Given its geopolitical heft and its own significant emissions, the US could have influence over other major emitters, particularly if it were to work in concert with its traditional allies among Western powers. This could lead to a negotiated outcome whereby global emissions are lower than would otherwise be the case.

6 UK climate policy can have some impact on the climate policy of other Western powers including the US. And this was the intention behind Net Zero.

The UK’s 2019 commitment to Net Zero aimed to influence a ‘leadership group’ of high ambition countries, principally but not exclusively in the West (and including the US), to adopt similar targets, and thus creating the conditions for an effective global dialogue[2].

The most obvious way for this to work was through its impact on the diplomatic conversations surrounding the main UNFCCC processes. A second channel of interaction was expected to be through cross-border opinion formation. There is good evidence that opinion in the large western democracies is affected by what is happening in other similar countries.

The approach appeared initially to be working. Arguably the commitment to Net Zero in 2019 had some role in catalysing the rush of Net Zero commitments over the following 2 years. But since then developments have been less encouraging. The current US government is set against decarbonisation, and there has been only limited progress since 2021 at the UNFCCC[3]. It is not clear that the UK’s follow up commitment to set a more demanding Nationally Determined Contribution (of an 81% reduction of 1990 emissions by 2035) has had much impact elsewhere.

It may well be the case that revocation of the UK’s commitment to Net Zero or an upward revision of its NDC’s would lead to other countries reducing their commitments and weaken the position of those within the US and elsewhere who are advocating stronger climate commitments – and this is important. But is hard to be confident that maintaining our existing approach is still delivering further relevant commitments to mitigation elsewhere.

Reforming the Climate Change Act

The UK may wish to retract some of its commitments under the Climate Change Act, either because it finds them too costly given limited international benefits, or because it elects a government which does not want to prioritise the mitigation of global warming.

In either case, it should recognise that something is being lost as a consequence of this decision, and seek to minimise the damage that backtracking is likely to cause to global and UK mitigation efforts. It is likely that this will be better achieved by reforming the Climate Change Act rather than scrapping it.

One approach to minimising the damage could be to row back on the national commitment (while managing this to minimise the extent to which other countries resile from their commitments), and to increase the UK’s commitment to sector specific decarbonisation in areas where the cost benefit mix is more favourable.

Revising UK national commitments to GHG reduction: Contingent national level commitments

The simplest reform would be to retain the Climate Change Act, but to change the targets. We could go back to an 80% target by 2050[4], or perhaps a net zero target at a later date. This has the advantage of being clear and relatively straightforward[5] to implement legally. It is hard to argue that this would be consistent with keeping the global increase in temperatures below 2 degrees[6], but accepting that would still be very different from giving up altogether on mitigating climate change.

An alternative could be for the UK to make its commitments in the Climate Change Act and its NDC’s contingent on what other major Western states do. This is consistent with the theory of change outlined above. UK commitments to Net Zero make sense if the West collectively is making a serious attempt to negotiate an overall decarbonisation outcome with other major emitters, and little sense if the West is not so committed. If this effort is going to get restarted, we want to be in on it and giving this play its best shot. And a commitment to this end is valuable. Without it, our national level commitments are likely to have little impact.

How might this work?

The Climate Change Act is based on a 5 yearly cycle of setting carbon budgets which set out the UK’s legal commitment to carbon reductions 12 years ahead. The Climate Change Committee makes a recommendation as to the level of these budgets and parliament has generally accepted these recommendations. The carbon budgets have to be set in the context of a duty to achieve 100% reduction in emissions by 2050.

The Act already allows the government to vary the 2050 overall target in the event that that there have been significant developments in European international law or policy that make it appropriate to do so. We could make it explicit that this includes consideration of the extent to which other major Western economies are making commitments commensurate with those made by the UK. We could require a five yearly review (by the government, taking account of advice from the Climate Change Committee) as to whether other national commitments are commensurate with those of the UK. We might set up an expectation that while the more imminent carbon budget targets would be unchanged by such a conclusion, those more than 5 years out could be revisited. We would revisit the UK’s 2035 UNFCCC target, and make it similarly contingent on the commitments of others, in the expectation that current US policies make it unlikely that we would be meeting this.

Consumption emissions

A target to reduce territorial emissions creates perverse incentives for an economy that is heavily reliant on international trade. A target based on emissions arising from our consumption would align more closely with the ends that we are trying to achieve.

This has previously been considered as an approach, and rejected; there are some strong arguments against. The UNFCCC framework is based on territorial emissions and it is sub-optimal for our domestic framework to vary too far from this. We have limited control over emissions outside the UK. Data on consumptions emissions is currently weak and intrinsically difficult to obtain.

But a legally binding duty for a government to work towards the ‘wrong’ target is not helpful either; if we are going to make more substantial changes to the Climate Change Act, we should revisit the question of consumption emissions as well.

None of this is very comfortable for a country that has positioned itself at the forefront of doing the right thing on climate. Upward revisions of NDC’s are permitted under the Paris agreement, but are rather against its spirit. Others might also be expected to reduce their levels of commitment.

But if do we want to change what we are doing this is a much better option than quitting the Paris agreement altogether and abandoning all climate policy.

Strengthening sectoral targets

The costs of UK decarbonisation vary significantly by sector. So too do the benefits. In a few sectors the UK has technology or market scale which can improve the economics of global decarbonisation. In a few ‘ green’ sectors it will also make sense for the UK to invest as a part of its industrial policy.

The decarbonisation targets in the Climate Change Act and the carbon budgets reassure investors and consumers that future governments are less likely to resile on legislation and policies (eg the Zero Emission Vehicle Mandate, commitments to support the roll out of EV charging infrastructure) which are important to their investment and their buying decisions. Were we to take away this support by making the national greenhouse gas reduction targets in the Climate Change Act contingent, we might seek to compensate by introducing into the act some unconditional sector specific targets.

Rather than a general – but probably undeliverable – commitment to decarbonise the whole economy, would we be better with specific commitments (eg 95% of light vehicles, 90% of electricity production, all new housing) which are both achievable and in themselves more likely to be desirable?

Other internationally relevant commitments

Opponents of the UK’s Net Zero commitment argue this is no longer proving a cost effective tactic for mitigating climate change.

It does not follow that all other climate change mitigation policy also requires change; indeed, logically, if one tactic is becoming less effective, we should be placing more emphasis on others.

Consider carbon pricing. The EU’s carbon border adjustment mechanism is in its early days, and has several flaws, but is a meaningful step towards developing consistent global carbon pricing, which partly addresses the free rider problems associated with international decarbonisation commitments. This may be part of the long term institutional framework of a decarbonised world. The UK’s commitment to a carbon border adjustment mechanism which aligns to that of the EU may be important and should be evaluated independently of a decision on net zero.

The same is true of UK financial assistance to the global South in respect of climate change mitigation, and UK participation in a wide range of other sectoral bodies – from finance, to aviation to maritime.

It can’t be right that the UK adopts a gut based ‘pro’ or ‘anti’ decarbonisation stance in all of these arenas. Each should be the subject of specific, thoughtful policy development.

What then happens?

Like it or not what the US does on decarbonisation is pivotal. At some point it may decide to make climate mitigation a bigger plank of its diplomatic interactions with China and other major emitters. Several large emitters may then move forward to a decarbonisation track which is mitigating climate change more rapidly. Whether/when the US does this is dependent on political and public opinion in the US, as well as other geopolitical considerations. Knowing that the UK (and perhaps other second tier Western powers) is committed to come on board rapidly with any serious US initiative to negotiate faster mitigation should help those on that side of the debate in the US make their case. Whereas if the UK simply walks away from all climate policy, this is more helpful to those in the US who oppose action on decarbonisation.

At the same time the UK should continue to making a difference to global decarbonisation at a sectoral level where it has the capability to do this.

Conclusion

A lot more effort is being put into defending or opposing the Climate Change Act than into considering alternatives. This is a shame.

After the next UK election in 2029, a new government may want to make change quickly. It should be given more options than simply abandoning all climate change policy and sticking with what we have.

The Climate Change Committee is a well resourced body with substantial experience in this area. Ideally it should be asked to look now at how alternative policy could be developed.

Alternatively this could also be an urgent agenda for a well-resourced UK think tank.

Leave a comment

[1] There have by contrast been proposals to modify the Climate Change Act to require the UK to take more rapid steps to decarbonise - see the Climate And Nature Bill which was proposed and rejected by parliament in October 2024.

[2] See Climate Change Committee, May 2019, ‘Net Zero. The UK’s contribution to stopping global warming’ Exec summary p11, chapter 4 , and, for the underlying thinking, the report from the International Advisory Group to the CCC headed by Peter Betts. https://www.theccc.org.uk/wp-content/uploads/2019/05/International-Net-Zero-Advisory-Group-Chair-Report.pdf

[3] EG –the 2025 UN Emissions Gap Report estimated only a 2GtCO2e a year reduction in emissions by the G20between 2030 and 2035 arising from new 2035NDC’s if the US’s pledge is excluded, and concluded that then current policy updates did not noticeably change expected emissions in 2030 by the G20 as a group

[4] The original target under the Climate Change Act as adopted in 2008.

[5] In the sense that it is legally straightforward to do this under the current act. The legal ramifications of this and other possible changes to the Climate Change Act discussed in this paper would likely be anything but straightforward

[6] Climate Action Tracker views the current NDC as ‘almost sufficient’ for achieving less than 2 degrees warming based on modelling global least cost pathways and ‘insufficient’ based on its analysis of the UK’s ‘fair share’ of emissions reductions. We would be retreating from this commitment.