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Rapid adoption of fifth carbon budget essential for business

26th November 2015

Further to the publication today of the Committee on Climate Change’s advice to government on the fifth carbon budget, the Aldersgate Group called on government to rapidly adopt the fifth carbon budget in 2016 and avoid the delays and investment uncertainty that came with the slow adoption of the fourth carbon budget. The Group stressed that the medium-term clarity provided by the carbon budgets was essential for encouraging international businesses to invest in the UK’s low carbon infrastructure and for remaining on track to meeting the UK’s long-term climate goals at least cost and in a way that could deliver growth.

Nick Molho, Executive Director of the Aldersgate Group said: “With the UK Met Office recently confirming that global temperatures are set to rise by more than one degree above pre-industrial levels for the first time, the UK needs to build on the emission reductions achieved to date and put itself in a situation where it can tackle the challenge of dangerous climate change in a way that is timely, cost-effective and delivers economic benefits in terms of growth and jobs to the UK. The timely adoption of the fifth carbon budget is key to this.

Companies investing in low carbon infrastructure, many of which are international and have a choice as to which countries they want to invest in, are already looking at projects that will be developed in the next decade. Continued confidence in the UK’s low carbon ambitions is essential to attracting this investment. It will allow businesses to keep on investing in innovation, new projects and supply chain factories, all of which will help develop much needed infrastructure, reduce the cost of new technologies and create new jobs in the UK’s low-carbon economy, which already employs 460,000 people.”

A day after the Autumn Statement, the Aldersgate Group also stressed that the Treasury had an important role to play in ensuring the UK would have the means to meet its fourth carbon budget (covering the years 2023 to 2027), as the majority of low carbon and energy efficiency policies and supportive funding were due to end over the course of this Parliament. The Group added that this was also key for the government to meet its existing renewables target for 2020, as the Department of Energy and Climate Change recently acknowledged.

Nick Molho added: “To remain on track for meeting our long-term climate goals cost-effectively, the Treasury must urgently support the government in rapidly introducing policies that will ensure the UK meets its fourth carbon budget. This requires in particular a clear set of new policies in the energy efficiency, low carbon heat and low carbon transport sectors where all support policies are expiring in the near future. Clarifying the government’s plans on renewable electricity beyond the offshore wind auctions announced last week is also an urgent necessity if the UK is to meet its climate goals at the lowest cost and its renewable energy targets for 2020.”

Committee on Climate Change