DECARBONIZING THE UK ECONOMY by 2050

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BUILDING RESILIENT SOCIETIES - You can almost watch the sea levels rising with the polar ice melt at its present rate, it is happening so quickly. Unlike our reaction time to making the reduction in carbon output to brake the effect that human industry and population growth is having on planet earth. 

Our gut reaction is that it is not going to happen. Be grateful though that at least we have a legally binding target that we should be aiming for, embodied in the Climate Change Act 2008. That this is statute in the UK does not mean that the targets will be reached, but it does mean that if the parties do not play their part, they may be in for it. Success requires constant reminders from organizations like us to local authorities about this duty, where they are more interested in generating an income for their district from council taxes - with a "larger the better" attitude to fuel energy guzzling houses - for higher valuations - hence income to their coffers.

The Cleaner Ocean Foundation has been keeping tabs on fuel oil and gas deliveries on our doorstep, with alarming revelations as to the vast sums being spent on heating oils for period Victorian houses in the vicinity, not one of which has any energy harvesting technology incorporated. COF is keeping tabs on house building applications in East Sussex and can reveal that developers are not being asked for micro generation inclusion as per the Climate Change and Sustainable Energy Act 2006. That is house building. What about transport?

It's pretty much the same. The heart of any smart town or city is the infrastructure for transport. The transport medium exists in that electric vehicles are gaining in popularity, but the infrastructure for would be clean drivers is pathetically weak. What is required is a strong heart in the form of energy storage and bulk transfers for transport along the lines of Better Place, and now Tesla's version - but even better, the Bluebird™ energy transfer system for city refueling stations for EVs could provide a long-term solution - but only if a universal format for energy-cartridges can be defined for motor manufacturers to work towards. This would be a positive CCA move, if only funding were available for such a challenging social endeavour. It is not!

POPULATION GROWTH = MORE CARBON

The first factor in the Kaya identity (see definition below) is overall population, since more people means more emissions, all else equal. In 2007, the UK Office for National Statistics projected a national growth rate of 0.7% per year to 2031 (National Statistics Online 2007). If this rate were to continue to 2050, then the UK would have about 82 million people, an increase of almost 22 million people from 2006. By 2022, under the same assumption, the UK is projected to have a population of more than 67 million. It is worth emphasizing that population projections are notoriously uncertain, so caution should be used when using them, as actual future populations could be higher or lower.

In 2006 UK carbon dioxide emissions (as accounted for under the rules of the Kyoto Protocol) were about 9 t/person. If a 2050 population of 82 million had per capita emissions of 9 t, then total UK emissions would be about 750 Mt of carbon dioxide, far above the 80% reduction goal of 119 Mt. A 2022 population of 67 million at 9 t of carbon dioxide per person would result in about 603 Mt of carbon dioxide, well above the 2022 target of 391 Mt. So a growing population means that the UK will have to reduce per capita emissions by as much as 85% in 2050, and by 35% in 2022, from 1990 levels.

CARBON FOOTPRINTS - The proof is in the pudding. A snapshot taken of Lime Park in Sussex and surrounding areas in 2017 reveals that in the Wealden District, truckloads of oil is being burned to fuel climate chaos. At this rate we'll never meet our targets. We need to keep tabs on what Councils in the UK are not doing, rather than what they are doing and lobby local councillors and MPs  for change.

INDUSTRIAL GROWTH = MORE CARBON

The second factor in the Kaya identity (see below) is economic activity. All else being equal more economic activity means more emissions. From 1990 to 2007 the UK averaged 2.5% per year annual GDP growth (inflation adjusted). If overall growth to 2050 is expected to occur at a modest 2.0% per year and population is growing at 0.7% per year, then this implies a per capita growth rate of 1.3% per year. Of course, governments strive for higher growth rates and a vibrant economy, just as they are now doing around the world to stave off the present global financial crisis, slowing growth.

For the purposes of the present discussion, let us assume that future per capita UK growth increases modestly at 1.3% per year. This level of growth would add another 440 Mt of carbon dioxide to the 2050 total, for a total of about 1200 Mt, ten times the 2050 target. And in 2022 this rate of growth would add about another 135 Mt of carbon dioxide emissions, for a total of 738 Mt, approaching twice the 2022 target.

EARTH EVALUATION - The 13th European Evaluation Society (EES) Biennial Conference will be held from 1-5 October 2018 in Thessaloniki,Greece. The theme of the conference is "Evaluation for more resilient societies". The conference will hold debates on evaluation in times of financial, geopolitical, environmental and humanitarian crisis.

The mandate of the European Evaluation Society (EES) is to stimulate, guide and promote the theory, practice and utilization of evaluation in Europe and beyond. The vision is a world where evaluation contributes to human welfare through social learning. Specifically EES seeks to advance evaluation knowledge and to encourage adoption of good practices by fostering evaluation excellence, independence and partnerships. EES activities aim to support improved enabling environments for evaluation, stronger communities of practice, relevant evaluation research and enhanced evaluation methods. This mission is aligned with recent changes in the policy environment. Evaluation in Europe is becoming an essential part of decision making processes at national and Commission levels.

EVALUATION 2006 - Cross-national comparisons can provide some quantitative, practical sense of the magnitude of the challenge. Figure 4 shows tonnes of carbon dioxide per $1000 of GDP for the United States, China, Germany, Japan and the United Kingdom. Figure 4 shows that the United Kingdom, at 0.42 t of carbon dioxide per $1000 of GDP in 2006, was comparable to Japan in its emissions per unit GDP. The UK was more carbon efficient than Germany, and much more so than the United States and China.

EVAL 91-06 - The UK's rate of decarbonization has been much greater than that of Japan, which saw little change over the period, and faster than the United States or Germany, which have had similar rates of decarbonization. One important reason for the decarbonization of the UK's economy has been the large decrease in manufacturing as a portion of its economy, from 33% in 1970 to 13% in 2007 (Marsh 2009). China saw its rapid decarbonization reversed in the early years of the decade. Thus, there is no recent precedent among developed countries with large economies for the sustained rapid rates of decarbonization implied by the Climate Change Act. Such rates necessarily must be several times greater than observed in the UK in recent decades, and based on different contributors as the sectoral shift away from manufacturing has its limits.

The developed country with a major economy with the lowest ratio of emissions to GDP is France, which emitted 0.30 t of carbon dioxide per $1000 of GDP in 2006. France has achieved this level of decarbonization due to its reliance on nuclear power for electricity generation. France achieved an average rate of decarbonization of about 2.5% per year from 1980 to 2006, but achieved only about 1.0% per year from 1990 to 2006. It took France about 20 years to decarbonize from 0.42 t of carbon dioxide per $1000 GDP, the level of the UK in 2006, to 0.30 t of carbon dioxide per $1000 GDP.

The approach to emissions reduction embodied by the Climate Change Act is a backward one. It begins with setting a target and then retrospectively asking policy makers how that target might be achieved

There appears to be no guidance as to feasible rates of carbon rehabilitation for councils that are more used to emptying bins, sweeping roads, collecting taxes and enforcing against unauthorized development. This is bound to lead to some cold-turkey situations, where councils fail to recognize climate change projects and waste public money trying to prevent such efforts, where that expenditure is of course increasing their carbon footprints - hence is counterproductive.

The uncomfortable reality is that no one knows how fast a major economy can decarbonize. Both the 2022 interim and 2050 targets require rates of decarbonization far in excess of what has been observed in large economies at anytime in the past. Simply makiivng progress to the targets requires steps of a magnitude that seem practically impossible, e.g., such as the need for the UK to achieve a carbon efficiency of its economy equal to that of France in 2006 in a time period considerably less than a decade.

A focus on decarbonization as the central goal of carbon policy rather than emissions reductions means that to achieve specific stabilization targets the rate of decarbonization of the UK economy must not only exceed the rate of economic growth, but it must exceed rates of decarbonization observed historically in the UK and in other developed countries.

For the UK, the good news is that it has demonstrated rates of decarbonization higher than those of other large economies. However, in the current decade that rate has declined significantly, and because it has depended on a shift away from manufacturing, future decarbonization will require different actions than in the past.

A UK climate policy recast in terms of accelerating decarbonization has the advantage for the UK to properly claim global leadership. Consider that if the world averaged 0.42 t of carbon dioxide per $1000 of GDP, as was the case in the UK in 2006, global emissions of carbon dioxide would have been about 10 000 Mt or 32% less than what actually occurred. This amount of reduction is almost 20 times the total emissions of the UK in 2006. Far more important than setting impossible national targets on timetables than cannot be met would be efforts to accelerate decarbonization in the UK to higher rates, while at the same time working internationally to assist other countries in meeting the challenge of decarbonization.

If global emissions are to be reduced by 80% by mid-century, or anywhere close to this level, then the world will have to achieve rates of decarbonization that have never been achieved in large economies in recent decades. However, with the world average currently at 0.62 tonnes of carbon dioxide per $1000 of GDP, it will first have to achieve levels observed in the UK on the way to even lower levels. Policy should focus less on targets and timetables for emissions reductions, and more on the process for achieving those goals, and the various steps along the way. Setting targets and timetables for sectoral efficiency gains and expansion of carbon-free energy supply would be a step in the right direction. Such a policy focused on incremental improvements in decarbonization, the details of which go well beyond the focus of this short paper, offers the only feasible approach to the challenge of mitigation. The failure of the UK Climate Change Act is yet to be broadly recognized, but when it is, it will provide an opportunity to recast carbon policies in a more effective manner.

CLIMATE CHANGE ACT FAILURE 2014 - The Belgian think tank Bruegel points to data showing that the United Kingdom's GDP has returned to pre-economic crisis levels, as shown above. This allows us to do a quick and intuitive examination of how much the UK economy has decarbonized over that time period, and how that rate of decarbonization compares to that implied by the UK Climate Change Act.

As a refresher, decarbonization refers to the rate of decline in carbon dioxide emissions to GDP. In order for the UK to hit the targets prescribed in the UK Climate Change Act for 2022, it will need to achieve consistently an annual rate of decarbonization of more than 3%, for any GDP growth rate greater than 1% per year. For more detail, and a full exploration of the quantitative implications of the UK Climate Change Act for decarbonization of the British economy, see my 2009 paper in ERL (open access).

With the UK GDP in 2014 at the same level as it was in 2008, it allows us to calculate a simple rate of decarbonization, as it will be exactly equal to the annual rate of emissions decline.

The 12 month (ending 2nd quarter 2008) carbon dioxide emissions for the UK for 2008 was 536.1 million metric tonnes (data here in XLS). The trailing 12 month (ending first quarter 2014) carbon dioxide emissions for the UK for 2014 was 507.9 million metric tonnes (data here in XLS).

These data imply a rate of decarbonization of -0.9% per year. This is far less than would be needed to hit the targets of the UK Climate Change Act.

YOICHI KAYA

The Kaya identity is an identity stating that the total emission level of the greenhouse gas, carbon dioxide, can be expressed as the product of four factors: human population, GDP per capita, energy intensity (per unit of GDP), and carbon intensity (emissions per unit of energy consumed).

It is a concrete form of the more general I = PAT equation relating factors that determine the level of human impact on climate. The Kaya identity is both simple and tricky, as it can be reduced to only two terms, but it is developed so that the carbon emission calculation becomes easy, as per the available data, or generally in which format the data is available.

The Kaya identity was developed by Japanese energy economist Yoichi Kaya. It is the subject of his book Environment, Energy, and Economy: strategies for sustainability co-authored with Keiichi Yokobori as the output of the Conference on Global Environment, Energy, and Economic Development (1993 : Tokyo, Japan).

Kaya identity is expressed in the form:

F = P × G/P × E/G × F/E

where:

F is global CO2 emissions from human sources
P is global population
G is world GDP
E is global energy consumption

UK OFFICE FOR NATIONAL STATISTICS - DOOMSDAY BOOK

Since its establishment, ONS has had five Directors: Professor Tim Holt; Len Cook; Karen Dunnell; Jil Matheson; and, from October 2012, Glen Watson. Len Cook was the first Director to hold the newly created role of National Statistician. The roles of Director of ONS and National Statistician were combined until 2012 when Jil Matheson continued as National Statistician while Glen Watson became Director of the ONS. John Pullinger replaced Jil Matheson as National Statistician (and Chief Executive of the UK Statistics Authority) in July 2014.

THE BLUE & PINK BOOKS

The annual United Kingdom National Accounts are published in an online publication (The Blue Book) by the Office for National Statistics. It records and describes economic activity in the United Kingdom and as such is used by government, banks, academics and industries to formulate the economic and social policies and monitor the economic progress of the United Kingdom. It also allows international comparisons to be made. The Blue Book is published alongside the United Kingdom Balance of Payments (The Pink Book).

BIG BROTHER AWARD

The Office for National Statistics won the 2004 Big Brother Award for the "Most Heinous Government Organisation" from the campaigning organisation Privacy International for its Citizen Information Project. The project is one of several that lead the Information Commissioner to warn that there is a danger of the country "sleepwalking" into a surveillance society.

IOP PAPER 18-6-09 - This paper evaluates the United Kingdom's Climate Change Act of 2008 in terms of the implied rates of decarbonization of the UK economy for a short-term and a long-term target established in law. The paper uses the Kaya identity to structure the evaluation, employing both a bottom up approach (based on projections of future UK population, economic growth, and technology) and a top down approach (deriving implied rates of decarbonization consistent with the targets and various rates of projected economic growth).

Both approaches indicate that the UK economy would have to achieve annual rates of decarbonization in excess of 4 or 5%. To place these numbers in context, the UK would have to achieve the 2006 carbon efficiency of France by about 2015, a level of effort comparable to the building of about 30 new nuclear power plants, displacing an equivalent amount of fossil energy. The paper argues that the magnitude of the task implied by the UK Climate Change Act strongly suggests that it is on course to fail, and discusses implications.

IOP Publishing provides publications through which leading-edge scientific research is distributed worldwide. IOP Publishing is central to the Institute of Physics (IOP), a not-for-profit society.

PINK BOOK SUMMARY PUBLISHED 30 OCT 2015

The deficit on the current account balance widened in 2014 to £92.9 billion. This deficit equated to 5.1% of gross domestic product (GDP) in current market prices. In both terms, this was the largest annual deficit since records began in 1948.

- In 2014, the deficit on trade in goods widened by £8.4 billion to £123.7 billion. The widening was due to a decrease in exports, partially offset by a smaller decrease in imports.

- The surplus in the trade in services balance widened by £8.1 billion, from £81.0 billion in 2013 to £89.1 billion in 2014.

- The deficit on the primary income balance widened from £16.8 billion in 2013 to £33.1 billion in 2014. The widening was mainly due to the surplus on direct investment falling from £18.8 billion in 2013 to £2.0 billion in 2014.

- The deficit on the secondary income balance narrowed by £1.6 billion, from £26.8 billion in 2013 to £25.2 billion in 2014.

- In 2014, the UK recorded a net inflow of £89.4 billion, an increase from a net inflow of £69.1 billion in 2013.

- The UK IIP showed a net liability position of £454.1 billion at the end of 2014, with reported assets totaling £10,171.7 billion and reported liabilities totaling £10,625.9 billion.

CONTACTS

Office For National Statistics

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Emma Howley - National Accounts Coordination Division
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Craig Taylor - Balance of Payments
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Office For National Statistics
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LINKS & REFERENCE

http://iopscience.iop.org/

https://www.theguardian.com/uk/2006/apr/19/politics.idcards

https://www.ons.gov.uk/

http://www.ees2018.eu/

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