Source · Select Committees · Public Accounts Committee
Recommendation 4
4
Government does not have a clear way of determining whether its actions to reduce emissions...
Recommendation
Government does not have a clear way of determining whether its actions to reduce emissions in the UK are transferring emissions to other countries. The net zero target applies to emissions generated within the UK and does not include emissions from the production of goods that are imported. This approach aligns with internationally agreed rules to prevent double counting of emissions. It is critical that actions to reduce the UK’s emissions do not result in simply moving them abroad, which would undermine global efforts to limit temperature rises. This could happen, for example, if UK policies push high-emitting industries (such as some manufacturing) abroad rather than ensuring those industries become carbon neutral. HM Treasury considers that this risk is lessened as other countries reduce their own emissions. But if the UK decarbonises more quickly than other countries (particularly countries it imports from), there will be a risk in the short term that policies to reduce emissions transfers them abroad instead. Recommendation: The Department should review how policies aimed at reducing UK-based emissions take into account the risk that emissions are passed to other countries and explore how to make the level of emissions generated in the manufacture of imported goods more transparent.
Government Response
Acknowledged
HM Government
Acknowledged
4.1 The government agrees with the Committee’s recommendation. Target implementation date: Winter 2021 4. 2 BEIS is jointly leading a cross-government work programme with HMT on the issue set out in this re commendation (often referred to as ‘carbon leakage’). This includes developing an analytical framework to consider the risk and potential impact of carbon leakage and assessing the range of mitigation measures av ailable. 4. 3 The recently published Industrial Decarbonisation Strategy sets out government's current approach to mitigating carbon leakage and includes a commitment to establish a targeted approach to mitigating ind ustry’s leakage risk throughout the journey to net zero as the UK’s emissions reduction policies become m ore ambitious. HMT will be publishing more analysis on risks and possible mitigation options in the up coming Net Zero Review. 4. 4 The department will also be reviewing ‘free allocation’ policy as part of a wider review into the UK Emissions Trading Scheme (UK ETS) now that it has been set up. This review will focus on how free allocations can be distributed more fairly or better targeted in line with a reduction to the overall cap. The department currently has a call for evidence open that is part of this review. 4.5 Regarding transparency, the Department for Environment, Food and Rural Affairs (Defra) publishes estimates of the emissions associated with final demand in the UK irrespective of where these arise globally (UK-Carbon-footprint). BEIS will continue to engage with Defra and researchers who provide these statistics to explore opportunities to provide more transparency. 4.6 The Industrial Decarbonisation Strategy commits to developing proposals to improve embodied emissions data transparency and for new product standards to support the development of the market for low carbon industrial products. A call for evidence will be launched on low carbon industrial products in 2021- 22.