Low Carbon Scotland - meeting the emissions reduction targets 2010-2022: report

Annex B: Tables of Abatement and Cost

Background

A.1 To assess the achievability of Scotland's annual climate change targets, the Scottish Government has undertaken analysis of the emissions reductions expected from the policies and proposals in this report compared to the "business as usual" emissions projection, detailed in table A1 below. The figures presented are subtracted from the projection and the resulting emissions profile shows that Scotland can meet its statutory climate change targets to 2022. Further detail on the methodology used to derive the projections and the emissions abatement and cost estimates is given in the Technical Appendix which accompanies this document ¹⁴⁸ .

Business as usual emissions projection

A.2 The business as usual emissions projection for Scotland uses evidence from several emissions projections publications and separates emissions that fall into the "traded sector" from those that fall within the "non-traded sector". Traded sector emissions are those which arise from installations that take part in the EU Emissions Trading System ( EU ETS).

• The traded sector emissions projections follow the trajectory of the future emissions cap in the
  EU ETS and have been defined for Scotland by the Committee on Climate Change ( CCC) in their advice to Scottish Ministers ¹⁴⁹ .
• The non-traded sector CO ₂ emissions projections come from the STEPS model commissioned by CCC ¹⁵⁰ , which draws on the DECC energy model.
• The Land Use, Land Use Change and Forestry ( LULUCF) emissions projections come from the Centre for Ecology and Hydrology ¹⁵¹ .

• The non-CO ₂ emissions projections come from the AEA publication "Non-CO ₂ Greenhouse Gas Projections for England, Scotland, Wales and Northern Ireland" ¹⁵² .

A.3 The projection contains underlying assumptions about variables which affect emissions including future economic growth, population growth, and oil prices out to 2022. The model runs have been updated to take account of 2008 Scottish and 2009 UK emissions data and to revise downward the estimates for medium-term economic growth. The projection can only reflect trends in emissions and cannot take account of one-off incidents such as a cold snap in the weather.

A.4 The reference projection includes the impact on emissions of policies that were in place by 2006, as presented in the UK and Scottish Climate Change Programme 2006 documents ^{153, 154} . Subsequent policy initiatives are assessed as current policies.

A.5 Many of the non-traded sector projections are relatively flat with the most significant changes being the reduction in emissions sequestered by forestry and a projected increase in emissions from the transport sector.

Abatement potential

A.6 Estimates have been made of the abatement potential of the policies and proposals in this report based on the best available evidence and data.

A.7 Where the policy has been developed at a Scottish level, a bottom-up assessment of the abatement that the policy is expected to deliver is presented, using Scottish data where possible.

A.8 In some instances, where policies are implemented at the EU or UK level and Scottish data is not readily available, a top-down assessment of the potential savings expected to arise in Scotland has been undertaken. For example, it has been necessary to apply the Scottish share of households in the UK to estimates of the abatement potential of the UK Government's smart metering policy to get an estimate of emissions savings in Scotland.

The rebound effect

A.9 The abatement analysis in Table A1 takes account of the primary rebound effect within sectors. The primary rebound effect occurs when consumers spend the money they have saved through fuel/energy savings on consuming more of that good or service and this offsets the initial reductions in energy demand. For example, installing loft insulation will lower the relative cost of heating a home to the same temperature. Consumers may then decide to spend part of this saving on heating their homes to a higher temperature, which will, to some extent, offset the reduction in emissions from installing the insulation.

A.10 There may also be an economy-wide rebound effect where a fall in the real price of energy services will lead to a fall in prices of goods and services and a rebound in overall consumption. It has not been possible to account for this wider impact in the analysis.

Costs

A.11 The CCC's advice is that the cost to the economy of meeting the 2020 interim target is likely to be less than 1% of GDP, which it advises should be accepted given the costs and consequences of not acting. In addition to the CCC's macro level assessment, Table A2 sets out the Scottish Government's estimate of the costs of implementing the individual proposals presented in Table A1, where the data is available. The costs of proposals will fall across Government, business and consumers, although the proportion falling to each will depend upon how the policies are implemented.

A.12 Many of the measures necessary to help meet the emissions targets can be introduced at negative cost, i.e. financial savings, over the lifetime of the measure. This is particularly the case for measures that encourage investment in energy efficient products or technology such as cavity wall insulation. One potentially significant barrier to the uptake of such measures, particularly in the domestic sector, is that the costs arise first as high up-front costs which are then paid back over their lifetime as a result of future fuel savings.

Wider (social and distributional) costs and benefits

A.13 In addition to financial costs and benefits, many policies have positive impacts on health or environmental quality, other than reductions in greenhouse gas emissions. For example, policies encouraging people to walk, cycle or use public transport rather than driving in cars deliver health benefits and improvements to local air quality arising from reduced traffic congestion. There may also be hidden costs in the form of an "inconvenience factor" associated with changing daily routines, or clearing a loft for installing insulation.

A.14 Due to a lack of data needed to put a monetary value on these variables, it has not been possible to consider all of the non-financial costs and benefits of mitigation policies. Therefore, for consistency of approach between sectors, the cost and cost-effectiveness figures given for a proposal only include variables that lead to a financial flow. This includes fuel and energy savings on the benefit side and up-front costs (e.g. capital) and on-going maintenance costs on the cost side. At the same time, in Chapters 3 to 8, important non-financial benefits or costs have been identified, and a qualitative assessment of the likely impact provided.

Table A1: Estimated abatement of policies and proposals and resulting emissions by sector, ktCO ₂e, 2010 - 2022

Traded Sector		2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
	Traded sector allocation - 20% EU target	23,025	23,025	23,025	18,035	17,708	17,390	17,071	16,752	16,422	16,101	15,779	15,851	15,522
	Policies
	EU move to 30% target	0	0	0	0	426	862	1,299	1,737	2,167	2,606	3,047	3,488	3,929
	EMISSIONS AFTER ALL POLICIES AND PROPOSALS	23,025	23,025	23,025	18,035	17,282	16,528	15,772	15,015	14,255	13,495	12,732	12,364	11,594
Homes and Communities	Business as usual projection	6,971	6,741	6,604	6,478	6,355	6,242	6,143	6,070	6,067	6,083	6,102	6,148	6,188
	Policies
	Smart metering	0	0	4	13	28	42	55	67	74	75	75	77	78
	Domestic building energy efficiency	0	88	190	185	179	174	170	165	163	161	160	159	158
	New-build domestic energy standards for 2010	0	4	13	27	41	55	68	84	100	116	132	148	164
	Renewable heat	0	5	16	30	50	76	106	143	184	251	318	318	339
	Total abatement from policies	0	97	223	255	298	347	399	459	521	604	685	702	739
	Proposals
	Fuel poverty and insulation programmes	0	0	0	69	128	182	211	240	270	296	321	348	374
	New-build domestic energy standards for 2013	0	0	0	0	5	14	28	44	60	76	92	108	123
	Total abatement from proposals	0	0	0	69	132	196	239	284	330	371	413	455	497
	Total abatement from policies and proposals	0	97	223	324	430	543	638	743	851	975	1,098	1,158	1,237
	EMISSIONS AFTER ALL POLICIES AND PROPOSALS	6,971	6,644	6,381	6,154	5,925	5,699	5,505	5,328	5,216	5,107	5,004	4,990	4,952
	% change against 1990	-10%	-15%	-18%	-21%	-24%	-27%	-29%	-32%	-33%	-34%	-36%	-36%	-36%
Business and Public Sector
	Business as usual projection	3,755	3,774	3,728	3,691	3,649	3,620	3,588	3,539	3,501	3,495	3,463	3,444	3,433
	Policies
	Smart metering	0	0	4	10	20	30	40	50	56	57	57	56	56
	Energy-intensive business package	0	0	0	162	162	162	162	162	162	162	162	162	162
	CRC Energy Efficiency Scheme	2	14	24	35	46	61	77	95	112	131	150	170	192
	New non-domestic buildings energy standards for 2010	0	2	5	10	15	20	25	30	35	40	45	50	55
	Renewable heat	0	15	38	69	112	174	258	375	535	742	988	988	968
	Total abatement from policies	2	31	70	285	354	446	561	711	900	1,131	1,402	1,426	1,431
	Proposals
	New non-domestic buildings energy standards from 2013	0	0	0	0	2	7	15	22	30	37	45	52	60
	Total abatement from proposals	0	0	0	0	2	7	15	22	30	37	45	52	60
	Total abatement from policies and proposals	2	31	70	285	357	453	576	734	930	1,168	1,446	1,479	1,491
	EMISSIONS AFTER ALL POLICIES AND PROPOSALS	3,753	3,743	3,658	3,406	3,292	3,167	3,011	2,805	2,571	2,326	2,016	1,965	1,942
	% change against 1990 including traded sector (20% EU target) 151	-26%	-26%	-26%	-40%	-42%	-43%	-44%	-46%	-47%	-49%	-51%	-51%	-52%
Transport		2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
	Business as usual projection	13,559	13,493	13,395	13,456	13,497	13,522	13,653	13,765	13,890	14,001	14,064	14,119	14,237
	Policies
	EU mandatory vehicle targets	27	40	60	91	140	215	272	346	444	573	746	983	983
	EU biofuels target	0	0	0	61	121	176	228	295	382	495	640	640	640
	Total abatement from policies	27	40	60	152	261	391	500	641	826	1,068	1,386	1,623	1,623
	Proposals
	Eco-driving	0	0	0	0	38	42	52	61	69	76	80	84	87
	Speed limit enforcement at 70mph	0	0	0	0	25	25	24	24	24	24	23	23	22
	Freight - HGV efficiency improvements 152	66	75	84	93	102	102	103	103	104	103	109	119	130
	Freight - Van efficiency improvements	0	0	3	5	7	9	12	14	15	17	19	18	18
	LCV infrastructure provision and procurement	0	0	3	10	17	23	27	31	45	58	70	82	97
	Intelligent Transport Systems	0	0	4	5	7	8	10	11	11	10	10	10	10
	Travel planning	0	0	0	0	53	67	113	154	178	212	225	236	242
	Car clubs	0	0	0	8	14	20	25	30	35	39	44	47	51
	Cycling and walking infrastructure investment	0	0	0	0	44	54	64	72	80	87	94	100	104
	Buses and taxis 152	0	27	56	83	110	136	162	187	192	197	201	208	215
	Freight - HGV modal shift	0	0	12	24	36	48	59	71	82	92	102	113	123
	Community Hubs	0	0	0	0	48	52	55	57	60	62	66	69	72
	Maritime transport	0	5	10	15	20	25	30	35	40	45	50	55	60
	Total abatement from proposals	66	107	173	244	521	612	736	851	935	1,024	1,093	1,164	1,232
	Total abatement from policies and proposals	93	148	233	396	782	1,003	1,236	1,492	1,761	2,092	2,479	2,787	2,855
	EMISSIONS AFTER ALL POLICIES AND PROPOSALS	13,467	13,346	13,162	13,059	12,715	12,519	12,417	12,274	12,130	11,909	11,586	11,332	11,382
	% change against 1990	1%	0%	-1%	-2%	-4%	-6%	-7%	-8%	-9%	-10%	-13%	-15%	14%
Agriculture and Related Land Use
	Business as usual projection	11,716	11,677	11,701	11,698	11,694	11,727	11,705	11,651	11,621	11,599	11,558	11,531	11,502
	Policies
	Farming for a Better Climate	39	77	116	154	193	231	270	308	312	315	319	322	326
	SRDP funding for anerobic digestion	5	6	7	8	9	10	11	13	14	15	16	17	18
	Total abatement from policies	43	83	122	162	202	242	281	321	326	330	335	339	344
	Proposals
	Single Farm Payment Scheme (Cross Compliance)	0	0	0	0	0	0	0	0	540	540	540	540	540
	Total abatement from proposals	0	0	0	0	0	0	0	0	540	540	540	540	540
	Total abatement from policies and proposals	43	83	122	162	202	242	281	321	866	870	875	880	884
	EMISSIONS AFTER ALL POLICIES AND PROPOSALS	11,673	11,594	11,579	11,536	11,492	11,485	11,424	11,330	10,755	10,729	10,683	10,652	10,618
	% change against 1990	-16%	-16%	-16%	-17%	-17%	-17%	-17%	-18%	-22%	-22%	-23%	-23%	-23%
Forestry		2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
	Business as usual projection	-9,552	-9,266	-8,929	-8,666	-8,442	-8,134	-7,895	-7,673	-7,517	-7,266	-6,911	-6,626	-6,323
	Policies
	Increase afforestation rate to 10,000 ha/year	0	0	9	15	16	45	92	144	195	248	310	373	435
	Total abatement from policies	0	0	9	15	16	45	92	144	195	248	310	373	435
	Proposals
	Increase afforestation rate to 15,000 ha/year	0	0	4	5	22	18	33	58	85	113	144	195	247
	Total abatement from proposals	0	0	4	5	22	18	33	58	85	113	144	195	247
	Total abatement from policies and proposals	0	0	13	20	38	63	125	202	280	361	454	568	682
	EMISSIONS AFTER ALL POLICIES AND PROPOSALS	-9,552	-9,266	-8,942	-8,686	-8,480	-8,197	-8,020	-7,875	-7,797	-7,627	-7,365	-7,194	-7,005
	Change from 1990 153	-1,260	-973	-649	-393	-187	96	273	418	496	666	927	1,099	1,288
Waste
	Business as usual projection	2,727	2,706	2,685	2,664	2,644	2,623	2,604	2,586	2,567	2,549	2,530	2,516	2,502
	Policies
	Zero waste policies (pre-May 2010)	86	125	164	204	193	183	175	167	158	150	142	128	114
	Zero waste policies - Zero Waste Plan	0	0	0	0	0	0	0	0	128	259	379	497	605
	Total abatement from policies and proposals	86	125	164	204	193	183	175	167	287	410	521	625	719
	EMISSIONS AFTER ALL POLICIES AND PROPOSALS	2,641	2,581	2,521	2,461	2,450	2,440	2,430	2,419	2,281	2,139	2,009	1,891	1,783
	% change from 1990	-54%	-55%	-56%	-57%	-58%	-58%	-58%	-58%	-61%	-63%	-65%	-67%	-69%
	Development - Land Use Change
	Business as usual projection	1,674	1,676	1,674	1,676	1,676	1,675	1,673	1,675	1,674	1,674	1,673	1,673	1,672
Whole Economy	Business as usual projection under 20% EU Agreement	53,874	53,826	53,884	49,031	48,780	48,665	48,541	48,366	48,225	48,235	48,258	48,656	48,734
	Abatement from Policies	158	376	650	1,073	1,324	1,654	2,008	2,443	3,054	3,791	4,639	5,090	5,292
	EMISSIONS AFTER POLICIES EXCLUDING EU MOVE TO 30%	53,716	53,450	53,234	47,958	47,456	47,011	46,534	45,922	45,171	44,444	43,619	43,567	43,442
	% change from 1990	-23%	-24%	-24%	-32%	-32%	-33%	-34%	-35%	-36%	-37%	-38%	-38%	-38%
	EMISSIONS AFTER POLICIES INCLUDING EU MOVE TO 30%	53,716	53,450	53,234	47,958	47,030	46,149	45,234	44,185	43,004	41,839	40,572	40,079	39,514
	% change from 1990	-23%	-24%	-24%	-32%	-33%	-34%	-36%	-37%	-39%	-40%	-42%	-43%	-44%
	Margin by which target is met (+) /missed (-)	-64	-46	-8	+18	-72	-221	-301	-239	-38	+137	+145	-584	-1,204
	Abatement from Proposals	66	107	177	318	678	833	1,023	1,215	1,920	2,086	2,234	2,407	2,576
	EMISSIONS AFTER ALL POLICIES AND PROPOSALS	53,651	53,343	53,057	47,640	46,352	45,316	44,211	42,971	41,085	39,753	38,338	37,672	36,937
	% change from 1990	-24%	-24%	-24%	-32%	-34%	-35%	-37%	-39%	-41%	-43%	-45%	-46%	-47%
	Margin by which target is met (+)/missed (-)	+1	+61	+169	+336	+606	+612	+722	+975	+1,881	+2,223	+2,379	+1,823	+1,373
	Statutory Annual Targets	53,652	53,404	53,226	47,976	46,958	45,928	44,933	43,946	42,966	41,976	40,717	39,495	38,310

151 The percentage change shown for Business and the Public Sector includes emissions from the traded sector, as it has not been possible to split emissions into "traded" and "non-traded" prior to the start of the EU Emissions Trading System in 2005.

152 It has not been possible to separate the effects of current schemes for improving HGV efficiencies from those of those proposals described in this report. The same is true for buses and taxis. For this reason, a conservative approach has been taken whereby all of the abatement is attributed to proposals rather than included with current policies. This is why the abatement from proposals is not zero in 2010 or 2011 for these measures

153 The absolute change rather than the percentage has been shown for forestry to avoid confusion when interpreting percentages of negative numbers.

Table A2: Estimated total costs of policies and proposals (public and private), 2011-2022, and net cost-effectiveness

	Cost - effectiveness (£/tCO 2e) (discounted)	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
		£ million, undiscounted, rounded to nearest million
Homes and Communities
Proposals
Fuel poverty and insulation programmes		0	0	278	344	337	304	308	308	258	258	258	258
New-build domestic energy standards for 2013		Not currently available
Total Costs		0	0	278	344	337	304	308	308	258	258	258	258
Business and Public Sector
Proposals
New non-domestic buildings energy standards for 2013		Not currently available
Transport
Proposals
Eco-driving	-84	0	3	3	3	2	3	5	5	5	3	4	6
Speed limit enforcement at 70mph	-119	0	0	25	3	3	3	3	3	3	3	3	3
Freight - HGV efficiency improvements	-89	4	3	2	2	7	5	4	3	3	9	6	6
Freight - Van efficiency improvements	-89	0	0	0	0	1	1	1	1	1	2	1	1
LCV infrastructure provision and procurement	48	7	5	11	11	11	11	11	20	20	20	20	21
Intelligent Transport Systems	1,211	41	44	19	19	19	20	20	13	13	13	13	13
Travel planning	-91	0	7	7	7	7	19	19	13	19	9	9	9
Car clubs	3	0	2	2	4	4	6	6	7	8	11	11	12
Cycling and walking infrastructure investment	345	0	296	207	146	81	82	83	83	84	85	86	87
Buses and taxis	305	110	130	132	134	135	137	138	138	139	139	140	141
Freight - HGV modal shift	70	15	15	15	15	15	15	15	15	15	15	15	15
Community Hubs	-107	0	2	2	2	1	1	1	1	1	1	1	1
Maritime transport	-76	2	2	2	2	2	2	2	2	2	2	2	2
Total Costs		179	508	426	347	288	303	307	305	313	312	312	317
Agriculture and Related Land Use
Proposals
Single Farm Payment Scheme (Cross Compliance)	-67	0	0	0	0	0	0	0	-53	-53	-53	-53	-53
Forestry
Proposals
Increase afforestation rate to 15,000 ha/year by 2015	20	40	44	48	61	66	70	72	75	78	80	82	83
Waste - no proposals
TOTAL COST OF ALL PROPOSALS		219	552	753	753	691	677	687	635	596	597	599	605