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by 2030, through some combination of nuclear plants, renewable generation and carbon capture and storage on gas and coal fired plants


• This low carbon electricity will enable decarbonisation of transport and heat, through electric vehicles and heat pumps


• The overall cost of the change is assessed to be less than 1% of GDP in 2030, but the capital investment in new energy infrastructure needs to rise from today’s level of around £2bn per annum to £10bn per annum.


There is an urgent need for a step change in our rate of progress in reducing emissions, in particular in three critical areas: electricity generation, transport and heat. Rapid progress in decarbonising our electricity system is fundamental to the UK achieving its carbon budgets in 2020 and beyond. Reducing the carbon intensity of electricity generation from the current level of around 450g CO2 per kWhr to below 90g/kWhr is both technically achievable and feasible in terms of the rate at which we need to replace ageing infrastructure. It would also improve the UK’s energy security by decreasing our reliance on imported coal and gas.


Low carbon transport is the second critical priority – ‘green’ vehicles and transport have a major role to play on the path to 2050. The CCC’s fourth budget report indicates the level of change that will be needed by 2030 to deliver 67% reduction in emissions. The indicative scenario for cars indicates that, by 2030, internal combustion engine (ICE) vehicles will be approaching their efficiency limits, delivering new vehicle emissions of around 80g/km (down from 145g/km today) and electric vehicles (EVs) of various types (full battery electric, plug- in hybrids and potentially some fuel cell electric) will need to make up at least 60% of new car sales.


This proportion of new technology vehicles in new car sales in 2030 looks challenging, just as the first EVs are starting to roll out across the UK this year, and Nissan begins a £420m transformation of its Sunderland plant to produce the Leaf and a facility to deliver 60,000 Li-ion battery packs annually. But the need is real – if we are to meet the 2050 targets, conventional ICE cars will have to be phased out before 2050, and with a vehicle life of 12 to 13 years, we must be well on the way by 2030. The importance of early action in this area is emphasised by the costs of inaction – the significant CO2 abatement contribution from a high penetration of electric vehicles in the 2040s delivers a potential saving of around £5 billion compared to the cost of purchasing carbon credits at the DECC forecast price in the 2040s of £135 – 200/ tCO2e.


Vans and heavy goods vehicles will need to play their role as well. An increasing focus is needed on how significant reductions can be made in these sectors – so it is particularly disappointing to see the European Union reducing the 2020 van emissions target from 135g/km to 147g/km at this critical time.


There have been a number of ‘false dawns’ for electric and other ultra low emissions vehicles. This time it has to be the real thing. The primary driver now is not local air quality or fuel security, despite their importance, but preventing a level of global warming which is likely to be highly damaging to life on the planet.


In order to deliver change at this rate, Governments around the world must take on the leadership. We cannot deliver this rate of change if we just wait for fuel prices or the carbon price to make expensive new technologies as cheap, for the consumer, as the tried, tested, and cost reduced ICE vehicles we are accustomed to today. Coherent packages of measures are needed, carrots and sticks, to encourage manufacturers and consumers to make and to buy low emissions vehicles – whether that is choosing the lowest emitting conventional vehicle in the class or becoming an early adopter of new EV technology.


The UK has made a good start, with Vehicle Excise Duty set at zero for cars with emissions below 130g/km; funding of £300m identified for the £5,000 new car grant for ultra low emissions vehicles; the Technology Strategy Board Ultra Low Carbon Vehicle Demonstrator project with some 340 vehicles currently being tested around England and Wales; the £30m for ‘Plugged in Places’ to provide public charging infrastructure for EVs. But more is needed – the CCC has recommended a target of 1.7 million EVs in the UK by 2020 if the path to 2030 and beyond is to be achievable.


We now need a coherent and funded plan to get to 2020 and beyond – the CCC indicated a likely need for £800m in support for new cars, other measures could include a steeper rise in VED on higher emitting vehicles; more widespread uptake of innovative measures like the ‘salary sacrifice’ scheme by which low emitting cars can be leased out of salary before tax and National Insurance; limited term measures to encourage take up such as use of priority lanes, free and/or convenient parking, zero congestion charge; if there is to be a fuel duty ‘optimiser’ to stop fuel from getting too expensive, it must also stop its price going down; strong EU wide targets for new car emissions in 2020, 2015 and 2030; support for research and development, as well as for inward investment, to build the supply chain (and create high value manufacturing jobs in the UK.)


I strongly encourage the Government to accept the CCC’s fourth budget recommendations and to take the opportunity, in its Carbon Plan, in June this year, to show that it will lead this change in the UK. The benefits of success are many – reduced emissions, cleaner streets and skies, quieter cities, new green manufacturing jobs in the near term, and lower costs to the economy in the future.


We can deliver the challenge of decarbonising road transport, but it needs strong action now.

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