• International
  • European Union
  • United Kingdom
  • Scotland
  • Jargon Buster

1. International

United Nations Framework Convention on Climate Change ("UNFCCC")

The UNFCCC forms the basis of international law in respect of climate change. The Treaty does not itself contain legally binding targets for reduction of Greenhouse Gases ("GHGs") or enforcement mechanisms but it does provide for updates or "Protocols" which can contain emissions limits. The best known of these so far is the Kyoto Protocol, described below.

UN Framework Convention on Climate Change:

Kyoto Protocol

It is perhaps little known that although the Kyoto Protocol was adopted in December 1997, the period to which it actually relates is 2008-2012. The forthcoming Conference of Parties ("COP") to the UNFCCC due to take place in December 2009 at Copenhagen is charged with achieving climate change agreement for the post-Kyoto period (2013 - ) and so can be considered the most significant COP since Kyoto.

Kyoto set binding, if relatively modest, targets for certain industrialised countries and the European Union to reduce their collective GHG emissions by an average of approximately 5% from their 1990 levels. In order to assist those countries and the EU in meeting their Kyoto obligations, the Protocol introduced the following:

  • Emissions trading – a market for GHGs. It was intended that countries with spare emissions allowances could benefit from selling their spare allowances to countries that had exceeded their emissions targets.
  • Clean Development Mechanism – whereby an Annex B (or "developed") country can implement an emissions reduction project in a developing country. This mechanism was intended to promote sustainable development and emissions reductions.
  • Joint Implementation - whereby an Annex I country (a developed country or one whose economy is "in transition") can implement an emissions reduction/removal project in another Annex I country. This mechanism is intended to assist parties in meeting Kyoto obligations whilst the country in which the project is being carried out benefits from investment and modern technology. It was intended that the countries of implementation would tend to be the so-called "economies in transition" of the former eastern bloc.

In order to achieve the political agreement required to produce a text for the Protocol, these market mechanisms were necessary. Opinion on market mechanisms ranges from those who are opposed to them and who believe strict mandatory emissions limit values should be imposed to those who believe market mechanisms are necessary to achieve emissions reductions without harming the economy and to provide an incentive for emitters of GHGs to reduce their emissions.

Whilst it appears reasonable to employ a mixture of mandatory emissions limit values and market mechanisms in addressing Climate Change, it appears equally reasonable to note that climate change has resulted from markets' failures to adequately take into account their environmental costs. Consequently, an over-reliance on market mechanisms would be inadvisable in addressing climate change.

The Kyoto Protocol:

2. European Union

The EU is a party to the UNFCCC (and subsequent Protocols) and has passed legislation, based on its Kyoto commitments, that sets climate change obligations for Member States including the UK.

The principal piece of EU legislation stemming from the Kyoto Protocol is the Directive that established the EU Emissions Trading Scheme ("ETS"). The ETS, which is currently in its second phase (2008-2012 i.e. the same period as the Kyoto Protocol), requires Member States to create a National Allocation Plan within which emissions allowances are allocated to various sectors that emit GHGs e.g. large electricity producers, refineries, chemicals, food & drink, etc. However, this national basis for allocation of emissions allowances will cease when Phase II ends on 31 December 2012. During Phase III (2013 – 2021), emissions allowances for each Member State will be set by the Commission. This is in response to criticisms levelled at the system of national allocation by which, perhaps predictably, allocation methods differed from country to country allowing Member States to favour their own industries. As mentioned in respect of market mechanisms, the reasons behind having climate change laws can easily be forgotten amongst the competing claims of activities and industries that cause climate change in the first place.

Click here to read our article on the EU ETS.

There are a number of other pieces of EU Legislation which relate to air pollution but which are not enacted on the basis of the UNFCCC or the Kyoto Protocol. However, these pieces of legislation (e.g. relating to emissions by industrial installations) are considered to have sufficiently similar objectives to the UNFCCC to warrant brief mention. A non-exhaustive list of these would include:

  • The National Emissions Ceiling Directive – this sets upper limits for each Member State in respect of certain pollutants (sulphur dioxides, nitrogen oxides, volatile organic compounds and ammonia)
  • The Integrated Pollution Prevention and Control Directive – this creates a regime under which certain industrial installations must hold a permit to operate. The permit will contain conditions designed to limit the pollution of the environment based upon Best Available Techniques. In order not to impede the market envisaged by the Emissions Trading Scheme Directive, operating permits held by installations participating in the ETS cannot contain emissions limit values.
  • The Large Combustion Plant Directive – this sets emissions limit values for sulphur dioxide and nitrogen oxides which are gases know to cause acidification.
  • The Waste Incineration Directive – sets emissions limit values for certain gases Nitrogen Oxides, sulphur dioxide, hydrogen chloride, hydrogen fluoride heavy metals and dioxins.

EU Emissions Trading Scheme:

National Emissions Ceilings Directive:

Integrated Pollution Prevention and Control Directive:

Large Combustion Plant Directive:

Waste Incineration Directive:

3. United Kingdom

"UK" Climate Change Act

The (UK) Climate Change Act 2008 contains many of the provisions to be found in the Climate Change (Scotland) Act 2009. The UK Act provides a framework to assists the UK's attempts to become a low-carbon economy.

The text of the UK Climate Change Act can be found here:

Carbon Reduction Commitment

Click here to see our article on the Carbon Reduction Commitment.

Carbon Capture and Storage ("CCS")

Click here to see our article on CCS.

4. Scottish Climate Change Act

Click here to see our article on the Climate Change (Scotland) Act 2009.

5. Jargon Buster

Annex I country – a country listed in Annex I to the UNFCCC which lists so-called "developed" countries and economies in transition – mostly comprising firmer eastern bloc countries.

Annex B country – a country, listed in Annex B to the Kyoto Protocol, whose permitted emissions limits for the period 2008-2012 are also listed at Annex B. Annex B countries are so-called "developed" countries and economies in transition – mostly comprising former eastern bloc countries.

Carbon Offsetting – the principle by which carbon emissions can be "cancelled-out" or compensated for by carrying out an activity that captures or otherwise sequesters CO2 that has been released to the environment.

Carbon Reduction Commitment – a UK emissions trading scheme designed to encourage energy efficiency through putting a price on participating organisations CO2 emissions.

Climate Change – the Intergovernmental Panel on Climate Change website contains a host of information on the science behind climate change:

Climate Change Agreements – This is a mechanism by which the government agrees improved energy efficiency or carbon emission reductions targets with businesses that fall within the scope of the Climate Change Levy. CCAs have a two tier structure: an "umbrella agreement" between DEFRA and the business sector or trade association; and "underlying agreements" between DEFRA and the operator of an individual installation.

Umbrella Agreements set out targets for a whole sector and the respective obligations of the sector and the Secretary of State. Underlying Agreements narrate targets to be met by the specific installation and the respective obligations of the operator and Secretary of State.

Climate Change Levy – this is a "green" tax on industrial and commercial supplies of "taxable commodities" in respect of lighting, heating and power to customers in such sectors as: industry, commerce, agriculture and public administration. The taxable commodities are: electricity, natural gas supplied by a gas utility, petroleum and hydrocarbon gas in a liquid state, coal & lignite, coke and semi – coke of coal or lignite and petroleum coke. Businesses making taxable supplies must register with HM Revenue & Customs.

Greenhouse Gases – these are the gases listed in the various international, EU and national pieces of legislation relating to climate change. Carbon Dioxide is the GHG most commonly referred to and is, in effect, the GHG "currency" as the other GHGs are often given a "CO2e" or CO2 equivalent.

The UNFCCC simply narrates GHGs as being: "those gaseous constituents of the atmosphere, both natural and anthropogenic, that absorb and re-emit infrared radiation."

GHGs under the Kyoto Protocol: Carbon dioxide (C02), Methane (CH4), Nitrous oxide, (N20), Hydrofluorocarbons (HFCs), Perfluorocarbons (PFCs), Sulphur hexafluoride (SF6).

GHGs under the UK and Scottish Climate Change Acts 2008 and 2009, respectively, have the same definition of greenhouse gases as in the Kyoto Protocol.

Renewables Obligation – this is a scheme that requires UK suppliers of electricity to source increasing proportions of electricity from renewable sources.

Renewables Obligation Certificates – These are certificates issued to generators of renewable electricity that is generated within the UK and which is supplied to UK customers by a licensed electricity supplier. ROCs are issued in respect of every megawatt hour of renewable electricity generated although following The Renewables Obligation (Scotland) Order 2009, different quantities of ROCs are available according to the type of renewable technology used. This is so that more electricity will be sourced from the less mature renewable technologies such as wave and tidal.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.