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SECTION 2: TARGETS

2.1 This section presents the findings on the questions in Section 5 of the consultation document relating to targets (questions 1-7) and any other relevant issues.

The basis of the target

1. Should a Scottish target be based on carbon dioxide only or the basket of six greenhouse gases?

2.2 The consultation explored which gases should be included in the target, and this question was addressed directly or indirectly in 224 responses. A large majority stated a preference for using the basket of 6 gases [carbon dioxide (CO ₂), nitrous oxide (N ₂O), methane (CH ₄) hydrofluorocarbons ( HFCs), perfluorocarbons ( PFCs) and sulphur hexafluoride (SF ₆)], rather than CO ₂ alone. This was true of both individual and organisational respondents, with the exception of business respondents, who were evenly divided. Three campaign texts explicitly supported the use of the basket of greenhouse gases. While not all events addressed this issue (and only the event hosted by the Scottish Government addressed it in some detail), the preference of most participants who did was also for the basket of gases (although examples of differing views were provided at the event hosted by the Scottish Government). A number of additional responses referred to "greenhouse gases" rather than to CO ₂ in their response (including the remainder of the campaign texts) without stating explicitly which they were referring to. For example:

"I would like the Bill to require reduction of greenhouse gas emissions of at least 80% by 2050". (Campaign text)

2.3 A small number of respondents suggested, that, whatever the basis adopted, it should be based on scientific evidence. Three other respondents argued that there was insufficient scientific evidence to support climate change as an issue, and that the need for targets of any kind was unfounded. One of these stated that "the supposed fact that CO ₂ causes global warming/climate change has never been proved". Two other respondents suggested that there was a need to focus on other pollutants.

2.4 The most common reason given for supporting the use of a basket of greenhouse gases was that each makes a contribution to climate change, and should, therefore, be part of the target. As one respondent noted, for example:

"It is vital that the basket of six gases be included, since some make a significant contribution to Scotland's overall emissions and their exclusion from the Bill would undermine its ability to effectively tackle climate change to the extent that the science now demonstrates is needed". ( NGO)

2.5 Some respondents enumerated the known impacts of other gases in their responses, suggesting that, like for like, their impact may be greater than CO ₂. It was suggested that using a basket of 6 gases would represent an holistic approach. A further identified benefit was that any increase in emissions of a gas as a result of reductions in emissions of CO ₂ would be more visible.

2.6 The importance of the basket of 6 gases to Scotland was also stressed in relation, for example, to landfill, forestry and agriculture, as well as in relation to emissions from aviation. It was suggested that failing to use a basket of 6 gases risked masking the impact of gases other than CO ₂, and one respondent argued that to use CO ₂ only would "misrepresent" Scotland's emissions. A small number of respondents also suggested that the adoption of a basket of 6 gases would demonstrate Scotland's leadership approach, and offer more flexibility in terms of policy responses to climate change. It was also noted by some respondents that this was a manifesto commitment of the Scottish Administration.

2.7 A small number of respondents acknowledged that using 6 gases, rather than CO ₂ alone, may make measurement more complicated and may be less accurate (although some also considered that this may be overstated, or that it should not preclude taking this approach). A number of respondents, including some of those making these comments, also identified that information on all 6 gases is already compiled and available for use. One "campaign plus" response suggested that the use of the basket would be more cost-effective.

2.8 A further issue raised was that using a basket of gases may make it easier to promote measures to reduce emissions of gases other than CO ₂ in sectors where CO ₂ is not the main issue. Alongside this, it was argued that the inclusion of 6 gases in the target would both incentivise businesses to address the reduction of these gases, and stimulate investment in research into technologies related to this (with the potential for positive economic impacts). A small number identified these and similar "benefits" as offsetting the likely increased costs of measurement and reporting which would follow from the use of a basket of gases.

2.9 It was suggested by a significant minority of those respondents supporting the use of a basket of gases, that measurements should be converted to CO ₂ equivalents (either instead of, or in addition to individual measurement). This argument was advanced primarily as a way of helping to make a target consisting of 6 gases easier to understand. It was argued that, as consumers and businesses are only now becoming familiar with CO ₂, adding further visible target gases at this stage may lead to confusion. It was also suggested that this would make the relative contributions of various gases easier to understand.

2.10 A small number of respondents proposed the use of an alternative basket of gases, namely CO ₂, CH ₄ and N ₂O. One suggested this on the basis that the CO ₂ equivalence effect of the remaining three gases is "negligible", while another that, as their levels are not falling, their relative importance has increased. A small number of other respondents proposed that, while the target should cover all 6, the main focus should be on CO ₂, CH ₄ and N ₂O, or, alternatively, on CO ₂ and CH ₄.

2.11 Among those supporting the use of CO ₂ alone, the main reasons given were partly scientific, and partly practical. It was suggested by a small number that the use of CO ₂ would be more direct, and would allow a stronger, less diluted message to be delivered through the target. It was stated by some respondents, for example, that as CO ₂ is responsible for a large majority of the greenhouse gas emissions, it would be easier and cheaper to focus on this, while covering most of the problem.

2.12 The main practical reasons advanced for the adoption of CO ₂ alone related to the ease of measurement, the ease of comprehension, and consistency with other international agreements (although one respondent added that the latter appeared to be the only reason in favour of this). It was also noted that the use of CO ₂ would be consistent with standards used in the building and construction industry. It was further suggested that some of the other gases are already regulated at source, or could be subject to further regulation, and that this would be a better way of addressing emissions of these.

2.13 Some respondents proposed a staged approach, with the use of CO ₂ in the first instance, and the use of a wider range of gases being phased over time. It was suggested that this would address one of the perceived shortcomings of the use of the basket of gases, namely that their measurement is currently problematic, but is likely to improve in the future. It was also argued that this would be consistent with the approach adopted at a UK level, and by the EU Emissions Trading Scheme ( ETS). Other respondents, however, cited consistency or comparability with other measures as reasons in support of the use of a basket of gases, particularly relating this to the Kyoto protocol.

2.14 One trade and professional organisation expressed a concern that setting targets for CH ₄ and NO ₂ may force agricultural production out of Scotland (although others stressed the importance of agricultural emissions, or stated that failing to include these gases in targets could divert attention away from the need to focus on reducing emissions from this sector). One campaign text also suggested that the use of a basket of gases (rather than setting targets for individual gases) would also prevent the unintended consequence of a rise in CH ₄ as a result of farmers seeking to cut CO ₂ alone.

2.15 Some respondents favoured the use of CO ₂ as the basis of the target with the requirement that the Scottish Government report on the basket of gases as well. Related to this, some respondents suggested that the Scottish Government should be more proactive in supporting research to improve measurement and reporting techniques. A small number proposed the use of separate targets for CO ₂ and for the other 5 gases. It was suggested that this could counter the perceived problems caused by the different levels of reliability of measurement.

Provision to alter the gases which are included

2. Should the Bill contain provisions to alter which gases are included, for example if the reliability of data for a particular gas improves or if science changes in the future about which gases cause climate change?

2.16 This question was addressed directly in 162 responses. It was not discussed specifically at the events. Amongst those who did respond, however, there was overwhelming support for the Bill to contain provisions to alter which gases are included, with only a handful of those expressing a view disagreeing. There was broad support for an approach which enabled a flexible but robust framework.

2.17 Although, as noted earlier, there was strong support for the target to be based on a basket of gases from the outset, some respondents suggested that the provision to alter the gases which are included would be of particular importance if the Scottish Government chose to use CO ₂ only, as this would allow the addition of other gases easily. Others also argued that this provision would be helpful if it became clear that gases other than those mentioned in the consultation document should be included in the target.

2.18 Although most respondents simply agreed with, or restated the points in the question, a small number identified additional issues which they believed to be important. Several, for example suggested that changes should only be made where they are based on appropriate independent scientific advice. For example:

"As the science of climate change is still evolving, the Bill should contain provisions to alter which gases are included, in order to increase its effectiveness. However, these amendments should only be made on the basis of sound science and independent advice". (Public Sector respondent)

Additional comments by other respondents included that:

• Any changes should reflect international advice or guidance.
• Decisions on whether or not to add particular gases to the target should not delay the implementation of a target or targets based on gases agreed at the outset.
• Regard should be paid to the need to remain consistent with other targets.
• These provisions should be used only to add, not to subtract gases.
• Any decision to remove a gas should be subject to full parliamentary approval.

2.19 Some respondents (including a small number of business and industry respondents and trade and professional organisations), while supporting this provision in principle, were cautious about its use in practice, suggesting that industry particularly requires both certainty (in relation to investment decisions) and long lead times prior to any change.

2.20 A number of respondents also identified ways in which provision for altering the gases included in the target could be accomplished, including permitting changes through a statutory instrument (or similar) or through delegating authority for this to an appropriate body (see responses to question 15). It was also suggested that trigger levels could be set for individual greenhouse gases, so that when these levels were reached, the gases would be added to the target. A small number of respondents argued that any changes of this type should be subject to wide consultation and / or parliamentary scrutiny.

2.21 Among the small number who considered that no provision for change should be made, the main reason cited was a view that, if the basket of gases were to be used as the basis of the target from the outset, no future change would be required. Two respondents also suggested that this provision was not required as the science would not change over the lifetime of the targets.

Incentives

3. The Scottish Government wishes to ensure that the Bill gives sufficient incentives to invest in energy efficiency and renewable electricity. Should the targets be based on source emissions; an end-user inventory; or on individual targets for energy efficiency and renewable electricity? Do you have any other suggestions?

2.22 This question was addressed, at least in part, in 135 responses. There was a marked difference in the likelihood of responding between individuals (30%) and organisations (56%). All of the events involved some discussion of issues which were relevant to this question, and the event hosted by Highlands and Islands Enterprise in particular exemplified the mix of views identified.

2.23 The consultation sought to explore whether the target should be based on emissions produced in Scotland (source emissions) or on emissions from goods and services consumed in Scotland (an end-user inventory). It is difficult, however, in this case, to assess definitively how many respondents supported either source or end-user methodologies. The nature of the question appeared to leave some respondents unclear about whether the choice was "either" / "or" (and this was raised specifically at the event hosted by Highlands and Islands Enterprise), or the potential combinations which were possible, particularly in relation to the means of including individual targets for energy efficiency and renewable electricity. As one respondent noted, "there is no simple answer here".

2.24 At a basic level, a small number of respondents expressed concerns about potential difficulties in measurement, whatever approach was adopted. It was suggested that the Scottish Government should work with scientists to ensure that the data produced is credible and robust. A few technical suggestions were also made, such as the use of error bands, that account should be taken of how baseline figures were derived, and that any methodology should be compatible with that used at a UK level.

2.25 Some respondents did express a specific preference either for source or end-user methodologies, and among these, there was a broadly even split. However, around a third of respondents who supported the use of a source-based methodology considered that at least some form of reporting of end-user emissions was also required, even where this was not suggested as the basis of the target. There was also a small number of respondents who considered that, while they would prefer an end-user methodology, a source-based methodology should be adopted for a variety of reasons (including the complexity of an end-user approach, and consistency with other international approaches). It was also suggested that the Bill should have provision to allow the progressive introduction of an end-user methodology in the future.

2.26 A wide range of arguments in favour of the use of each methodology were advanced by respondents (whether or not they favoured that particular approach). In terms of the use of a source-based approach, the most common reason provided in support of this was that these emissions are easier and cheaper to measure and verify, as well as being easier to understand. It was also noted that a significant amount of Scotland's source emissions are already measured and reported through the EUETS. Among other reasons offered were that:

• This measure would be consistent with international methodologies, and the approach perceived to be likely to be taken in England and Wales.
• This would better reflect the contribution of Scottish organisations and businesses to reducing emissions through efficiency and the application of new technology, rather than through reducing demand.
• It would allow Scotland to take responsibility for the emissions it produces, as there would be local control of these.
• It would provide more of an incentive for some sectors, including transport and those primarily engaged in exporting, to address their own emissions.

2.27 A range of concerns with source-based emission methodologies was also offered by respondents, including that these:

• Present only a partial picture of Scotland's contribution to climate change.
• Ignore the consumption of imported goods.
• Have the effect of removing a focus from some industry sectors.
• Make it difficult for some sectors (e.g. tourism) to estimate their contribution to climate change.
• May remove the incentive to export, which has wider economic benefits.
• Provide little incentive for consumers to reduce their consumption.

2.28 A small number of respondents suggested an alternative approach to a source-based methodology, designed primarily to exclude the energy exported by the power generation sector. This was not, however, supported by some others, whose view was that emissions generated to produce power for export should be included. Some mentioned that, as England is likely to use a source-based methodology, if Scotland were to adopt an end-user approach, these emissions would not be accounted for in either country. However, the argument was also advanced that the adoption of an end-user approach in Scotland could lead to emissions related to goods produced in England being double counted.

2.29 Some concerns were expressed that, if a source-based methodology was adopted, and policies developed from this, there may be a danger that some businesses would leave Scotland. It was suggested that this would do nothing to reduce emissions overall, as industries were likely to re-locate to less regulated countries.

2.30 Among the arguments in favour of adopting an end-user based approach, the most common was that it would provide a more meaningful and fairer estimate of the contribution Scotland makes to global emissions. It was also suggested that this would better reflect the contribution Scotland as a whole will make to reducing global emissions, and would be more useful in identifying whether reductions are genuine, or as a result of exporting emissions (through increasing imports to satisfy increasing consumption). A number of respondents argued that this approach would make Scotland more accountable for its own contribution to climate change.

2.31 Among the other reasons offered in support of the adoption of an end-user methodology were that this would:

• Allow a greater focus on sectors other than power.
• Allow more of a focus on industries not currently regulated by the EUETS.
• Place more emphasis on companies' purchasing decisions, rather than simply on investment in new technology, as this would better reflect the contribution of, for example, imported raw materials.
• Provide more of a focus on, and an incentive to sectors not engaged in manufacturing or agriculture.
• Allow a better measure of progress in relation to energy efficiency and renewable energy.
• Allow individuals to have a better sense of their own contribution, and prompt individual action. (One respondent also suggested that it would be helpful if the global footprint of goods produced in different countries could be made widely available as a way of stimulating consumers to buy from the most efficient sources.)
• Allow local authorities to gain a better picture of both the contribution of their area to climate change, and the impact of any changes introduced. It was also noted that, for areas with high concentrations of industry (such as, for example, Fife and Falkirk in relation to Longannet and plants in Grangemouth), it would allow a focus on emissions over which there could be some element of local control.

2.32 Some respondents acknowledged that an end-user inventory would be more difficult, and more expensive to implement, but believed that this would be justified by the benefits. One area of complexity, acknowledged by a small number, was the view that a fair end-user inventory should include estimates of embedded emissions, which would be difficult and potentially expensive to implement. One respondent expressed a concern that the proposed approach may be "cherry-picking", and that it would be inappropriate to adjust consumption figures for sectors which had the effect of making Scotland look better, while ignoring other, less positive sectors.

2.33 A number of respondents, however, suggested ways in which end-user inventories could be undertaken. Among the points made about this were that the Scottish Government should continue to support the Local Footprints project, which is seeking to help local authorities account for consumption in their areas. A number of databases, inventories and methodologies were also identified as being potentially helpful, including the Resource and Energy Analysis Programme ( REAP) and the Energy Saving Trust's Home Energy Efficiency Database ( HEED).

2.34 Whatever the approach to source or end-user based methodologies, around a third of respondents who addressed this question considered that there was a need to have some way of including measures for energy efficiency and / or renewable electricity (which need not necessarily be statutory targets). Although it was not always clear from responses, most appeared to suggest this in addition to the main target based on source or end-user methodologies. A very small number of respondents suggested that measures related to these activities should not be in the Bill, as they may detract from what was seen as its overall purpose, or they could be confusing.

2.35 A range of possible specific targets were also proposed by some respondents, for example, relating to the energy efficiency of buildings in the residential, industrial and commercial sector, as well as the public sector, the number of combined heat and power ( CHP) schemes installed and the emissions of the transport sector. A small number of respondents suggested that strategies should be created in policy areas relating to energy efficiency and / or renewable electricity (although it was noted that not all areas of policy relating to this are devolved, and it was highlighted that the Scottish Government would have to work closely with UK departments).

2.36 The importance of incentives was acknowledged by a number of respondents. It was suggested that, in addition to promoting energy efficiency and renewable electricity, incentives are also required to reduce overall demand. It was also argued that incentives are required in other areas, such as renewable heat, and in encouraging the development of the skills necessary to install and service new technology relating to both energy efficiency and renewable power.

2.37 A range of reasons to support investment in both energy efficiency and renewable electricity were also offered by respondents, and a number considered specifically that separate targets for these would provide a direct incentive for this. It was also suggested that these would be useful as a planning tool for businesses, and would also provide a market incentive, for example, to builders for the early introduction of measures to reduce CO ₂ emissions from new homes, and to businesses developing new technologies for domestic and export markets. Not all respondents agreed, however, with a small number also suggesting that targets in these areas may be too restrictive to aid business decision making, or that they would not necessarily account for the lack of flexibility some businesses face in investment, or the changed economic and technological factors which may apply.

2.38 There were also a number of respondents who pointed to potentially negative consequences of incentives, such as: that the benefits of energy saving cost reductions would be taken in the form of increased consumption in other areas; that meeting energy efficiency targets may not necessarily lead to a reduction in overall emissions; or that such targets could detract from the primary objective of the Bill, could lead to confusion or be too restrictive. One respondent also indicated a concern that some developments could take place (for example in renewable energy) simply to meet the target where there is no other operational benefit. One respondent also noted that the consultation document provided strong arguments against such targets.

2.39 A range of means of promoting investment were advocated, and these are dealt with in more detail later in the report. It was indicated (e.g. by a small number of public sector respondents and an individual), that, to be effective, incentives need to be large enough, targeted, not exclusive to a small number of sectors, and not excessively time-limited. One respondent suggested that some clarification about how large energy-consuming companies could be incentivised to reduce emissions would aid understanding of how such measures might work. It was also argued by a small number of respondents that there would be a need to identify and address any potential for perverse incentives. Two respondents also expressed a concern that incentives would be funded by higher taxes or charges on the consumer.

Changes to the means of measurement

4. Do you agree that the Bill should allow the means of measuring the target to be changed through secondary legislation to reflect international developments or unforeseen consequences of the Bill¹¹?

2.40 This question was addressed directly in 161 responses. There was strong support for the view that there should be a provision to allow the amendment of the means of measuring the targets by secondary legislation. Participants at the event hosted by Highlands and Islands Enterprise discussed this issue (and were generally supportive of the provision). Most respondents simply agreed with the proposition, noted that having such a provision was sensible, or recognised that science (and measurement techniques) develop over time. Some also noted that it was important to have such flexibility to be able to respond to changes in both international advice and best practice.

2.41 However, as with Question 2, a number of respondents also offered qualifications. As one stated, for example:

"Yes, especially if new discoveries are made so that the measuring target techniques are improved. But again, great care should be taken so that alterations are allowed only to make the system more reliable". (Individual)

Among the other comments made were that:

• Any changes should only be considered on the basis of independent scientific advice, or the advice of an appropriate independent body (see question 15).
• Public consultation should be undertaken before secondary legislation is considered and secondary legislation should not be seen as a way of by-passing public consultation.
• The measurement method used should be robust and credible. It was also suggested that scientific peer review should be used prior to any change.
• Changes in methods of measurement should not be used as a way of weakening the actual target or targets.
• If the Scottish Government adopts a target based on CO ₂ alone, advances in measurement techniques should be used to allow the extension of the target to other greenhouse gases.

2.42 A very small number of respondents were opposed to the use of secondary legislation, or, in two cases, to any flexibility being allowed, with the general view that primary legislation should be required. One respondent stated that the use of the suggested provision would have the potential to undermine the credibility of the target.

Taking account of emissions trading schemes

5. Should the emissions reduction target take account of the abatement effort made by companies under emissions trading schemes? If so, how?

2.43 The consultation explored how to account for emissions already regulated through the EU Emissions Trading Scheme ( EUETS) and asked whether the target should take account of the abatement effort made by companies under the scheme. This question was addressed directly in 141 responses. Organisations (53%) were more likely than individuals (35%) to respond. Three events discussed issues or made comments which were relevant to this question (sometimes identifying the importance of addressing this, or highlighting the complexity of the issue, by recognising the different considerations). A small number of respondents also made observations about the operation of the EUETS, or offered technical suggestions about how the scheme generally, and the auction process specifically, could be improved. A number of other respondents simply stated that they were opposed to the principle of emissions trading schemes ¹².

2.44 Among those expressing a specific view on the question posed, around twice as many supported the proposition that the target should take account of abatement effort than disagreed with it. These proportions were broadly reflected across most categories of respondents, although there was a higher level of support among businesses, while individuals were more evenly split. The most common reason given for including the impact of emissions governed by trading schemes was the need to include all emissions in a Scottish target (regardless of the exact nature of that target). It was also suggested that the exclusion of these emissions would undermine consistency with UK measures and targets.

2.45 A number of respondents observed that it would be impossible to ignore the impact of trading schemes on the achievement of Scottish targets, or noted that to do so would undermine the credibility of the targets. For example:

"Abatement efforts of companies included in the EU's ETS should be included in the Scottish target. A significant proportion of Scotland's climate changing emissions are accounted for within the ETS and it would undermine the credibility of the target if it did not take them into account". (Trade and professional organisation)

2.46 Some also stressed the overall importance of the purpose of the EUETS, and highlighted its potential impact in achieving reductions in emissions (as well as identifying the benefits to individual companies in terms of flexibility). However, some also argued that ensuring that the EUETS was properly accounted for in the target may be complex.

2.47 It was also identified that the Scottish Government has no influence over the operation of the EUETS (although a small number of respondents advocated that it should press the UK government and the EU to increase the proposed levels of emissions reductions to be achieved by the scheme, while one "campaign plus" response suggested that the government should buy back permits to ensure that necessary reductions are made). Some respondents also stressed the need to ensure local actions alongside the scheme, and believed that the EUETS could not be expected to achieve the level of reduction required on its own.

2.48 The main reason offered for excluding emissions covered by the EUETS was the perceived need to make real domestic reductions, and not to rely on an approach which includes the ability to purchase credits. (A small number of respondents also made a similar point about the practice of carbon offsetting.) One respondent also noted that:

" … the emissions reduction target should not take account of the abatement effort made by companies under emissions trading schemes because such schemes do not contribute to an overall reduction in CO ₂ in global terms - it merely shifts the problem elsewhere. Including ETS in the target could also mask the true picture of emissions reductions and make it look as if we are doing better than we actually are." (Public sector respondent)

It was suggested that the inclusion of these emissions was inconsistent with the stated purpose of the Bill. One respondent stated that Scotland should show leadership:

"… in the midst of other countries who are using such schemes to continue to pursue their economic growth goals at the cost of the environment." (Public sector respondent)

2.49 A wide range of further observations and concerns were made by respondents of different types, even where, in general terms, they supported the proposition. Among these were that:

• The EUETS does not currently allow for member nations, or parts of member nations to set different targets.
• As the current EUETS targets are lower than those proposed for Scotland, and given that around 50% of emissions are covered by the scheme (and that this is likely to increase), this would place an undue burden on the non-regulated sector through requiring them to achieve higher rates of reduction. In relation to this, a small number suggested excluding companies regulated by the EUETS and applying the Scottish target of 80% reduction only to the remainder.
• The Scottish proposals may lead to double regulation, and a fairer means would be to encompass only non-regulated industries.
• Imposing a higher target on Scottish businesses covered by the EUETS may not lead to reduced emissions per se, but to these companies purchasing more credits, which could have the potential to undermine their competitiveness by increasing their cost base with no overall gain in terms of Scottish (rather than global) emissions. A small number of other respondents suggested that this was not a specific concern, as the issue was global, and the location of the reduction was less important than the fact of it.
• Having a different approach in Scotland would undermine the "level playing field" approach which underpins the EUETS.
• The complexities of accounting for these emissions would make the identification of other reductions more difficult, and may mask the impact of policies.
• The future impact of the EUETS on Scottish industries is uncertain, with the move towards the use of auction. In this respect, a small number of respondents proposed that the Bill should contain a provision to allow changes to the way in which traded emissions are accounted for in Scottish targets, should the need arise.

2.50 A very small number of respondents suggested the creation of a purely Scottish-based trading scheme (e.g. separate to, and for companies not currently covered by or included within the EUETS), with tighter reductions targets for Scottish industries.

2.51 There were mixed views from some respondents about the means by which emissions covered by the EUETS should be counted, with some favouring the use of the allowance level, while others favoured the use of the actual emissions produced locally (or argued that these should at least be accounted for separately). A small number of respondents who made comments on this argued that Scottish companies should be required to achieve a minimum proportion of their emissions allowances through domestic reductions. More generally, it was suggested that any approach to measurement should be robust and credible, that it should use an agreed baseline and that it should be directly comparable to emissions measured from companies outwith the EUETS.

2.52 A small number of business and industry, and trade and professional organisation respondents proposed that the Scottish Government should consult with businesses affected when taking such a decision. Similarly it was suggested by respondents of other types that the Scottish Government should both commission research to address the incorporation of traded emissions, and seek expert advice.

International credits

6. Do you agree that international credits should be counted towards Scottish targets? Should there be limits on credits counted towards Scottish targets?

2.53 The consultation document noted that the Kyoto Protocol and the EUETS allow the purchase of carbon credits from overseas to count towards domestic targets, and the consultation explored whether international credits should be counted towards Scottish targets. A total of 138 responses addressed this question directly. Individuals were less likely to respond (33%) than organisations (60%). Participants at the event hosted by the Scottish Government discussed this issue specifically.

2.54 There was a marked disparity of view between individuals and organisations about whether or not they supported the proposition that credits should be counted. While more than 70% of organisations expressing a view supported this, only 37% of individuals did so. The strongest support for the proposition was found among business and industry respondents, although there was also a clear majority in favour among NGOs and public sector respondents. Participants at the event hosted by the Scottish Government also expressed views in favour of this (with some qualifications).

2.55 Among those who believed that credits should be counted, the main reason advanced in support of this was that reductions in emissions would still be brought about, and the location of the reduction was irrelevant (although as will be set out later, others disagreed with this). It was also suggested by a small number of respondents that the use of credits could be a way of bringing about necessary reductions and making progress towards the Scottish target, for example:

"We agree that international credits should be counted towards the Scottish target, in line with the international principles established under the Kyoto Protocol. This would provide greater flexibility and likelihood in meeting the overall target". (Business and industry respondent)

It was also argued that this could bring about the reductions at a lower cost than if these were sought purely from within Scotland.

2.56 The majority, however, also offered some qualifications or reservations. It was suggested, for example, that credits should be accounted for separately to emissions produced in Scotland and reported separately, (for example to Parliament as set out later at question 13). A number of respondents reiterated comments in the consultation document and supported the view that only verified credits should be counted. As with other measures, a small number of respondents believed that the Scottish Government should seek expert advice prior to acting.

2.57 There was strong support among both individuals and organisations who responded (as well as one campaign text) that the level of credits to count against Scottish targets should be limited. As with the EUETS (see question 5), a number suggested that the use of credits should be a last resort, that it should only be permitted for a limited time period, that these should be used only in specific, pre-defined circumstances and that the aim should be to move towards zero use of credits. Few respondents offered views about the limit which should be allowed, with suggestions ranging from 2% to 30% (as well as that it should be related to EU and international emissions trading).

2.58 A small number of respondents proposed that the limits should be contained within the Bill, or that Ministers should be given a power to enforce a cap in future. One respondent suggested that, prior to any purchase, an independent body (see question 15) should be asked to verify that the Scottish Government had done "enough" to stimulate domestic reductions, before granting approval. More generally, it was also advocated that an independent body should have oversight of the operation of credits in Scotland.

2.59 Among those who expressed the view that credits should not be counted in any form, it is worth noting that a number were opposed to the principle of credits, as well as considering that they should not be counted towards a target. It was also suggested that allowing international credits to be counted towards the Scottish target could be seen as undermining the Scottish Government's stance on addressing climate change.

2.60 Some described this proposal as primarily an accounting device, or considered that it would be a way of avoiding taking action, or avoiding responsibility for domestic emissions. It was argued that these credits may divert attention from the need to address domestic emissions. It was also described by two respondents as a moral issue, and another stated that it was an issue of natural justice that Scotland should address its own emissions. Others suggested that the use of credits could be used as a means of delaying difficult decisions necessary to bring about reductions in domestic emissions, or that future administrations could use this as a means of not having to make changes set in place by previous administrations. As one respondent stated, for example:

"No. This will just delay the time taken for us to live truly sustainably in Scotland. We should not spend Scottish money on such complacency". (Individual)

2.61 Some expressed the view that the Scottish Government should be aiming for 100% domestic reductions, with no use of credits. A number of respondents (even among those generally supportive of the use of credits) identified what they believed to be shortcomings in the credits approach. These related, for example, to issues with verification, the potential for double counting, a lack of additionality and a concern that purchasing a credit would not (in the view of these respondents) necessarily mean that a reduction would be achieved elsewhere.

2.62 It is worth noting that a number of respondents suggested specifically that it was right that Scotland should assist other countries to cut their emissions. In their view, direct aid, not the use of credits, would be the way to do this, although this view was not shared by some other respondents, who viewed credits as a legitimate form of development investment. A small number of suggestions were made about how the credits could be used, for example to invest in the supply chain for goods and services consumed in Scotland. It was also advocated that they should promote sustainable development (as well as addressing climate change).

Provision to change the level of the target

7. Should the Bill allow the level of the 2050 target to be changed through secondary legislation? If so, should this only be allowed on the basis of independent, expert advice, to reflect international developments or unforeseen consequences of the Bill? Should any changes to the target be limited to an increase in the target?

2.63 This question was addressed, at least in part, in 163 responses. As with most other questions about targets, organisations were more likely to respond than individuals. This question was not discussed specifically at the events. Overall, there was strong support for the proposition to allow for the level of the target to be changed by secondary legislation.

2.64 Among those supporting this, the most commonly expressed reason centred around the need for flexibility, and having the ability to respond to changes in understanding, advances in science or in the light of advice from international bodies. For example, as one respondent stated:

"The science of climate change is evolving rapidly and it is vital that flexibility remains to be able to embody the latest developments". (Academic and Research Institution)

2.65 As well as the overall target, some respondents also suggested that the power to amend interim targets ¹³ should also be included in the Bill (for example, if insufficient progress was being made towards the overall target). Those who did not support the proposition to allow the level of the target to be changed through secondary legislation mostly identified that, in their view, any change to the target should be subject to primary legislation.

2.66 A number of respondents who supported the proposition to allow for the level of the target to be changed by secondary legislation stipulated that it was important that it was not "too easy" to revise the level of target, and, related to this, there was virtually unanimous support for the view that any proposed change should be on the basis of scientific advice. Only one respondent expressed scepticism about using scientific advice, stating that it appeared to them to be possible to find an "expert" to support any position.

2.67 A small number of respondents who supported the proposition suggested further caution, for example, suggesting that the proposals be scrutinised and approved by an external body (see question 19), be subject to public consultation, or be required to be considered by Parliament.

2.68 Views on whether the facility should exist for the target to be revised up or down were more mixed. Among individuals, the split was nearly 4:1 in favour of restricting this to upwards movements. Among organisations, the views were split 55:45, again in favour of allowing only an upwards movement. Within this, there were marked differences, with NGOs strongly positive, businesses more evenly split, but a clear majority of both public sector and trade and professional organisations supporting the provision for both an upwards and downwards move. Some respondents also suggested what they viewed as a further safeguard, namely that any proposed downward revision should be subject to primary, not secondary legislation (even where respondents were content that the latter could be used to action an increase). This notwithstanding, some respondents who supported the view that a decrease should be permitted stipulated that this should only be done on the basis of clear and robust scientific advice.

2.69 A small number of respondents suggested that the Bill should contain examples of circumstances in which a reduction in the target would be permitted. Examples provided included: a period of war; a public health crisis; a period of global cooling; negative impacts on the economy; or the need to respond to unforeseen events (such as, for example, a global food crisis). Some respondents, however, also advocated caution in the frequency of reviews, particularly in terms of their potential negative impact on business investment planning. One respondent suggested that the Bill should contain the power for the target to be scrapped once the "hysteria" about global warming dies down.

Other issues relating to targets

2.70 A large number of respondents of different types raised additional issues relating to targets. These are summarised in the paragraphs below.

Support for the target

2.71 Around a third of all respondents (including all but one of the campaign texts) reiterated, or expressed their specific support for the level of the target, with some welcoming the measure (and some specifically commending the statutory nature of the proposed target). A small number suggested that an 80% reduction was insufficient, and should be raised (generally to 85% or 90%, although one "campaign plus" response proposed 100%). Conversely, a small number of other respondents believed that 80% was too high, with most of this group believing that the Scottish target should mirror the UK target (currently 60%, although this is being reviewed) in the interests of consistency and fairness (for example, in terms of business competitiveness). A small number expressed a concern that the target would not be achievable.

2.72 A number of respondents suggested that the overall priority of the Bill should be clear in terms of the wider context of limiting the rise in global temperature to 2°C. It was proposed, for example, that this should be written into the preamble to the Bill. Some respondents provided technical information relating to the relationship between the proposed 80% target and the need to restrict global temperature rises to 2°C ¹⁴.

General issues about the target

2.73 A wide range of general issues were raised about the target (in addition to specific issues relating to measurement, regional and sectoral issues, and aviation and shipping, which are dealt with below). Among the issues raised were that the targets should be:

• Accessible and understandable.
• Administratively simple.
• Achievable and realistic.
• Achievable without further harm to the environment (which was an issue raised in two campaign texts) ¹⁵.

The basis of the target

2.74 A small number of respondents questioned the basis of the target, describing it as both political and aspirational. One of these respondents (and some others) asked that the basis of, or the rationale behind the target (or the level of the target) be stated more explicitly. One respondent also sought clarification about whether or not the target relates only to activities which are devolved, and another about what constitutes "Scottish" emissions.

2.75 A concern about setting targets without specific examination of the cost, or economic impact was also raised by a small number of respondents. Some also suggested that there needs to be a balance between these measures and economic prosperity. Participants at the event hosted by Highlands and Islands Enterprise described a tension between economic growth (and increased energy use) and reducing emissions. The need to have regard to the impact of targets on individual businesses was also raised, as was a concern that measures may have an impact on the ability of the agricultural sector to feed the nation (described by another respondent as one of the "perverse consequences" of legislation).

2.76 Respondents to the written consultation and participants at events both raised issues about what would happen in the event that targets were not met, with some suggesting the need for sanctions, while others were unsure about how this would work ¹⁶. A small number of individual respondents were opposed to a target of any kind being set.

Measurement of the target

2.77 A small number of respondents raised issues relating to the measurement of performance toward the target, including:

• The need for accuracy, robustness and consistency.
• Technical issues about the methodologies which may be employed to address specific measurement issues (for example, relating to: baselines; end-user inventories; the relative share of renewable energy sources; how to account for power exported from Scotland; aviation and shipping; and the impact of biofuels).
• Concerns about whether it would be possible to develop measurements for small areas, with a number of methodological concerns about attribution and double counting.
• Concerns about delays in the availability of data (as set out in the consultation document), with the suggestion that the Scottish Government should commission research to reduce this.
• Issues about measurement at the level of individual companies.
• The suggestion that the concept of an amount of CO ₂ may be difficult for non-scientists to understand. One event participant commented that "I can recognise a £1,000,000, I'm not sure I'd recognise a ton of carbon".

Geographical and sectoral issues

2.78 A number of respondents suggested that there should be targets (or at least measurements) available at levels below Scotland, whether these are defined by area or by sector. In terms of the former, a small number of respondents advocated that some distinction should be drawn between urban and rural areas, to reflect their varying contributions both to producing emissions and helping to reduce the impact of these.

2.79 Although some who supported sectoral targets specified which sectors should be covered, others did not. Among the sectors suggested were: building and construction; water; land-based transport and aviation; agriculture and "heavy" industry. A small number of respondents specifically rejected sectoral targets, in one case arguing that one sector (in this case, agriculture) should not have an 80% reduction target applied as this would affect the competitiveness of businesses. A number of event participants noted ways in which their sectors were already subject to targets which could have some impact on the Scottish Government's overall target and two argued that sectoral targets would represent double regulation (with the EUETS). A small number of respondents argued that it would be inappropriate to apply the 80% target across all sectors equally, as this would not reflect the contribution each currently makes and could make in future.

2.80 It was also suggested (by a small number of respondents) that there could be specific targets for individual local authorities, either in terms of overall emissions, or directed towards specific activities, such as the energy efficiency of buildings, reductions in waste or changes in transport use by employees. In relation to non area-based targets, some respondents also specified that these should include other public sector bodies, including the Scottish Government itself. Others proposed additional targets relating to, for example, physical activities such as cycling.

International aviation and shipping

2.81 The consultation document contains a section on international aviation and shipping, setting out the Scottish Government's reasons for excluding the impact of this from the target (making a distinction between this and the domestic element of aviation and shipping, which is already included in the Greenhouse Gas Inventories statistics). Although no question was asked about either aviation or shipping, around a third of respondents suggested the inclusion of aviation and shipping in the target. For example:

"There is no question about the inclusion of emissions from aviation and shipping following paragraphs 5.49-5.52 so I shall include my comment here. I believe the Bill should include emissions from international aviation and shipping in the reduction targets". (Individual)

2.82 The inclusion of international aviation and shipping was supported in all of the campaign texts. The range of respondents addressing this issue was wide, and included individuals, NGOs, COSLA and a number of individual local authorities. While some respondents, in addressing these issues, referred particularly to international aviation and shipping (the elements currently excluded) or specified that all aviation and shipping emissions should be included (either separately, or more usually in combination), not all made the specific distinction, and some simply commented on the perceived exclusion of aviation and shipping ¹⁷. Only one response specifically supported the exclusion of aviation from the target.

2.83 The main reasons provided by respondents for the need to include these emissions related to the relative proportion of Scotland's emissions accounted for by aviation and shipping, the growth of these emissions and the damage caused to the environment as a result. A number of respondents suggested that, without the inclusion of aviation and shipping, Scotland's target would lose credibility and would be partial. It was also argued that, as a result, other sectors would have to achieve a higher share of the emissions reductions in the target.

2.84 Some respondents acknowledged the arguments for excluding international aviation and shipping set out in the consultation document, as well as technical difficulties in measurement and attribution (with a small number suggesting ways these could be overcome), but suggested that these should not preclude their inclusion. A number of respondents also provided significant amounts of technical information to support their views (largely relating to aviation rather than shipping) and, although this will not be summarised here, all of this material is available to the Bill team.

Summary of issues: Targets

The issues raised relating to targets can be summarised as follows:

• In relation to question 1, exploring whether a Scottish target should be based on CO ₂ alone or the basket of 6 greenhouse gases, a large majority of respondents stated a preference for using the basket of 6 gases, rather than CO ₂ alone. The most common reason given was that each makes a contribution to climate change, and should be part of the target.
• Among those supporting the use of CO ₂ alone, the main reasons given were partly scientific, and partly practical. Some respondents suggested a staged approach, with the use of CO ₂ in the first instance, and the use of a wider range of gases being phased over time.
• In relation to question 2, exploring whether the Bill should contain provisions to alter which gases are included (for example if the reliability of data for a particular gas improves or if science changes in the future about which gases cause climate change), there was overwhelming support for this. Only a handful of those expressing a view disagreed.
• In relation to question 3, exploring whether the targets should be based upon source emissions; an end-user inventory; or on individual targets for energy efficiency and renewable electricity, it was difficult to assess definitively how many responses favoured either source or end-user methodologies.
• Among those who did express a preference, there was a broadly even split, but around a third of respondents who supported the use of a source-based methodology, suggested that at least some form of reporting of end-user emissions was also required, even where this was not proposed as the basis of the target. A wide range of arguments in favour of the use of each methodology were advanced by respondents (whether or not they favoured that particular approach).
• Whatever the approach to source or end-user based methodologies, around a third of respondents who addressed question 3 considered that there was a need to have some way of including measures for energy efficiency and / or renewable electricity (which need not necessarily be statutory targets). Most appeared to suggest this in addition to the main target based on source or end-user methodologies and a range of possible specific targets were also suggested by some. The importance of incentives to encourage action in these areas was acknowledged by a number of respondents.
• In relation to question 4, exploring whether the Bill should allow the means of measuring the target to be changed through secondary legislation to reflect international developments or unforeseen consequences of the Bill, there was strong support for the view that there should be provision for this. Most simply agreed with the proposition, noted that having such a provision was sensible, or recognised that science (and measurement techniques) develop over time (although some also offered qualifications).
• In relation to question 5, exploring whether the emissions reduction target should take account of the abatement effort made by companies under emissions trading schemes, around twice as many of those who expressed a specific view supported the proposition than disagreed with it. The most common reason was the need to include all emissions in a Scottish target. It was also suggested that the exclusion of these emissions would undermine consistency with UK measures and targets.
• The main reason offered at question 5 for excluding emissions covered by the EUETS was the perceived need to make real domestic reductions, and not to rely on an approach which includes the ability to purchase credits. A wide range of further observations, concerns and qualifications were made by respondents, even where, in general terms, they supported the proposition.
• In relation to question 6, asking whether international credits should be counted towards Scottish targets, there was a marked disparity of view between individuals and organisations about whether or not they supported this. While more than 70% of organisations responding supported this, only 37% of individuals did so.
• Among those who believed that credits should be counted, the main reason was that reductions in emissions would still be brought about, and the location of the reduction was irrelevant. The majority, however, also offered some qualifications or reservations. Among those who suggested that credits should not be counted in any form, a number were opposed to the principle of credits. It was also argued that this could be seen as undermining the Scottish Government's stance on addressing climate change.
• There was strong support among both individuals and organisations who responded to the issues at question 6 that the level of credits to count against Scottish targets should be limited, although few respondents offered views about the limits which should be allowed.
• In relation to question 7, examining whether the Bill should allow the level of the 2050 target to be changed through secondary legislation, there was strong support for this. The most common reason centred on the need for flexibility, and the ability to respond to changes in understanding, advances in science or in the light of advice from international bodies. There was virtually unanimous support for the view that any proposed change should be on the basis of scientific advice. Those who did not support the proposition at question 7 mostly identified that, in their view, any change to the target should be subject to primary legislation.
• Views about the part of question 7 which asked whether any changes to the target should be limited to an increase were more mixed. There were differences between different types of respondents in their views of this, with individuals more likely to favour restricting this to upwards movements, although the overall balance of views of organisations was also in favour of this.
• A large number of respondents raised additional issues relevant to targets:
  • Some expressed specific support for the level of the target.
  • A number suggested a need to ensure that the overall priority should be clear about limiting the rise in global temperature to 2°C.
  • Comments were made that the targets should be: accessible and understandable; administratively simple; achievable and realistic; and achievable without further harm to the environment.
  • A small number questioned the basis of the targets.
  • Some raised issues about the cost, or economic impact of the targets.
  • Some raised issues about what would happen in the event that targets were not met.
  • A small number were opposed to a target of any kind being set.
  • A small number raised issues about measurement of performance.
  • A number suggested that there should be targets (or at least measurements) at levels below Scotland, whether by area or sector.
  • Although no question was asked about international aviation or shipping, around a third of respondents advocated the inclusion of these sectors in the target, either separately, or more usually in combination, and this was supported in all of the campaign texts.

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