Consultation on Proposals for A Scottish Climate Change Bill: Analysis of Responses

SECTION 3: SUPPORTING FRAMEWORK

3.1 This section presents the findings relating to the questions on the supporting framework in Section 6 of the consultation document (questions 8-12) and any other relevant issues.

Factors when setting the level of budgets

8. What factors should be taken into account when setting the level of budgets?

3.2 The consultation document set out a number of factors which the Scottish Government believes should be taken into account in setting the level of budgets (paragraph 6.5 of the consultation document). For reference, these include:

Likely economic growth.
Likely population growth.
Likely technological progress.
Social impacts, including impact on rural areas.
Environmental impacts.
Impacts on the economy and business competitiveness.
International circumstances.
Scientific knowledge about climate change.

3.3 This question was addressed directly in 151 responses. Participants in three of the events made a range of comments and suggestions on these issues, sometimes providing specific expertise on issues affecting different parts of Scotland, or different sectors, as well as recognising some of the complex factors (and potential tensions) involved.

3.4 A small number of respondents, and participants at two of the events, expressed concern that the concept of "budget" was difficult to understand, and may be misleading to some. At a basic level, a small number of respondents suggested that budgets should not be seen as a substitute for statutory targets, and specifically that budgets should only be used when these are additional to statutory targets.

3.5 Around a fifth of those who addressed this question simply supported the factors detailed above, without adding others or making further comment on the inclusion of those currently on the list (although one respondent restated them ranked by importance). One respondent suggested that the list was too exhaustive, stating that if all of these criteria were to be considered, the need for an interim target (discussed at question 12) would become even greater. Many respondents provided additional details relating to each of these factors, although scientific knowledge about climate change and likely economic growth were those mentioned most often.

3.6 The inevitability of economic growth was mentioned by some respondents, but some pointed to what they saw as the tension between economic growth and setting budgets at an appropriate level to achieve the necessary reductions in emissions. Some business and industry respondents (including one making an efficiency-related technologically advanced product) pointed to the tension between their own output growth and emissions growth. It was also suggested that the budget should be able to account for changes in the pattern of economic activity within Scotland.

3.7 In terms of population growth, a number of points were made, albeit by a small number of respondents. A specific point made by some was the relationship between the Scottish Government policies relating to promoting population growth and the need that this would bring for new housing. It was suggested that the budget would have to account for some of this housing being developed before emissions standards change in 2016. It was argued that this would also have an impact on energy consumption, and, depending on where growth is concentrated, transport and food production. One respondent suggested that "population change" would be a better term.

3.8 Respondents who made additional comments about technological progress all acknowledged that this was inevitable, but there were two broad views about how this should be accounted for (both, however, by small numbers of respondents). Some, on one hand, suggested that the likelihood of progress should be factored into later years' budgets. Others, however, pointed to what they saw as potential dangers in this, in that budgets set for early years would be too high, or that there would be too much reliance placed on technological change to achieve lower budget levels in later years. One respondent called for more research into what levels of reduction may be possible from the use of existing technology.

3.9 It was also recognised by some respondents that there are likely to be wider changes in society which should also be accounted for, including that young people's values appear to be changing, and that this may affect behaviour relating, for example, to purchasing decisions (and hence impact on budgets). One suggested that health benefits relating to less transport use should also be a factor. It was also noted that the likely changes would have a range of impacts on rural areas, and that these should, as set out in paragraph 6.5 of the consultation document ("social impacts, including impact on rural areas"), be considered.

3.10 The environment was recognised by some respondents as being potentially a key factor in setting budgets. This included the potential for adverse impact of climate change or measures to address this on the environment. It also included the role it could play, for example, in relation to carbon storage, as a carbon sink or as a source for renewable energy installations. A number of respondents made specific points about the impact of the built environment, and particularly the need to take account of current and future building standards, as well as the likely take up of retro-fit measures. Many respondents stressed that it is important take account of the need to ensure no further damage to the environment. Some respondents also recognised that there could be tensions in this.

3.11 In terms of impacts on the economy and business competitiveness, some respondents suggested that the budget should be set in ways which allow maximum time for businesses to allow them to plan investments etc. A small number of respondents (e.g. some business and industry and trade and professional organisations) stated specifically that they considered that economic competitiveness should not be compromised (although this view was not shared by some other respondents, including, for example, another trade and professional organisation). It was also proposed by one respondent that businesses adversely impacting on the achievement of the budget could be supported, for example, to replace a problematic plant earlier than its economic life would suggest. Specific issues relating to agriculture were identified at various points in questions 1 to 7 and again in response to this question. It was suggested, for example, that budgets should take account of international competitive pressures on agriculture, which may force changes in practices.

3.12 A small number of respondents recognised the potential impact of international circumstances on Scottish budget levels, primarily through the advice offered by international bodies and the operation of international agreements, particularly the EUETS. Some also mentioned links between what happens in Scotland and what some saw as the country's moral obligation to take its responsibility seriously, and urgently address a reduction in emissions (with consequences for the prospective levels of budgets). It was also noted that there is a link between this factor and business competitiveness, and some respondents expressed a concern that countries which did not take a "fair share" would be placing Scotland, and Scottish companies at a competitive disadvantage.

3.13 Points relating to scientific knowledge about climate change were also made by a number of respondents. Some stated their view of the importance of taking account of scientific knowledge, and some went further, suggesting that this should be the main factor in the determination of the level of the budget. A small number of respondents set out specific measures or indicators they believed should be used. One respondent suggested that there would be a need to take account both of the uncertainty of current knowledge, and that knowledge would change over time (with potentially different consequences for budgets arising from these changes). A small number of respondents argued that both national and international scientific research on climate change should be taken into account. One suggested that there was a need to strengthen the Scottish skill base in this area.

3.14 In addition to the amplification of the points made in paragraph 6.5 of the consultation document, some respondents also identified additional factors which should be taken into account (with a general point made by some that the Scottish Government should seek expert advice). The additional factors are set out in the bullet points below, and included that budgets should be:

Reflective of the need for early action (variously described) and what was identified as the urgency of the need to make progress with reducing emissions. In this respect (and looking ahead to question 11) some respondents suggested that budget levels should be set in order to allow banking of emissions in the early years of implementation.
Realistic in terms of the prospect for early progress.
Able to show international leadership.
Sufficiently flexible to account for the need to change the overall target in the light of any of the circumstances set out at question 7.
Equitable in sharing the impacts of change associated with the achievement of the budget level of reductions.
Able to take into account changes in land management and land use patterns.
Flexible to take account of likely changes in the pattern of power generation, particularly the decommissioning of nuclear power plants.
Able to account for the impact of carbon storage in due course.
Realistic, recognising that there are factors beyond the control of the Scottish Government which will have an impact.
Able to account for the impact of other policy developments, which may be required, but which may have an adverse impact on the budget.
Related to the shadow price of carbon ¹⁸.

3.15 A small number of respondents suggested setting budgets at levels other than Scotland as a whole (geographical and / or sectoral), allowing more account to be taken of regional and sectoral variation and priorities. As with targets, some respondents proposed that budgets should be developed for transportation, particularly for aviation and shipping. A small number also suggested budgets for public bodies. Some participants at the event hosted by Highlands and Islands Enterprise suggested budgets set by type of activity, for example, behavioural change or improving the efficiency of the building stock.

3.16 At a more basic level, some respondents (including one campaign text) suggested that the budgets should not be set only on the basis of consideration of specific factors, but that these should follow what is required to achieve a reduction of 80% (or at least 80%) in emissions by 2050. Linked to this, as will be set out in detail later, a large number of respondents favoured a budget level equating to a 3% per annum reduction, and some respondents proposed that the budget should be directed towards achieving this. Others suggested that the budget should be set in order to achieve a desired emissions reductions trajectory. As one noted, the " budget should be what is necessary". One campaign text identified the need to take into account the fair and equitable delivery of the overall target. A small number of respondents argued that the budget, conversely, should be set at the level of what is possible, rather than what is desirable or necessary.

Length of budget periods

9. How long should interim budget periods be?

3.17 A total of 152 responses addressed the question of the length of interim budget periods, and there were, as might be expected, a wide range of views expressed. These were apparent, for example, in the two events where this was discussed, where a range of suggestions were made. Of the respondents, 112 made one or more specific suggestions, with the remainder making more general comments about interim budgets. One respondent suggested that these should be termed "carbon budget" periods, rather than emissions budget periods.

3.18 Before presenting the responses to this question, it is important to note that, as will be set out in detail later, a large number of respondents (including all of the campaign texts) stipulated that there should be annual point targets (and generally that these should be statutory or mandatory). There is clearly a close relationship between targets and budget periods, and, in this consultation, a complicating factor is that most of those suggesting annual targets did not address either of the questions relating to budgets (9 or 10).

3.19 Among those addressing this question directly, while 5 years was the most common period suggested, there was also support for annual interim budget periods, particularly among individual and NGO respondents, as well as one campaign text. The main reasons given in support of this were to ensure that a focus is kept on progress and to promote early action. A number also stated that they felt that a longer period would make this less likely, with the possibility of more difficult decisions being deferred to the end of budget periods (which could also mean into a fresh political administration). It was also suggested by a small number (including one campaign text) that annual budget periods would deliver more accountability, with one respondent suggesting that these should be enforceable. A small number of respondents suggested that annual budgets would mean that the impact of measures (or lack of impact) would be clear earlier. One respondent advocated the development of multiple annual budgets, which would be set in advance, with limited flexibility around the level set.

3.20 A small number of respondents supported 2 or 3 year budget periods, giving a range of reasons including: to fit with financial cycles; to fit with the plans of some public bodies, such as local authorities, and to be shorter than a parliamentary term. Two respondents suggested three years on the basis that 5 years was "too long". The most common reason given by those supporting 4 year interim budget periods was that this coincided with the parliamentary cycle. Some tied this to making Ministers accountable for the budgets, and for progress towards the targets. Some of those supporting 4 years also indicated that they would be content with 5 year periods.

3.21 As noted, however, the most common suggestion for interim budget periods was 5 years. Within this, the reason cited most commonly related to consistency with the UK Bill and with other international agreements. As one noted, for example:

"Probably five years, which has the best international tie in". (Business and industry respondent)

3.22 One of those supporting a 5 year period indicated that a cross-party approach could be promoted by this falling at different times in the parliamentary cycle (although another suggested that this would allow an administration to complete a full term within a budget period, making them potentially less accountable). Some also made a link to their view that the UK Committee on Climate Change should be charged with providing advice to the Scottish Government (see question 15), and it was argued that this period would be consistent with its work relating to the UK as a whole.

3.23 Some respondents took a less specific view, reasoning that a five year period "felt about right". It was also suggested that 5 years was not too long to be manageable, and struck what was seen as the right balance, allowing year on year variations (or anomalies) to be accommodated, while promoting overall progress. One respondent argued that, given the lag in the availability of data, a period of 5 years would allow a reasonable amount of data to be available covering the budget period in question.

3.24 Only a very small number of respondents suggested longer interim budgetary periods. One proposed 6 years, one 6 - 10 years, and 2 were not specific. A small number of respondents proposed that budget periods should coincide with other reporting periods, including: fuel poverty statements; housing quality targets; strategic development plans; national park plans; Intergovernmental Panel on Climate Change ( IPCC) reports and time periods set out in the Water Framework Directive. One respondent suggested that the period was not the main issue, and that their concern related to how budgets would be embedded in the work of Scottish Government.

3.25 A number of additional points were made including the following:

Whatever the length of the budget period, a small number of respondents suggested that annual reports should be produced.
Budgets need to be grounded in theory not "finger in the air".
Budgets should be supported by detailed action plans.
The lag in data availability may need to be taken into account in setting a budget period (although one respondent specifically rejected this, suggesting that some data, and preliminary data on other measures, would be available earlier).
The Scottish Government should invest in research to reduce the lag in data availability.
Budget periods should be rolling, in order to always provide a minimum period of notice to businesses, public bodies etc. This would also provide the opportunity to report single years' out-turns against the previous five years' data (see also question 10).
The budget period in the early years should be shorter than in later years (e.g. to stimulate early action).

Setting budget periods in advance

10. How many years in advance should emissions budget periods be set in order to provide sufficient time to develop infrastructure?

3.26 The consultation sought to identify the lengths of lead-in time required for infrastructure developments, and this question was addressed in 142 responses. The respondents mapped very closely to those at question 9 (as might be expected), and included participants in the two events mentioned at question 9. Responses to this question split into three main groups, namely those who:

Specified a number of years in advance.
Specified a number of budget periods in advance.
Wished to have budgets set for the whole period to 2050.

3.27 A small number of respondents interpreted the question in a different way, and set out their views on the length of interim budget periods ¹⁹. One respondent suggested that there was no need to set budgets at all.

3.28 There was little practical difference in the reasons provided by those wishing to have budgets set a number of years, or a number of periods, in advance, with a close correlation between these. For example, a number of people who specified 5 year interim budget periods proposed that these should be set 5 or 10 years in advance, which is identical in practical effect to those suggesting 1 or 2 budget periods in advance. A number of respondents stipulated that, notwithstanding the length of the budget periods, the first budgets should be set and published as soon as possible.

3.29 The most common suggestions provided equate to setting budgets 5 - 10 years in advance (when account is taken of the suggestions respondents made in question 9 about interim budget periods). There was support among a smaller number for longer period, equating to between 10 and 15 years. In a few cases, longer still was suggested, largely because major investments may have an operational life span of more than 40 years, for example in water supply and power generation, although it was also identified that an industrial heating boiler may also have an operational life approaching this. In a small number of cases, respondents advocated variants of whole budget periods, for example, that a budget be set for one period in advance, with the first part of the following budget (which may be 2 or 3 years) also being set.

3.30 Regardless of the number of years or number of periods specified, the main reasons provided for setting budget periods some years, or some periods in advance were that this would:

Give a clear statement of the Scottish Government's intentions.
Give businesses enough warning for investment and business planning.
Be adequate for inward investing companies.
Link to "typical" budget payback periods of 3 - 7 years (although it is clear from other respondents that, for major plant, the payback periods can be longer that this).
Fit with local authority capital investment programme periods.
Fit with property leasing arrangements for businesses (particularly smaller businesses) which may be more relevant than other measures, such as payback or life cycle.
Provide an incentive to businesses engaged in the production of new technologies in relation to the direction that their market would be likely to take.
Ensure that Ministers do not avoid tough decision on new emissions sources.

3.31 A small number of respondents expressed caution, with the view that the accuracy of budgets is likely to decline the longer the period they apply to. One organisation, for example, suggested that 8 years would be realistic, but that anything longer than this could only be indicative. A small number of others echoed this, albeit suggesting slightly different periods.

3.32 As noted, some respondents advocated that the budgets should be mapped out for the whole period to 2050. In some cases, respondents who suggested shorter periods also believed that indicative budgets should be available covering the whole period. One respondent suggested that:

"Whatever the rate of reduction, there need to be indicative budgets to 2050". (Individual)

3.33 The rationale for providing indicative budgets for the period was similar to that for other periods, namely that it would provide a higher level of certainty for investment. A small number acknowledged the potential difficulties with this, particularly the need for flexibility to allow for under (or over) achievement in the early years of implementation, or to account for unexpected factors.

Banking and borrowing

11. What should be the limit (in terms of absolute quantity or as a percentage of the budget period) on the amount of emissions which the Government can borrow from a following budget period?

3.34 The consultation also explored the issue of the ability of the Government to bring forward or "borrow" emissions allocations from following budget periods, and this was addressed in a total of 141 responses. The issue was discussed at two of the events, both of which discussed some of the detailed issues relating to banking and borrowing.

3.35 Some respondents offered comments on banking (set out in the text of Section 6 of the consultation document), although this was not asked specifically by the question. These issues will be dealt with first as some of the subsequent points relating to borrowing relate also to banking. Banking is essentially the ability to carry over unused emissions to a subsequent period. The assumption in the consultation document is that this would allow some latitude in periods where there are unexpected fluctuations in emissions. Overall, slightly more respondents were in favour of banking than were against it. Among the comments offered were that it:

Provides an incentive for early action.
May encourage innovation.
Helps smooth out fluctuations (as set out in the document).

3.36 A small number of respondents who provided views on this either were opposed to, or expressed caution about banking. Some suggested, for example, that subsequent targets should be re-profiled to make them tighter, reflecting the higher past performance or a view that the target had been too low. It was also argued that this could encourage complacency, which may result in early gains being dissipated.

3.37 Among those (at events or in the written consultation) who commented on borrowing specifically, respondents split into three main groups:

Those who agreed that borrowing should be permitted with no additional restrictions.
Those who agreed that borrowing should be permitted, but only in specific circumstances.
Those who did not agree that borrowing should be permitted.

3.38 Views on these issues were broadly split, with, overall, slightly more favouring the provision to enable borrowing from a following budget period than did not (although some of these respondents recognised concerns with this). A small number suggested that the concept of banking and borrowing was flawed. One described it as complex, and another stated that this was "government speak".

3.39 Among those supportive of the provision to borrow from subsequent periods (whether or not with additional conditions), the main reason offered for this view was that it allowed some flexibility to cope with unforeseen circumstances, or to accommodate uncertainties and error margins in measurement. One suggested that to exclude this would undermine the Bill (although, as will be set out later, a considerable number did not agree with this). Another argued that, without the facility to borrow, the Scottish Government may have no choice but to purchase international credits to reach the annual budget, and this may be wasteful if the issue being addressed is temporary.

3.40 Some respondents (including one campaign text) offered views on how borrowing should work in practice. Among these suggestions were that:

Borrowing should carry a charge (although some were not specific about how this would be levied, and who would benefit).
The deduction from subsequent periods should be the amount borrowed, plus an amount equivalent to "interest".
Limits should be applied over a full budget period, rather than by year.
Limits should be set at the maximum previously banked.
It should be "repaid" only in the year immediately following (or in a "short period" following) the borrowing.

3.41 As noted, a number of respondents (including one campaign text and participants in the two events) suggested either conditions which should apply to borrowing, or ways in which it should otherwise be restricted. Some also suggested specific circumstances in which borrowing should be permitted, including that it should:

Be a last resort.
Not be "planned" in the sense of being identified as necessary at some point in the future.
Only occur when there is no other viable course of action.
Only take place as a result of an unforeseen circumstance, such as unusually cold weather, or following a significant incident.
Be agreed by Parliament, be scrutinised and accepted by an independent body (see question 19) or be subject to public consultation.
Always be reported to Parliament.
Only take place where there is a banked surplus from previous years.
Not be permitted close to an election.
Be independently monitored and audited (see question 17).

3.42 A wide range of possible percentage limits to borrowing were proposed, ranging from 1% to 50%, although others were less specific, suggesting that the level should be, for example, as low as possible. A small number suggested that the Scottish limit should mirror that set for the UK as a whole, and one respondent stated that:

"… we do not wish to see this becoming a mechanism for excusing continued shortfalls in target achievement, and would recommend that the amount of emissions that the Government can borrow from a following budget period be scientifically and rigorously determined from historical data, taking into account any other factors that might be relevant following independent scientific advice". (Academic and Research institution)

3.43 One respondent stated that the information in the consultation document was inadequate to form a view, and a small number of others, that research was required to determine better the extent of variability in current emissions. The most common view offered (by respondents of different types) was that borrowing should be restricted to not more than 1%, with most of those who expressed a view suggesting 5% or less (although a small number, as noted, suggested that the amount of borrowing should be unlimited). The low limits are consistent with the views offered above on the circumstances in which borrowing should be permitted. Some who did not accept borrowing in principle suggested that, in the event that it should be permitted in the Bill, it should be restricted to a low level.

3.44 A small number of respondents advocated that the level of borrowing should vary depending on the length of the budget period, specifically, that a shorter budget period would require larger borrowing limits than a longer period. One campaign text suggested that while borrowing should be permitted on a one year budget period, it should not if a four year period was adopted.

3.45 Among those who believed that borrowing should not be permitted (primarily individual and NGO respondents), a wide range of reasons were offered for this view, including that it:

Undermined the credibility of the target.
Would send out a negative message, described variously as that it would be "OK" to fail to keep within budgets, or that it may encourage complacency and discourage early action.
May create difficulties for incoming administrations, and may encourage unsustainable polices.
Relies on there being no "exceptional circumstances" in future years.
May build up a "debt" that cannot be "repaid" over time.
May mask the actual progress towards the target.
Would discourage accountability, as it may divert attention away from a failure to keep within an agreed budget.

3.46 Some, who favoured a 3% per annum statutory reduction target also suggested that borrowing was incompatible with this. Some respondents stated that other ways should be found to deal with fluctuations (although they did not detail what these might be). The main view offered about this was that the overall budget should be re-profiled, rather than a deficit be carried forward.

Interim point targets

12. Should the Bill include an interim point target? If so, what year (or years) should it be for (2020, 2025, 2030 etc.)? How should the level be chosen?

3.47 The question of whether an interim target should be set in the Bill was addressed in 223 written responses, and arose at two of the events. Amongst these, there was considerable support for interim point targets in some form, with 206 respondents (about 92%) who agreed or implied the use of these. Two main approaches were proposed: a large number argued for annual targets in some form ²⁰; while a similar number of respondents suggested other approaches to interim point targets and the timing of these ²¹. A small number of respondents (some of whom offered suggestions) identified that the Scottish Government should take independent expert advice before fixing the date, or level of any point targets. One further suggested that research was required to provide more robust evidence than that currently available.

3.48 The need for annual targets was set out by a range of respondents, including individuals, NGOs, trade and professional organisations and public bodies, campaign texts and some participants in the event hosted by the Scottish Government (offering a range of detailed reasons for this). A common feature of the campaign texts was that the Bill should contain an annual target of a 3% per annum reduction ²². A number of respondents pointed to the arguments made against mandatory annual targets in the consultation document ²³, and took issue with these, one suggesting, for example, that they had been "overstated". Some suggested that a 3% per annum reduction provided point targets, although others extrapolated from this to provide a view on the implications of this for targets for specific years to 2050.

3.49 A wide range of arguments were made in favour of 3% per annum reduction targets including that these reflect:

The approximate level of annual reduction required to reach 80% by 2050.
A view that a reductions trajectory should be established at an early stage.
A means of keeping the overall 80% target in the forefront of public and organisations' attention.
The need to make early reductions.
The need to stimulate action and avoid complacency.

3.50 As noted above, at question 11, some linked their view to a contention that targets, as with budgets, should not be set on a multi-annual basis (and that no borrowing should be permitted). A very small number of respondents supported the arguments made against annual targets in the consultation document.

3.51 Among those who suggested other approaches to interim point targets, some respondents advocated that point targets should be established for specific years to 2050. Of these, the most commonly mentioned was 2020. It was identified (for example, in one campaign text) that this was consistent with the date of the EU target and / or the UK interim target. Some argued that 2020 was far enough away to show progress, but still left sufficient time to allow action before 2050. Similar arguments were offered in support of 2025 and 2030, although a small number of other respondents specified 2021 (being the long term target date for the Regional Transport Strategy) and 2023 (being 15 years from the date of the Bill).

3.52 A small number of respondents proposed recurring targets set for periods between 2 and 10 years. The reasons offered for this approach were, in some cases, related to views expressed previously relating to budgets. Of these, 4 years and 5 years were identified most commonly, with the former being linked to Scottish parliamentary periods. The arguments offered to support recurring targets over these periods were similar to those offered about budgets earlier, for example tying into existing budgeting periods and being adequate to inform investment decisions. A very small number of respondents specifically suggested setting targets corresponding to the chosen interim budget periods.

3.53 In terms of the definition of the actual point target (regardless of the year or years specified) the most common approach suggested was to extrapolate from the trajectory required to reach the target by 2050. A number qualified this by suggesting that the trajectory chosen should reflect the need to make early savings, and so should not be a simple pro rata reduction of the target for 2050 (although some did suggest this). A number of respondents made suggestions about how the trajectory could be established on this basis. One campaign text proposed that an interim target of at least 50% should be set for 2020.

3.54 Notwithstanding the level of the target, or the year or years specified, it was suggested by some respondents that these needed to be set as a matter of urgency. (Similar views were expressed about budgets.) A small number of respondents stated that the target- setting process would take some time, as would the implementation of actions, and that this should be considered when setting any point targets.

3.55 A small number of respondents suggested that it would not be necessary to set specific point targets. A range of reasons were provided to support this view, including that setting point targets would:

Restrict the ability of the independent advisory body to give advice to the Scottish Government as it saw fit.
Be unnecessary if other targets (and budgets) are adhered to.
Be better simply to focus on the 80% target exclusively.
Draw attention away from the need to focus on the delivery of budgets (to whatever agreed period).
Be inconsistent with the idea of a trajectory (e.g. as a point target does not fix the path of the trajectory).
Lead to a focus on achieving the interim, rather than the longer term target, potentially leading to sub-optimal policy choices being made.
Require significant effort and expense for monitoring and reporting.

3.56 A small number of respondents (including some of those who did not consider it necessary to set specific point targets, and others) suggested using cumulative targets rather than, or as well as, point targets, which could be set and monitored by the Scottish Government. It was argued, for example, that this approach would be more consistent with setting a trajectory, and would ensure that progress is made over the period to 2050.

Summary of issues: Supporting Framework

The issues raised about the supporting framework can be summarised as follows:

In relation to question 8, examining the factors which should be taken into account when setting the level of budgets, around a fifth of those who addressed this question simply supported those identified in the consultation document. Of these, scientific knowledge about climate change, and likely economic growth were mentioned most often. Many other respondents made additional comments on the suggested factors.
A number of other factors were identified, such as that budgets should reflect the need for: early action; a realistic approach; leadership; flexibility; equity; and that they should be related to the shadow price of carbon. A small number suggested setting budgets at levels other than Scotland (geographical and / or sectoral). Some proposed that the budgets should follow what is required to achieve a reduction of 80% (or at least 80%) in emissions by 2050, or to achieve a desired emissions reductions trajectory. A large number favoured a budget level equating to a 3% per annum reduction, and some suggested that the budget should be directed towards achieving this.
In relation to question 9, asking how long interim budget periods should be, five years was the most common period proposed, and the most common reason related to consistency with the UK Bill, and with other international agreements. Only a very small number of respondents suggested longer interim budgetary periods.
There was also support for annual interim budget periods. It was also noted that a large number of respondents suggested that there should be annual point targets and there is clearly a close relationship between targets and budget periods (although most of those suggesting annual targets did not address either of the questions relating to budgets directly). The main reasons given were to ensure a focus on progress and to promote early action.
In relation to question 10, exploring how many years in advance emissions budget periods should be set, responses split into three main groups, who: specified a number of years in advance; specified a number of budget periods in advance; or wished to have budgets set for the whole period to 2050. The most common suggestions equated to setting budgets 5-10 years in advance. There was support among a smaller number for longer period and some advocated that the budgets should be mapped out for the whole period to 2050 (including some who suggested shorter periods).
Regardless of the number of years or periods specified, the main reasons for setting budget periods some years, or some periods in advance related to providing: clarity of the Scottish Government's intentions; a warning period for investment and planning and other factors affecting businesses; a link to "typical" budget payback periods; and an incentive to businesses engaged in the production of new technologies.
In relation to question 11, exploring the limit on the amount of emissions which the Government can borrow from a following budget period, respondents split into those who: agreed that borrowing should be permitted with no additional restrictions; agreed that borrowing should be permitted, but only in specific circumstances; or did not agree that borrowing should be permitted. Views were broadly split, with, overall, slightly more favouring the provision to enabling borrowing from a following budget period than did not, with the main reason for support being that this allowed some flexibility to cope with unforeseen circumstances, or to accommodate uncertainties and error margins in measurement. Some respondents offered views on how borrowing should work in practice and a number suggested either conditions which should apply to borrowing (including the application of an "interest rate"), or ways in which it should otherwise be restricted. Many reasons were also provided by those who believed that borrowing should not be permitted.
A wide range of possible percentage limits to borrowing were suggested, ranging from 1% to 50%, although others stipulated that the level should be, for example, as low as possible. The most common view offered was that borrowing should be restricted to not more than 1%, with most of those who expressed a view suggesting 5% or less.
Some respondents offered comments on banking, with slightly more respondents in favour of banking than against it, with those who were positive suggesting that this: provides an incentive for early action; may encourage innovation; and helps smooth out fluctuations.
In relation to question 12, most respondents agreed that point targets should be specified (although a small number did not, or suggested using cumulative targets rather than, or as well as point targets). A wide range of views were offered about the timing of point targets among those who supported these.
Many respondents suggested that the Bill should contain an annual target (with many suggesting the need for a 3% per annum reduction). A very small number of respondents supported the arguments made against annual targets in the consultation document. Some suggested that point targets should be established for specific years to 2050, with the most commonly mentioned being 2020. A small number proposed recurring targets for periods between 2 and 10 years (with 4 and 5 years identified most commonly). The most common approach suggested for the definition of the point target was to extrapolate from the trajectory required to reach the target by 2050.

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