We recognise that a robust result from top-down analyses is that a ‘fair’ contribution from the UK (alongside other developed nations) is to take responsibility for reducing emissions faster than needed from the world as whole to achieve the Paris Agreement long-term temperature goal (Box 7.2). • Using bottom-up modelling to test feasibility. We use our bottom-up assessment to identify the credible limits of ‘highest possible ambition’ for UK (domestic) reductions that are likely to support the global efforts to rapidly reduce emissions and reach Net Zero globally. In practice, this will mean ambitious but still credible pathways to lead the development and deployment of actions to reduce emissions sooner than required from the • Considering all aspects of the UK’s contribution to causing and tackling climate change. We also recognise that some top-down allocation formulas suggest more ambitious emissions reductions than the Committee currently deems credible as the basis for legally binding targets. Therefore, we also consider additional contributions that the UK can make to reducing global emissions in the round to complement rapid domestic decarbonisation. This includes contributions through actions to reduce the UK’s overseas consumption emissions and wider international climate policy, including climate finance, to support critical parts of the global emissions as fast as possible. 323 Sixth Carbon Budget – The path to Net Zero This approach is consistent with our approach to identifying 2050 for the UK Net Zero target. 2050 was the earliest date for which the Committee judged it was credible to set a legally binding target for reducing the UK’s territorial emissions to Net Zero, while recognising that some top-down allocations would suggest a larger contribution, which at the margin could be delivered better through international collaboration, such as climate finance or credit purchase. Top-down equity-based allocations of emissions for the UK Top-down analyses using simple metrics for allocating emissions can be u sed to quantify what different equity framings (such as stresses on either equality of the right to emissions, responsibility for past emi ssions, or capability to reduce emissions) would mean for UK aspect of equity stressed and the specifics of the methodology used, but generally suggest that the UK shou ld be aiming to do more than the reductions required in the global average. These contrast with allocation principles based on equal marginal abatement costs, which generally suggest lower levels of emission reductions from developed countries like the UK. The Paris Agreement does not use a defined equity principle to allocate emissions reductions to countries. Furtherm ore, usi ng these top -down allocation methodologies in isolation does not capture several aspects key to setting domestic reduction targets • Respective capabilities and national circumstances. The Paris Agreement recognises that the deliverable emissions reductions will depend on specific national circumstances that are not captured within these simple allocation formulas. For example, where emissions footprints are dominated by sources with av ailable low- or no-cost alternatives (e.g. power sector) ‘equal effort’ could mean emissions may could fall quicker in the near -term than where dominated by sources with currently • Clean growth opportunities. Many simple allocation fo rmulas implicitly assume that cutting emissions faster necessarily imposes additional cost and could make development objectives more difficult to meet. However, undertaking more ambitious emissions reductions in the near -term may in fact have benefits for meeting sustainable development obje ctives.1 Several aspects of the required low -carbon transition are now expected to be cost -saving relative to a high -carbon future in large parts of the world (e.g. renewable generation for new power system capacity) a nd can bring significant additional be nefits, particularly for air quality. 2 • Territorial emissions are only one part of a country’s contribution. Simple allocation formulas refer to the emissions reductions that a country is ‘responsible’ for. This can b e made up of domestic reductions but sh ould also consider a country’s wider contribution to tackling climate change through climate finance efforts and funding of emissions reduction through international carbon markets. Actions such as funding development of a key low-carbon technology may onl y have a small direct impact on global emissions but could be a major contribution to the global effort to tackle climate change in the long -run. Developed countries also have a responsibility to be supporting adaptin g to climate changes around the world u nder the Paris Agreement. These factors suggest the need to incorporate insights from top -down equity approaches alongside a broader evidence base to assess ‘fairness’ more completely under the Paris their own does not capture all

Chapter 7: The Sixth Carbon Budget as a contribution to the Paris Agreement 324 on top-down equity principles and our du Pont, Y.R. et al. (2016) National contributions for decarbonising the world economy in line with the G7 agreement. Environmental Research Letters, 11,5, 054005; CCC analysis. Allocations use a subset of global emissions pathways considered by IPCC-SR15, which have per capita emissio ns reductions slightly lower than the median of the full set of pathways but well within their range. Reductions are for all GHGs and expressed as a percentage of 1990 levels of emissions. The proposed Balanced Net Zero Pathway for the UK is added here in purple. b) Comparing with global pathways This sub-section compares the Committee’s recommended Balanced Net Zero Pathway for the UK against key metrics of global transitions expected to keep warming to the long-term temperature goal of the Paris Agreement according to the IPCC. We consider first aggregate metrics (e.g. for emissions), and then timings and scale of required actions (e.g. timing of the switch-over to key low-carbon i) Comparison on economy -wide emissions Delivering the Balanced Pathway to the Sixth Carbon Budget would, on a per person basis, see the UK catching and then surpassing global pathways expected Zero Pathway for the UK and those required globally*: * In this section we compare with the range of modelled scenarios assessed by the IPCC in the 2018 Special Report on Global Warming of 1.5°C.
These scenarios allocate effort amongst regions, gases and sectors to minimise the modelled global cost of the transition. 325 Sixth Carbon Budget – The path to Net Zero • Date of Net Zero. The UK has legislated an earlier date to reach Net Zero than required for the world to keep warming to below 1.5°C (with ~50% probability). It is around two decades ahead for aggregated GHG emissions, and the scenarios in this report imply it would be around five • Emissions reductions to 2030. The IPCC identified pathways with no or limited overshoot of 1.5°C as requiring global aggregated GHG emissions to fall by around 45% from 2010 to 2030. The UK scenarios in this report see GHG emissions fall by around 55% in the same period. A smaller percentage reduction in UK emissions over 2020 - 2030 than required for the world as a whole reflects a significantly higher level of per person emissions in the UK than for the global average in 2010. • Emissions per person. Our Balanced Net Zero Pathway implies aggregated GHG emissions per person of around 2.7 tCO2e per person in 2035 (the central year of the Sixth Carbon Budget period), consistent with the global average level in pathways expected to keep warming to 1.5°C. Per person emissions are generally higher in the UK Balanced Net Zero Pathway than in the 1.5°C consistent pathways prior to this date and lower afterwards. • Cumulative emissions. The UK’s cumulative emissions of CO2 and long-lived GHGs from now to 2050 would be below the global per person averages for pathways limiting temperature rise to well below 2°C, but above those for 1.5°C (although just within the scenario range for each).† This in part reflects the UK’s higher per person emissions today, particularly for CO2 emissions. Important sources of emissions reductions for the world over the next decade under 1.5°C-aligned scenarios have already been deployed in the UK (e.g. closure of coal-based power generation) or are not geographically applicable (e.g. ending deforestation), with continued reductions in UK per person emissions depending on emissions reductions from sectors that have not yet seen emissions declines (e.g. transport and buildings), with an inevitable lag for policy actions taken immediately to feed through the capital stock and result in significant emissions reductions. These high-level metrics demonstrate that the domestic emissions outcomes from the Balanced Net Zero Pathway are broadly aligned to global pathways for the Paris Agreement, including the 1.5°C goal. Any slower reductions to 2035 would bring into question whether the UK could be credibly considered to be pursuing efforts to limit warming to 1.5°C, given that the UK is expected to have higher per person emissions than the global average under 1.5°C consistent scenarios prior to this date. The Balanced Net Zero Pathway should be considered as the minimum level of ambition for the transition to Net Zero. Where opportunities to reduce emissions further (e.g. as considered in our Tailwinds scenario) are uncovered, * Some global scenarios keeping warming to below 1.5°C do not reach Net Zero GHG emissions by 2100, nor do the majority keeping warming well-below 2°C. † In this report we interpret ‘well-below’ 2°C in the Paris Agreement long-term temperature goal as bounded on the high at least a 66% probability of keeping peak warming below 2°C, consistent with our interpretation in the 2019 similar per person emissions as Slower UK emissions reductions

Chapter 7: The Sixth Carbon Budget as a contribution to the Paris Agreement 326 Economy-wide emissions comparisons between the Bal anced Net Zero Pathway and global scenarios consistent with Cumulative CO 2 emissions (2020 – 2050) Cumulative long -lived GHG emissions (2020 – 2050) Rate of CH 4 emissions (2050) [tCO 2e/person/yr] 0.5 0.6 (0.3 – 0.9) 0.7 (0.5 – 1.3) Aggregated GHG emissions (2030) [tCO 2e/person/yr] 4.5 3.5 (2.5 – 4.4) 4.8 (3.2 – 7.5) Aggregated GHG emissions (2035) 2.7 2.6 (1.5 – 3.7) 4.0 (2.6 – 5.9) 64% 25% (8% - 45%) -2% (-57% - 31%) 54% 45% (33% - 60%) 25% (-15% - 50%) 36% 46% (31% – 63%) 33% (-1% - 49%) Date of Net Zero CO 2 emissions 2044 2050 (2037 -2082) 2074 (2050 -2100+) Date of Net Zero long -lived GHG emissions 2045 2059 (2039 – Date of Net Zero aggregated GHG emissions 2050 2071 (2048 -2100+) 2100+ (2079 -2100+) CCC analysis, Huppmann, D. et al. (2018) A new scenario resource for integrated 1.5°C research. Nature Climate Change, 8 (12), 1027. Cumulative emissions per person over the 2020 – 2050 period are evaluated using expected 2050 population sizes. GHG emissions are aggregated using GWP100 values from the IPCC 5th Assessment Report (with climate-carbon feedbacks). Long-lived GHG emissions here include carbon

327 Sixth Carbon Budget – The path to Net Zero consistent with the Paris Agreement CCC analysis. Huppmann, D, et.al. (2018) A new scenario resource for integrated 1.50C research. Nature Climate Change, 8 (12), 1027; Olivier, J. & Peters, J. (2019) Trends in global CO2 and total greenhouse gas emissions. Aggregation of greenhouse gas emissions is done using the global warming potential metric at time horizon of 100 years. Values from the IPCC 5th Assessment report (with climate-carbon feedbacks) are used. Minimum and maximum ranges are used across the global emissions scenario categories used by the IPCC Special Report on Global Warming of 1.50C. These figures do not include the uncertain of COVID-19 on 2020 emissions. Chapter 7: The Sixth Carbon Budget as a contribution to the Paris Agreement 328 ii) Comparison on deployment rates The Balanced Net Zero Pathway would see the UK taking actions earlier than required for the global average in pathways expected to keep warming to below • Power Power sector decarbonisation under the Balanced Net Zero Pathway would be well advanced by 2030 with renewable sources the cheapest form of new power generation in the UK. This would keep the UK ahead of a global transition aligned to 1.5°C on all power sector metrics.
• Decarbonising household heating and Decarbonisation options in these sectors are now starting to be available at scale with low or no additional cost. The UK has high per person emissions in these sectors compared to the global average highlighting the importance of the UK pushing ahead with deploying low-carbon options more rapidly. – Close to half of the UK fleet of passenger vehicles could be electric (both battery and plug-in hybrid) by 2030, considerably more than in the global average and consistent with that expected from developed regions such as the EU (40-55%) as part of the global – UK heat pump installations would reach over one million a year by 2030 under the Balanced Pathway. This would be 1.7% of the global total installations consistent with a scenario keeping warming ‘well- below’ 2°C and 1.4% for a scenario expected to keep warming to • Deeper decarbonisation The Balanced Net Zero Pathway would see the UK deploy deeper decarbonisation options (e.g. carbon capture and storage (CCS), low-carbon hydrogen, and engineered greenhouse gas removals) at-scale ahead of the global average. These aspects of the decarbonisation challenge currently continue to have some costs relative to high carbon alternatives but are expected to be significant for the global effort to keep to the Paris Agreement, particularly after 2030 (section Moving ahead of the global average in the deployment of these options does not mean that this imposes an additional burden on the UK. Our analysis throughout this report suggests that many aspects of this transition will be cost saving and have additional co-benefits associated with them. The overall impact on UK GDP could be very limited or an overall boost to the UK economy (Chapter 5). decarbonisation options in the

329 Sixth Carbon Budget – The path to Net Zero Comparison of the UK decarbonisation actions with global average pathways Coal % of electricity generation – 2030 Low-carbon % of generation - 20301 CCS per capita - 2030 (tCO2/person/yr) Heat pump installation rate - 2030 (heat Low-carbon hydrogen production - 2030 (kg / Engineered removals per capita - 2030 CCC analysis; 1Huppmann, D. et al. (2018) A new scenario resource for integrated 1.5°C research. Nature Climate Change, 8 (12), 1027; 2Climate Action Tracker Initiative (2020) Paris Agreement Compatible Sectoral Benchmarks; 3IEA (2020) World Energy Outlook 2020 Electric car fleet figures here include plug-in hybrids. For Europe as a whole, the Climate Action Tracker analysis suggests a benchmark of 40 – 55%. Median figures are used for the IPCC-SR1.5 pathways, with a wide range around these medians across the scenario ensemble. CCS is often used extensively within IPCC-SR1.5 pathways and to greater extents than in other global pathways (e.g. those from the IEA). Chapter 7: The Sixth Carbon Budget as a contribution to the Paris Agreement 330 c) Comparing ambition to international commitments Our proposed Balanced Net Zero Pathway would place the UK in line with the most ambitious current and expected commitments for 2030 from other similar countries • Emissions targets for the UK set on the Balanced Net Zero Pathway would put the UK ahead of existing targets from other similar large European countries and ambitious US states, both in terms of progress reducing emissions since the base year (1990) and in percentage reductions from • As part of the wider EU package to increase NDC ambition, countries such as France and Germany may be required to set more stringent targets than current ones. Any increase in ambition from these countries is still to be determined, but an additional 15% increase in 2030 targets (consistent with the proposed EU-wide increase in ambition) would still leave the UK with highly competitive emissions reduction targets across a set of metrics and well placed amongst a group of ambitious countries. We also estimate that our proposed UK NDC, based on the Balanced Net Zero Pathway, is at least as ambitious, than would have been required from the UK as a contribution to the proposed strengthened EU NDC (a 55% reduction from 1990 levels – increased from a 40% reduction currently) if the EU were to use a similar approach to allocating this effort to member states as under the previous target Comparison to existing and proposed international targets for 2030 European Union (proposed) 55% 39% 6.0 110 France (current) 40% 27% 5.1 110 Germany (current) 55% 34% 7.1 140 CCC analysis; UNFCCC GHG inventories; OECD (2018) GDP long-term forecast (indicator); World Bank Population Projections. Emissions are aggregated using IPCC-AR5 global warming potential (100-year time horizon) values – including carbon-climate feedbacks – to aid comparability to the Balanced Net Zero Pathway. For New York State the second column evaluates emissions reduction relative to 2016. The most recent year of GHG inventory data. LULUCF and IAS emission are removed from the Balanced Net Zero Pathway to aid comparison with other targets excluding Projections and GDP projections from OECD long-term forecast. 331 Sixth Carbon Budget – The path to Net Zero What would have been the UK’s share of the EU 55% reduction target? The European Commission has recently proposed to update th e EU’s NDC for 2030 to a 55% reduction relative to 1990 le vels, from the current 40% reduction. * This now needs to be agreed amongst the member states at the European Council, and then new targets for the EU Emissions Trading System (EU-ETS) and indi vidual member states in the non-ETS and LULUCF sectors agreed to achie ve it. Based on the pre vious methodology for the 2030 target it is possible to estimate what might ha ve been the UK’s share if it was still an • ETS sectors are expected to hav e to decline by between 58-65% in modelling to achieve the EU wide goals.3 Assuming a similar UK share of the ETS cap as in the advice on the Fifth Carbon Budget then UK ‘traded sector’ emissions would have to fall to between 80 - 91 MtCO2e/yr by 2030.
• Non-ETS sectors have been allocated to member states in the past based on relative differences in average GDP per person. For the proposed 55% EU reduction the member state allocations are yet to be determined, but allocation based on a similar methodology to the current 2030 target would suggest a UK reduction in the region of 53 - 62% below 2005 levels, depending on the range of possible contributions from non- ETS sectors to the overall target. A more complex allocation mechanism may be required for the non-ETS sectors for the strengthened 2030 target to effectively capture differences in cost effective abatement options between member states in non-ETS • Land-use, land-use change and forestry (LULUCF) emissions have only been included within the current EU 2030 package based on a ‘no-debt’ rule to date. The EU Commission has now proposed to include fully LULUCF within the accounting for the Overall, we estimate that the UK’s share would have been around a 65 - 69% reduction , excluding emissions from international aviation and shipping (but including LULUCF emissions) if it was still an EU member state. While the Balanced Pathway requires the UK to go further and faster in the low- carbon transition, it is not out of step with the pace and scale of change expected in other comparable economies considering their own pathways to Net Zero by • Phase out of the sale of high-carbon assets. Ending petrol and diesel car sales by the mid-2030s has been committed to by many Governments. Many European countries have committed to this by 2030, including Denmark, Ireland, the Netherlands and now the UK, with Norway having the most ambitious date of 2025.4 California has made a recent commitment to achieve this by 2035. European countries are also starting to propose the phase outs of fossil fuel heating systems. The Netherlands is developing legislation to ensure new homes are no longer connected to the gas grid ahead of the 2025 phase out date shared by Ireland’s and the UK’s current Future Homes Standard. • Scale up deployment of low-carbon technology. Other countries are also planning for high penetration of renewable electricity generation by 2030. Germany is expected to achieve a 65% renewable share, similar to the UK under the Balanced Net Zero Pathway, with higher shares anticipated in other European countries such as Spain (74%) and the Netherlands (70%).5 Proposals for deeper decarbonisation in other countries are also being * Several scopes for this target have been proposed in the Commissions impact assessment including with and without emissions from international aviation and navigation (shipping). making or considering similarly

Chapter 7: The Sixth Carbon Budget as a contribution to the Paris Agreement 332 By 2030, significant electrolyser capacity (for hydrogen production) is being planned for in both France and Germany (5 GW and 6.5 GW respectively) and the European Commission has recently released a new hydrogen strategy aiming to reach 40 GW of electrolyser capacity across the EU.6 Norway has committed to developing a full-scale carbon capture and storage supply chain with capacity of up to 5 MtCO2 per year, which would be just under half of what the UK would be expected to deliver under the Balanced Net Zero Pathway by 2030. The Balanced Net Zero Pathway, and an NDC based on it, would leave the UK well-placed to support raising international ambition as the host of COP26 and President of the G7. The UK would not be doing this alone. Other countries and regions are committing to similarly ambitious transitions over the next decade, highlighting the growing international momentum behind delivering the scale and speed of transition outlined in our scenarios. Adopting lower ambition for 2030 would limit the UK’s ability to credibly call for the raising of ambition to the level required globally, and risk being left behind by similar economies, missing out on the clean growth opportunities that the transition is expected to bring. necessary for the UK to support the global effort as host of the

333 Sixth Carbon Budget – The path to Net Zero 3. Supporting global efforts to reduce emissions In this section we look at what would be needed from the rest of the world to deliver on the overall ambition of the Paris Agreement and how the UK can support this. If other developed countries adopted pathways with similar ambition and developing countries followed rapidly soon after, then the global temperature rise can be limited to well below 2°C. Achieving a 1.5°C temperature goal will likely need maximum ambition in every sector and every region. It will be important that large emerging economies with most capability contribute significant ambition. The proposed UK ambition within the Balanced Net Zero Pathway should encourage this and will be expected of the UK with its role as COP26 President. a) A global pathway to deliver on the Paris Agreement b) UK action to support the global effort a) A global pathway to deliver on the Paris Agreement This subsection lays out the key aspects of the global transition to achieve the Paris Agreement. There are three parts to i) Introducing ‘leadership’ to Paris-aligned global pathways ii) Key elements of the global decarbonisation transition iii) Additional efforts for pursuing 1.5°C i) Introducing ‘leadership’ to Paris -aligned global pathways Most pathways of a global transition expected to be consistent with the Paris Agreement use a cost-effective framework, meaning that modelled cost is the only factor used to allocate emissions reductions across regions, sectors and gases. We developed the concept of ‘leadership-driven’ pathways within our advice on setting a Net Zero target for the UK in 2019, which aim to build-in aspects of other important factors (e.g. obligations for developed country leadership) into the scenario. We commissioned Vivid Economics and UCL to further develop this framework for this report.7 These scenarios contained three groups of regions, • Developed regions take the lead in deploying the solutions that are necessary to reduce emissions globally and reach Net Zero emissions first.
In accordance with many emerging commitments, these regions achieve or go beyond Net Zero CO2 emissions by 2050. Near-term emissions reductions are made consistent with achieving these 2050 objectives and keeping warming to the Paris Agreement long-term temperature goal. • Large industrial economies, which includes China, represent a large fraction of future cumulative CO2 emissions and will be very important for the future global emissions trajectory. Keeping warming to the long-term temperature goal of the Paris Agreement requires that they peak their emissions very soon (significantly improving on their current NDCs) and reduce them rapidly in the next two decades to reach Net Zero CO2 the Paris Agreement to identify pathways of the global effort. Chapter 7: The Sixth Carbon Budget as a contribution to the Paris Agreement 334 • Developing regions 'leapfrog' to low-carbon development paths. Emissions remain low on a per capita basis, but do not need to reach Net Zero CO2 until around 2070, and some may not reach Net Zero before 2100. Opportunities for low-cost emissions reduction are taken within these regions, in line with the requirement for highest possible ambition. Some more expensive options are also required in developing nations, but these tend to happen after earlier deployment in developed nations and could be supported (in part) by mechanisms such as climate finance and This hybrid scenario represents a plausible global transition pathway towards the long-term temperature goal of the Paris Agreement. At a global level, this scenario would see CO2 emissions rapidly fall from 2020 to reach close to Net Zero by 2060 would be expected to keep warming to the 1.5°C to 2°C corridor of the Paris Agreement long-term temperature goal (Chapter 8). * emissions in a ‘leadership-driven’ scenario consistent with the Paris Agreement Vivid Economics (2020) Unpacking leadership-driven scenarios towards the Paris Agreement; CCC analysis. The UK trajectory is the Balanced Net Zero Pathway with all other regions taken from modelling with TIAM ‘Central and South America’ region is associated with a modelled transition to a large land sink in that region. * Within the model a constraint is applied to keep global cumulative emissions to the remaining carbon budgets for a 50% probability of keeping warming to below 1.75°C from IPCC-SR1.5, we explore the range of climate outcomes consistent with this global emissions pathway in Chapter 8. 335 Sixth Carbon Budget – The path to Net Zero ii) Key elements of the global decarbonisation transition The cumulative nature of how long-lived GHGs (such as CO2) impact the climate (Chapter 8) means global emissions must be aligned to Paris-consistent pathways over the full time period to Net Zero. It is not enough just to aim to reach Net Zero by or soon after 2050 without consistent effort in the near-term. ‘leadership-driven’ Paris Agreement scenario and under current global ambition Vivid Economics (2020) Unpacking leadership-driven scenarios towards the Paris Agreement. Current global ambition is modelled through constraints requiring regional emissions to match those from current ND Cs in 2030 followed by further improvements in the overall emissions intensity of the economy after 2030 consistent with the improvement over 2020-2030 needed to meet current NDC targets. Pledged targets for Net Delivering the necessary near-term emissions reduction for this Paris-aligned global transition would require a rapid scaling up of action across the global economy over the next decade. Key wedges of abatement are expected to come from rapid reductions in coal-fired electricity generation, expansion of electricity systems in a low-carbon way, the rapid roll-out of electric vehicles, efficiency in building and industry, and a reduction in deforestation to reduce global land-use emissions reductions are essential. Only without near-term action isn’t enough to deliver on the Paris global ambition, particularly in

Chapter 7: The Sixth Carbon Budget as a contribution to the Paris Agreement 336 Key wedges of increased global ambition over the 2020s. Despite a wide range of modelled pathways to achieve the Paris Agreement, most share common features for key changes required over the coming • Rapid and large reductions in electri city from unabated coal . Electricity generation from coal drops by around 55% – 65% over 2020 – 2030 for global scenarios that keep warming to 1.5°C and ‘well -below’ 2°C respectively.8 However, only 16% of global installed capacity is expected to shut down by 2030 under normal economic coal plant lifetimes.9 Significantly accelerated retirement (or retrofitting with CCS) of existing plants will be needed, as well as current pipelines of unabated new coal power to not go ahead. Low -cost renewables are now st arting to undercut the cost of electricity generation from existing coal plant, but significant additional barriers remain to reducing existing coal capacity particularly in regions of the world with very young coal fleets.10 Finding ways to rapidly switch away from coal electricity generation is the single biggest cont ribution to reductions in global cumulative emissions. • Low-carbon sources meet the need for increased power system capacity. Global demand for electricity grows by around 15% over 2020 – 2030 in typical modelled pathways consistent with keeping warming to 1.5°C.11 This is lower than the rate in current policy scenarios due to the important role of end -use efficiency to limit energy demand growth. 12 The large majority of this demand growth will be in developing countries as living standards rise. This inc reasing overall demand needs to be met by low-carbon sources as well as compensating for the electricity generation from early retirements of coal power. Falls in the costs of renewable electric ity has helped make this transition more feasible than was env isaged only a few years ago, The lowest -cost sources of renewables are as cheap as, or cheaper than, new fossil -fuel alternatives in countries containing around two -thirds of the world’s populat ion according to recent analysis (based on fossil fuel prices in 2019).13 • Accelerated uptake of electric vehicles (EVs).
Keeping road transport emissions low whilst global mobility rises will require a large increase in the fraction of car sales that are electric alongside the rapidly decarbonising and expanding global electricity systems. Over 40% of global passenger vehic le sales by 2030 would likely have to be EVs, rising from just 2% today, under Paris -aligned pathways according to the IEA. The emerging cost-competitiveness of EVs with internal combustion engine -driven cars due to falling battery costs will help provide momentum to this transition. • Reducing deforestation and better management of land. Currently CO 2 emissions from land-use change and forestry are about 13% of the total global GHG emissions, arising primarily from tropical deforestation of very high carbon content land. Most global pathways consistent with the long -term temperature goal of the Paris Agreement transform this net source of e missions into a net sink over the next few decades. Reduced rates of deforestation can make a large contribution to this , and if implemented in ways that are mindful of other uses of land and barriers to action , can contribute to wider sustainable developm ent goals.14 The reducing costs of low -carbon technologies and wider alignment with sustainable development objectives indicate that a rapid scaling -up of global decarbonisation action this decade could be possible and desirable. The required pace of chan ge will require a large and rapid shift in global investment patterns to make it happen. The key technologies to enable this rapid transition over the next decade are now largely widely available with little or no additional cost over a high carbon alternative, due to rapid falls in costs over the past decade.15 Some additional investment is required, but most importantly a shift is needed in the pattern of investment away from unabated fossil fuel power and towards low-carbon

337 Sixth Carbon Budget – The path to Net Zero From 2030-onwards, global deployment of additional deeper decarbonisation technologies will be needed to maintain global emissions reductions and move towards Net Zero emissions • Expansion of low-carbon electricity systems enables electrification to decarbonise much of end-sectors such as transport, buildings and industrial • A global hydrogen economy is likely to be required to decarbonise areas where electrification may be challenging (e.g. some parts of industry, long- distance heavy goods vehicles) and to provide flexibility in high variable • Carbon capture and storage (CCS) is required to deal with process emissions in industry and enables at-scale active removal of CO2 from the air (e.g. biomass energy with carbon capture and storage – BECCS - or direct air capture), a necessary feature of most pathways that reach global Net Zero CO2 emissions. Many of these technologies are available at protype or demonstration stage today but have not yet been deployed at significant scale. Our modelled global ‘leadership’ transition involves a higher and earlier concentrations of these ‘harder’ decarbonisation actions in the developed regions of the world. Early actions over the 2020s by developed regions, consistent with their responsibilities under the Paris Agreement, are likely to have an important role in driving forward the necessary developments and cost reductions to make subsequent global deployment more Progress is currently being made on many of these fronts, for • The heat pump installation market is rapidly expanding in Europe, with around a 12% annual average growth since 2015 with Scandinavian countries having some highest penetration rates.17 • Announced plans for low-carbon hydrogen production indicate that global production would quadruple by 2023. Several large European countries have announced plans to scale-up hydrogen use, along with the European • The first large-scale (1 MtCO2/yr) direct air capture plant could be operational in the USA by 2023. The UK has plans to deploy large-scale carbon removal through BECCS over the 2020s and beyond.19 Our Balanced Net Zero Pathway aims to ensure that the UK helps to drive forward developments in these key technologies over the 2020s. Slower deployment of these technologies than in our Balanced Net Zero Pathway would risk undermining the plausibility of the necessary post-2030 global transition to keep warming to the long-term temperature goal of the Paris Agreement. Chapter 7: The Sixth Carbon Budget as a contribution to the Paris Agreement 338 iii) Additional efforts for pursuing 1.5°C Keeping peak warming to below 1.5°C will likely require additional ambition beyond the ‘leadership-driven’ scenario outlined previously. * This would require global Net Zero CO2 to be reached earlier (around 2050) and more rapid global emissions reductions on the path to Net Zero. In models able to simulate this level of ambition there are two key aspects to this • All regions reach Net Zero CO2 emissions around 2050. Published scenarios capable of achieving this level of additional ambition generally show all regions converging to reach Net Zero CO2 emissions around 2050, with very little variation between them. • Significantly increased global ambition prior to 2030. Significant extra ambition in the global power sector is likely to be necessary to achieve this. According to the IEA World Energy Outlook 2020, global power sector CO2 emissions would need to fall by 60% over 2019 – 2030, with power generation from unabated coal essentially ended by this date. Around half of new car sales globally would need to be electric by 2030 relative to around 40% in below 2°C scenarios. The switch to low-carbon fuels in global industry is likely to need to have made significant progress by 2030. Changes on the demand-side are also key.
Further accelerations in domestic emissions reductions by developed regions beyond the levels in this scenario can only play a marginal role in delivering this additional ambition need for a fully 1.5°C aligned transition, due to the declining share of emissions they will comprise, although additional opportunities to reduce their emissions should be taken where they become feasible.† For this ambition to be realised it will be essential for all mitigation actions to proceed immediately in all global regions with no significant space for differing dates of deployment across the world. Developed regions will need to provide additional support for this required global increase in effort. * Significant net negative global CO2 emissions after reaching global Net Zero could help decline global warming back to 1.5°C after peaking at higher levels but would not significantly affect the level of peak warming reached. † Only around 25% of cumulative CO2 emissions come from developed regions in our simulated Paris Agreement Fully aligning the global effort reduction in different regions. limited role in the additional 1.5C, but their support of the global effort will be essential. 339 Sixth Carbon Budget – The path to Net Zero b) UK action to support the global effort i) The need for additional global ambition Significant new Net Zero pledges from large emitters (Box 7.5) are, if delivered, starting to align global mid-century ambition with that needed to halt global warming in time to deliver on the Paris Agreement. However, the expected level of global emissions in 2030 remains significantly above those consistent with pathways expected to keep warming to the long-term temperature goal of the Paris submitted revised NDCs for 2030 with only 33 additional countries committed to updating their NDC by 2020.20 Many countries, including most of the big emitters are now not expected to revise their NDC by the 2020 deadline set under the UNFCCC with many now expected in 2021. compared to Paris Agreement-aligned scenarios Climate Action Tracker (2020) CAT Emissions September 2020 update; United Nations Environment Programme (2019) Emissions Gap Report 2019; Huppmann, D. et.al. (2018) A new scenario resource for integrated 1.50C research. Nature Climate Change, 9 (12), 1027. Assessment of the ‘No-policy baseline’ from UNEP Emissions Gap Report 2019. ‘Current policies’ and ‘Submitted NDCs’ are from the Climate Action Tracker. Aggregated 2030 emissions levels for Paris Agreement compatible scenarios are from the IPCC-SR15 >66% 20C and >50% 1.50C low or no overshoot categories. GWP 100 values from the IPCC 4th Assessment Report are used to aggregate gases. Chapter 7: The Sixth Carbon Budget as a contribution to the Paris Agreement 340 New Net Zero commitments and 2030 ambition in high emitting regions Closing the gap between current trajectories and those expected to achieve the Paris Agreement will require increased ambition across the world, but particu larly so in the large emitters. G20 countries make up 78% of global GHG emissions, with around half of global emissions coming from the largest four emitters (China, USA, EU and India). There has been developing ambition across several large emitters ove r the last • China (25% of global emissions) has recently announced that it intends to reach carbon-neutrality by 2060 as well as committing to enhancing its 2030 ambition. Given the size of China’s emissions, achieving its carbon -neutrality aim woul d be expected to reduce global temperatures by 0.2 - 0.3°C.21 However, what China does in the next 10-15 years matters hugely given the scale of Chinese emissions. China’s response to the pandemic to date has seen emissions rebound beyond pre -COVID-19 levels and a large increase in permitting for new coal fired power plants. 22 • USA (12.5% of global emissions) The incoming Democrat administration has an ambition to ‘put the United States on an irreversible path to achieve Net Zero emissions, economy-wide, by n o later than 2050’, and is also expected to re -join the Paris Agreement. There has not yet been a proposed new NDC target for 2030, but the incoming administration has also expressed an ambition to achieve carbon -free power by 2035 (power sector emissions were 27% of US GHG emissions in 2018). 23 • The European Union (8% of global emissions) is currently considering raising its NDC ambition to a 55% reduction (relative to 1990 levels) from the current 40% commitment. The EU Commission has also proposed a new cl imate law and European Green Deal framework to help achieve it and to give the 2050 Net Zero objective legal status. The European Green Deal framework includes a substantial international facing component, including a proposed carbon border tax to help inc rease international ambition in trade -exposed sectors and p revent carbon leakage. • India (7% of global emissions) has not yet indicated that it will increase its 2030 NDC ambition. It remains on track to overachieve its NDC commitments but there is significant scope for this to become more ambitious. India is yet to announce a Net • Japan (3% of global emissions) has recently pledged to become carbon neutral by 2050, requiring the country to transition away from coal power which currently is a significant fraction (approximately one -third) of its electri city mix. Prior to the announcement of the 2050 carbon -neutrality target Japan had already resubmitted its 2030 NDC without increas ing ambition from the levels pledged in 2015. • South Korea (1.3% of global emissions) has recently pledged to become carbon neutral by 2050 and has proposed a Green New Deal to invest in low -carbon infrastructure and shift away from coal power. The proposed Green New Deal also signals a planned end to the financing of co al power p lants overseas. Including the USA, around 75% of global GDP is now covered by Net Zero targets for mid - century and over 60% of global CO 2 emissions.
ii) Opportunities for UK action to help global effort We commissioned work from Vivid Economics and UCL to identify ways through which developed countries like the UK could support the necessary increases in global ambition to achieve the Paris Agreement. This independent piece of work is published alongside our Sixth Carbon Budget advice.24 A short summary of this report is provided in Box 7.6. emitting countries and regions, but only limited indications of

341 Sixth Carbon Budget – The path to Net Zero Unpacking leadership -driven global pathways towards the Paris Agreement Research commissioned by the Committee to support its work on the Sixth Carbon Budget developed a categorisation of ac tions for how a developed country such as the UK can support the global effort to raise • Demonstrating Net Ambitious domestic emissions reductions can help develop technologies and bring their costs down. • Diplomatic Accelerating decarbo nisation efforts around the world through formal and i nformal diplomatic channels, including multilaterally (e.g. through • Trade Implementing carbon pricing and/or product standards on imported products thro ugh trade deals could provide an incentive to accelerate the decarbonisation of global production processes. • Capacity Providing technical assistance to other countries to help develop their capacity and capability in introducing climate mitigati on solutio ns. • Direct financial Financial transfers to directly fund the deployment of low and Net Zero carbon technology elsewhere in the world. • Action on overseas supply Addressing the overseas emissions ‘embedded’ within global supply chains of products consumed by the UK. The most effective ways to assist global decarbonisation will vary across key ‘wedges’ of the global transition. For example, areas with more global interconnectedness will likely have a greater role for trade -related leve rs, while capacity building will be essential where there are large non -cost barriers to overcome. The report identified a wide range of actions that developed countries could take to support important parts of the global transition in a ‘leadership -driven’ scenario. These include capacity building to help enabl e the rapid shift to stable high variable renewable electricity systems in the developing world, coordinated trade measures by developed countries to develop large markets for low -carbon manufactured pr oducts and drive changes in production methods elsewhe re in the world, and setting high standards for the global trade of biomass , carbon removals and offset credits to ensure that these deliver true benefits for the climate. For the UK specifically this report highlights opportunities • Coal phase out diplomacy. Rapidly ending power generation from coal is the single biggest contributor to aligning global trajectories with those expected to deliver on the Paris Agreement, requiring retirement s in Asian countries with young coal fleets. The UK can help others learn from its own experience phasing out coal. • Building on UK experience to help offshore wind to play a large role in global low - • Leading the development of CCS and low -carbon hydrogen technologies given the UK’s access to geological carbon storage, expertise base, and offshore wind resource. • Leading on developing a Net Zero framework and pathway for aviation given the UK’s high per person aviation emissions. • Developing G HG removals incentives and sustainabi lity standards. The UK is expected to be among the first countries to deploy key new technologies for greenhouse gas removal at large-scales, including bioenergy with carbon capture and storage • Green recovery and greening the UK financial sector. The UK is one of the leading providers of international climate finance to developing countries. The UK should use its position as a global financial sector with substantial cross -border investment to help drive financial sector reform to provide the neces sary shift in private sector investment. These opportunities are not unique to the UK, but the UK could be well placed to significantly contribute to all of them. Vivid Economics (2020) Unpacking leadership-driven global scenarios towards the Paris Agreement. There are several ways through which the UK could effectively

Chapter 7: The Sixth Carbon Budget as a contribution to the Paris Agreement 342 The priority for the UK should be to focus on actions that will have the largest impact in the transition to a low-carbon economy globally, while at the same time being consistent with the achievement of sustainable development goals (SDGs) and building on the areas where it has particular advantages. The largest priority over the next year will be the UK’s responsibilities for hosting COP26 in Glasgow at the end of 2021 and at the same time holding the presidency of the G7 group of countries. 2021 will see Governments around the world produce economic recovery packages following COVID-19 induced recessions. If aligned to climate goals these can help stimulate some of the required investments needed to deliver the low-carbon transition this decade. The UK can put decarbonisation at the forefront of these recovery efforts in its role as lead for the UN’s global workstream on ensuring an inclusive and sustainable recovery, alongside its 2021 international The Government should bring forward ambitious commitments for all aspects of the Paris Agreement as part of its strengthened commitments this year. This includes finance, technology transfer, capacity building and supporting efforts to adapt to current and future climate impacts around the world. This should involve putting in place much stronger climate adaptation planning, which has languished for the last decade, alongside its strengthened emissions reduction commitments. The UK has recently announced a doubling of its climate finance commitments over the coming five-year period. This funding should continue to be split between climate mitigation and climate adaption, as adapting to climate risks is significantly underfunded at a global level.25 The UK should encourage other large providers of climate finance to do the same. iii) Conclusions on the purchase of international carbon units The Paris Agreement allows countries and other bodies (e.g. private companies and international aviation) to collaborate to achieve the NDCs (Article 6).
The rules on Article 6 have yet to be finalised – the UK will coordinate efforts aiming to establish a robust and credible centralised global carbon market and rules to avoid double counting of emissions reductions at COP26. The Committee does not recommend setting a Sixth Carbon Budget that either requires the purchase of international carbon units or allows for international carbon units to contribute to meeting the budget (Chapter 10). The Balanced Net Zero Pathway fully achieves our recommended budget through domestic actions. Using international carbon units in place of domestic action to meet the Balanced Pathway poses several risks • The UK has an internationally influential record of domestic emissions reductions. The usage of international carbon units to substitute for emissions reductions that could be achieved domestically could undermine this influence and legitimise other countries to weaken their commitments to domestic actions. • Usage of credits could impair the clarity of the sectoral actions required to meet the budget by suggesting possible flexibility in the need to deliver • Substituting domestic effort with purchased emissions reductions from outside the UK could make it more difficult to achieve the necessary domestic transitions needed to reach Net Zero by 2050. use of international emissions 2021 will be the focus for its

343 Sixth Carbon Budget – The path to Net Zero Outside of use for compliance with the UK emissions targets, some use of credit purchase may be a useful part of the UK’s international climate policy in addition to domestic delivery of the Balanced Pathway. For many aspects of the global transition supporting the global effort with capacity building and climate finance would likely have more benefits for sustainable development and transformational change towards deeper decarbonisation than funding through global carbon markets. However, modelled leadership-driven scenarios achieving the Paris Agreement still involve a large amount of expensive effort (e.g. CCS and removals) in developing and middle-income countries. These are likely to need an ongoing income stream, which carbon markets and transfers of carbon units could help Any credits purchased for this purpose must be robust and represent real and equitable action to effectively support the global effort to achieve the Paris Agreement. There should be clear evidence of additionality to emissions reductions that would be expected to be achieved otherwise, and they must fulfil sustainability criteria including at a resulting in no net harm, being fully compatible with sustainable development goals and avoiding detriment to local communities. This is particularly important for credits dependent on significant use of land or biomass. We outlined a set of principles for robust credit purchase in our Credit purchase outside of the UK’s emissions targets could be parts of the global effort but

Chapter 7: The Sixth Carbon Budget as a contribution to the Paris Agreement 344 4. Reducing the UK’s carbon footprint Under the UNFCCC and the Paris Agreement, emissions accounting is based on territorial emissions (the emissions produced within the territorial bounds of countries). This is the internationally agreed accounting methodology for NDCs and is aligned to who has sovereignty over the sources of emissions. Given the widespread acceptance of this accounting framework internationally it remains the right framework under which the UK should set legally binding targets, both for the domestic carbon budgets and for the UK’s NDC. An alternative perspective associates emissions caused during the production of goods and services with the country that is the final consumer of those goods and services independent of where in the world those emissions occurred. This is known as consumption-based The UK has a larger consumption emissions footprint than its territorial based account – as is the case with many developed countries. This section looks at actions the UK could take to help reduce overseas emissions associated with UK consumption as part of its efforts to help reduce global emissions. We conclude that the UK can and should aim to reduce its overseas consumption footprint as part of its contribution to reducing global emissions. A growing fraction of the UK’s consumption emissions footprint is now being covered by Net Zero commitments around the world and there are several levers available to the UK to help tackle its consumption emissions footprint to support its domestic efforts. Our analysis suggests it is credible for the UK to reduce its total consumption footprint by around 90% below 1990 levels if other countries follow pathways consistent with the Paris Agreement and we will track progress towards this goal. a) The current composition of the UK consumption emissions footprint b) Levers for tackling UK consumption emissions a) The current composition of the UK’s consu mption footprint In 2017, the most recent year for which estimates are available, the UK’s consumption emissions footprint was 772 MtCO2e, about 50% higher than its 54% of these consumption footprint emissions were produced in the UK and are therefore counted in the UK’s territorial account. • Of these UK produced consumption emissions, a significant fraction (34%) of these emissions occur directly from households – through driving of cars where emissions can be reduced to zero through a combination of technology and behavioural change as outlined in Chapter 3. • The other 66% of the UK-produced consumption emissions arise from other sectors of the UK economy that produce goods and services consumed in the UK. This will include emissions from electricity generation, some industrial products, food production, waste services and other transport services. All these sources are included within our territorial emissions scenarios. Most can be reduced to close to zero emissions by 2050, but some (e.g. parts of agriculture and aviation) will remain as positive emission sources. consumpt ion emissions as part

345 Sixth Carbon Budget – The path to Net Zero 46% of UK consumption emissions are ‘imported’ – occurring in production processes overseas to produce goods and services that meet UK final economic demand. This includes emissions from the supply chains of both imported final goods and services, and imports that are inputs to a domestic economic activity (e.g.
steel imports for the UK car manufacturing industry): • Of these imported consumption emissions, 55% arise from the supply chains of goods and services that are imported into the UK as final products to directly meet UK final economic demand, for example manufactured cars produced abroad that are imported and then sold in the UK. Any emissions generated producing inputs for the production process outside of the UK are also included within this total. • 45% arise from the supply chains of imported products or components that are inputs to a domestic economic activity. Defra (2019) The UK’s carbon footprint. 2016 data is used here as this edition of the dataset provides the required breakdown. No significant changes wo uld be expected in 2017, the most recent year with consumptions emissions data available. Recent and expected Net Zero emissions commitments from the European Union, Japan, South Korea, the US and China means that around 76% of the UK’s carbon footprint (48% of imported emissions) is, or will soon be, covered by Net Zero targets consumption emissions will also

Chapter 7: The Sixth Carbon Budget as a contribution to the Paris Agreement 346 In 2017 the UK consumption emissions footprint was 16% below 1990 levels. Over the same period, the monetary value of the UK’s total consumption of goods and services grew by around 80% in real terms. Between 1990 and 2006 the UK's consumption emissions footprint increased by around 6%, before the effects of the global financial crisis caused the UK's consumption emissions footprint to decline sharply over 2007-2009. Since 2009 it has steadily declined although at a slower rate than the UK's territorial emissions. consumption emissions footprint for 2017 Defra (2020) The UK’s carbon footprint. Regions that have set a Net Zero target are shown as solid colours, with other regions shown with hatching. South Korea has a Net Zero target and falls within the other OECD region within these accounts. b) Levers for tackling UK consumptio n emissions As UK territorial emissions decline on the Balanced Net Zero Pathway the overseas emissions associated with UK consumption will become an ever more important part of the UK’s contribution to climate change. As a developed country, the UK should be aiming to help reduce these overseas consumption emissions as part of its efforts to support global emissions reductions. Action to help accelerate the reduction in consumption emissions can be gathered into several • Reduce domestic territorial emissions to Net Zero along the Balanced Net Zero Pathway. The majority of the UK’s consumption footprint occurs within the UK. Achieving the required territorial reductions (in a way that doesn’t offshore these emissions) remains the single most important contribution to reducing the UK’s consumption emissions footprint overall. footprint has declined, but not as fast as its territorial emissions. 347 Sixth Carbon Budget – The path to Net Zero Domestic decarbonisation also reduces the UK demand for imported fossil fuels – eliminating additional consumption emissions associated with their extraction and transport. Changes in consumption patterns needed in our scenarios to meet Net Zero territorially mean that there will be additional reductions in the UK’s consumption emissions footprint. This would be further enhanced with a policy approach that will tend to lower the carbon- intensity of imported goods and provide a level playing field to domestic low-carbon production, as discussed in our accompanying policy report. • Consumer action to reduce demand for high-carbon goods. Our scenarios to deliver Net Zero domestically involve changes in consumption by consumers (e.g. reduced meat consumption), alongside waste reduction and resource efficiency. These changes will have additional benefits for UK consumption emissions to the extent to which they apply to imports as well as domestic production. * This can help reduce the 55% of the UK’s imported consumption emissions that are in the form of final goods and services. • Corporate action. 45% of the UK’s imported consumption emissions come from the products that are inputs to a domestic economic activity. Better measurement of emissions along supply chains will help companies identify the emissions ‘hotspots’ within their supply chains, work with suppliers to reduce the carbon intensity of these goods and/or find alternative low- carbon supply chains. Resource efficiency in production processes (which is included in our scenarios) can require less use of imported carbon intense • Action enabled by effective trade measures and product standards. Both actions by the final consumer and by UK corporations can be aided by trade arrangements. Product standards and border carbon adjustments, if they can be made effective, create markets for both final and intermediate consumption that help consumers and firms make low-carbon choices. They can also play a role in preventing ‘offshoring’ of emissions from actions to decarbonise industry in the UK which would otherwise undermine the benefit of domestic decarbonisation for UK consumption • Avoiding scrappage. Scrapping high-carbon capital stock early in its lifetime and replacing it with low-carbon alternatives could help reduce operational emissions that occur within the UK’s territorial emissions account, but may not bring benefits in terms of consumption emissions when production emissions occurring overseas are considered. Where possible we have tried to avoid scrapping capital stock unnecessarily when constructing our scenarios for reducing the UK’s territorial emissions. The UK’s changing global trade relationships at the present time presents an opportunity to stimulate global decarbonisation through trade arrangements and the Government should explore this alongside the other levers to reduce the UK’s consumption emissions footprint. The growing spread of mid-century territorial emissions Net Zero targets could form a basis for possible border carbon This should be done mindful of the economic challenges in recovering from COVID-19 in countries all around the world, particularly in developing countries, who are generally not expected to reach Net Zero emissions on the same timelines as developed countries under the Paris Agreement. Fair and effective border carbon adjustment proposals would need to be mindful of these factors.
* We quantified an estimate of the size of changes in overseas consumption emissions from demand changes in our

Chapter 7: The Sixth Carbon Budget as a contribution to the Paris Agreement 348 We have produced exploratory scenarios for the UK’s future consumption emissions footprint (Box 7.5) that suggest that if the world is successful in efforts to reduce global greenhouse gas emissions in-line with scenarios expected to deliver the Paris Agreement, the UK’s consumption footprint could fall by 65% by 2035 and 90% by We will monitor the UK’s overseas consumption emissions footprint against this indicative pathway alongside our progress reporting on territorial emissions. The Government should explore the levers identified above to reduce the UK’s consumption emissions, alongside its wider support of the global effort (Section 3). Approach to developing ‘exploratory’ UK consumption emission pathways We have projected po ssible futures for the UK’s consumption emissions footprint, building on the methodology in our 2013 report Reducing the UK’s carbon footprint and managing competitiveness risks developed with the University of Leeds. These projections • International We consider two scenarios for how international carbon intensities of production will evolve in the future, based on the global modelling described in Section 3. The ‘Current global ambition’ case repr esents cou ntries meeting currently pledged NDCs for 2030 and continuing to decarbonise at the same rate after 2030. The ‘Paris Agreement’ scenario sees global CO 2 emissions fall to Net Zero around 2060, consistent with limiting warming to ‘well -below’ 2°C above preindustrial levels. In both cases we consider reductions of UK territorial emissions along the Balanced Net Zero Pathway to Net Zero. • Consumption patterns and production We assume overall growth rates in the consumption of most categori es of good s and serv ices consistent with the UK -wide GDP trajectory we have used throughout the rest of this report. We represent shifts in the final demand for goods and services consistent with our Balanced Net Zero Pathway where these can easily be mapp ed to specific groups of goods and services (e.g. passenger aviation demand). Due to the speculative nature of projecting changes in the production structure of economies (how sectors interact with each other in the UK and around the world), we hold this c onstant at today’s levels. • Production Delivering the Balanced Pathway requires significant changes in the methods of production for trade -exposed sectors such as heavy manufacturing. Our supporting policy report recommends exploring trade measu res to ensure that t his transition is not undermined by ‘offshoring’ of production reducing the benefits of the decarbonisation action for global emissions. We include a simple representation of these standards within our projection for future imported emi ssions by converging the carbon intensities of production overseas with UK levels within a limited number of heavy industry and fuel production sectors. • Some sources of emissions fall outside of the consumption emissions framework. Emissions fro m land -use, land-use change and forestry around the world have large uncertainties and are difficult to associate with demands for products at the level of economic sectors, so are not included within the UK’s consumption emissions accounts at present. These exploratory scen arios suggest that significant falls in the UK’s consumption emissions footprint would be expected over 2020 to 2050 across the range of possible global emissions reduction ambition. Most of this reduction comes from reducing the UK’s territorially sourced emissions to Net Zero. In a current global ambition case imported emissions would only decline by 15% relative to their 1990 levels, with our modelled simple representation of production standards necessary to keep imported emissions f rom rising. With increased global ambition approximately aligned to the Paris Agreement, imported emissions would also fall – by about 75% relative to 1990 levels in our modelled scenario. footprint is possible by 2050. emissions might evolve and will

349 Sixth Carbon Budget – The path to Net Zero consumption emissions under a current ambition and Paris Agreement aligned global emissions Defra (2020) The UK’s Carbon Footprint; CCC analysis. Chapter 7: The Sixth Carbon Budget as a contribution to the Paris Agreement 350 1 Cambridge Econometrics (2020) China’s net zero ambition could boost GDP by 5% during this decade; Scovronick, N. et al. (2019) The impact of human health co-benefits on evaluations of global climate policy. Nature Communications, 10, 2095; Luderer, G. et al. (2019) Environmental co-benefits and adverse side-effects of alternative power sector decarbonization strategies. Nature Communications, 10, 5229. 2 Bloomberg New Energy Finance (2020) Scale up of solar and wind puts existing coal and gas at 3 Tsiropoulos I. et al. (2020) Towards net-zero emissions in the EU energy system by 2050– Insights from scenarios in line with the 2030 and 2050 ambitions of the European Green Deal? 4 Ember (2020) Vision or division? What do National Energy and Climate Plans tell us about the EU 5 Spanish Government (2020) Integrated National Energy and Climate Plan 2021-2030; The Netherlands Government (2019) Integrated National Energy and Climate Plan. 6 European Commission (2020) A hydrogen strategy for a climate-neutral Europe. 7 Vivid Economics (2020) Unpacking leadership-driven global pathways towards the Paris 8 IPCC (2018) Chapter 2: Mitigation pathways compatible with 1.5°C in the context of sustainable development Special Report on Global Warming of 1.5°C. 9 Cui, R. Y. et al. (2019) Quantifying operational lifetimes for coal power plants under the Paris goals. Nature Communications,10, 475. 10 IRENA (2020) Renewable Power Generation Costs in 2019; IEA (2020) China’s Emissions Trading 11 IPCC (2018) Chapter 2: Mitigation pathways compatible with 1.5°C in the context of sustainable development Special Report on Global Warming of 1.5°C. 12 IEA (2019) World Energy Outlook 2019. 13 Bloomberg New Energy Finance (2020) Scale up of solar and wind puts existing coal and gas at 14 IPCC (2019) Special Report on Climate Change and Land. 15 IRENA (2020) 10 Progress to Action. 16 McCollum, D.L. et al. (2018) Energy investment needs for fulfilling the Paris Agreement and achieving the Sustainable Development Goals.
Nature Energy, 3(7), p.589. 17 IEA (2020) Heat Pumps Tracking Report. 18 IEA (2020) Tracking Hydrogen. 19 Carbon Engineering (2019) CE expanding capacity of commercial Direct Air Capture plant; Drax (2020) Drax BECCS timeline. 20 World Resources Institute (2020) 2020 NDC Tracker. 21 Climate Action Tracker Initiative (2020) China going carbon neutral before 2060 would lower warming projections by around 0.2 to 0.3 degrees C. 22 Global Energy Monitor (2020) A New Coal Boom in China. 23 EPA (2020) Sources of Greenhouse Gas Emissions. 24 Vivid Economics (2020) Unpacking leadership-driven global pathways towards the Paris 25 OECD (2019) Climate-related Development Finance Data. 351 Sixth Carbon Budget – The path to Net Zero Scientific context for setting the 1. The fundamentals of the physical science basis remain strong 355 2. Updated understanding of the climate system 359 3. Global CO2 budgets as a guide for mitigation pathways 367 4. Minimising the UK’s future contribution to climate change 372 5. The need to adapt to a changing climate 377

353 Sixth Carbon Budget – The path to Net Zero The Committee is required to consider scientific knowledge about climate change when providing advice on the level of the UK’s carbon budgets. This chapter presents our assessment for the purposes of advising on the level of the UK’s Sixth This chapter builds on our assessment in our Fifth Carbon Budget advice in 2015 and our recent advice on setting a Net Zero target for the UK in 2019. It draws on recent developments in the scientific literature, the recent Intergovernmental Panel on Climate Change (IPCC) Special Reports and Fifth Assessment Report (AR5), which remains the most up-to-date comprehensive assessment by the IPCC of the physical basis for climate change until the IPCC Sixth Assessment Report is published in 2021. Our conclusions • Fundamental understanding of climate change and its causes continues to strengthen. The conclusions of our Fifth Carbon Budget assessment are strengthened by the latest developments in the scientific literature. The recent Special Report on Global Warming of 1.5°C (SR1.5) has improved the understanding of how future greenhouse gas emissions affect the climate and what is required to keep warming to the Paris Agreement long-term temperature goal. We have drawn on this strengthening knowledge base to inform the construction of our UK emissions pathways towards the 2050 • Understanding of climate sensitivity has continued to progress since our Fifth Carbon Budget advice and IPCC-AR5. A new community synthesis (published in 2020) of multiple lines of evidence regarding how sensitive the climate is to atmospheric carbon dioxide has suggested narrower ranges for uncertainties in the climate sensitivity than IPCC-AR5. The range of climate sensitivity from a new generation of complex climate models extends to higher values than previously. This new knowledge base will be reviewed by the IPCC next year. The global emissions pathways assessed by IPCC-SR1.5 currently remain the best indicators of the global ambition expected to achieve the Paris Agreement temperature goal. • Minimising cumulative emissions of long-lived greenhouse gases will help minimise additional climate impacts along the pathway to Net Zero. Estimates of the remaining global cumulative CO2 emissions consistent with keeping warming to the Paris Agreement long-term temperature goal ultimately depend on a set of choices and definitions, which imply a wide range could be consistent. This means it is challenging to use these estimates to constrain national emissions pathways robustly. National emissions pathways should however seek to minimise cumulative long-lived greenhouse gas (GHG) emissions on the pathway to Net Zero to minimise additional climate impacts, highlighting the need for ambitious near-term emissions reductions to fully align with the Paris Agreement. • Adapting to climate risks is essential given the wide ranges of climate futures that remain possible. Climate impacts are already being felt in the UK and around the world. These will increase with further warming – and some increase is inevitable even under the most ambitious global emissions reductions. Warming in excess of 2°C cannot be ruled out even under global emissions scenarios expected to satisfy the Paris Agreement and warming in excess of 4°C by 2100 remains possible if the current ambition for reduction in global emissions is not increased. This demonstrates the importance of considering a wide range of climate outcomes in adaptation planning and implementation. It builds on the assessments in

Chapter 8: Scientific context for setting the UK’s Sixth Carbon Budget 354 We set out our analysis in five 1. The fundamentals of the physical science basis remain strong 2. Updated understanding of the climate system 3. Global CO2 budgets as a guide for mitigation pathways 4. Minimising the UK’s future contribution to climate change 5. The need to adapt to a changing climate

355 Sixth Carbon Budget – The path to Net Zero 1. The fundamentals of the physical science basis remain strong This report builds on the assessment of the scientific knowledge about climate change in the Committee’s Fifth Carbon Budget and Net Zero advice reports.1 It is also informed by the two new Special Reports from the IPCC on The Ocean and Cryosphere in a Changing Climate and Climate Change and Land. This section reviews the key messages from those reports. i) IPCC Fifth Assessment Report The last time the Committee advised on the level of a UK carbon budget (the Fifth Carbon Budget in 2015), the recently published IPCC Fifth Assessment report (IPCC- AR5 - completed in 2014) formed the scientific underpinning of our assessment. It remains the IPCC’s latest full assessment report, with the IPCC’s Sixth Assessment IPCC-AR5 clearly demonstrated that the climate is changing as a result of human activity, causing damaging impacts, and that to stop continued increases in global temperature, global emissions of greenhouse gases must be reduced to • The climate is changing as a result of global greenhouse gas emissions. The IPCC concluded that it was unequivocal that humans were influencing the climate.
It is extremely likely (>95% probability) that human activity is the dominant cause of the warming observed since the 1950s, with the best estimate of the human-induced contribution similar to the observed • Many climate impacts are being detected across the world. IPCC-AR5 concluded that 'recent climate changes have had widespread impacts on human and natural systems on all continents and across the oceans'. Attributable impacts included an impact of climate change on crop yields, shrinking glaciers and changing rainfall patterns affecting water availability, along with changing geographic ranges of species on land and ocean. • Further emissions will lead to further warming and change. The pathways of future global greenhouse gas (GHG) emissions will be the primary determiner of how the climate continues to change in the future. Future warming will bring additional increases in the climate-related risks already present, as well as the emergence of new ones. • There is no simple threshold beyond which climate change moves from safe to dangerous. Climate impacts are being felt today and are having significant consequences for people and natural systems already. There is no ‘safe’ level of global warming at which significant climate impacts can • The increase in global temperature is determined mainly by total carbon dioxide emissions over time, which must fall to near zero in order to limit warming. Long-lived GHGs (such as carbon dioxide – CO2) accumulate in the atmosphere, meaning continued emission of these gases leads to continually increasing warming. Warming created by long-lived GHGs is not naturally reversible on the timescale of decades-to-centuries. Therefore, reducing this warming would requires the active removal of long-lived core of the evidence basis for Fifth Assessment Report on the

Chapter 8: Scientific context for setting the UK’s Sixth Carbon Budget 356 Over the five years since the Committee’s advice on the UK’s Fifth Carbon Budget, these key messages remain valid. Confidence in these conclusions has increased as evidence and understanding has continued to accumulate. They have been reinforced by additional observations of climate change, new climate modelling efforts and improved understanding of the climate system (Section 2). ii) IPCC Special Report on Global Warming of 1.5°C The Committee’s Net Zero report in 2019 built on the recently published IPCC Special Report on Global Warming of 1.5°C (IPCC-SR1.5) to assess what was necessary to keep warming to the long-term temperature goal of the Paris Key messages emerging from that assessment • Any action to reduce emissions helps limit future climate risks. The world has already started moving away from the highest emissions futures and the most severe future climate impacts. Meeting the temperature goal of the Paris Agreement would lead to significantly smaller increases in future climate risks than projected under current pathways. Any action to reduce global GHG emissions helps to reduce future global temperature increases and keep future increases in climate hazards as small as possible. • Net Zero emissions of long-lived GHGs are needed to stop the planet warming, alongside falling emissions of shorter-lived GHGs. Emissions of long-lived GHGs (e.g. CO2 and nitrous oxide) lead to increased atmospheric concentrations for many decades. Emissions of shorter-lived GHGs (e.g. methane) see atmospheric concentrations return to normal levels within a few decades after emissions are stopped due to their removal from the atmosphere by natural chemical cycles. • Keeping to the long-term temperature goal of the Paris Agreement requires reducing long-lived GHG emissions rapidly over the next few decades to reach Net Zero, alongside rapid reductions in short-lived GHGs. Global emissions pathways expected to keep peak warming to 1.5°C reach Net Zero CO2 emissions by around 2050 and around 2075 for 'well-below 2°C' 2070 for a 1.5°C limit with most pathways not yet reaching Net Zero GHG emissions before 2100 for ‘well-below’ 2°C.† The emissions pathways assessed by IPCC-SR1.5 were a key part of the analysis underpinning the Committee’s advice that the UK should set a long-term emissions target for Net Zero aggregated GHG emissions by 2050 – ahead of the date necessary for the world as a whole for a 1.5°C pathway. IPCC-SR1.5 remains the most recent synthesis assessment of global emissions pathways expected to satisfy the Paris Agreement, and therefore remains the core of the evidence base for the purposes of this report. An updated assessment is expected from the Working Group III assessment, as part of the IPCC Sixth Assessment Report, expected in * In this report we interpret effort consistent with the ‘well-below’ 2°C limit in the Paris Agreement long-term temperature goal as bounded on the high end by global emissions scenarios with at least a 66% probability of keeping peak warming below 2°C. This is consistent with our interpretation in the 2019 Net Zero report. † GHG emissions are here aggregated using the Global Warming Potential metric with a time horizon of 100 years, consistent with international GHG reporting practice. 357 Sixth Carbon Budget – The path to Net Zero CCC (2019) Net The UK’s contribution to stopping climate change. Chapter 8: Scientific context for setting the UK’s Sixth Carbon Budget 358 iii) IPCC Special Reports on the Ocean and on Land Whilst there has not been a new comprehensive IPCC assessment report since our advice on the Fifth Carbon Budget and the UK’s Net Zero targets, there have been additional IPCC Special Reports on The Ocean and Cryosphere in a Changing Climate and Climate Change and Land, which have helped to document particular aspects of this improved knowledge base (Box 8.1). IPCC Special Reports – Oceans & Cryosphere in Changing Climate; Climate Change and The IPCC produced a special report on climate change and land (published in August 2019) that assessed literature looking at the role of climate change on desertification, land degradation, sustainable l and management, food security, and greenhouse gas fluxes in terrestrial ecosystems. Several conclusions on the role of land in climate • Land plays a critical role in supporting human society and is already under pressure from climate change. Land provides humans with food, freshwater and ecosystem services.
About 70% of the planet’s ice -free surface is directly affected by humans in • Land surface temperatures have warmed by over 1.5°C from the pre -industrial period. This warming, and the associated changes in weather extremes, i s already impacting food security including crop yields and agricultural pests and diseases. • Land-based mitigation can play an important role in limiting future warming. Emissions from the global food and land-use system contribute 21 - 37% of global GHG e missions today, but measures to reduce these exist with many bringing other co -benefits for • There are limits to what land -based mitigation can achieve by itself. Land will com e under further pressure from future climate change and very large-scale use of land for mitigation (e.g. afforestation or biomass production) could have negative consequences for other functions of land such as biodiversity, food production and The IPCC Special Report on Oceans and the Cr yosphere i n a Changing Climate was published in September 2019. The main conclusions • Observations show that the Earth’s oceans are getting warmer and becoming more acidic; glaciers and ice shee ts have reduced in volume and sea ice coverage and thickness has reduced. The rate of global sea level rise has recently accelerated due to increased water input, primarily from melting ice sheets and glaciers. • These changes are having impacts today. Cora l reef bleaching events have become more common and the geographical extent of species’ ranges in the ocean is changing. Melting glaciers are affecting water availability in some mountain regions. • Significant additional changes will occur in the oceans ev en if the Paris Agreement long-term temperature goal is achieved. Sea levels will continue to rise for many hundreds of years even after global temperatures are stabilised. Average sea levels could rise by 0.3 – 0.6 m (>66% probability range) above 1986 -2005 levels by 2100 under a global emissions scenario app roximately consistent with achieving the Paris Agreement long-term temperature goal and would continue rising after 2100. • The upper end of projections for future sea level rise have been revised upward s from the IPCC Fifth Assessment Report. This is primar ily due to increased uncertainty regarding the contribution from Antarctic melt. Under a scenario with very high future global GHG emissions, global sea level rise could be 0.6 – 1.1 m (>66% probabilit y range) above 1986-2005 levels by 2100. These special reports document the improved understanding of the risks from climate change to oceans and land. They have strengthened the evidence base on what mitigation and adaption actions can be taken to help limit future risks. 359 Sixth Carbon Budget – The path to Net Zero 2. Updated understanding of the climate system Knowledge about the climate system has continued to progress over recent years. New observations show continued warming occurring. The fingerprint of human- induced climate change can increasingly be found in extreme weather events. At the same time, a new generation of complex climate models is becoming available with improved representations of physical processes relevant for projecting future climate change. Together new observations and new modelling capabilities are leading to new understanding of the climate system. This section summarises some recent developments in the evidence base relevant to the Committee’s advice on the level of UK’s Sixth Carbon Budget. It is split into a) New observations of climate change b) New modelling and understanding of climate sensitivity a) New observations of climate change Over the five years since our Fifth Carbon Budget advice, further changes in the climate system have been • The five years since 2015 have seen the five warmest years (globally) on • The global average level of human-induced warming is now in excess of 1.1°C when defined consistent with practices used by the World Metrological Organisation and IPCC-SR1.5.3* Best estimates indicate that human activities are responsible for 100% of the warming observed since 1850-1900.† The observed rate of increase in global temperature (~0.2°C per decade) has proceeded consistent with the near-term warming projection made by the IPCC-AR5 report in 2013 (a 0.12 - 0.42°C per • Global sea levels have continued to rise, with the rate of increase over the last five years being the fastest observed to date. Global average sea levels are now estimated to be around 20 cm above levels in 1900.4 • In the UK, the 2010 – 2019 decade was the second warmest cardinal decade on record after 2000 – 2009. In 2019, the highest ever temperature reached in the UK was recorded as well as the warmest ever recorded winter temperature.5 Considerably more high temperature records were set in the UK over than 2010s than low temperature records. The detection and attribution of the role of human-induced climate change in extreme weather events has now become firmly established as a scientific discipline.6 Human-induced climate change has been clearly shown to increase the frequency and intensity of many (but not all) extreme weather events, with particularly clear signals in extreme heat and many heavy rainfall events.7 * A blend of near-surface air temperature over land and sea surface temperature over oceans.
† This period is regularly used as an approximation of pre-industrial conditions, including by the IPCC

Chapter 8: Scientific context for setting the UK’s Sixth Carbon Budget 360 Attribution studies have also linked the human-induced changes in climate hazards through to its impact on people, for example an estimated 20% increase in heat-related mortality in London during the 2003 European heatwave (which was linked to ~300 additional deaths in the Greater London area).8 Human-induced climate change is also shown to be increasing the kinds of conditions in which wildfires can occur including in areas of Western North America and Australia that have seen recent large fires.9 The impact of other extreme events has also been shown to be amplified by climate change, for example hurricanes are more damaging due to higher sea levels, and warmer seas leading to higher wind speeds and heavier rainfall.10 These continued changes indicate just some of the consequences of the continued increase in drivers of climate change due to human activities (Box 8.2) and illustrate the impact of a planet over 1°C warmer than pre-industrial levels. Changes in the drivers of climate change sin ce the Fifth Carbon Budget advice The drivers of climate c hange have continued to evolve over the period since the Committee’s advice on the level of the Fifth Carbon Budget in 2015. • Global annual CO 2 emissions have increased by 3% (energy -related emissions only) over 2014 - 2019, a significantly slower rate th an over th e proceeding five -year period.11 2019 saw close to zero growth on 2018 levels, with an expected fall in 2020 levels following the effects of COV ID-19 on energy use around the world. Projections from the International Energy Agency now suggest cont inued slow or no growth in global energy-related CO 2 emissions over the coming decade, following the initial bounce-back from COVID -related declines soon after 2020. It is now very possible that global CO2 emissions may remain below 2019 levels over the co urse of th e coming • Global non -CO2 GHG emissions. Global methane emissions have been rising steadily over the past decade, driven largely by ri sing emissions from the oil and gas sector and from ruminant agriculture. 13 Nitrous oxide emissions have also been rising, primarily due to increased emissions from agricultural soils, whilst F -gas emissions are rapidly approaching the same magnitude (on a CO2-equivalent basis) as global nitrous oxide • Atmospheric GHG concentrations have continued t o rise for major GHGs. CO 2 concentrations are driven by accumulating CO 2 emissions in the atmosphere, reaching nearly 150% of their pre -industrial valu es.14 Understanding of the global atmospheric methane and nitrous oxide budgets has improved. 15 Evidence indicates that rising emissions from both agricultural and energy sectors have underpinned the recent rise in atmospheric methane concentrations, with limited evidence to date of increasing methane release from the Arctic. 16 • Radiative forcing. The radiative forcing (heat trapping potential) of well -mixed GHGs has increased by around 45% since 1990, dominated by increases in the atmospheric concentration of CO 2.17 A recent community assessment of radiative forcing from aerosols estimates that betw een 20% - 50% of the radiative forcing from well -mixed GHGs is being offset by aerosols. 18 There have been no significant changes in natural climate forcing (e.g. from volcanic eruptions) over the past decade. The drop in annual global CO 2 emissions expected for 2020 du e to the impacts of COVID - 19 will not lead to any decrease in the atmospheric concentrations of CO 2 or the levels of human-induced warming.19 Continued CO 2 emissions, even at a declining rate, continue to increase the global average temperat ure and will not reverse t he changes in the climate system seen over recent decades. continued to rise over the past five years, but their growth has slowed recently. Emissions over 2019 levels due to longer-term effects of COVID -19 on global

361 Sixth Carbon Budget – The path to Net Zero b) New modelling and understanding of climate sensitivity Since IPCC-AR5 and the Committee’s advice on the UK’s Fifth Carbon Budget there have been new estimates of the equilibrium climate sensitivity - a predictor of long-term warming under a future atmospheric concentration scenario - from complex climate models and from a prominent synthesis of multiple lines of evidence. We summarise these areas of new evidence before assessing the expected implications for projections of climate change under rapid global While a comprehensive assessment of this new knowledge will be undertaken by the IPCC Sixth Assessment Report in 2021, we conclude that available evidence to- date suggests that the global emissions pathways summarised by the IPCC-SR1.5 remain good guides to the level of ambition expected to be consistent with the Paris Agreement’s long-term temperature goal. Equilibrium climate sensitivity (ECS) is an important metric for future climate changes. It is defined as the amount of global warming that would eventually occur following a doubling of atmospheric CO2 concentrations (from pre-industrial levels). Estimates of ECS have extended over a similar range of uncertainty for many decades, with central estimates around 3°C of warming for a doubling of CO2 concentrations, but with significant uncertainty intervals extending from 1.5°C to 4.5°C (>66% confidence) in IPCC-AR5. Newly updated complex climate models are now available. Some of these models have a sensitivity to carbon dioxide that is above the range of complex climate models from the previous generation (Box 8.3). These models raise the possibility that the risks of very high temperature rises are higher than previously thought, but the process of understanding the reasons behind these new results - and their consistency with other lines of evidence - is still ongoing in the scientific community. Climate sensitivity in new complex climate models Computer simulations of the physics, chemistry and biology of the climate system are used to understand the fundamental processes important for the Earth’s climate and to project future changes.
A new gen eration of climate models h ave been developed around the world over the past five years. These new models improve the resolution (the size of grid that the world is broken up into) to around 60 km from around 150 km in the previous generation. Some also in clude representati ons of ad ditional physical processes, such as interactively simulating changes in the nitrogen cycle that previously have not been possible, and improved representations of cloud physics processes. This new generation of models (known as CMIP6 models) co ntain a n umber of models with ECS lying outside the assessed 1.5 – 4.5°C likely range from the IPCC -AR5 (this represents an interval in which the authors have over 66% confidence that the true value lies), and outside the range of values simulated by compl ex climate models in the previous generation (CMIP5). This means the upper end of the range of global temperature increases simulated under standardised emissions scenarios is now higher in The process of und erstanding the reasons behi nd these new higher sensitivity climate models is still ongoing in the scientific community, with strong cloud feedback over the Southern Ocean seemingly a key difference between the highest ECS models and The reasons for this sensitivity investigated by the scientific Earth’s climate sensitivity has

Chapter 8: Scientific context for setting the UK’s Sixth Carbon Budget 362 However, sev eral important caveats have already been identified suggesting caution over their direct relevance for mitigation • Very high climate sensitivities can be difficult to reconcile with other lines of evidence on how the climate responds to forcing. I n particular, what we know a bout how the climate was different in the Last Glacial Maximum (around 15,000 years ago) suggests that values for ECS above 4.5 °C are unlikely but doesn’t categorically rule them out. • Some high sensitivity CMIP6 models struggl e to accurately simulate the historical period. The observed rate of w arming since the 1980s, which better constrain climate sensitivity due to limited changes in aerosol radiative forcing over this period, is lower than in many of the highest climate sens itivity models.22 However, th is is not the case for all high sensitivity models with some having a good historical simulation and still a very high climate sensitivity due to non -linear cloud feedback mechanisms. 23 • The equilibrium climate sensitivity is not necessarily the most dire ctly policy relevant metric of the climate response for this century. It is defined based on a fixed concentration of CO 2 in the atmosphere so doesn’t include the effects of carbon cycle and how it will change in the future. F or alternative metrics of the climate sensitivity that also incorporate carbon cycle responses many of the models with very high equilibrium climate sensitivity do not lie outside of the assessed ranges from IPCC - These caveats suggest caution in us ing the direct CMIP6 model outp uts as representative of the overall range of uncertainty in projections of future climate change, particularly as the set of available models does not represent an attempt to sample the full range of uncertainty in climate s ensitivity in a structural way. An assessment of these new climate models will be possible in the forthcoming IPCC Sixth Assessment Report, which we do not try to pre-empt in this report. ii) New synthesis of multiple lines of evidence A recent effort from across the scientific community published in 2020 and coordinated by the World Climate Research Programme (WCRP) has attempted to synthesise several lines of evidence on climate sensitivity. It has proposed a • This study used constraints from multiple lines of evidence including observed climate change, evidence from past climate states and understanding the processes relevant for future climate system feedbacks. This assessment does not directly rely on the estimates from complex • Combined together these lines of evidence suggest a central estimate for ECS of 3.1°C, with a >66% probability of it lying in the range of 2.6 - 3.9°C, narrower than the 1.5 – 4.5°C >66% probability range from IPCC-AR5. Alternative statistical modelling assumptions in the calculation to estimate ECS from the same data can extend the upper end of this >66% probability interval up to 4.5°C, similar to the distribution based on new complex • Values of climate sensitivity below 2°C were found hard to reconcile with all the lines of evidence, while values above 4.5°C are difficult to reconcile with what is known about how the climate changed around the Last Glacial Maximum (around 15,000 years ago). This WCRP estimate will be assessed, along with all other new studies, in the forthcoming IPCC Sixth Assessment Report. A recent assessment looking at multiple kinds of evidence has narrowing of climate sensitivity This study did not categorically rule out the possibility of very

363 Sixth Carbon Budget – The path to Net Zero While the outcome of that assessment is still to be determined, these advances suggest the probability of very low levels of future warming for a given scenario of future atmospheric GHG concentrations may now be significantly less than indicated by the assessment of IPCC-AR5. This emphasises the need for rapid and sustained global emissions reductions to avoid significant increases in climate The WCRP assessment also suggests that the probability of very high levels of warming for a given scenario of future global atmospheric GHG concentrations may also be reduced compared to the assessment of IPCC-AR5, but still cannot be multiple sources / assessments Sherwood, S. et. Al. (2020) An Assessment of Earth’s Climate Sensitivity Using Multiple Lines of Evidence. Reviews of Geophysics, 58, 4; Schlund et al. (2020) Emergent constraints on Equilibrium Climate Sensitivity CMIP5; do they hold for CMIP6? Earth Syst. Dynam.
Discuss; IPCC (2013) Summary for policymakers – Climate Change 2013: Here climate sensitivity refers to the ‘effective climate sensitivity’ an approximation to the true equilibrium climate sensitivity derived from the first 150 years following a doubling of atmospheric carbon dioxide concentrations from preindustrial levels in climate models. CMIP refers to the Coupled Model Intercomparison Project – an ensemble of complex climate models from around 2013 (CMIP5) and around 2020 (CMIP6). WCRP refers to the World Climate Research Project climate sensitivity assessment. The ‘baseline’ range refers to the main set of statistical modelling assumptions used within the assessment and the ‘uniform sensitivity prior’ represents an alternative set of statistical modelling assumptions. IPCC-AR5 did not provide a 50th percentile estimate. Chapter 8: Scientific context for setting the UK’s Sixth Carbon Budget 364 iii) Implications for climate projections under rapid global We have worked with the UK Met Office (Box 8.4) to understand the implications of these new WCRP estimates for climate sensitivity uncertainty on the range of projected global warming under a global emissions scenario expected to keep (median) warming to the Paris Agreement long-term temperature target range Modelling of implications of WCRP climate sensitivity distributions and additional Earth System feedbacks for climate projections We have worked with the UK Met Office to model the implications of the newly proposed climate sensitivity distri butions from the World Climate Research Programme (WCRP) study under a rapid global decarbonisation scenario, and a global emissions pathway consistent with current global emissions reduction • These projections use a version of the MAGICC simple climate model, one of the two simple climate models used to understand the climate implications of global emissions pathways in the IPCC -SR1.5 report.26 • Distributions of model parameters for the physical climate response are chosen to be consistent with pre scribed climate sensitivity distributions from the WCRP assessment. Other parameters (e.g. carbon cycle responses) remain tuned to span the ra nge of responses consistent with the conventional use of MAGICC for probabilistic projections • Global emissions pathways for CO 2, CH4 and N2O are taken from those produced under modelling with the TIAM integrated assessment model (Chap ter 7). Two scenarios are a scenario expected to be consistent with keeping median peak warming to aro und 1.75°C (based on IPCC -SR1.5 assessment of allowable future cumulative CO 2 emissions), and a scenario in which current 2030 emissions targe ts (Nationally Determined Contributions – NDCs) are achieved and a similar level of global emissions reduction amb ition is maintained over the rest of the century. Pathways for other GHGs and aerosol emissions are estimated from relationships between emissions of different gases across the range of scenarios assessed by IPCC - SR1.5 with similar socioeconomic developmen t assumpt ions.27 The effects of incorporating additional Earth system feedbacks that are not typically included in the definition of climate sensitivity is also • These processes include amplifying feedbacks such as the thawing of permafrost as well as feedbacks that act to reduce climate change, such as the feedback of a warming climate on the atmospheric lifetime of methane emissions. An initial estimate of the size of these additional climate feedbacks associated with these processes was provided in the IPCC-AR5, but confidence remains low in many of them. 28 • When combined, the net effect of these processes suggests an addit ional amplifying climate feedback (median estimate), but with substantial uncertainty (spanning an overall negative feedback through to a more strongly amplifying feedback). The impact of these additional feedbacks on climate projections over the century i s assessed following published methods, within the same simple climate model. 29 These additional feedbacks represent a potent ially importance source of uncertainty in projections of the future climate but are expected to be less important than uncertainty in well-studied climate and carbon -cycle feedbacks (e.g. cloud feedback uncertainty) for projections over the coming century. * This is a scenario that sees rapid falls in global GHG emissions from 2020, with global CO2 emissions falling to Net Zero around 2060. Based on the assessment of IPCC-SR1.5, this global emissions scenario would be expected to keep median peak warming to around 1.75°C above preindustrial levels. narrowing of climate sensitivity

365 Sixth Carbon Budget – The path to Net Zero WCRP climate sensitivity distributions for a rapid global decarbonisation scenario UK Met Office; CCC analysis. Future temperatures are expressed relative to the 2006 – 2015 reference period from IPCC-SR1.5 and offset by 0.870C to express warming relative to preindustrial levels. The dashed line shows estimated peak warming for this scenario based on the IPCC-SR1.5 global carbon budget assessment. Several conclusions can be drawn from this • The median estimate of warming remains within the 1.5 – 2°C range under the WCRP estimates of climate sensitivity uncertainty, indicating that the IPCC-AR5 and IPCC-SR1.5 would remain valid guides to the global emissions reductions expected to keep central estimates of warming to the long-term temperature goal of the Paris Agreement. • It is very likely that additional warming will be seen between 2020 and 2050 even under the most benign climate responses. This ‘inevitable’ level of future warming would be raised by the increase in the lower bounds of the ECS uncertainty range between the WCRP and IPCC-AR5 estimates if confirmed by the IPCC Sixth Assessment Report. • There remains a non-negligible probability of warming exceeding 2°C above pre-industrial levels even if the world is successful in delivering a global emissions pathway expected to be consistent with the Paris Agreement.
The overall risks of warming exceeding 4°C above pre-industrial levels under ambitious global decarbonisation remain low (<1%) under this modelling, but is difficult to quantify robustly due to the dependence on the representation of the upper tail of climate response distribution, which is IPCC assessed global emissions possible narrow ing of climate

Chapter 8: Scientific context for setting the UK’s Sixth Carbon Budget 366 We have also modelled the impact on climate projections of including additional climate and carbon cycle feedbacks that generally are not included within the definition of climate sensitivity, such as permafrost thawing. There has been further understanding of these mechanisms since IPCC-AR5 but no overall change in the assessment of their impact on future evolution of global average temperature under ambitious global decarbonisation scenarios. Overall, these feedbacks are expected to further amplify warming and further increase the risks of warming significantly exceeding 2°C, though with only a limited impact on median peak including additional Earth system feedbacks for a rapid global decarbonisation scenario UK Met Office; CCC analysis. Future temperatures are expressed relative to the 2006 – 2015 reference period from IPCC-SR1.5 and offset by 0.870C to express warming relative to preindustrial levels. The dashed line shows estimated peak warming for this scenario based on the IPCC-SR1.5 global carbon budget assessment. A median estimate of additional feedbacks is used for the green trajectory shown here. This modelling suggests that the pathways from the IPCC-SR1.5 remain valid representations of the global effort necessary to achieve the Paris Agreement, while acknowledging the continued range of climate outcomes that could be consistent with such emissions pathways. We continue to use these pathways as representative of the global effort expected to be necessary to meet the Paris Agreement and for analysing the UK’s contribution to the Paris Agreement long- term temperature goal in this report (Chapter 7). 367 Sixth Carbon Budget – The path to Net Zero 3. Global CO2 budgets as a guide for mitigation pathways Our 2019 Net Zero report looked at the need to reach Net Zero emissions to stop continued rising global temperatures. It is the pathway of emissions reductions prior to reaching Net Zero that will determine the level of warming that is reached before global temperatures stop rising. This section looks at a constraint on that global pathway – a limit on cumulative global CO2 emissions – and the precision with which this constraint can be estimated for direct use in national mitigation policy. a) The concept of a remaining global CO2 emissions budget The Paris Agreement contains a long-term temperature goal to limit global average warming to prevent ever increasing climate impacts (Box 8.5). The science of what this means for global GHG emissions has been established for over a decade and was summarised in detail in the Committee’s 2019 report on setting • Long-lived greenhouse gases (e.g. CO2, and N2O over timescales of up to a century) accumulate in the atmosphere, so continued emissions of these gases lead to continually increasing warming. Stopping global temperature increasing requires global emissions of these gases to be brought to near Net Zero. The total amount of warming that these gases create depends on the cumulative total emissions before that point and not on the specifics of the emissions pathways (e.g. how much is emitted within a particular year). • Shorter-lived greenhouse gases such as methane affect the climate in qualitatively different ways to CO2, with constant rates of emission leading to an approximately near-constant level of raised global average temperature. These gases do not need to be brought to Net Zero to stop increasing global temperature, but instead need to be stabilised and then This science has been used to estimate the amount of future global cumulative CO2 emissions consistent with keeping warming below a given level. * These estimates were first provides in the IPCC-AR5 for a range of different warming levels, before the estimates were refined and improved for the 1.5°C warming level specifically in the IPCC-SR1.5. * These cumulative emissions concepts cannot be accurately used for the all-GHG aggregated emissions (using the global warming potential metric at a time horizon of 100 years) due to the qualitative difference in how shorter-lived reaching Net Zero is important It is the cumulative emissions of matter for their contribution to

Chapter 8: Scientific context for setting the UK’s Sixth Carbon Budget 368 The purpose of the Paris Agreement long-term temperature goal The 2015 Paris Agreement agreed a long -term temperature goal as a focus for international climate action. Parties committed to holding 'the increase in the global average temperature to well below 2°C above pre -industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre -industrial levels'. This long-term temperature goal was chosen • The UNFCCC sets an overall goal of avoiding dangerous climate change. • Climate science has shown that the over all level of impacts from climate change is well captured by the global average level of warming. • Every add itional bit of warming is associated with additional climate impacts. • The aggregate level of climate impacts expected at 2 °C (the previous long -term target of the international negotiations) was judged to be too severe overall, through the formal UN revie w of the long-term goal, with a strong push from vulnerable nations (such as low -lying island states) to keep the aggregate level of climate impacts The Paris Agreement long -term temperature goal can be interpreted in different ways – one interpretation is that it is fundamentally about avoiding climate impacts represented by the temperature goal as opposed to the level of warming itself. Ke eping warming to lower levels always brings additional benefits in terms of avoided climate impacts – emphasising the value of pursing ‘highest possible ambition’ (as required under the Paris b) Variations in Paris-aligned global CO2 emissions budgets There is significant uncertainty in estimates of the future global cumulative CO2 budgets consistent with the Paris Agreement long-term temperature goal.
A major uncertainty comes from the sensitivity of the climate to GHG emissions (Section 2), meaning that it is only ever possible to link an amount of future global cumulative CO2 emissions with a probability of keeping warming below a given level. There are also fundamental choices and definitions required which can be equally or more important to the size of the overall • Definition of global The Paris Agreement was informed by the IPCC-AR5 assessment of climate impacts at different levels of warming. This used the 1850-1900 period as an approximation of pre-industrial levels to define the (then) present level of global temperature change and the levels of aggregate climate impacts associated with 1.5°C and 2°C of warming. Alternative definitions are possible (e.g. using an earlier temperature period for pre-industrial levels) but would alter the level of impacts linked with global warming levels of 1.5°C and 2°C from those considered at the time of the Paris Agreement.32 • Balance of CO2 and non-CO2 GHG Emissions targets under the Paris Agreement are normally set aggregating all GHGs together using the Global Warming Potential metric (at time horizon of 100 years). However, pledged GHG emissions reductions can be achieved with different combinations of CO2 and non-CO2 emissions with differing consequences for global temperature.33 This means that any ‘budget’ for cumulative global CO2 emissions varies depending on the assumed pathways for choices required in estimating

369 Sixth Carbon Budget – The path to Net Zero • Changes in non-GHG climate Under the UNFCCC and Paris Agreement only a specific basket of GHGs are regulated. There are other emissions outside this basket that also affect the climate, including the emissions of aerosols particles that reflect sunlight and influence the formation of clouds. These aerosol emissions are estimated to have an overall cooling effect on the climate. As fossil fuel use is reduced and efforts are made to improve air quality, global aerosol emissions are expected to fall rapidly. There are various possible pathways for the speed and extent of these reductions, with deeper reductions in aerosols allowing less additional GHG-induced warming to keeping overall warming to the Paris Agreement • The Paris Agreement does not refer to a specific time horizon for its long-term temperature goal. Some pathways have looked at getting warming below 1.5°C by 2100 with temperatures allowed to exceed this level temporarily beforehand. This would allow more global cumulative CO2 emissions prior to reaching Net Zero, with some of these emissions removed from the atmosphere subsequently through active CO2 removal methods. As rapidly declining global temperature after peaking is likely to require possibly infeasibly large-scale global net-negative CO2 emissions, it is not prudent to plan for an intentional temporary overshoot of warming levels. These choices depend either on global societal preferences for how far we can reduce non-CO2 emissions in the future or on how warming is defined under the Paris Agreement. They therefore cannot be robustly sampled in a statistical way, unlike for uncertainties in the physical climate response. These definitional and societal choices mean a broad range of remaining global carbon budgets could be consistent with keeping warming to 1.5°C with approximately 50% probability a ‘corridor’ of estimates for future global cumulative CO2 emissions with a climate target are valid – it is not possible to estimate a single ‘correct’ value. keeping warming to 1.5°C with 50% probability. The IPCC-SR1.5 central budget for this probability of keeping warming to 1.5C with 50% probability was 580 GtCO2. These factors also underlie the 319 – 751 GtCO2 range in cumulative CO2 emissions (from 2020 to date of Net Zero CO2 emissions) in modelled global emissions pathways assessed to keep warming to below 1.5°C with no or low overshoot by IPCC-SR1.5. global societal preferences and definitions of warming. A very wide range of future cumulative Agreement due to these factors

Chapter 8: Scientific context for setting the UK’s Sixth Carbon Budget 370 CO2 emissions for keeping warming to 1.50C Sour IPCC (2018) Special Report on Global Warming of 1.50C; CCC analysis. A remaining cumulative emissions budget of 580 GtCO2 (from 2018 onwards) from IPCC-SR1.5 is used as a reference case to express these changes against (consistent with a 50% chance of keeping warming to this level when allowing for physical response uncertainties). Impacts on the remaining emissions budget is calculated for alternative non-CO2 and non-GHG effects using the methodology in Section 2. SM. 112 of IPCC-SR1.5 Chapter 2. The minimum and maximum reductions across the ensemble of scenarios assessed to be consistent with keeping warming to 1.50C with no or low overshoot used. A log-normal distribution is used to assess the impact of an alternative shape for the climate response distribution. The impact of using an earlier period for preindustrial is quantified using an quantified using an additional 0.10C of historical warming. Budgets using an alternative definition of global temperature are taken from IPCC-SR1.5. c) Implications for national pathways to Net Zero The unavoidable dependence of estimates of remaining global future cumulative CO2 budgets consistent with the Paris Agreement on societal choices, create large variations in the estimates for budgets expected to be consistent with the Paris Agreement long-term temperature goal. This limits the utility of using global remaining cumulative emissions budgets to directly constrain the UK’s emissions trajectory towards the 2050 Net Zero • The many different totals for future global cumulative CO2 emissions that could be consistent with the Paris Agreement long-term temperature goal span a very large range and do not provide an unambiguous global starting point for allocating shares to countries. • Allocating shares to countries requires additional considerations of common-but-differentiated responsibilities and respective capabilities in light of national circumstances, as required under the Paris Agreement. This introduces a further set of choices and value judgements (Chapter 7). There are limitations on the use

371 Sixth Carbon Budget – The path to Net Zero • UK carbon budgets are set on an aggregated all-GHG emissions basis and not using CO2 (or long-lived GHG) emissions alone.
Global cumulative emissions budgets are only robustly defined for CO2 and other long-lived GHGs and not for cumulative aggregated emissions of all GHG emissions. * The Paris Agreement does not attempt to allocate remaining global cumulative CO2 emissions estimates to individual countries, but rather requires ‘highest possible ambition’ from all parties, and that parties put forward commitments that reflect their common-but-differentiated responsibilities and respective capabilities. We consider that a sensible approach in the face of the uncertainties and boundaries of the science and have designed the analysis in this report on that basis. * When using the Global Warming Potential metric which is standard practice for international GHG accounting and these global budgets to derive

Chapter 8: Scientific context for setting the UK’s Sixth Carbon Budget 372 4. Minimising the UK’s future contribution to climate change Our advice on setting a Net Zero target in the UK highlighted that reaching Net Zero GHG emissions in the UK would be consistent with stopping the UK’s contribution to increasing global temperature (from its territorial emissions) and beginning to reduce its all-time impact on the global average temperature. Section 3 highlighted that it is the pathway of global emissions reductions prior to Net Zero that will determine the amount of warming before global temperature • For long-lived GHG emissions (such as carbon dioxide and nitrous oxide) the cumulative total emissions prior to reaching Net Zero mainly determines how emissions of these GHGs contribute to peak global temperatures. • For shorter-lived GHG emissions (such as methane) the rate of emissions over the few decades prior to global temperature peaking mainly determines the contribution from these gases to peak warming.34 As peak warming occurs around 2050 for scenarios consistent with keeping warming below 1.5°C, this requires near-term reductions in these emissions to minimise their contribution to peak warming. Rapid and sustained reductions in both long-lived and shorter-lived GHG emissions will be needed over the several decades for the world to keep additional warming sufficiently low to keep within the warming limits of the Paris Agreement. Well-mixed GHG emissions affect the climate similarly independent of where they are emitted, so these principles also apply to the UK’s contribution to global temperature increase (from its territorial emissions) prior to reaching Net Zero by • Reaching Net Zero emissions by 2050 with no near-term action to substantially reduce emissions prior to 2030 would lead to a significantly higher warming contribution from UK territorial emissions than under the range of exploratory pathways developed within this report, all of which • If this delay of ambition was replicated globally it would be close to impossible to achieve the 1.5°C end of the Paris Agreement long-term temperature goal, as all modelled global pathways require significant reductions this decade to keep the required post-2030 reductions within the limit of what might be feasible. Pathways attempting to reach Net Zero by 2050 without early action to reduce emissions would also carry substantial risks of failing to achieve the target, challenges in delivering the low-emissions transition in a just way, and would not capture the economic opportunities and co-benefits that actions over the next decade are expected to bring (Chapter 9). It would also seriously undermine the efforts to achieve the necessary increase in global near-term ambition given the global reductions in emissions

373 Sixth Carbon Budget – The path to Net Zero emissions under exploratory scenarios and a stylised ‘delayed action’ scenario Emissions of F-gases are excluded from these calculations but their relative contribution to warming is expected to be relatively small compared to the total of the other GHGs. Contributions to warming are calculated using the climate response functions for calculating emissions metrics in IPCC-AR5. This provides a central estimate of the future warming and the difference between the scenarios considered here but does not allow for uncertainty in the climate response to GHG emissions. Although this is substantial it would similarly scale the level of warming for all the scenarios, meaning qualitative comparisons between them are expected to be robust. The stylised ‘no action to 2030’ pathway assumes no emissions reductions over the 2020s before emissions linearly a) Additional non-CO2 climate impacts from aviation There are additional direct climate impacts associated with UK activity that are not explicitly regulated under the Paris Agreement or the UK Climate Change Act. These include changes in the reflectivity of the land-surface with changing land use, emissions of aerosol particles and non-CO2 effects from aviation and shipping. Aviation non-CO2 climate effects are complex and large uncertainties persist, but best-estimates suggest that these currently represent the majority of global aviation’s impact on the climate (Box 8.6). Unlike aviation CO2 emissions, these non-CO2 effects are shorter-lived and largely depend on sustained aviation activity

Chapter 8: Scientific context for setting the UK’s Sixth Carbon Budget 374 The science of aviation non -CO2 climate impacts Aviation produces a range of non -CO2 pollutants that affect the climate in different ways. These include emissions that have a warming effect, such as nitrogen oxides, and those that have a cooling effect, such as sulphates. Planes can also create contrails (long trails of cloud caused by a ircraft flying through supersaturated air) depending on the local atmospheric conditions. These high -altitude contrails can help the formation of cirrus clouds, w hich have a relatively large warming effect on the global surface air temperature. A new study has provided an updated synthesis of the effects of global aviation on the • Overall, the net aviation non -CO2 effect is to warm the climate. Globally, non -CO2 effects contribute around two -thirds of the total aviation effective radiative for cing – twice as much as historical CO 2 emissions from aviation. The dominant non -CO2 effects are found to be those from the formation of contrail -induced cirrus clouds, followed by the net effect of the emi ssion of nitrogen oxides on atmospheric chemistry.
• These non-CO2 effects are generally short -lived, meaning that if aviation emissions were stopped then their effects on the climate will quickly dissipate. In contrast, CO 2 emissions from aviation will res ult in el evated atmospheric CO 2 concentrations for • Some possible aviation non -CO2 effects remain unquantified. The effect of particulate emissions on the reflectivity of low clouds are still too difficult to quantify but might b e a cooling effect that offsets a significant frac tion of aviation non -CO2 warming from It remains extremely challenging to accurately aggregate the effects of these non -CO2 impacts into a CO 2-equivalence ‘multiplier’ for use within climate policy mechanisms. These effects still have signi ficant uncertainties associated with them and their size can depend on the conditions under which the activity occurs, unlike for well -mixed greenhouse gases which affect the climate similarly independently of where they occur. Efforts to reduce aviation non-CO2 effects will help to lower peak levels of global warming if implemented prior to the date of global Net Zero CO2 emissions (e.g. around 2050 -2075 for pathways that meet the Paris Agreement long -term tempera ture goal), provided these are not achiev ed at the expense of additional CO 2 emissions (which would create more warming in the long -term). The future evolution of UK aviation non-CO2 effects will depend strongly on the trajectory of UK aviation demand (Box 8.7). In the absence of technological breakthroughs that can help mitigate aviation non-CO2 effects, scenarios that keep aviation demand lower will sustain lower non-CO2 warming than those with higher aviation demands. * It is therefore not appropriate to apply a fixed ratio or multiplier to estimate non-CO2 impacts as part of the single basket of GHG emissions. However, the UK should attempt to report annually a best estimate of the impact of these non-CO2 effects on global temperatures, as they are a significant part of aviation’s impact on the climate. For consistency with the Net Zero target, under which UK GHG emissions are reduced to Net Zero to stop contributing to further increases in global temperature by 2050, UK aviation non-CO2 effects should also target stopping contributing to further increases in global temperature by this same date. Without the development of mitigation options for these non-CO2 effects, this would require year-on-year demand growth to be reduced to essentially zero by or before 2050. * Scenarios in which people are most willing to change their behaviour and fly the least would keep non-CO2 warming from UK aviation below 2018 levels in 2050. depends strongly on the future contribution to global warm ing Globally, non-CO2 effects from aviation contribute about two-

375 Sixth Carbon Budget – The path to Net Zero Future UK aviation non -CO2 climate impacts We have projected best estimates of the change in non -CO2 warming from UK aviation consistent with our exploratory scenarios to 2050 for aviation demand and GHG emissions. These estimates rely on the latest synthesis of aviation non -CO2 effects.36 In 2020, there has been an estimated 60% drop in UK air travel d ue to COVID -19 compared to 2019 levels. The short -lived nature of aviation non -CO2 effects means a similar percentage redu ction in the radiative forcing from aviation non -CO2 effects will There are significant variations in 2050 aviation non -CO2 warming across our exploratory • A Baseline trajectory with high growth in activity would see a significant growth in aviation non-CO2 impacts by 2050, rising by 45% from the level of warming sustained by UK aviation non -CO2 emissions in 2018. • Demand management cons istent wi th Headwinds and Balanced Net Zero Pathway scenarios limits future demand growth but would still see the warmi ng sustained by non-CO2 effects increase by 7 -14% by 2050 compared to 2018. • The Widespread Innovation scenario reduces aviation GHG emiss ions thro ugh sustainable aviation fuels and higher efficiency, allowing higher demand than in the Balanced Net Zero Pat hway. However, without additional mitigation options to reduce non-CO2 effects, this scenario would mean a 24% increase in non -CO2 warming by • In Widespread Engagement and Tailwinds, there is declining demand, which leads to the warming sustained by non -CO2 aviation effects falling to 14 -19% below 2018 levels In these scenarios we have not explicitly modelled other technologies that could reduce non-CO2 effects (except for electrification), due to the current lack of a robust evidence Potential options being explored include use of low -aromatic sustainable aviation fuels (to reduce soot and therefore cirrus formation), development of low NO x engine designs, re-routing of aircraft to avoid cirrus formation zo nes in the atmosphere (although this would require more accurate forecasting, and may increase CO 2 emissions), or switching to electric p ropulsion or cleaner fuels in these zones. Further research and testing are required to quantify the potential of these mitigation options, although early stage analysis suggests that they may be able to reduce UK aviation non-CO2 warming effects in 2050 b y 5-20 percentage-points. Chapter 8: Scientific context for setting the UK’s Sixth Carbon Budget 376 effects in 2050 relative to 2018 Lee, D. et.al. (2020) The contribution of global aviation to anthropogenic climate forcing for 2000 to 2018. Atmospheric E nvironment, 244, 117834; CCC analysis. These bars represent a central estimate of the warming from UK aviation’s non-CO2 emissions under the exploratory scenarios considered in this report. These are expressed relative to 2018 levels and are based on the warming equivalent emissions metrics from Lee et.al. (2020). There is substantial uncertainty in the absolute size of non-CO2 warming effects from aviation, but the relative changes across scenarios are expected to be more robust. The UK aviation passenger demand growth across these scenarios are (2050 relative to 2018): Balanced Net Zero Pathway = +25% (no net airport expansion), Headwinds = +25%, Widespread Engagement = -15%, Widespread Innovation = +50%, Tailwinds = -15%, Baseline = +64%.
377 Sixth Carbon Budget – The path to Net Zero 5. The need to adapt to a changing climate This section summarises the evidence that indicates climate impacts will continue to increase even under a rapid reduction in global emissions and could be greater still if global emissions reductions are not sufficiently rapid to achieve the Paris This emphasises the need for the UK to adapt to the effects of a changing climate and support climate-vulnerable countries around the world to adapt to climate impacts as part of its contribution to the global effort to address climate change. Planning for a range of climate outcomes is prudent even while also aiming to a) Climate risks continue to increase with additional warming The overall level of impacts from climate change will increase with every additional small increment in warming. A growing body of research, summarised by the recent IPCC Special Reports and Fifth Assessment Report, shows how higher levels of warming levels result in increasingly severe and pervasive impacts with effects on humans and ecosystems • 1°C above preindustrial Today’s level of warming is already having significant impacts around the world. The frequency of heatwaves has increased in most land regions.37 There are demonstrable impacts on heat- related mortality particularly for elderly and vulnerable people.38 Patterns of water availability are changing due to melting land-ice and shifting rainfall in some parts of the world. The frequency and intensity of heavy precipitation has increased at a global scale due to climate change, with knock-on implications for flood risks. Flooding is also increasing in coastal areas as climate change pushes up sea-levels. Climate change is being increasingly linked with making the conditions for wildfires more likely.39 Ecosystems and species have been impacted by climate change, with many species changing their geographical extent and/or migratory patterns. Climate change has affected crop yields, with more negative impacts than positive effects.40 • 1.5°C above preindustrial Impacts at 1.5°C warming will be more severe than at present. Hot temperature extremes will increase more rapidly than the global average temperature, and over twice as fast in some parts of the world (e.g. mid-latitude summers). Across the globe there would be around twice as many people affected by river flooding than over the recent past.41 The intensity and frequency of heavy rainfall will generally increase. Around 6% of insects, 4% of vertebrates, and 8% of plants would lose >50% of their current species ranges.42 There will be very large impacts on some ecosystems (e.g. coral reefs are projected to decline by a further 70–90% at 1.5°C). 2°C above preindustrial At 2°C warming many regions will experience considerable and damaging climate change impacts including extreme weather and associated detrimental effects on water availability and food production. Heat-related mortality risks increase beyond the risks at 1.5°C. Across the globe there would be around a 170% increase in the number of people affected by river flooding than over the Significant climate impacts are

Chapter 8: Scientific context for setting the UK’s Sixth Carbon Budget 378 recent past. Widespread damage to ecosystems would occur with the rate of climate change likely too fast for many species to be able to migrate to regions with compatible climates. Around 18% of insects, 8% of vertebrates, and 16% of plants would lose >50% of their geographical range. The risk of irreversible loss of many marine and coastal ecosystems (e.g. coral reefs) increases significantly for warming at 2°C and above. Risks of 'large-scale singularities' in the climate system (e.g. triggering inevitable loss of major ice sheets or collapse in the Atlantic meridional overturning circulation) would be ‘moderate’ at this level of warming. • 3°C above preindustrial Major and severe impacts would be experienced worldwide. For example heat waves would become prevalent across large parts of the world, with around 4.5 billion people exposed to associated serious health risks.43 Risks to land-based ecosystems would be very high with around 25% of species expected to lose over half of their geographical range by 2100.44 There would be a high risk of 'large- scale singular events' at 3°C. • 4°C above preindustrial Warming and increases in humidity in many regions could make outdoor working, for example in agriculture, very difficult or even impossible based on people’s current tolerance to heat extremes. Many freshwater and land-based species would face substantial risk of extinction. Large risks to the functioning of the global food system could occur with a substantial chance of large-scale crop failures. Large- scale failures of food systems and increases in climate-related extreme events could contribute to large-scale migration of people around the world creating pressures on social and economic systems with difficult to predict geopolitical consequences. Any additional warming is associated with increases in climate change impacts. Poorer and more vulnerable parts of society are expected to be relatively more exposed to impacts from many of these increasing climate risks. However, the UK is not immune from these risks and needs to adapt to the changing climate, even for the lower levels of warming. Box 8.8 summarises the impact of different levels of global average warming for the UK. Climate change risks for the UK under different global warming levels The UK is experiencing climate change impacts today which are predicted to increase further under additional future global warming. The UK Climate Change Risk As sessment (CCRA) provides a regular assessment of the climate risks (and opportunities) associated with different levels of global average • Current warming level (~1.1 °C above preindustrial levels) : The UK’s average annual temperature has increased by around 1.2°C relative to pre -industrial levels, sea level has risen by ~16 cm sinc e 1900, there is some evidence of increasing heavy rainfall depending on the metric used. The likelihood of summer heatwaves such as that in 2018 has doubled over the pa st few decades.
• Less than 2°C above preindustrial levels : If global average warming is kept to the long- term temperature goal of the Paris Agreement, the UK is predicted to experience increased average annual temperatures of around 0.6°C by 2050, heavy r ainfall would see an estimated 10% increase, and hot summers like 2018 will occur every other year (central estimates). Sea levels around the UK would rise by a further 3 - 37 cm (by 2060) compared to today and due to the slow response of the ocean to climate warmi ng continue to rise reaching 5 - 67 cm above present levels by 2100. 379 Sixth Carbon Budget – The path to Net Zero Water deficits could affect around 15% of water resource zones, but it is likely that adaptation measures could manage most of the increased risk from flooding and water scarcity in 2050, though not necessarily by the end of the century. • 3°C or more above preindustrial levels : A global mean warming of around 3°C or more by the end of the century would result in a very large increase in seasonal changes and weather extremes in the UK. Winter rainfall could increase by up to 50% and summer rainfall decrease by 60% by 2100. Water deficits across England could rise to over 5.5 billion litres per day, and the number of people living in areas of significant flood risk would more than double. The UK would also experience centuries of sea level rise; with 1 metre or more becoming inevitable. Daily temperatures exceeding 40°C could occur every 3 -4 years. At this level of warming, significant and systemic impacts are projected to occur, an d accepta nce of impacts might be the only viable adaptation strategy in some ca ses. Lower levels of warming are also expected to bring some opportunities and benefits to • Outdoor activities may become more attractive, helping to promote healthier • Cold-related deaths would be expected to decline with future warmin g, though the benefits could be largely offset by an increasing elderly population. • Growing seasons may lengthen and productivity in agriculture and forestry could improve with warmer summers. However, these benefits would only be realised if water and soil quality are not limiting, which they could be even at low levels of CCC (2017) Climate Change Risk Assessment 2017 Evidence Report. b) A wide range of warmi ng outcomes remains possible Past global emissions have increased the global average temperature by more than 1.1°C above pre-industrial levels, with impacts now being realised around the world. While past emissions are not expected to commit the world to significant amounts of additional warming above this level, a large fraction of the observed warming will be maintained for several centuries even if global CO2 emissions were instantaneously reduced to Net Zero according to the latest climate models.45 As global emissions continue, warming, and climate impacts, will • Additional warming is expected even under the most ambitious global emissions pathways and best-case climate outcomes. Under global emissions trajectory reaching Net Zero CO2 emissions around 2050 additional warming of over 0.2°C is expected by mid-century in nearly all possible climate outcomes.46 The recent estimates by the WCRP assessment on climate sensitivity suggest that inevitable levels of warming may be slightly higher than this, further emphasising the need to improve preparedness for additional climate impacts. • Under global emission reduction scenarios that aim to deliver on the Paris Agreement, exceedance of 2°C warming still remains possible. Our modelling of the climate outcomes consistent with a rapid global reduction in CO2 emissions to Net Zero by 2060 suggests that there remains a chance (around 10 – 20% probability) of seeing warming exceed 2°C by 2100 even if this scenario was successfully delivered. • Current global pledges are still insufficient to deliver on the Paris Agreement and central expectations of future warming are for higher levels. Under a continuation of the global ambition needed to achieve current 2030 emissions targets, the median estimate of warming in 2100 is around 3°C

Chapter 8: Scientific context for setting the UK’s Sixth Carbon Budget 380 Recent commitments from large emitters such as the US and China to reach Net Zero by 2050 could, if achieved, lower the median level of expected warming to around 2.3 – 2.4°C above pre-industrial levels by 2100, but are not sufficient on their own to achieve the Paris Agreement.47 Increased ambition towards trajectories expected to be consistent with the Paris Agreement would bring rapid benefits in terms of reduced rate of warming and the climate risks experienced, reducing 2020 to 2050 warming • Very high levels of warming and climate impacts could be possible under current global ambition for emissions reductions. Under global emissions scenarios consistent with the ambition of present NDCs continued across the rest of the century, there remains a significant possibility of warming in excess of 4°C by 2100, with associated very high levels of climate impacts. Higher warming also increases the risk of low likelihood, high impact events including abrupt or very fast rates of climate change, and irreversible changes, some of which could then accelerate global warming further. The climate impacts being felt today, the inevitability of future increases in climate risk and the wide range of climate outcomes possible over the rest of the century all highlight the importance of continued and increasing effort on preparing for climate risks alongside emissions reductions. The CCC’s Adaptation Committee has advised the Government that it needs to implement resilience measures for a minimum 2°C warming level and should also include consideration of adaptation planning for up to the 4°C level.
The Adaptation Committee’s latest report to Parliament shows that the UK is not yet prepared for the 2°C level, let alone the 4°C as part of effective adaptation progress suggests that the UK is

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37 IPCC (2018) Chapter 3 - Impacts of 1.5°C of Global Warming on Natural and Human systems. 38 Ebi, K.L. et al. (2017) Detecting and attributing health burdens to climate change. Environmental Health Perspectives, 125 (8), 085004. 39 Jones, M. et al. (2020) Climate Change Increases the Risk of Wildfires. 40 IPCC (2014) Summary for policymakers, Working Group 2 - 5th Assessment Report. 41 Alfieri, L. et al. (2017) Global projections of river flood risk in a warmer world. Earth’s Future, 5, 2, 42 Warren, R. et al. (2018) The projected effect on insects, vertebrates, and plants of limiting global warming to 1.5°C rather than 2°C. Science, 360, 6390, 791-795. 43 Arnell, N. et al. (2015) The global impacts of climate change under 1.5ºC, 2ºC, 3ºC and 4ºC 44 Warren, R. et al. ( 2018) The implications of the United Nations Paris Agreement on climate change for globally significant biodiversity areas. Climatic Change, 147 (3-4), 395-409 45 MacDougall, A. et al. (2020) Is there warming in the pipeline? A multi-model analysis of the Zero Emissions Commitment from CO2. Biogeosciences, 17, 2987–3016. 46 CCC (2020) How much more climate change is inevitable for the UK? 47 Climate Action Tracker (2020) Biden’s election could bring a tipping point putting Paris Agreement 1.5 degree limit ‘within striking distance’. 48 Forster, P. et al. (2020) Current and future global climate impacts resulting from COVID-19. Nature Climate Change, 10, 913–919. 49 CCC (2019) Progress in preparing for climate change – 2019 Progress Report to Parliament. Chapter 9: The shape of the emissions path to Net Zero 384 The shape of the emissions path to 1. Delivering on the Paris Agreement 389 2. Supporting the recovery and maintaining momentum 391 3. Making progress in every sector in the 2020s 394 4. Why the recommendation does not require faster progress 408

Chapter 9: The shape of the emissions path to Net Zero 386 Our recommended Sixth Carbon Budget (i.e. a 78% reduction in emissions from 1990 to 2035), requires faster progress prior to 2035 than it does thereafter to 2050. Emissions must fall by an annual average of 21 MtCO2e from 2019 to 2035, then by an annual average of 13 MtCO2e to 2050. As a percentage of the previous year’s emissions, the emissions reduction generally increases over time, given the falling level of remaining emissions (e.g. an emissions reduction that would represent a 10% reduction in 2040 might be a 50% reduction in 2049). The shape of our emissions trajectory is an outcome of our bottom-up scenario construction, reflecting the principles that we have built into them (see Chapter 1). This chapter addresses the question of whether it would be better to act more slowly and benefit later from learnings that lead to lower costs and having longer to scale up solutions. The Committee concludes that it would not be appropriate to act more slowly, reflecting four key considerations laid out in this • The UK’s global contribution. Delivering the goals of the Paris Agreement requires deep global emissions reductions over the next decade as well as reaching global Net Zero emissions of long-lived greenhouse gases (GHGs) in the longer term. To align to the Paris Agreement, UK carbon budgets must reflect the ‘highest possible ambition’ for near-term emissions reduction. This is particularly important given the UK’s role as President of COP26. Minimising the cumulative emissions of long-lived GHGs on the path to Net Zero, alongside ambitious reductions in other GHGs will keep the contribution from UK territorial emissions as low as possible. • Investing for the recovery, and for the future. The changes under our pathways are highly capital-intensive. The required investment programme can help boost the UK’s economic recovery from the COVID pandemic to the benefit of GDP and employment (see Chapters 5 and 6). Record-low interest rates currently provide a further reason to fast-track investments. Investing in low-carbon solutions will ensure that the UK is preparing for the future as the world increases its ambition on climate action. A slower emissions reduction would mean a smaller investment programme and a lower boost to the economy and jobs, with greater risk of stranded assets • Building on current momentum. Our proposed budget would send a clear signal that the UK is open for low-carbon investment. Since the UK set its Net Zero 2050 target in mid-2019, considerable momentum has built in businesses, in local/regional Government, in policymaking and in the UK population at large. Net Zero has brought a clarity that all emissions must go, and that no sector can be left behind. Our proposed budget aims to extend that clarity to the coming 15 years by requiring strong action across every emitting part of the economy. A weaker carbon budget would undermine that clarity, adding risk and costs to businesses looking to support the transition to Net Zero in 2050. • Making progress in every sector. Our bottom-up scenarios (described in Chapters 2 and 3) reflect the challenges and opportunities in every sector of the economy in reducing emissions towards Net Zero. Our pathways reflect the need to make progress to prepare for the 2050 target, and the benefits of making that progress. The pathways see the most rapid emissions reductions over 2025-2035, once opportunities have been created during an initial period to develop low-carbon supply chains, points to rapid action to 2035. the investments to get on track UK businesses investing in low-

387 Sixth Carbon Budget – The path to Net Zero • Cost-saving opportunities. Many low-carbon choices can save money compared to high-carbon alternatives. These include improvements to energy efficiency and resource efficiency across the economy, deployment of wind farms, and a rapid shift towards electric vehicles. We have included deployment of these at a rapid but feasible rate. • Health benefits. Our Balanced Pathway features actions over the next 15 years that would both reduce emissions and have significant benefits to health.
These include people choosing to adopt healthier diets, exercise benefits of walking and cycling, improvements to the quality and comfort of the UK housing stock and improvements to urban air quality both through switching away from cars and widespread uptake of electric • Innovation and option creation. Our Balanced Pathway assumes some deployment in the 2020s of technologies that are not yet fully mature, such as those for hydrogen production and use (e.g. turbines, boilers), carbon capture and storage (CCS), and greenhouse gas removals. This deployment will help to prove their performance and drive cost reductions through ‘learning by doing’, as has been so successful for offshore wind over the last decade, as well as creating greater optionality for potential • The ‘critical path’ to Net Zero by 2050. Some aspects of the transition require immediate and concerted action to make the necessary progress in time to contribute fully to Net Zero by 2050. These include planting trees and restoring peatlands, in order to allow these to sequester the necessary CO2 by 2050, and deployment of decarbonised heating solutions for buildings to build a supply chain for full roll-out in later years. • Limiting reliance on greenhouse gas removals. While reaching Net Zero will require some level of engineered greenhouse gas removals (see Chapter 2), these should not be relied upon to deliver unlimited offsets to remaining positive emissions. As well as being relatively immature technologically, there are limits to the quantity of sustainable bioenergy available to the UK, while direct air capture of CO2 will be energy-intensive. A more back- ended path for emissions has less scope to correct should things go wrong, risking an over-reliance on removals and/or missing the Net Zero target. A slower path would fail to meet the criteria set out by the Climate Change Act. It would risk missing the 2050 target, fail to fulfil the UK’s commitments under the Paris Agreement and undermine UK leadership ahead of the UN climate talks at COP26, store up higher costs for later on and risk missing opportunities for economic growth and to drive down costs through deployment, and it would fail to encourage the actions to improve people’s health. We also consider in this chapter whether setting a legal target requiring a quicker path than that under the Balanced Pathway would be desirable. We conclude it would not, based on current understanding of technologies and behaviours. A quicker path would potentially go beyond feasible rates of deployment, given the need to engage people, and to develop supply chains, infrastructure and markets. The results of a faster path could also include widespread premature scrappage of assets such as boilers and vehicles, and/or carbon leakage to other reducing existing emissions, in

Chapter 9: The shape of the emissions path to Net Zero 388 A faster path may prove possible in future if technologies develop more quickly than we assume and/or people prove more willing to adopt new technologies and choose greener lifestyles. If it proves possible, then such a quicker path would be desirable given the difficulty in achieving the more ambitious end of the Paris Agreement objective (i.e. limiting global warming to 1.5°C). This chapter draws on evidence from earlier in the report, to explain why this path is the right one for emissions on the way to Net Zero. It is set out in four 1. Delivering on the Paris Agreement 2. Supporting the recovery and maintaining momentum 3. Making progress in every sector 4. Why the recommendation does not require faster progress This is the right path for now, but it would be desirable to go further if that turns out to be

389 Sixth Carbon Budget – The path to Net Zero 1. Delivering on the Paris Agreement The impact of CO2, and other long-lived greenhouse gases, on the global climate is primarily a result of their cumulative emissions (see Chapter 8). To meet the goals of the Paris Agreement the world must reach Net Zero CO2 (and ultimately long- lived GHG) emissions and do so quickly enough to keep cumulative emissions sufficiently low up to that point. The contribution of any country’s territorial emissions to global temperature therefore reflects both the date at which it will reach Net Zero and the pathway it follows to get there. For example, the IPCC’s Special Report on Global Warming of 1.5°C concluded that in order to limit expected global temperature rise to 1.5°C the world would • Reduce global CO2 emissions to Net Zero by around mid-century. • Reduce global CO2 emissions by around 45% from 2010 to 2030. • Reduce global non-CO2 emissions deeply. Recent developments in global climate ambition appear to be aligning to the global objective on Net Zero. Commitments to reach Net Zero by 2050 have been made by the EU, Japan, South Korea covering all greenhouse gases, and the incoming US administration has also committed to Net Zero by 2050. China has also recently made a commitment to reach carbon-neutrality by 2060. However, a large global ambition gap remains for 2030, with the EU the only one of the above proposals to be accompanied by a strengthened 2030 target (agreement on this target still needs to be reached across EU member states). Increasing ambition to 2030 must therefore be a key goal for the UK’s Presidency of the delayed UN climate talks (COP26). To support that goal the UK must itself adopt an ambitious interim goal, as implied by our recommended pathway for the In Chapter 7 we compare our recommended Balanced Net Zero Pathway to the Paris Agreement and conclude that it is consistent, but should not be any • Our proposed pathway is comparable to that being adopted by other climate leaders such as the EU, and could help the UK support necessary increases in global ambition for emissions reductions by 2030 as part of a group of ambitious countries and through its COP26 Presidency.
• Our proposed pathway requires that the UK deploy low-carbon options around the same time as other climate leaders and slightly before their full global roll-out is needed in 1.5°C-consistent pathways. • While our proposed pathway sees UK per person GHG emissions aligned to those needed from the world as a whole in a 1.5°C consistent scenario over the Sixth Carbon Budget period, cumulative long-lived GHG emissions per person over the whole pathway would be at the very limit of the range consistent with a 1.5°C-aligned trajectory for the world as a whole. Top- down allocations of effort according to equity principles are not formally used within the Paris Agreement, however several of these principles suggest that the UK (as a developed country with relatively high wealth and historical responsibly for climate change) should be aiming to go

Chapter 9: The shape of the emissions path to Net Zero 390 In Chapter 7 we set out how our proposed pathway can be considered a ‘fair and ambitious’ contribution towards the goals of the Paris Agreement. However, the structure of the Paris Agreement, scientific understanding linking every additional reduction in emissions with more avoided climate impacts, and the range of different possible framings of ‘fairness’ can provide valid reasons for even more ambitious emissions reduction in the UK. The binding constraint on the ambition in our Balanced Net Zero Pathway is the Committee’s judgement over what represents a feasible basis for an ambitious yet deliverable territorial emissions reduction pathway in the UK for the basis of setting legally-binding targets under the Climate Change Act. The credibility of targets set by the UK under the Climate Change Act and the Paris Agreement is an important part of our international signalling that the UK is serious about reducing emissions and will deliver on the targets that it sets. The UK should also be aiming to support the global effort to reduce emissions in other ways alongside its domestic emissions Should more rapid emissions reductions in UK territorial emissions action turn out to be feasible (e.g. as in our Tailwinds scenario), as a result of positive developments on societal/behavioural changes and innovation, then ambition should increase, rather than allow this to be taken as an opportunity to ease off effort elsewhere. The Balanced Pathway should be seen as the minimum level of ambition for the UK’s pathway to Net Zero, with opportunities taken to go further than it where Even if it were possible to delay effort while still achieving Net Zero by 2050, this would result in higher cumulative emissions. Higher cumulative emissions would lead to a worse climate outcome, and a more back-ended path would also undermine the UK’s ability to demonstrate international • Chapter 8 shows that a stylised pathway achieving Net Zero by 2050 but with limited action to reduce emissions over the 2020s would lead to a significantly higher contribution to global warming from UK territorial emissions over the 2020 – 2050 period. As well as leading to avoiding additional climate impacts, if replicated globally this would make it extremely difficult to keep warming to the 1.5°C end of the Paris Agreement • The influence from UK action to global action is currently at its strongest as the UK hosts the next UN climate talks. These talks are aimed explicitly at increasing global effort to 2030. • The more challenging and costly parts of our recommended trajectory – decarbonising buildings and industry, and scaling up CO2 removals from the atmosphere – are also the areas where the UK has a particularly important leadership role in helping (alongside other climate leaders) to develop new global markets and technologies (see Chapter 7). Without action from the UK (alongside others) to develop and deploy this new wave of deeper decarbonisation options, the rapid and large-scale global deployment of these technologies that is needed to reduce global emissions in line with the Paris Agreement would not be credible. These factors provide a compelling argument that without pursuing ‘highest possible ambition’ across the entire pathway to Net Zero, as required by our recommended Sixth Carbon Budget, the UK would not be satisfying its obligations

391 Sixth Carbon Budget – The path to Net Zero 2. Supporting the recovery and maintaining momentum Much has changed since we published our Net Zero advice in May 2019. Net Zero by 2050 is now law in the UK. It has since been recognised as the ambition for around half of the world’s emissions (and rising). In the UK more and more businesses, people and local authorities are recognising the need for, and taking, climate action. This year the COVID-19 pandemic has created a vast public health crisis and has had a profound economic impact. The months ahead have huge significance. The steps that the world and the UK take to rebuild from the COVID-19 pandemic and its economic damage can accelerate the transition to low-carbon activities and improve our climate resilience. Short-term choices that lock in emissions or climate risks must be avoided. The window for increasing global climate ambition is now. This section consists of two a) Investing in a green recovery b) Building on existing momentum a) Investing in a green recovery The investment programme detailed in Chapter 5 of this report suggests that a large scale-up of low-carbon investment in the 2020s is ambitious, but achievable. It is financeable and can boost jobs and GDP, and it will lead to significant operating cost savings over the longer term. Similarly, there is strong evidence, set out in our 2020 Progress Report to Parliament and elsewhere, to support a range of low-carbon and climate adaptation 'green stimulus' measures.1 Many can be delivered quickly and have high multipliers, high numbers of jobs created, and In our 2020 Progress Report we suggested that action by the Government in response to the pandemic must protect workers and businesses, restore confidence, stimulate spending and rebuild the economy. These goals can be strongly complementary to the UK's climate goals.
We noted that green stimulus measures tend to have higher short-run economic multipliers that increase the effect on GDP of each investment and higher numbers of jobs created, as well as co-benefits for health and the natural environment. The investment programme in our Balanced Pathway fits the conditions for a successful green stimulus programme. It includes new additional investment in all emitting sectors, compared to a scenario with no further climate action. These investments align to areas that we’ve previously identified as being strong green • Low-carbon building retrofits and buildings that are fit for the future. Our scenarios involve retrofit of 13 million homes by 2030. Importantly, this programme is geographically dispersed, reaching all areas of the UK, with the potential to create local jobs. Estimates outlined in Chapter 6 suggest potential for over 200,000 new jobs in this sector by 2030, equivalent to close to 1% of the UK workforce. ‘green stimulus’ measures that

Chapter 9: The shape of the emissions path to Net Zero 392 • Natural capital investments in tree planting, peatland restoration and green infrastructure. Tree-planting increases to up to 30,000 ha annually by 2030, up from 13,000 hectares per year today, and twice the current level of restored peatland is restored by 2030. • Strengthening energy system networks and building low-carbon power. Our scenarios see a rapid increase in electrification, supported by resilient grid infrastructure and underpinned by an expansion of renewable electricity. • Infrastructure to make it easy for people to walk and cycle, leading to a shift in journeys away from private cars. • Moving towards a circular economy by ensuring that product design maximises re-use of materials and minimises waste over the product’s lifetime, leading to lower emissions in industry. In total, our Balanced Pathway entails increased annual low-carbon investment of around £50 billion by 2050. That scale-up in investment can support the recovery in the near term and draw on record-low interest rates. In the longer term, it brings pay-offs in terms of reduced operating costs (reaching £60 billion per year by 2050), broader benefits to health and the environment, as well as reduced Our recommended Sixth Carbon Budget would send a clear signal that the UK is open for low-carbon investment. It could bring wider economic opportunities from capturing a share of the value from growing global markets for low-carbon goods and services. A slower transition that continues to invest in high-carbon assets could result in stranded assets or store up difficult transitions in future. b) Building on existing momentum Momentum in the UK is building towards the UK’s Net Zero objective. 80% of the public are concerned about climate change and 66% of people are now aware of ‘Net Zero’ specifically, up from around half of people earlier this year.2 Similarly, businesses and local authorities continue to produce ambitious pledges and deliver climate action, with businesses, including oil and gas companies, pledging their own Net Zero targets, and the majority of local authorities now having Work is underway across all areas of Government, led by two new Cabinet Committees on climate. Taken together, this can be seen as a foundation for a comprehensive programme of climate action and investments in the 2020s: • Policy development is underway across all areas of Government, including on at least seven key decarbonisation strategies and plans across energy, transport, land use, manufacturing and buildings in anticipation of a comprehensive Net Zero Strategy from Government in 2021. The Policy Report that accompanies this advice offers detailed recommendations about what these strategies should include. • Businesses are at the forefront of the UK’s climate ambition, with 45% of FTSE 100 businesses with Net Zero objectives. Increasingly, businesses are delivering on these ambitions, by procuring low-carbon electricity, switching to electric vehicles and decarbonising their own operations. The Confederation of British Industry (CBI) has called on the Government to capitalise on this through a ‘decade of delivery’ of climate action.3 We set out how action by businesses can align to the UK’s Sixth Carbon Budget pathway in a briefing note that accompanies this report (Box 9.1).4 Businesses and local authorities of climate action in the 2020s. 393 Sixth Carbon Budget – The path to Net Zero • Local and regional Governments are looking to lead the way on local delivery of Net Zero. The majority of local authorities have now set Net Zero targets, many of which are more ambitious than the UK’s national objective. Increasingly they are looking for support from Government, and a framework within which effective climate action can be coordinated. We are publishing a briefing note on how local and regional authorities can align their actions to the goals of the Sixth Carbon Budget alongside this • People are increasingly aware of the need for climate action and are looking to have a say about how best to go about it. However a gap in understanding while 66% of people are aware of the concept of Net Zero, only half are aware that their gas boiler produces emissions.6 The recent Climate Assembly, where a representative sample of the UK population deliberated around how best to achieve the UK’s Net Zero objective, emphasised the need for immediate action, as well as involving people in the decision-making process. Our accompanying Policy Report offers recommendations on a public engagement strategy for Net Zero. There are also potential economic opportunities from near-term action, as noted in The role of business in deliver ing the S ixth Carbon Budget Corporate action is already driving significant change across the UK and internationally, and accelerating this action will enable the policy, technological, behavioural, and business model changes needed for a zero -carbon society. Yet many businesses within the UK are increasingly looking for information and a better understanding of the future context in which they will operate.
Alongside our advice on the Sixth Carbon Budget we have developed a briefing note, published alongside this report, on how businesses in the UK can act to support the UK’s transition to Net Zero. This suggests th e following principles to guide business ambition in • Do the basics well – measure, disclose, target, act, adjust . Companies should a ccount for, and take action on, all emissions they are responsible for and be transparent about their objectives to reduce emissions, and how they plan to do it. • Adopt the highest possible ambition , acknowledging that some, particularl y large, businesses may be ab le to achieve Net Zero earlier than the UK’s national objective. • Address all emissions, and go beyond. In particular companies should look at the emissions that occur in their supply chains (‘Scope 3’ emissions), and go beyond this. In particular we identify two areas to advance – Companies can lead the transition to electric vehicles in the UK, and should switch their vehicle fleets to EVs over the 2020s – Companies should ensure corporate renewables procurement pays for new low-carbon electricity t o be installed, rather than just purchasing existing • Ensure Climate Change is addressed at the highest levels of corporate leadership , including ensuring climate action is given board level and CEO responsibility. • Minimise offsets, ph ase them out, and ensure only permanent emissions removals remain, in line with our recommendations around how the UK should meet its national CCC (2020) The role of business in delivering the UK's Net Zero ambition decisions on how to get there. Chapter 9: The shape of the emissions path to Net Zero 394 3. Making progress in every sector in the 2020s The scenarios we set out in Chapters 2 and 3 demonstrate that action is needed across the economy for the entire period from now through to 2050. The scale-up over the coming decade arguably will be the most challenging part of the programme, and the most fundamental to delivering the Net Zero 2050 target. Delivering that scale-up will depend on effective policy being developed in the coming year and rolled out over the rest of this Parliamentary term (to 2024). This Government must be the one to shift the UK decisively onto the path towards ending our contribution to global warming. The pathways to Net Zero laid out in this report broadly involve two distinct phases for UK climate policy, with the next decade being • The 2020s: scale-up. The UK must build supply chains and new markets for low-carbon consumer offerings (e.g. electric cars and heat pumps) so that these can scale from being niche offerings to dominate the market and fully push out high-carbon alternatives by 2030 or soon after. Alongside, we must develop and scale up new options for industrial decarbonisation such as carbon capture and storage (CCS), low-carbon hydrogen and engineered emissions removals. Tree planting rates must increase from 13,000 hectares per year today to 25,000 hectares per year by 2025 and • From the early 2030s to 2050: roll-out. Having scaled up the required markets, these will then take around 15 years to flow through the stock of vehicles and houses. Instruments driving implementation in industry and land use should be well developed and continue to drive roll-out at similar rates. But policy will be less about aiming to scale up markets, instead focusing on continuing achieved rates of roll-out, tackling emerging barriers and systems challenges and ensuring fairness across society. Our scenarios have been developed with a particular attention to the pace at which change is feasible, allowing time for supply chains to scale up and for consumer choices to change. They move in step with the natural turnover of long- lived assets like vehicles and boilers, avoiding increases in embedded emissions or This section considers three particular aspects of our analysis that have led to the pace of emissions reduction in the Balanced Net Zero a) Taking low-cost opportunities and realising co-benefits b) The need for progress by 2030 to reach Net Zero by 2050 c) Learning-by-doing, demonstrations and pathfinders Progress across every sector in conditions a re set for a mass

395 Sixth Carbon Budget – The path to Net Zero a) Taking low-cost opportunities and realising co-benefits There are opportunities to reduce greenhouse gas emissions that would be worth taking, even ignoring the climate benefits, because they save costs or have substantial co-benefits (e.g. to health). These opportunities might not have been taken previously, due to barriers to uptake, a lack of joined-up policy or the cost reductions only having occurred • Barriers. There remains considerable potential for reducing demand for energy and materials, much of which would also be cost-saving or have small net costs, but where barriers to date have stopped some of these – Improvements to home energy efficiency have stalled in the last eight years, despite remaining cost-effective potential, due to changes to policy that have failed to address barriers properly, including information and the cost of finance. – There are considerable opportunities to improve the resource efficiency of our economy, thereby reducing the need for carbon- intensive manufacturing, that are currently not being taken, even though they would reduce costs to consumers. These include designing products to last for longer and to be suitable for repair and re-engineering, increasing sharing of vehicles and appliances, and • Co-benefits. A range of measures that reduce emissions also bring co- benefits to society, most notably for people’s health. Many of these have small or negative financial costs, and would make sense to pursue even if considering either climate action or health in isolation. Measures that would bring overall net benefits to society when considering these wider benefits, include increases in walking and cycling, better diets, improving home insulation and measures that improve air quality. Chapter 5 contains a summary of the main co-impacts of our scenarios.
• Recent reductions in costs, especially of renewable electricity generation and batteries over the last decade, mean that zero-emissions technologies are set to become cheaper than the high-carbon – Renewables. Recent cost reductions for renewable electricity generation have enabled it to become competitive with new fossil power plants for bulk electricity generation. The auction results of £39/MWh for offshore wind* have been particularly important for the UK, because of the large potential for UK deployment and the positive correlation with energy demand in the UK. Given the strategic importance of electrification across the whole economy, recent Government announcements on allowing onshore wind and solar to compete in auctions and for a target of 40 GW offshore wind deployment by 2030 are very welcome. * The auction results are quoted as standard in 2012 prices. £39/MWh in 2012 prices equates to £45/MWh in 2019 prices. Chapter 9: The shape of the emissions path to Net Zero 396 – Electric vehicles. Similarly, the costs of batteries, and therefore of electric vehicles, have fallen dramatically over the past decade. This is likely to lead to electric vehicles being competitive with those of petrol and diesel vehicles in terms of upfront costs by 2030 and, given large phase-out of petrol and diesel vehicles by 2030 will save money, improve air quality and reduce greenhouse gas emissions. Pursuing this set of measures is a win-win to improve the UK’s wellbeing and economic health, while also helping to meet the climate targets. While difficult to forecast accurately, action in the 2020s to reduce emissions will also potentially create a range of economic opportunities (see Chapter 5). for new petrol and diesel cars and vans Comparison between the annual cost to society (cost of vehicles, infrastructure, fuel and maintenance) of the EV transition under three phase-out dates for new petrol and diesel car and van sales (including PHEVs): i) 2030; ii) 2032 (as in our Balanced Net Zero Pathway); and iii) 2035. 397 Sixth Carbon Budget – The path to Net Zero b) The need for progress by 2030 to reach Net Zero by 2050 The dynamics of decarbonisation vary both across and within sectors. There are some measures to reduce emissions for which the timing is relatively flexible between now and 2050, where there are relevant arguments to be made over their timing (as set out in other sections of this Chapter). In other areas, however, there is no real flexibility on timing – immediate and concerted action is required to get on track to making a full contribution to achieving Net Zero by 2050. This lack of flexibility can be for a range of reasons, including the need to scale up supply chains (and associated jobs – see Chapter 6), the need for long-term certainty in order for businesses to transition to new business models, as well as ensuring low-cost financing of the investments in our scenarios (see Chapter 5) and avoiding boom-bust cycles for • Stock turnover. Typical asset lifetimes are around 15-20 years, for example for cars and boilers. Investment should therefore switch entirely from high- carbon to low-carbon assets by early in the 2030s, apart from such exceptions that have a clear route to cost-effective retrofitting (e.g. hydrogen-ready boilers in an area designated for hydrogen roll-out). Any later switch-over date would imply early capital scrappage, which could be costly, would undermine investment cases, would increase embedded emissions* and would make a just transition more difficult to achieve as it would imply stop-go replacement profiles. • Lead-times. Reaching a point at which all new investment is in assets that are compatible with Net Zero cannot happen overnight. Lead-times from policy to investment and impact, together with the need to scale up markets, supply chains and supporting infrastructure, as well as public acceptance of new solutions, means most policies must be at least outlined in the coming year and firmed up this Parliamentary term (by 2024 or earlier). That should be a realistic goal given that policy is under active development in most of the required areas. Importantly the scale-up must include all areas of decarbonisation, including solutions to reduce emissions today, and technologies that will be required to remove emissions from the atmosphere in the future. We have considered the dynamics of emissions reduction across all areas of the economy, and identified areas where these constraints make immediate and concerted action necessary to get on track to Net Zero. A failure to get on with action in the buildings and land use sectors could lead to unnecessary scrappage and disruption and/or an over-reliance on engineered greenhouse gas • Buildings. There is minimal room for delay if UK buildings are to reach zero emissions by 2050, given the need to scale up low-carbon solutions in the 2020s in order to phase out installation of fossil fuel heating installations in the early 2030s. Delays to this timeline would imply costs and disruption of scrappage in the 2040s, and could risk failing to reach Net Zero by 2050: – A delayed path for rolling out low-carbon heating would require accelerated deployment in the 2040s, potentially going well beyond the natural replacement rate of heating appliances. This would imply much more early scrappage of fossil fuel boilers in the 2040s, increasing costs and disruption for households. * I.e. the emissions involved in the production and end-of-life disposal of assets like vehicles and boilers. to build up supply chains, and required by 2030. A failure to from the UK’s housing stock by

Chapter 9: The shape of the emissions path to Net Zero 398 Starting the transition as soon as possible also provides the opportunity to drive down costs through steady deployment. – A more back-ended path including widespread scrappage would also need a large temporary increase in supply-chain capacity (e.g. to deliver well over 2 million installations annually in the 2040s) to deliver the low-carbon solutions in a condensed timeframe. This expanded supply chain would then be underutilised post-2050.
– Failure to make timely progress also risks that the delay cannot be compensated for by extra deployment in the 2040s. A five-year delay in our Balanced Net Zero Pathway for buildings would lead to 9 9.2). These would respectively imply 15% and 48% increases in required deployment of engineered greenhouse gas removals by 2050. reductions in the buildings sector programme of buildings retrofit

399 Sixth Carbon Budget – The path to Net Zero • Land use. For land-related measures, such as afforestation and peatland restoration, there are physical limits to how quickly delays can be caught up later on. Natural rates of growth and carbon sequestration cannot simply be accelerated. Costs for many measures are low, and they are labour-intensive, providing excellent opportunities to support the recovery in the 2020s. A five-year delay in our Balanced Net Zero Pathway for land use would lead to 6 MtCO2e extra in 2050, while a ten-year delay would 22% increases in required deployment of engineered greenhouse gas removals, and would substantially increase costs relative to achieving land- reductions in the land use sector • Net Zero targets around the world imply that the future of manufacturing and construction must be low-carbon. Our scenarios reflect a transition to low-carbon manufacturing and construction over the 2020s and 2030s, in line with a global transition for this sector. This is reinforced by real-world trends. For example, some early projects internationally are already demonstrating that hydrogen-based steel production and low-carbon cement is possible, and the European cement sector is aiming for Net Zero emissions by 2050. Given the increased costs of these processes, mechanisms will need to be developed in order to ensure a level playing field for low-carbon and higher-carbon processes. Our scenarios reflect an evolution of these mechanisms over the 2020s, towards a world where low- carbon manufacturing scales up globally by the 2030s. Chapter 9: The shape of the emissions path to Net Zero 400 A back-ended path for emissions reduction has less scope to be corrected should things go wrong, risking an over-reliance on removals and/or missing the Net Zero While the strategy for Net Zero should seek to develop and deploy engineered greenhouse gas removal options, it should not over-rely on their • As well as being relatively immature technologically, there are limits to deployment of engineered removals both in terms of the finite quantity of sustainable bioenergy available to the UK and the energy requirements of direct air capture of CO2 – in the near term low-carbon energy supply should be prioritised for uses that will contribute more efficiently to • Costs for engineered removals are also likely to be towards the high end of the range for opportunities to reduce emissions, meaning that a greater reliance on them is likely to increase costs. • Action to develop these technologies, through large-scale demonstration, can give confidence in the ability to scale up these technologies further in order to meet Net Zero. Reaching 2030 without making progress in these areas is likely to increase risk and reduce options for the remainder of the • The UK Climate Assembly did not favour use of engineered removals. While some may be inevitable, they should be a last resort that is used only to offset other emissions that cannot be reduced. Therefore, while reaching Net Zero will require some level of engineered greenhouse removals (see Chapter 2), these should not be relied upon to deliver unlimited offsets to remaining positive emissions. c) Learning by doing, demonstrations and pathfinder s Innovation theory and historical experience suggests that the limited amount of time available to achieve Net Zero means that although new technologies will arise, not all potential innovations will be able to make a significant difference by 2050 (Box 9.2). Innovation is about much more than just technology, extending to business models, institutions, social change and policy development. Furthermore, although early-stage research and development is important in establishing the viability of a technology, without demonstration and deployment technologies cannot be proven at scale and the costs of technologies are less likely to fall. Our pathways reflect this, scaling up currently known technologies and options to reduce emissions over the course of the 2020s, so that by the 2030s mass uptake of low-carbon technologies, fuels and behaviours is possible, across all sectors of the economy. Our scenarios envisage that a programme of demonstrations, pathfinders and ‘learning-by-doing’ allows technologies to be developed, commercialised and deployed on realistic timescales, taking into account the current status and future potential of technologies. However, we do not assume innovation produces unspecified breakthroughs to reduce emissions. If innovation occurs at a faster pace than that envisaged in our scenarios, then the UK’s climate objectives could be achieved more easily, or more quickly. We also include innovation in business models, and behaviour change, resulting in lower emissions. Policy frameworks will therefore need to incentivise mass deployment of established low-carbon technologies, while driving deployment of some less- mature solutions, even if these have higher costs than other low-carbon technologies in the near term. 401 Sixth Carbon Budget – The path to Net Zero Energy innovation theory & historical experience Experience suggests that energy technologies take multiple decades to reach commercial scale.7 For example, solar panels were in vented in the 1950s, but were not deployed at scale until the 2000s. Similarly, commercialisation of the modern wind turbine is estimated to have taken 40 years. 8 In many cases, the biggest driver of cost reductions and technological improvement will be through d eployment at scale. This has been apparent in the last decade for offshore wind in the UK where reduced technology costs and reduced cost of capital now mean that generation from offshore wind is the same cost as from a new gas-fired power plant (without a carbon price), and the efficiency of the technology has improved.
This trend has also been apparent internationally, where mass manufacture and deployment of solar PV panels, onshore wind turbines and batterie s have reduced costs, while improving efficiencies. Innovation theory suggests that modular technologies such as solar panels, wind turbines and batteries continue to reduce in costs in line with continued deployment achieved through scale and replication of manufacturing processes (a concept known as ‘learning rates’). *9 However, this isn’t always the case. For example, no similar trend has been established for the historical deployment of nuclear power stations, which are larger, and therefore less easy to replicate.10 Though some cost re ductions have occurred in South Korea, 11 and could be available through improved construction processes and replicable designs in the UK,12 and potentially through Small Modular nuclear Reactors (SMRs). 13 Global trends are likely to dictate how the scale of deployment affects the cost and efficiencies of technologies such as renewables, batteries and electrolysers, though multiple studies have highlighted areas where the UK can play a more active role in innovation, a nd where technology innovation can lead t o export opportunities for the UK.14 This includes CCS, low -carbon hydrogen, offshore wind, novel battery technologies, nuclear power, and smart technology for electricity systems. Business model innovation will also be important, influenced by policy, and the global role of the UK’s financi al sector can also play a role in developing, and reducing the costs of low -carbon • Offshore wind. The UK has been a global leader in offshore wind and will continue to play a strong role, supporting a rapi dly growing global market for the t echnology. • Carbon Capture and Storage is a critical global technology, and is likely to play a strong role in the UK. Demonstration in the UK can prove the viability of high capture rates for this technology. Similarly, UK Government action can deliver co st savings in the deployment of CO 2 transport and storage networks. • Low-carbon hydrogen. The UK has a strong research base in hydrogen fuel cells, and UK companies are active in the development of electrolyser technologi es. Addit ionally, the UK could be a key country in demonstrating advanced methane • The UK is pioneering research into future battery technologies . • The UK is also one of a few global leaders in nuclear power ,15 and is one of just a fe w countries considering deploying Generation III nuclear reactors and SMRs. • Smart technology such as digital optimisation, design and artificial intelligence to optimise the electricity system for integrating renewables into the grid is an area where the UK already has prowess, and will b e increasingly important in a renewables -centric * For example, the cost of solar panels has fallen by around 25% with each doubling of installed capacity for the technology, since 1980. See Fraunhofer (2020) Photovoltaics report

Chapter 9: The shape of the emissions path to Net Zero 402 • Low-carbon heat. Our scenarios suggest a transition to electrification in buildings heating could make the UK one of the largest markets for air -to-water heat pumps. Cost reductions could be available through increased deployment of this technology. • Aeronautics, including emerging research into electric and hydrogen aircraft • Business models, policy development and financial innovatio n are also important. F or example the UK was an early adopter of competitive auctions for renewable electricity, which is increasingly the model being used around the world . * Similarly, the UK’s Climate Change Act has been used as a model for other countries around the world.17 The UK is also recognised as a leader in green and sustainable finance and has considerable potential to shape global financial frameworks towards a transition See sources 4-15 in Endnotes. i) The role of innovation in achieving Ne t Zero Particularly in areas where the UK has a key role to play in developing low-carbon technologies and business models, acting now both creates viable pathways to reach Net Zero and delivers opportunities for cost saving along the way. Conversely, delayed action risks higher costs on the pathway to Net Zero, and a loss of potential export opportunities for certain technologies. In some sectors of the economy, near-full decarbonisation can be achieved with the set of technologies that is already established (e.g. power generation, buildings, light-duty vehicles), recognising that global trends continue to improve the efficiency and reduce the cost of these technologies and broaden the range of low-cost options. Here, the focus of policy should be on creating frameworks that drive deployment at scale in the UK, building on global trends, and allowing markets to deliver with low cost of capital, while having the flexibility to enable innovative solutions to contribute as they become available. Establishing clear goals for technology uptake can be valuable in driving investment into a sector and reducing the cost of capital. We note the value of conditional goals informally available to offshore wind, which promised a large future market for the technology contingent on continued cost reductions, supported through the competitive allocation of long-term contracts through the Contracts for Difference (CfD) scheme. In some areas, although the technologies exist to reduce emissions to very low levels, estimated costs of doing so are relatively high (e.g. for heating buildings, emissions removals). Policy frameworks will therefore need to be designed in a way that not only drives the necessary decarbonisation, but also in a way that gives the best chance of realising and benefiting from cost reductions, and of sharing the costs and risks of technology deployment in a fair way. Where people are adversely affected through higher costs being passed through, targeted Government support may be required (see Chapter 6). * A consultancy report, published alongside our advice, notes the opportunities for leading countries such as the UK to develop zero carbon power market designs through relevant policies (e.g.