Article by Philip Dunne MP published by the Hansard Society.

The Climate Change Act 2008 established a framework for setting carbon budgets every five years. But the role of Parliament in approving these budgets has been widely criticised, including by the Prime Minister. The Environmental Audit Committee has proposed improvements in the scrutiny process to ensure effective climate action, particularly in the context of the UK’s commitment to achieving 'Net Zero' emissions by 2050. These reforms will significantly alter the way Parliament handles the Seventh Carbon Budget in 2025.

The Climate Change Act, enacted in 2008, has rightly been held up as a model of detailed, considered legislation to achieve significant and lasting reductions in the UK’s carbon emissions.

The Act established:

• an independent, respected body—the Climate Change Committee—to provide detailed, impartial advice to Parliament, the UK Government and the devolved institutions on the measures required to deliver these reductions; and

• a process to set statutory carbon budgets—the UK’s maximum net emissions permissible in a five-year period—in a way which gives governments flexibility to decide on the policy measures required to achieve the budgets and for Parliament to approve them.

So far this process has been successful: the Government has recently trumpeted the UK’s achievements in delivering the largest reduction in emissions of any peer economy since 1990, while achieving 80% GDP growth, below the emissions ceilings set under the First, Second and Third Carbon Budgets.

What role does Parliament currently have in approving carbon budgets?

The Climate Change Committee is required to provide advice to Ministers on the recommended carbon budget for each five-year period consistent with achieving the overall emissions targets set by the Act. Until 2019 the target was to reduce UK emissions by 80% by 2050 from a 1990 baseline. In 2019 both Houses agreed to a Government proposal to change the law by secondary (or delegated) legislation so as to require 'Net Zero' emissions by 2050.

Once Ministers have received the advice, they decide on the level of carbon budget they wish to set in law. Having done so, they present the headline sum to both Houses for approval by means of secondary legislation. Once both Houses agree, the proposal is signed into law. Only after that is the Government required to prepare and lay before Parliament its detailed strategy֫—the policy measures it plans to take to achieve the emissions reductions required.

What is wrong with the current parliamentary process for approving carbon budgets?

The current process worked well for the setting of carbon budgets before the 'Net Zero' target was established.

But there has been relatively little political debate in Parliament about the policy choices needed to achieve the overall emissions reductions the law requires: and frankly surprisingly little demand for such a debate.

In 2021 the measure to set the Sixth Carbon Budget—the first to be consistent with a 'Net Zero' emissions goal—received a mere 17 minutes’ debate in a Commons Delegated Legislation Committee, with no debate on the floor of the House. In both the Commons and the Lords it was agreed to without a division.

But the Government’s plans to deliver its 'Net Zero' policies were disrupted in July 2022, when the High Court ruled that the Net Zero Strategy—which the Government had presented to Parliament in October 2021 elaborating the policies to achieve the Sixth Carbon Budget reductions—had not taken a number of relevant considerations into account. Ministers were ordered to submit a revised analysis to Parliament before the end of March 2023 explaining in greater detail how the policies in the Net Zero Strategy would contribute to the UK’s emissions reduction targets.

By the summer of 2023 the Prime Minister was concerned that the cost to consumers of implementing measures to deliver the Net Zero Strategy was at risk of alienating the public from delivering the behaviour change envisaged.

On 20th September he declared a reset of the tone towards 'Net Zero', announcing a relaxation of some specific targets and measures in a more pragmatic way which he argued would make the 'Net Zero' transition more affordable for families.

In a landmark speech he was critical of the way in which Parliament barely scrutinised the introduction of carbon budgets into law, passing through both Houses with minimal consideration of the policy implications. He committed to ensure this would not occur again with parliamentary scrutiny of the Seventh Carbon Budget.

What will change in 2025?

This commitment in September 2023 to improve parliamentary scrutiny was very welcome. On behalf of the Environmental Audit Committee I wrote to the Prime Minister asking for further details of the assumptions behind his policy changes. There was universal approval in the Committee for one element of his speech—the commitment to have the Government’s proposals for the Seventh Carbon Budget fully debated before Parliament is asked to approve the legislation.

The Committee followed this up in February this year with a detailed proposal for greater parliamentary engagement in the carbon budgeting process. Last month we were very pleased to receive confirmation that the Government agreed with our proposals: I had confirmation from the Prime Minister himself when I questioned him (see Q87) at the Liaison Committee on 26th March.

What we have proposed is simple and effective. Before Ministers seek approval from Parliament for the emissions ceiling in the Seventh Carbon Budget, they should present to Parliament a draft delivery plan which sets out the main measures they plan to take.

We propose that this plan ought to be before Parliament for a minimum of three months. During that period the Environmental Audit Committee and other interested committees can take evidence on the Government’s plans. The Climate Change Committee will be asked for its view on whether the plans stack up. Departmental select committees will want to question Secretaries of State about the emission-cutting measures they propose. Committees will be able to report their findings to their Houses.

At the end of the scrutiny period the Government will present its budget-setting legislation to the House for approval.

This time there should be no cursory debates in obscure committee rooms followed by agreements on the nod. In the Commons, Ministers will have to secure approval for their plans following a full day of debate on the floor of the House, during which MPs will have the benefit of the detailed scrutiny work undertaken by committees.

What is the point of changing the process?

There will inevitably be criticism of the Government’s approach. Good. The place to have these principled disagreements and debates is in public, around the Committee Room horseshoes and across the green benches in the Commons Chamber, in full view of our constituents on whose behalf we are elected to legislate and who will be directly affected by the decisions we take. Ministers will have to think through the potential implications of the strategies they are proposing, in a way they can defend to their peers in the House of Commons.

The legislation itself will not change. Following parliamentary approval of the Seventh Carbon Budget figure, the Government will have to lay before Parliament its full strategy to deliver emissions reductions. I imagine that scrutiny of the draft delivery plan will ensure that the strategy is far better prepared, in a way which is more responsive to concerns expressed across the House on behalf of our constituents—who not only face the reality of climate change but also the challenges of adapting to 'Net Zero' Britain.