Chamber and committees

Yes, we are on schedule but timing is very tight and much work needs to be done. My officials are working very closely with Department of Energy and Climate Change (DECC) to ensure that this happens. I am therefore pleased to announce that the Scottish Government is today publishing, along with the UK Government and the other Devolved Administrations, the third consultation on the Carbon Reduction Commitment (CRC).

The UK Climate Change Act last year set legally binding targets for the UK to reduce its greenhouse gas emissions by 80% by 2050. Our own Climate Change (Scotland) Bill is currently at Stage 1 of its parliamentary process and will set a target to reduce Scotland''s emissions by 80% by 2050. This will be supported by a framework of annual targets and - a world first - will include international aviation and shipping emissions.

To help meet the 80% target, the UK Act provided powers to create emissions trading schemes. The CRC will be the first scheme created under these powers. The scheme will be made through an Order in Council. The Order will be laid before the Scottish Parliament later this year and will be subject to an affirmative resolution.

The CRC will be the world''s first mandatory carbon dioxide emissions trading scheme to auction all allowances. It will cover large non-energy intensive organisations from both the public and private sector such as supermarkets, banks, schools and hospitals. The scheme will encourage participating organisations to use energy more efficiently, thereby reducing energy costs as well as reducing CO₂ emissions.

After the first three-year introductory phase, cap limits will be introduced on the amount of carbon this sector of the economy can emit. The views of the UK Committee on Climate Change will also be taken into account when setting the cap to ensure that the environmental goals of the scheme will be met. The CRC is expected to deliver emissions savings of at least 4Mt CO₂ per year by 2020.

The Scottish Government believes that this innovative scheme will drive improvements in energy efficiency in a large sector of the economy. We expect the market for energy efficient technology and energy services to grow in response to the CRC, stimulating innovation and helping to lay the foundations for low carbon economic growth.

The CRC has been developed by government in close consultation with stakeholders in business and the public sector. The Scottish Government will itself be a participant in the scheme: we look forward to leading by example and exploring every avenue to become more energy efficient and to drive down our emissions from on-site energy use.

Copies of the consultation package on the draft CRC Order, which will form the statutory basis of the scheme, are available through Scottish Parliament Information Centre (Bib. number 47937). It is also published on the Scottish Government Climate Change website.