Fake Accounting Exaggerates Emissions Reduction Claims

Consumption emissions reveal the collapse of vital industries.

Introduction

Back in 2024, the then Sunak Conservative government celebrated the fact the UK was the first major economy to cut greenhouse gas emissions (GHG) by 50% compared to the 1990 baseline. The trouble is emissions accounting is just as susceptible to fake claims as other elements of the Net Zero agenda. This article explores how the Government is cooking the books to make false claims about emissions reduction.

Emissions Accounting

Accounting for emissions is a complex area, with differing methodologies covering different types of emissions. The Sunak government’s claim came from official statistics published in 2024 covering emissions up to 2022 (and provisional figures for 2023). Those data covered all GHG emissions, not just carbon dioxide. It is true that those figures did show a 50.0% reduction in GHG in 2022. However, in an illustration of the fickle nature of emissions accounting, the latest figures show that the reduction in GHG emissions in 2022 is now recorded as 48.9% and the 50% threshold was not crossed until 2023. The latest government figures show reductions in carbon dioxide emissions of 46.9% in 2022 and 50.0% in 2023.

These figures cover only territorial emissions or emissions taking place within UK shores. Emissions in other countries to provide goods and services for the UK - called consumption emissions - are not covered.

Our World in Data (OWID) uses figures from the Global Carbon Budget to measure both territorial and consumption emissions. Although the OWID data shows a similar trend to the government figures, their different methodology gives slightly different results. For instance, their figures show a 48.3% reduction in carbon dioxide emissions in 2022 and 48.9% in 2023. The figures from OWID, supposedly a like-for-like comparison of territorial carbon dioxide emissions, are quite different from the government calculations. Therein lies the first problem, emissions accounting produces hugely different results depending on what is measured and how it is measured.

For the rest of the article, we will focus on OWID data because they also include consumption emissions, which as we shall see are particularly important. Figure 1 shows the trajectory of UK territorial emissions of carbon dioxide, from OWID data.

Figure 1 - UK Territorial Carbon Dioxide Emissions 1990-2024 (million tonnes) from OWID

Lower Energy Consumption

As we can see from Figure 2, much of the emissions reduction has occurred because coal has been removed from the power grid and the reduction has come at the cost of much lower total energy consumption and electricity generation.

Figure 2 - Change in UK Energy Consumption and Electricity Generation (from OWID)

Within that and as shown in an earlier article, industrial energy consumption is down over 40% since 2024. In other words, a large part of the claimed UK emissions reduction has come at the expense of losing vital industries.

Change in Consumption Emissions

As shown above, government focus has been on reducing territorial emissions. Figure 3 shows the change in consumption emissions alongside the change in territorial emissions.

Figure 3 - UK Territorial and Consumption Emissions 1990-2024 (million tonnes) from OWID

While the claimed territorial emissions have reduced by 48.9% from 1990 to 2023, the reduction in consumption emissions is much lower at 26.9%. The difference between territorial emissions and consumption emissions is the carbon dioxide emissions from the UK’s net trade position as shown in Figure 4.

Figure 4 - UK Net Trade Emissions

Net trade emissions have nearly tripled from 64m tonnes in 1990 to 179m tonnes in 2023. Territorial emissions in 2023 were 307m tonnes, so on balance we are importing more than half of our territorial emissions. In effect, much of the UK’s emissions have been taken off balance sheet into consumption emissions that are quietly ignored.

On its own terms, this is not an environmental success story, it is a sorry tale of industrial destruction. Jobs, investment, economic growth destroyed and tax revenue forgone to make Ed Miliband and his acolytes feel good and look good at COP meetings.

Accounting Sleights of Hand

However, that still paints too rosy a picture of the real situation. There are two more sleights of hand that overcount UK emissions reductions.

First, careful examination of the right-hand side of Figure 2 shows that generation of electricity from bioenergy has increased significantly, particularly since 2016. This is because power plants like Drax have converted to burning pelletised trees from North America instead of coal.

The emissions accountants treat burning trees as renewable, so the carbon dioxide emissions from this source are simply not counted in the figures. However, wood is less energy dense than coal and so produces more emissions per unit of electricity than burning coal. If we generously assume that burning wood pellets emits 1,000kg per MWh, and using NESO generation mix data we can calculate the omitted emissions as shown in Figure 5.

Figure 5 - UK Territorial Emissions Adjusted for Biomass

The percentage reduction in emissions falls from 48.9% without counting biomass to 46.6% if we include tree-burning to produce electricity.

The second sleight of hand relates to the way emissions from electricity imports are counted. Ed Miliband has decreed that imported power be classed as zero-carbon even though some of it may be generated by coal, gas or even on some occasions diesel.

As Figure 6 shows, UK net electricity imports are rising, making us more dependent on other countries for our electricity supply.

Figure 6 - UK Net Electricity Imports (TWh)

It is shameful that increased electricity imports are being used as a way of reducing our headline carbon dioxide emissions.

Conclusions

Like many aspects of the debate about Net Zero, the Government is cooking the books to make fake claims emissions reductions. They rely on off-balance sheet accounting tricks that would have made Enron blush. We simply cannot pretend that these emissions do not exist. Nor should we celebrate the fall in energy consumption. The destruction of electricity generation capacity and the collapse of vital industries should be a source of shame not celebration.

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