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There are two main policy responses to climate change: mitigation and adaptation. Adaptation seeks to lower the risks posed by the consequences of climatic changes (e.g. from more flooding). Mitigation deals with the causes of climate change (by reducing emissions). Both approaches are necessary, because even if emissions are dramatically decreased in the next decade, adaptation will still be needed to deal with the global changes that have already been set in motion.

A back-up reserve of electricity used when there is a major surge in demand and/or when electricity from intermittent renewable sources such as wind and solar are not in sufficient supply. This is usually referred to as ‘back-up capacity’ (or ‘stand-by capacity’ or ‘system reserves’) when designed to maintain a given level of reliability, and ‘balancing reserves’ when used for ensuring system balancing. It is typically provided by gas-fuelled power stations whose electricity output can be increased and decreased relatively quickly in response to demand.

Converting electrical energy into another form of energy when demand is lower than supply, and converting it back to electricity when the system requires it. In the UK, storage capacity is currently largely made up of pumped storage (based on water reservoirs). In the longer term, new storage opportunities are expected to emerge, such as compressed air and heat storage in molten salts.

Sets a maximum limit on emissions (known as the cap) and then distributes or sells emissions permits to firms who emit green house gases. Firms then have to have a permit to cover each unit of pollution they produce. They can gain permits either through an initial allocation (where each firm is given a certain number of permits), through auction, or through trading with other firms (who may have a surplus of permits). As it’s cheaper for some firms or industries to reduce their emissions, trading takes place. The maximum pollution quantity is set but the price of a permit can change according to supply and demand.

Legally-binding limit on greenhouse gas emissions in the UK for a five year period. Each carbon budget provides a total cap on emissions, which should not be exceeded in order to meet the UK’s emissions reduction commitments under the 2008 Climate Change Act.

A technology that can be used to capture carbon dioxide emissions which are released when fossil fuels are burnt in power stations. It stores carbon dioxide underground – for example in empty oil or gas reservoirs, or under the seabed – instead of releasing emissions into the atmosphere.

The amount of carbon dioxide emitted by power plants per each unit of electricity generated. Usually measured in terms of grams of carbon dioxide per kilowatt-hour (kWh).

A cost applied to carbon pollution. Essentially a ‘damage cost’ applied to goods and services which produce greenhouse gases – the impacts and costs of which will be felt by future generations. Can be administered through a carbon tax or cap and trade system.

Sets a tax on each unit of greenhouse gas emissions emitted into the atmosphere, to act as an incentive to reduce greenhouse gas emissions where doing so would cost less than paying the tax. The price is set but the total quantity of emissions can change.

The Climate Change Act, passed in November 2008, sets out emission reduction targets that the UK must legally comply with. It represents the first global legally binding target set by a country The Act commits the UK to reducing its greenhouse gas emissions by 80 per cent by 2050, compared to 1990 levels. The Act also provides a system of carbon budgeting, to help the UK meet its targets through a series of five year carbon budgets.

Mathematical computer simulations that apply the laws of physics and chemistry and use quantitative data and physical earth observations to predict potential future climate change and its associated impacts. Different models offer different resolutions and different time-periods for their predictions.

A form of unconventional natural gas (mostly methane), trapped in the fractures and on the surface of coal beds.

Countries who sign up to the environmental treaty, the UNFCC (United Nations Framework on Climate Change) are known as Parties. The COP, or Conference of Parties, refers to the annual international meetings held for all members or Parties, to review and agree international climate change policy agreements and to assess country’s progress and commitments to taking action on climate change.

Natural gas typically found in sandstone, siltstone and limestone, in discrete, well-defined reservoirs. It is typically extracted through vertical wells and has relatively high recovery rates: usually over 80 per cent of the original gas in place can be extracted.

The decarbonisation of the economy means the reduction of greenhouse gases from economic activity. The term is often used with respect to the power sector, where it means reducing its carbon intensity; that is, the emissions per unit of electricity generated (often given in grams of CO2 per kWh), to lower the greenhouse emissions produced.

The process of determining the present value (i.e. the value today) of future financial flows (costs, benefits). The discount rate reflects the social preferences for current as compared with future uses. In a simple economic model it also equals the opportunity cost of capital, i.e. the alternative return an investment might earn. For example, if capital can earn a return of 10 per cent per annum, a future revenue of £110 in a year’s time is equivalent to £100 today.

The combination of different energy sources (for example, fossil fuels like coal, oil and gas, or renewables such as solar or wind) used to make up the total energy supply.

Adopted in December 2011, the EU Energy Roadmap 2050 sets out aspirational targets for the European power sector to achieve 54-68% decarbonisation by 2030, and between 93-99% decarbonisation by 2050. It examines how to make Europe’s energy production carbon-free by 2050, whilst ensuring a secure and competitive energy supply. The Roadmap examines a range of potential decarbonisation routes and scenarios, including energy efficiency, nuclear, renewables and carbon capture and storage (CCS).

The controlled burning of natural gas in the course of routine oil and gas production operations.

Hydraulic fracturing, or fracking as it is commonly known, is a technique used to extract unconventional gases like shale gas, which are trapped underground in rocks with low permeability. As an unconventional gas, shale gas cannot flow easily through rocks, which is why horizontal drilling and fracturing are used for extraction.

Deep holes are drilled down into the shale rock, followed by horizontal drilling to access more of the gas reserves – as shale reserves are typically distributed horizontally rather than vertically.

Fracking fluids, containing a mix of sand, water and chemicals are then pumped at high pressure into the drilled holes, to open up fractures in the shale rock. This enables the trapped gas to flow through the fractures into collection wells, where it can then be piped away for commercial use.

Browse all our content on fracking.

A mixture of water, sand and chemicals pumped into shale rock under high pressure, to open up or widen existing fractures in rock.

Gas which is leaked or released during (gas) well development and production.

A measure often used to describe the total volume of gas, such as shale gas, trapped in rock. Does not account for the socio-economic or technical feasibility of actual extraction.

The total energy consumed by end-users, such as households, industry and agriculture, as well as the consumption of electricity, and heat used by the energy sector for electricity and heat production. Also includes losses of electricity and heat in distribution and transmission.

see fracking

Refers to the variability in supply of electricity from some renewable technologies such as wind turbines, where the ability to reliably produce electricity varies depending on external conditions over which the operator has no control – such as wind speed (for wind energy) or amount of sunlight (for solar energy).

The average cost of producing electricity over the lifetime of a generation plant, and therefore the price at which electricity must be sold to consumers for the supplier to break-even (excluding taxes and subsidies). It is calculated by dividing the lifetime capital and operational costs of a power source by the total value of the electricity it generates, both discounted through time. It is usually expressed in units of currency per kWh or MWh, for example p/kWh or £/MWh.

The average hourly quantity of electricity generated as a percentage of the average capacity of an installation at the beginning and end of a year.

When a free market does not work perfectly (for example because of information problems, monopolistic power or external costs that are not reflected in prices) and maximises society’s welfare this is described as failure; policy action is required to correct it.. Climate change is described by some economists as a market failure.

There are two main policy responses to climate change: mitigation and adaptation. Mitigation addresses the root causes, by reducing greenhouse gas emissions, while adaptation deals with the consequences of climate change. Both approaches will be necessary, because even if emissions are dramatically decreased in the next decade, adaptation will still be needed to deal with the global changes that have already been set in motion.

Released in July 2013 as part of the UK government’s commitments set out in the 2008 Climate Change Act, a plan which sets out what actions government, business and society are undertaking to adapt to the impacts of climate change and become more ‘climate ready’.

A renewable energy technology, where wind turbines are located on land to harness the energy of moving air, to generate electricity.

The widely accepted principle where those who pollute should consequently bear the costs of managing it to prevent harm to the environment or to human health. Under the 1992 Rio Declaration, this principle has been applied to emissions of greenhouse gases which cause climate change.

The actual volume of reserves (e.g. of gas or oil) that can be feasibly extracted from a source, once socio-economic, legal and technical considerations are taken into account.

Where water is pumped from low to high elevation reservoirs in order to store energy. When energy supply is needed, water is released through turbines which produce electricity (CCC, 2012).

Reducing Emissions from Deforestation and Degradation (REDD) refers to policies which seek to provide a financial incentive to governments, agribusinesses and communities to maintain rather than reduce forest cover. These policies could not only cut carbon emissions but may also – given that tropical forests are the most species-rich terrestrial habitat – offer benefits in terms of biodiversity conservation and local ecosystem services.

Introduced in 2002 by the UK government to incentivise renewable energy technology deployment. It requires electricity companies to source a proportion of their commercial supply from renewable sources – via the setting of annual obligation targets, which rise year on year. Where annual targets are not met, companies are fined accordingly – also referred to as the buy-out price.

A fine-grained sedimentary rock, made from mud, silt or clay deposits and organic matter, which, given its low rock permeability, makes it more difficult for fluids to pass through it.

Shale gas is a form of unconventional natural gas (mostly methane), which is trapped underground in shale rock; a fine-grained, less permeable rock formation made up of mud, silt and clay deposits, alongside organic matter.

A future version of our current electricity grid system, which aims to enable more efficient and cost-effective delivery of electricity, by using information and communications technologies to collect real-time data on power generation and demand to adjust the system accordingly.

The concentration of greenhouse gases in the atmosphere (the stock) depends on the difference between emissions released into the atmosphere and the natural removal of greenhouse gases from the atmosphere, for example through absorption by plants or oceans. Flow refers to the rate at which greenhouse gases are emitted into the atmosphere.

Using the analogy of a bath tub, where the tub represents the atmosphere and the water represents the stock of greenhouse gases, the running tap represents manmade emissions and the plug represents removal of greenhouse gases through natural processes. The total volume of water in the tub increases if the tap is left running at a rate faster than the water can drain away.

When this is applied to climate change, greenhouse gas emission stocks are increasing as humans continue to emit greenhouse gases faster than natural processes can remove them. As such, to limit further warming, action is required to stop the atmospheric stock of greenhouse gas emissions from increasing further.

A form of unconventional natural gas (mostly methane) found trapped in relatively impermeable hard rock, limestone and sandstone.

Presented to Parliament in December 2012, it sets out the Government’s view on the role gas can play in the UK’s future electricity market. Its stated objective is to ‘reduce the uncertainty around gas generation for investors’. The Strategy lays out three possible gas scenarios which would lead to different levels of ‘decarbonisation’ of the electricity system.

Gas from power plants built without carbon capture and storage, a technology which captures carbon dioxide emitted from fossil fuel plants.

There are three main types of unconventional gas: tight gas, coal-bed methane and shale gas. These are found in less permeable rock formations than conventional gas. Low permeability means it is more difficult for fluids to pass through the rock – making unconventional gas found in these rock formations more difficult to extract. Hydraulic fracturing (fracking) and horizontal drilling are typically required to extract the gas. Recovery rates are lower than for conventional gas; typically only 15 to 30 per cent of the gas in place can be extracted.

The controlled release of gases into the atmosphere in the course of oil and gas production operations.

The price paid at the mouth of a well for natural gas as it flows from the ground, without any processing or transportation provided.