Investment In Low-Carbon Technology: The Legal Issues

Document summary

This paper by Herbert Smith examines the legal issues facing investment in the low-carbon technologies covered by the London Accord and provides commentary on specific regulatory incentives and risks associated with low-carbon technologies. It concentrates on the regulatory position in the UK (as influenced by international and European Union measures), providing a comparison with other jurisdictions where appropriate. This paper is divided into six sections. The first section is an overview of the regulatory mechanisms at the international, European Union and UK level which are specifically aimed at the mitigation of climate change (through GHG emissions reduction) and adaptation to climate change. The second section focuses on the regulatory risks associated with a specific form of climate change mitigation: carbon capture and storage. This is quickly emerging as a technology with a massive potential to significantly reduce carbon dioxide emissions from power generation - if only the economic and legal hurdles can be overcome. The remaining sections of this paper look at those low-carbon technologies which are motivated by a desire to mitigate climate change as well as broader sustainability issues, such as concerns over energy conservation, security of supply and local environmental issues. The technologies considered in this regard are renewable energy, biofuels, new nuclear and energy efficiency. Investment in each of these technologies is heavily influenced by the regulatory environment created by EU and UK law, and we are currently in a major state of reform of the regulatory drivers applying to each of these technologies.