Select Committee on Environmental Audit Minutes of Evidence

Examination of Witnesses (Questions 1 - 19)



  Chairman: Welcome, Deputy Prime Minister. I understand Michael Meacher may join you when he finishes his statement in the House. Thank you for coming along this afternoon, I know it is a busy day for you. You will recall that this meeting had its origins in the meeting we had to postpone after the break down of The Hague talks and we want to talk to you before you embark on further talks in a very short time. We want to concentrate on the COP6 discussions, what happened there, the aftermath and what may happen now. Mr Chaytor.

Mr Chaytor

  1. Thank you, Chairman. Deputy Prime Minister—

  (Mr Prescott) Do you not want me to say one or two words beforehand?


  2. Not really, we are a bit pressed for time.
  (Mr Prescott) I always rely on that for another half an hour.

  3. If you would like to make it very short.
  (Mr Prescott) I will leave out what I would have said except I do want to say a couple of things. One is that Michael will be with me, of course, but I have also brought along with me the Head of our Global Atmosphere Division because, as you know, at COP6 it is partly involved with the negotiations that go on with the Civil Service first and then the politicians and they may be able to give a fuller reply to some of the questions you might want to ask on COP6. Secondly—it is rather an awkward way of putting it—I just want to apologise that I did not come in December but we were preparing to go to Oslo and trying to resuscitate the talks after the failure that had occurred at The Hague, and also to apologise for this afternoon, to thank the Committee for understanding those difficulties. My last point, to curry even more favour, is I would like to say the Environmental Audit Report, since I first came to this Committee and said "I hope you have got the power to snap at our heels", was an excellent report. We will be responding in a positive way and I think the recommendations are something that will make the Committee much more effective and we have a lot more to do about targets. I wanted to put that on the record and hopefully that puts me in a good light before starting.

  Chairman: You are sucking up very well today, Minister. That will not prevent us asking tough questions about COP6 which is an entirely different matter. Mr Chaytor.

Mr Chaytor

  4. Chairman, thank you very much. Deputy Prime Minister, I wonder if I could start off by asking a question or two about the reasons for the failure to reach agreement at The Hague. First of all, can I ask did you feel that there was a significant shift in opinion between Kyoto and The Hague on behalf of the Umbrella Group? Have they become less willing to negotiate, less convinced of the science of climate change? Was there any change between the original conference and what happened at The Hague?
  (Mr Prescott) Yes, I think there was a change between Kyoto and The Hague and it happened at The Hague. We just lost our political courage and political will to make an agreement quite frankly. That was on the European side, in my view. The developing countries were quite happy to see whatever agreement could come between the Umbrella Group and, indeed, the European Group, which were the two major groups in that really. I think the break down of negotiations was largely because we were not prepared to come to an agreement with the Umbrella Group. Of course, in all agreements it requires you to compromise and the issue is always compromising. Let me give you an example. At Kyoto the target that the Europeans proposed for a cut in the CO2 greenhouse gases was 15 per cent. That was an impossible target. I think we all knew that was just "hopefully you might get that target". Eventually we had to negotiate and we got a target which was eight for Europe, seven for America, six for Japan. They were very high targets against the predictions that America would not do anything, Japan would agree to be no more than one or two, but I think everybody found the political will in those last few days to find agreement. That was in a much more hostile setting where a number of the motorcar industries and the big energy users in America had got together in these alliances and were pressing very hard for no agreement. We still got the agreement, admittedly working through the night for it but the will was there to do it. I think you have got to recognise whilst at Kyoto, to be fair, we were setting targets, at The Hague it was how you achieved those targets and much of the technical matters on which you had to agree was where there was not a lot of work done, whether talking about the sinks, the science, all of those things were involved. All of those had to be worked out before The Hague. Whilst I think a great deal of movement had been made, it was not sufficient to convince some of our European colleagues that you could compromise on a deal. I think that was unfortunate. Others will have a different view but since you are asking mine, certainly other countries may have said "we are not prepared to accept that kind of deal". There was great compromise on the Umbrella Group side and I think we could have settled an agreement, but we did not and hopefully we will go on to the next stage.

  5. So you think the failure was more on the European side than on the Umbrella side?
  (Mr Prescott) I thought the question was were the Umbrella Group sticking very hard at not getting an agreement. The fact is they were quite prepared to change their position on the CDM, whether they could use sinks in the CDM, which would have been a big way of getting out of domestic controls. They were quite prepared to accept those principles in those negotiations but what happened as we got to the later stages was the Americans who were mainly doing the negotiations, but there were very powerful voices from Australia, from Canada, they worked very closely as a group, they began to see there was less unity on our side and pressures were coming in from their own countries and the negotiators then began to step away from where we had got to the edge of an agreement. That was unfortunate. To be fair to the Europeans, and in this sense I include myself of course as a European, in those negotiations being handled by Mr Pronk, who was the Chair of the COP, and the EU Presidency, Mme Voynet, both of them asked me if I could get an agreement with the Americans and the Umbrella Group. At that stage we were united but unfortunately the deal was not acceptable.

  6. Looking at the European Union side, in your statement to the Committee you say that at the final moment it was not possible to get a majority of the European Union countries to agree. Could you tell us what the voting figures were and which European countries were opposed to the agreement? How big was the disagreement? Was it a narrow majority or a large majority?
  (Mr Prescott) There was not a vote. It is a kind of collection of voices that goes on really. This is one of the difficulties of these kinds of conventions, it is not really put to a vote. At Kyoto you had to get consensus. There was no laid down "if you get 25 per cent, 30 per cent, 55 per cent", there was no formula for it, it was totally consensus. That meant at Kyoto we had a Chair that rolled over the opposition in a way and everybody else was so exhausted they said "oh, yes, great". That is how these great moments come in history, I think. We got agreement. We had a Chairman who had quite a lot of courage and he brought about the Kyoto Agreement and that was a major achievement, however it came about. When it came to The Hague and in the EU we did not have a vote because you sound voices. Here if I am critical of a political position, and I would like to put it to the Committee and this is just my own judgment on it, some of the Green Ministers in it, namely the German representative and the French, are from the Green Parties. Frankly I think they are very much concerned with the negotiators outside from a Green point of view than they are from national governments. They are all in minority positions but have quite strong voices. Therefore, if they get together and strongly say "we are not going to do it", although there was some division between the French and the Germans, if you cannot get a strong enough consensus among the majority of them you really cannot go forward. The way they do the negotiations in Europe is the Presidency has a very strong position and the Presidency in this case, to my mind, had not really shown the will to want to find an agreement and, frankly, the Commission were not much help either.

  7. So the French and the German Green Parties have disproportionate influence?
  (Mr Prescott) They were stronger outside but to be fair to the German Minister, he was trying to find an alternative route, he did want agreement and at the last minute tried to suggest another compromise. I am afraid Madame Voynet took the view that it was over and Mr Pronk agreed with her. Many of the negotiators by late Saturday morning had gone so the whole thing just fell. They were hurrying to get out in order to allow an oil conference to take place the next day in the conference hall. I do not know whether they booked it to make sure that we were short on time but it was a problem.

  8. Can I ask a couple of questions about some of the details of the agreement, particularly on the question of compliance and the ideas for a compliance regime. We understand that one of the ideas was that there should be for those countries who did not comply with their initial targets a penal increase in emissions reduction targets in a future period, so if you do not hit your targets in the first period you are penalised by having a huge increase in your targets in a later period. Is this the dominant idea in terms of the compliance regime? What other ideas are there? What is the favourite idea at the moment?
  (Mr Prescott) The issue of the penalties, whilst they were in the original document by Mr Pronk, did not really get a great deal of attention because you needed to be further along the line to get agreement. It was one of those areas you would have had to thrash out once you had got the core of the agreement and the core of the agreement was for the developed nations themselves to agree these issues as to whether there was going to be a domestic level forced on them, which the Umbrella Group did not want, or whether there was going to be the issue of the Kyoto mechanisms and how they worked. Each had different vetoes, if you like, and we did not really get into a great deal on penalties. Indeed, the same argument on penalties came within the European bubble because the argument then came "what if somebody in the European sector does not achieve their share of the bubble?" Overall we had eight per cent internationally and then it had to share out. If we did better than other countries the question came "because we are doing better does Europe claim that or do we put a penalty on those that are not achieving it?" I think we tended to look away from penalties, quite frankly. The real issue was to see if we could get an agreement between all developed countries, known as the Annex 1 countries, to this process.

  9. If I could ask about another aspect of potential question and that is the question of supplementarity. We understand that the European Union position originally was that there should be an absolute cap on the extent to which the various Kyoto mechanism could be used to reach the emissions target. Then we are told that there is now a discussion about a qualitative cap from the supplementarity issue as opposed to a quantitative cap. That does not make sense to me. Can you explain this question of supplementarity and the different kinds of caps that have been suggested?
  (Mr Prescott) That may have come at the later stage about the qualitative caps. Michael was dealing very much with those. Were you involved with the discussions in the Civil Service?
  (Mr Betts) As part of the compromise package we would have been prepared to move away from a quantitative cap towards language that said that a significant proportion of each developed country's effort would need to be done at home. This would have been set out in national communications and it would have been assessed through the compliance process.

  10. So rather than saying "by 50 per cent" it would be a significant proportion?
  (Mr Betts) Correct. That was part of the package; the EU would have been effective winners on the sinks element of the package.
  (Mr Prescott) You have to remember in all these that the Americans particularly but also the Australians, the Canadians and the Umbrella Group were against any ceiling whatsoever. They just said that we should be able to come to an agreement, we should not have any restrictions on these matters. Basically they had some doubts to a certain extent whether it should apply to developing countries. We have now seen the new US President suggest that he finds that unacceptable. I must say that is quite at variance with what the US agreed with Michael at the recent G8 Environment Ministers meeting with the Head of the US Environmental Protection Agency. There were really strong lines. It is like the 15 per cent argument, at the end of the day you have to break away from those positions and find agreement. The ceilings were certainly one of the more difficult ones although in the last minute negotiations they were quite prepared to do that and accept it.

  11. If I can ask one more question about the state of the science. Was this an issue for the Umbrella Group? Is there still an ongoing dispute about the science of climate change on behalf of the Umbrella Group? I mention this in the context of the floods we had in the autumn which some people said were not the result of climate change but were the result of other weather conditions, and also in view of the Second Report of the Intergovernmental Panel on Climate Change that was published at the beginning of this year in February.
  (Mr Prescott) Yes.

  12. I notice in President Bush's statement earlier this week, or last week, about his change of policy on carbon dioxide emissions, he says quite forcefully that the science of climate change is still incomplete. Is this a problem? Are the Americans still resisting the conclusions of the Intergovernmental Panel?
  (Mr Prescott) Certainly nobody in the Umbrella Group was doing that, we all accepted that, and indeed it was reinforced by the latest IPCC scientific report. If President Bush is saying that now I think it is quite different from what we heard from the Americans before and that is quite clear because Vice President Gore was the man who played a major part without any doubt in reaching the Kyoto Agreement. He had to come then and lift it up from zero to minus seven, that meant almost a 30 per cent cut in their emissions over the period of time we were talking about getting to the 1990 levels. We never found in any of those negotiations that anybody disputed the science on which it was based. There was a lot of it at Kyoto but certainly not at The Hague. One of the reasons I felt quite strongly about the break down was I could see President Bush coming and holding a different view. To be fair to President Bush, I do not know whether that really is his view. I have heard his latest statement but that came after the statement by the Head of the US Environmental Protection Agency at the G8, which Michael attended, where they agreed language on Kyoto. Since talks are going on, and I know there have been exchanges between the Prime Minister and the Foreign Secretary and Mr Powell about these matters, we got the impression it is still a negotiating matter, a discussion matter. We have agreed that COP6 now will resume in July instead of May and that was at the Americans' request. I assume the US will come and enter into the debate. If they are going to tell us they do not accept the science they might as well come in May and tell us that as much as in July. I think it just shows a new administration trying to look at all the problems. Perhaps this is not at the top of their agenda at the moment but it is certainly under discussion and we are wise at the moment just to read what is said either by the President or the Environmental Protection Agency at the moment and wait until they come to make a more definitive statement at COP6.

Christine Russell

  13. Could I ask you what degree of consensus was reached at The Hague regarding a funding package for developing countries, as far as helping them with transferring technology and other measures to enable them to reach compliance?
  (Mr Prescott) This is quite an important element. The developing countries were not too concerned about The Hague agreement. They said, "It is for you to sort out what you are going to do about your agreement on implementing and achievement of those targets" in the first period, which was the essence of the Kyoto agreement. On the development package which Mr Pronk was very strong about, he was able to put together a package that was very much dependent upon agreement and moneys on a scale which was acceptable as well as the other things involved in the clean development mechanism technology that the developing countries were quite prepared to accept and were very happy with. Again, it was one matter you would come back to if you had the core of the agreement in the developed countries. My impression was that they very much welcomed and wanted the fund and were looking forward to it; whereas the Umbrella countries were looking at how you sort out emissions trading and sinks. All these were seen as economic advantages to developed countries, whereas at Kyoto they were doubtful about it. By The Hague, they could see a great deal of money and gain, not pain, coming from those kinds of techniques involved in bringing out emission trading, dealing with the definitions of sinks, dealing with development mechanisms. All those were part of the Kyoto agreement.

  14. Was there agreement or would it have been premature to reach agreement between the individual EU countries as to what contribution each one would be liable for towards the funding package; or was it just an agreement in principle rather than having any amounts worked out?
  (Mr Prescott) The European countries were very strong on development aid and there was a great deal of measure of agreement. There is always a tendency for some countries to want to try and develop a kind of bilateral, but you could not solve this matter bilaterally. The French always took the strong view that they had a number of developing countries which were francophone; we have strong connections with the Commonwealth countries and it is inevitable in these international negotiations. You do what you can in the countries that have common views about it. The problems at The Hague were not the developing countries but the developed.

Mr Owen Jones

  15. Could I take you back to the last question that David Chaytor raised about the acceptance or otherwise of the Americans and the scientific bases. David may have been quoting from a letter that President Bush wrote to Senators Hagel, Helms, Craig and Roberts on the 13th of this month in which he said, "... we must be very careful not to take actions that could harm consumers. This is especially true given the incomplete state of scientific knowledge of the causes of, and solutions to, global climate change ...". A couple of years ago I had a meeting with Newt Gingrich over global climate change. I was not the only person at the meeting. It was very enlightening because Newt Gingrich denied that global climate change was occurring at all. Do you think the President believes in global climate change and believes that carbon dioxide has a role in it?
  (Mr Prescott) I used to meet Jesse Helms on occasions and he believed in the science of missiles, but leaving that aside these were highly intelligent people who do choose to say that the science is not proven as far as they are concerned. That is very difficult when you see the last IPCC report that has come out. It is very hard to reject it and an important difference to take into account that may be the vital factor here is the switch around in American industry. Up to then, if you take the car industry, the heavy energy users, they were all against it. They were there in force at Kyoto. They were not at The Hague, even oil companies. The BP purchase of the American Oil Company changed the attitude overnight. Business people have begun to recognise that there is some profit in this. I do not say they are motivated solely by profit but it has turned it from pain into gain. The Americans have been very successful in developing emissions trading and some of these ideas. To that extent, President Bush may well take more into account the business view, if the business still holds to that view. Bear in mind it was President Bush's father who led to the setting up of the Rio conference. If the Americans had not played a part in that, it would not have got off anywhere at that time. We must wait and see. It is an illustration in this first few months. It may arrive at that view. Now we have the President's letter, I am a bit confused about that and I wonder whether that was a reaction to the Environmental Protection Agency spokesman who signed up to language on Kyoto targets at the G8.
  (Mr Meacher) It is difficult at the moment to understand what exactly is American policy on climate change. I did meet Christine Todd Whitman who is the Bush Cabinet Environment Minister at Trieste and she made it perfectly clear, first of all, that the US was committed to taking action over climate change; that President Bush did believe in the science of climate change and she waxed lyrical about her multi-pollutant strategy which included CO2. The Bush letter has moved away clearly from the Kyoto Protocol, despite the fact that Mrs Whitman signed up to a communique which contained a phrase about supporting the environmental integrity of the Kyoto Protocol. It may be that he has had considerable difficulty with his multi-pollutant strategy, including CO2, because of the situation of California, the impact on energy prices and consumer prices and that he has chosen to take a short term way out. Whether that indicates a longer term view remains to be seen. The United States is now engaged at a high level review of climate change policy. I think it is at an early stage. There is now currently an announcement about the new representative to replace Frank Loy as the state department negotiator. We will have to see what line she takes. It is premature to take a view too early as to how far the Americans are either moving away from the Kyoto Protocol, which I still find it difficult to believe they will, or whether they are looking for some significant or fundamental restructuring of the Kyoto Protocol, which itself could also be difficult. This is not just a matter of environmental treaty; it is a matter of foreign policy relations between America and the rest of the world.
  (Mr Prescott) We should not underestimate the concern of developing countries. The one strong issue for them was decided by the Bonn conference in 1995. They agreed that the developed countries, annex one, 40-odd nations I think, had to agreed targets themselves and show that they were committed to making the change. If now, as the suggestion could be from President Bush's letter, that he is now saying, "All these countries who are in the developing world are not committed to targets", if you are now reversing that agreement, which they originally signed, and saying it now applies to all, I have grave doubts that you will be able to get an agreement with the developing countries, who tend to feel that perhaps we have poisoned the world well ahead of them and perhaps we should do something about it first.

  16. I do not think you would get any disagreement from most of the Committee on that. You were very frank with the Committee about disagreements within the European group, particularly your disagreements with some of the other ministers. Do you think it could be argued that these public disagreements within the European group weaken the unity of the European negotiating position?
  (Mr Prescott) I think unity is better than disunity. In the nature and politics of these kinds of agreements, it is not easy to keep everything quiet. For example, all the way through the negotiations, particularly the green representatives were told the green party was outside. The green party would be demanding more and more, shifting and changing. It is very difficult to do negotiations under those kinds of circumstances, some wanting to show that they are championing inside the negotiating group and there are divisions and compromises to be found. If you go outside to these groups you get a lot of hostility and that affects the politicians in different ways. I can always recall the Kyoto agreement, where many of the Europeans felt that to accept this agreement was going to cause them a lot of trouble with the environment groups in their own countries. They were staggered to find that the environment groups after a lot of hostility to keep the 15 per cent were much more realistic saying, "Thank goodness, you have got an agreement. We did not think you would get an agreement." It is up to the politicians to make the judgment then as to how far they can go but in that process of negotiation there is a play off because the NGOs are part of the conference. To that extent, it does make for difficulties. If you want to suggest there is a compromise and that 15 per cent is no good, which we had to argue, you are not going to get that agreement and you must find a compromise, in the process of compromise the political forces are not just inside the European group. They are outside. You have to do it against that background. Even with those divisions, we concluded a very good agreement at Kyoto and I think it would have been possible to do it also at The Hague. Unfortunately, for one reason or another, it did not come about. What is true is that the opponents you are negotiating with are aware of the different opinions in the groups, but that is not unique. Whether it is trade negotiations or environment negotiations, people know what is going on in each group. It is an inevitable part of it.

  17. I was not privileged to read most of the world's press but I was privileged to read our press following the meeting. If I was a member of the Umbrella Group, I think probably I would take some comfort from the fact that the press were portraying the breakdown of the meeting as a row within the European group rather than as a lack of agreement between the European group and the Umbrella Group. We appear to have got the blame.
  (Mr Prescott) I do not think it affected the negotiations for the Umbrella Group. They know these differences from talking to them. They just say, "Is it possible to get agreement? Can you deliver?" The fact that I came into that group at the request of Madame Voynet, the EU Presidency and the president of COP6, carried authority because people say you can see we are doing a deal. It is exactly as it came out at Kyoto, but this time it did not happen. In regard to the press though, the press have nothing but hostility in the main to these things, in my experience. They are not prepared to put a case fairly one way or the other. They are more interested in the personality and the conflict. I am supposed to have stormed out of a meeting. That is absolute rubbish. The meeting had come to a decision an hour and a half before. Why I was moving quite quickly, I had discovered I could get a flight back to Humberside and get home for Saturday when I thought it was not going to be until Sunday. Adding to that by saying you are feeling gutted gives a bit of colour so I have to accept my responsibility for that, but that had not affected the negotiations in any way. It did affect the presentation of what was going on. I take the opportunity again with Madame Voynet. I did not say that she was particularly tired. When it came to the final deal, she said she was too tired to really consider the complexities of it and I am not surprised. We had been negotiating two or three days. You are tired. I was tired. Everybody was tired. So we were at Kyoto but the difference is we did an agreement.
  (Mr Meacher) I will not forget that last night for quite a long time. It was in many ways similar to Kyoto but it was slightly different. It was agreed that the four strategic issues would be dealt with by the key group of negotiators in a particular room. The first one was going to be developing countries, which we all accepted. After three hours, and we were getting to three or four o'clock, still that particular issue had not been settled. It did become clear that if we carried on at that rate we were not going to get through the agenda or have an agreement. I do say, and I am no sycophant as John knows very well, if it had not been for John Prescott we would not have got that close to an agreement. We got very, very close to agreement solely because of his skill and determination to force the relevant partners to face up to each of these issues in parallel with the key people brought together, the relevant questions put and a settlement made. It may be outside the procedure of a normal formal procedure but that was exactly what happened. If we had not done that we would not even have got within miles of an agreement but we got within inches of it. I thought that we actually had got an agreement, as I said perhaps unwisely on Radio 4. I was convinced of that, I would not have said it otherwise. What actually happened just before I made that radio broadcast was there was a meeting of EU Ministers and most—I say this without any blame—were not taking part in the negotiation and were in their hotel rooms asleep. A meeting was called at about seven o'clock in the morning as I remember and the details were put to them such as we had and they said round the table, perfectly understandably, that they had not got enough information to be able to make a judgement, they wanted more information. I thought that was totally fair. We said that we would get more information within the next two or three hours and we could have a further meeting. The French Presidency, who had always had some difficulty about the degree of concessions which should be made in order to get an agreement, again a perfectly fair judgement that ministers have to make—


  18. What was that difficulty?
  (Mr Meacher ) Sorry?

  19. What was that difficulty? You said they had some difficulty all along.
  (Mr Meacher) She had difficulty because the central issue was the balance between trying to get the Umbrella Group, in particular the Americans, to give priority to domestic action, which they did not want to do, and what phraseology would be applicable which would be short of requiring that action to be at least 50 per cent domestic action on the one side and, secondly, the really critical issue was on sinks, how far one should be able to use sinks under Article 3.3 and 3.4 in your own country or sinks in developing countries under the CDM. Some of us took the view that although there is always a bottom line in these negotiations, no-one is going to get everything they want and one has to make some concessions to get an agreement. We did get an agreement with all the relevant partners in one room, which was repeated again in another room and I took to be formalised.
  (Mr Prescott) Including Madame Voynet.
  (Mr Meacher) It was the case, I think, that the French Presidency judged the earlier meeting, at which not one single EU Minister opposed the agreement but several said they had not got enough relevant information, and took that as a lack of a mandate to proceed to reach that final agreement. I understand why she did that. We have to have an understanding of other people's positions. It was these kinds of very delicate sensitive judgements that had to be made under time pressures as we were moving remorselessly to the conclusion of this at about four in the afternoon because, I know this is unbelievable, it had to be used for other purposes.

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