Members present:
              Mr John Horam, in the Chair
              Mrs Helen Brinton
              Mr David Chaytor
              Mr Dominic Grieve
              Mr Jon Owen Jones
              Mr Tim Loughton
              Christine Russell
              Mr Malcolm Savidge
              Mr Simon Thomas
              Joan Walley
                       EXAMINATION OF WITNESSES
                 RT HON JOHN PRESCOTT, a Member of the House, (Deputy Prime Minister and
           Secretary of State for Environment, Transport and the Regions), RT
           HON MICHAEL MEACHER, a Member of the House, (Minister for the
           Environment), MR DAVID PROUT, Private Secretary to the Deputy Prime
           Minister, MR PETER BETTS, Head of Global Atmosphere Division , DETR,
           MR DAN OSGOOD,Global Atmosphere Division , and MS GABRIELLE EDWARDS,
           Global Atmosphere Division , examined.
        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
                              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 in the
  middle of going to Oslo and trying to resuscitate 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
        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.  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 set for a cut in the COř 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 against the predictions that America would
  not do anything, Japan would 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 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 sticking very
  hard at not getting an agreement.  The fact is they were quite prepared to
  change on their position in the CDMs, whether they could use sinks in the
  CDMs, which would have been a big way of getting out of no 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 President,
  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
        (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 Europe Group 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
        (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 the
  President 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 did not want, or whether
  there was going to be the issue of the CDMs and how they applied.  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
        (Mr Betts)  Correct. That was part of the package where 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 President suggest that he
  finds that unacceptable.  I must say that is quite at variance with what he
  agreed with Michael at the G8 with the Environmental 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 UMM 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 his Environmental Agency statement at the G8,
  which Michael attended, where they agreed the Kyoto targets.  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 be extended to July instead of May and that was at the
  Americans' request.  I assume it is to 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 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
        (Mr Prescott)  This is quite an important element.  The developing
  countries were not too concerned at 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 countries developing which were French;
  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 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 Environment Agency spokesman who signed up to the 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 infantry 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 infantry,
  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 countries 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 abroad 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 president of the
  group 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 judgment, 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 judgment 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
        (Mr Meacher)   She had difficulty because the central issue was the
  balance between trying to get the Americans, in particular the Umbrella Group,
  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 in your own country or sinks in developing countries under
  Article 3.4.  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 President 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 judgments
  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.
        20.      Just to interrupt you, are you saying that it was not so much the
  content, the issue, so much as the view of the negotiations that was taken by
  the French Presidency which led to the collapse, that another person might
  have taken a different view in forcing it through on the same content?
        (Mr Meacher)   I think that is possible.  The point I was making that
  John cannot make is we would not have been in a position to make these
  judgments about should we have had the agreement, could we have got it.  We
  were inches away and if he had not taken that initiative - something John is
  very good at - of knocking people's heads together and forcing them to come
  to an agreement to settle matters or to say "we cannot make an agreement",
  that would not have been done.  It desperately needed doing and it is only
  John Prescott, in my experience, at these international negotiations who has
  the determination and skill, for which he is so often not given the credit,
  for doing this.
        (Mr Prescott)  That was absolutely correct, of course.
        21.      Everybody is sucking up to everybody else this afternoon.
        (Mr Prescott)  It is very kind of Michael but he did play quite a crucial
  part in the whole negotiation.  We act as a team.  I would like to record in
  front of your Committee the skill of the civil servants who were absolutely
        22.      That is taken as read, you are full of praise for the civil
        (Mr Prescott)  At Kyoto it was the skill of our people who negotiated
  that agreement and it was the skill of our people that put this package
  together.  Sometimes they get a lot of knocking and we get a lot of the praise
  saying "we are up there", but without their back-up, and they were really
  superb ----
        23.      I fully recognise all of that and great credit to everyone
  concerned, including the civil servants obviously.  What we are trying to get
  at here is what was the nature of the content.
        (Mr Prescott)  There was one content point that was very important in the
  process.  We were able to say to the European groups when we met as a European
  Group that they had agreed that sinks, which was always the concern about
  developing forests, could be used as part of the contribution to the target
  they had got by doing it in developing countries.  The Europeans were set
  against that and said "we do not want that".  We got the Umbrella Group to
  agree that was the proposition.  The Europeans were quite staggered at that
  but when they got awkward and they wanted more the Americans and the Umbrella
  Group withdrew from it.  That was what kept the attention of the Europeans. 
  We were able to say to the Europeans "look, you said they would never do that
  and this is in this agreement" and then people started walking away from it
  when it got difficult.  To be fair about Mme Voynet, she did go round the
  table and a number of the other European countries who did not understand the
  agreement, were not actually involved and just came in, and said "I am sorry,
  we do not have enough information".  My main concern was this was one window
  and it would be lost.  To be fair, we have not mentioned the next window where
  we hoped to try to get over it again at Oslo, which got cancelled.  Frankly
  that was a failure of political courage and political will again.
                               Mr Jones
        24.      I asked in my earlier question whether the Americans accept some
  of the science behind the causes of global warming.  Whatever the
  uncertainties amongst them, the uncertainties that exist over the
  effectiveness or otherwise of sinks is rather greater.  Was it the uncertainty
  about the effectiveness of sinks that was behind some of the European
  Ministers' problems?
        (Mr Prescott)  Yes, that was part of it but it was connected to the
  ceiling.  Michael was very much involved in negotiating those powers.
        (Mr Meacher)   You are absolutely right that there is great doubt about
        25.      There is some evidence that some so-called sinks may actually
  contribute towards carbon dioxide rather than reduce it.
        (Mr Meacher)   Oh, they do.  I was about to say that trees sequestrate
  carbon, there is absolutely no question about that.  The problem is, and as
  one gets older one learns this, when they are young or middle aged they absorb
  carbon but as they get older they yield it up.  If they burn they no longer
  sequestrate it but you get a double-whammy because it all goes up in smoke and
  COř into the atmosphere.  There is also the real problem about sinks, to make
  a distinction between what is the sequestration effect of a forest being there
  where it happens naturally, as a natural phenomenon, and how much human agency
  adds to this.  The view that we took was that countries should get credits for
  the amount of increased sequestration which takes place as a result of things
  from human management as opposed to the simple existence of a natural
  phenomenon.  There was no agreement about any of these matters, certainly how
  you calculate the latter, we simply do not know how that is done and we need
  a lot more experience.  That was why we said that sinks should not ideally be
  in Article 4 in the Clean Development Mechanism in developing countries, that
  we needed experience up to the first commitment period of 2008-12, we could
  review it perhaps in 2005 or 2008, and use that scientific knowledge and we
  may be able to incorporate in a reliable, quantifiable way how much those
  sinks should contribute to targets but we should not do that immediately.
        26.      How confident can you be, given the uncertainties of science
  about the sinks, that you do not achieve an agreement based around targets
  which actually do not deliver anything at all or maybe deliver the reverse of
  what you want?
        (Mr Meacher)   Indeed, that is exactly the point.  5.2 per cent of Annex
  1 emissions might save in the order of a quarter of a billion tonnes of carbon
  a year.  If we allow in sinks in domestic countries it could well add
  something like a billion tonnes, which was agreed under the Kyoto Protocol,
  and if we allow it in the CDM possibly another 0.8 billion tonnes.  To be
  fair, I mentioned a quarter of a billion tonnes but between a quarter and a
  billion tonnes depending on certain conditions.  Even on the most optimistic
  scenario, if we allowed sinks in unqualified there could be a doubling of the
  level of COř emissions actually permitted under the Kyoto Protocol, which
  would be an absolute nonsense.  That is why we have to treat this with
  enormous care.  The American view was not necessarily to disagree with us
  scientifically, they have never challenged us on any of these figures, it was
  simply that they have a problem on the Hill, they have a problem in the Mid
  West, they want to get a lot of credits from changes in land usage in the
  Prairies and they want to use their forests to the full in order to minimise
  any impact on their domestic economy.  That is politically an easier way of
  trying to reach their targets.  Since they are probably now 20/25 points above
  their Kyoto target, and they are supposed to be seven points below it,
  anything that gives them an easy way of achieving the target is clearly
  desirable.  It is not a difference about science, it is about political
  accommodation to an embarrassing external target.
        27.      Is it your view that we do need to secure a political deal on
  sinks before we can move forward on anything else?
        (Mr Meacher)   Absolutely.
        (Mr Prescott)  Do not forget the important point about that, which some
  of our European colleagues sometimes want to forget, is that Kyoto was agreed
  and, yes, they are targets but they were based on a technology and science we
  were not too sure about as to how you could measure targets and emission
  trading.  In the period of time in between Kyoto and the COP6 and moving to
  agreement all of this had to be worked out but it was a pretty new area.  It
  has not necessarily got the preciseness and it does not help with the targets
  but they are an inevitable part of it and it is consistent, I think, with your
  criticism of targets that you made in your last Environmental Report.  It is
  good to have targets to measure against but sometimes the things on which they
  are based are not all that accurate although it was part and parcel of putting
  Kyoto together.
                              Mr Chaytor
        28.      If I can just step back a moment to the question of the deal that
  you are both saying was informally agreed by all the European Union Member
        (Mr Prescott)  The leaders of them.
        29.      The leaders, sure.
        (Mr Prescott)  Because the French, the Swedish, the British, the Germans,
  the Commission, they were all in that room and they then took it back to the
  full European Group and that was when it all began to fall apart.
        30.      So the leadership agreed what was on the table but they wanted
  more time?
        (Mr Prescott)  They would take it to the Group.  But in between arriving
  there and at the Group they said there was not enough information.
        31.      Has that view ever been published in written form?  Can you tell
  us exactly what was agreed there?  I followed the reporting of the conference
  with interest but nowhere did I read what the sticking points were.  What I
  understand from what you have said this afternoon is that there was an
  agreement over supplementarity and the original sticking point of 50 per cent
  was relaxed to become a form of words that was "a significant proportion" and
  there was an agreement that sinks could not be used in developing countries.
  Were those the two points that were negotiated with the Umbrella Group and
  were they agreed by the leaders of the European Group or were there other
  points?  Does this exist in a written form somewhere?  If not, would it be
  possible for the Committee to have a note about exactly what was agreed
  because that would inform our understanding of what is likely to happen in the
        (Mr Prescott)  We could give you a note of what that negotiating position
  was at that moment.  Do remember, it was the full conference that made the
  decisions.  There was an executive group that was set up to negotiate it but
  they had come to the end of the road and they could not get any agreement,
  hence the reason could we get the real people who were going to have to make
  decisions on some kind of agreement.  We put forward negotiating positions on
  what we thought of each one of the positions and the Americans particularly,
  on behalf of the Umbrella Group, had theirs.  We can give you a statement at
  that point in time when we brought in the leaders, the French, the Germans
  came in, and listened to what we had to say.  They then went back to their
  group to study and to consider our group, and we went back as well.  In the
  meantime, when it got difficult and we said, "We want more information than
  this" or, "Let's negotiate again", at that late date, you either accept or
  reject.  As the discussions went on and the President called us back to ask
  how far we had got, people began to change their positions.  The Americans
  began to say, "We did not quite mean that", because otherwise they would be
  outflanked.  There comes a time in any negotiation when that is it.  You can
  either accept it or reject it.  If you accept some and you want to build on
  it again, it becomes very difficult.  We can give you a paper which we took
  into the Europe group, giving our judgments of what was on the table, which
  was a paper given to us by the Americans and the Umbrella Group.  We thrashed
  through those bits but quite properly we then went into the European group
  and, if they were not prepared to accept it or said, "We need more time or
  information", as we said to them, "If you let this go, the whole deal goes. 
  Secondly, if you do not decide now, there are only a few hours left."  We are
  talking minutes left, an hour or so.  "If you do not accept that now and you
  start negotiating again, frankly, you may find a change in the political
  situation in America and the fear is that it may be a different attitude." 
  I do not know whether that is going to happen but there are signs of it at the
  moment and we are in a more difficult situation.  You have a memorandum that
  is our understanding of that agreement.  We put our understanding because,
  once it went into the group, people started saying, "I want a bit more on
  this.  I want a bit more on that" and everybody walked away from it because
  the Americans particularly, do not forget, have to go and answer to their
  Senate.  They did not want, "Did you agree this?" when they had thrown it
  away.  Agree it in the context of agreement, fine, but if you have not got
  agreement you were prepared to give that away and when it came to Oslo that
  is what the problem was.  In Oslo, they began to back off the negotiations.
                               Mr Thomas
        32.      Following on from that and the evidence you have just referred
  to which you presented to the Committee, the outline you have given us on
  where things may go now is that there is a paper which Mr Pronk has prepared
  which was the subject of the almost agreement, which has been now subject to
  further comments and views and so forth, was not able to take in Oslo but
  could now come back in early April for further discussion.  It is a question
  as to whether these are the right tactics.  Is it right to work with a paper
  that has failed?  We could not, you could not and the Europeans could not
  quite get it together.  Are you convinced that you are taking the right line
  with this or, in order to get this to work, because ultimately the prize of
  getting this to work is what everyone needs, even if it does take a bit more
  time.  Is it better to put all bets off on that and to look again at the whole
  issue of the sequestration of the sinks and the clean development mechanisms
  and, okay, if it needs to go back to the drawing board, let's try a different
  path?  How much consideration have you given to that?
        (Mr Prescott)  I think the paper is bust.  I do not think you can go back
  with that now because people in those late stage negotiations were prepared
  to do something.  They might not now.  Anyway, the administration has changed. 
  The administration might not be the same to the American negotiator now, so
  Mr Pronk is producing another paper.  The issues are still the same, the
  formulas that you find agreement on, and now President Bush seems to be
  suggesting that anything that is just for the developing countries in the
  first stage is not acceptable to me.  That is a fundamental change.  Michael,
  in the Environmental Group in the European Union, has been dealing with some
  of these negotiations.
        (Mr Meacher)   We do accept exactly as you are saying that it would not
  be appropriate to continue with a paper which we have really had two go's at
  and not succeeded.  Jan Pronk, the Dutch Environment Minister and President
  of COP6, has put together another paper -- I am not sure if it has been
  published.  I think it is going to be published very soon -- on the basis of
  consultation with all the parties, trying to put forward a set of proposals
  which might bring them all together.
        33.      Does that include America?
        (Mr Meacher)   Yes, absolutely, although the American position is
  completely unknowable.  They have this major review and we are getting very
  contradictory reports from what senior ministers are saying in Washington.
        (Mr Prescott)  If the paper was to suggest that we reopen it all again
  and the developing countries have got to fix themselves some targets, you can
  forget about getting any agreement.
        34.      The Kyoto Protocols are not open for negotiation; they are
  agreed.  There might be a previous administration in the US, but nevertheless
  that is the international agreement.
        (Mr Prescott)  You still have to ratify them.
        35.      It has not been ratified yet?
        (Mr Prescott)  No.  That requires so many nations to do so.  You can sign
  up for it at its first stage of the protocol but if you do not actually sign
  the ratification -- and indeed there was an argument at one stage that perhaps
  some of the Europeans entertained the idea that you could get enough to sign
  up without the Americans.  Frankly, I doubt it.  Secondly, an agreement in
  this case without the Americans is not going to be very workable because many
  other countries will say, "Why should we bother if the Americans are not?"
        36.      If I can put it to you in your terms, how gutted are you today
  that Bush has very recently questioned not only the negotiations that happened
  in The Hague but the actual climate change itself?
        (Mr Prescott)  The gutted response was one reaction.  I thought we had
  missed an opportunity.  The events since then rather confirm that.  I am sad
  about that because it was one opportunity, like Kyoto.  Kyoto had every chance
  of failing but to fail on this one when we had Kyoto, I was gutted.  Now we
  are in the process of negotiations and the reality of global negotiations. 
  The Americans have elected another President and the President is entitled to
  put his point of view.  I am entitled to argue with it and no doubt others
  will agree with America.  That is into the public arena.  Therefore, you live
  with that.  You try to find agreements.  If you say that all the developing
  countries have to come in and line up targets, I think it will make it
  impossible but who knows?  Every country has to reassess when a major player
  like the Americans in this sense says, "We do not want to play that game" or,
  "We are not prepared to sign up for that."  That does not mean we give up
  arguing and saying, "You have got it wrong."  I have already said that I think
  public opinion in America has been moving as fast as it has here.  It is no
  coincidence that many of those big industries began to change their views and
  that is a lot to do with public opinion.  I have a lot more faith in public
  opinion than the media statements and we will keep arguing our case.  The
  weather will keep reminding them perhaps that something is wrong and perhaps
  also the whole business of electricity provision in California might
  concentrate minds as much as floods here.  They are not going to get away from
  those pressures.  They are going to continue to be there and the public is
  aware that something is going on.  They will want some response.
                              Mrs Brinton
        37.      Have we any timescale of this fundamental review of climate
  change policy on behalf of the new American President?  We have timescales set
  for other negotiations but if they are still fundamentally reviewing it it
  seems a big, black hole at the centre of those negotiations.  Have we any idea
  whatsoever what is in Bush's mind?
        (Mr Prescott)  If I can refer to the American request for a delay in the
  meeting at COP6 to July, it can be interpreted in a number of ways, I suppose,
  but if they were saying no in May I assume that was to assess the position. 
  They know it is a very important, global issue.  That is encouraging and if
  there are views and discussions that are going on the Prime Minister in our
  case, the Foreign Secretary, other people and Michael at the G8 meeting in
  Italy -- we all make a very clear view and it is interesting at the G8 meeting
  they did sign up to the Kyoto, so July is the time when we will know what the
  American position is.
        (Mr Meacher)   They certainly said that they would complete the review
  in time to be able to engage seriously in the resumption of 16 to 27 July.
        (Mr Prescott)  Also, the American President said he was concerned about
  energy, electricity, prices and things like that.  There are different ways
  you can achieve your targets and that is up to the government, to make its
  decision.  He might not want to do something in one section but he can
  probably achieve it in another.  It does not rule out the possibility that he
  can meet his political difficulties as he sees them and yet achieve the same
  targets he is committed to.
                              Mr Loughton
        38.      Could we move to the post-COP meeting in Canada in December
  between the EU and the Umbrella Group, where they discussed ways of  moving
  forward?  I gather you said that it emerged that the two sides now had
  different understandings of the political package which had been discussed in
  the early hours of 25 November in The Hague.  Could you tell us when the
  different understandings of your last minute deal arose between the EU and the
  Umbrella Group?  Were they there all along and just an inevitability about the
  length of the negotiations, or was the Umbrella Group stepping back in the
  cold light of day from commitments which had been given in reaction to
  vacillation by the EU before?
        (Mr Prescott)  He was at a meeting of officials in Canada where they
  discussed that so I will ask Peter Betts about that.  I would not be surprised
  if people said there is confusion because the main negotiator, Frank Loy,
  having done the business and put it on paper, then said, "I was not prepared
  to go that far."  He began to change his position, which is understandable. 
  If you do something thinking you are going to get agreement and then you find
  it is done, you are not going to put yourself into the negotiations on that
  basis of what you agreed there.
        (Mr Betts)  We had thought in The Hague that sinks were excluded from the
  CDM.  That was our understanding from the Umbrella Group.  We also thought
  that Article 3.4 sinks, in the jargon, would apply only to three main parties,
  the United States, Canada and Japan.  When the officials got to Ottawa, we
  learned from the Umbrella Group that they were now saying it had not been
  agreed that sinks would be excluded from the CDM.  There would simply be a
  review before a decision was taken and it had never been agreed that only
  three countries would get Article 3.4 sinks.  That possibility would be open
  to all developed countries.  
        (Mr Prescott)  Russia was particularly apprehensive about being left out
  of that.  Everybody then began to look at it and Russia said, "Why are we not
  in it?"  Let's face it: Bush had a pretty good deal out of Kyoto.
        (Mr Meacher)   To be fair, Sweden and Finland were also interested in
  this.  This is another area where divisions of interest between wanting to
  restrict CO2 from sinks are separate from a national interest and being able
  to take advantage of a rather convenient source.  All of these tensions began
  to build up once that so-near link was broken.
        39.      In part you are blaming a lack of time for the negotiations for
  COP6, but are you talking about time for the technical effort by the officials
  or time for the politicians to break the logjam and the deadlock?  If it is
  the former, was not two years long enough?  If it is the latter, is it not a
  shame that the Umbrella Group did not want to pursue further, informal
  negotiations in Oslo in December?
        (Mr Prescott)  It was more to do with political will than technical terms
  because we knew anyway that, even if we agreed it, there were certain things
  that you would need to dot the I's, cross the T's and go on to the next
  meeting.  What we wanted was a political framework that allowed you to go on
  to the next meeting in July and the developed countries had agreed among
  themselves what the principles were.  The principles would be taken to the
  overall conference.  The real problem then was that many of the negotiators,
  particularly for the developing countries, had gone.  Some of the negotiators
  on the European had gone.  They had gone well before I even left.  It was not
  possible to make it back to the main assembly that has to make the
  recommendation for which there is the political agreement.  I still believe
  that was the political will.  Oslo was still an opportunity.  Hopefully we
  would come to some agreement, but it had become more complex.  The other
  countries to this agreement had been left out of it and the Umbrella began to
  say, "I am not going to do that" or, "I am not going to do this".  It became
  more difficult.  The Europeans in our discussions -- the French were still of
  a strong mind about this, and felt it was not enough and in my view there was
  a bit of fancy dancing went on about who was going to be blamed for the result
  of the fall-out of talks in Oslo.  The reality is that once you get into that
  frame of mind you have not got negotiations.  If you have not got the goodwill
  to meet and settle that agreement, it was not there; it was not on the Euro
  side and it was not on the Umbrella side.  It had become more difficult and
  it had become too late to do anything.  People then were beginning to say "let
  us wait until COP6 I", or whatever it is called, "in July" and hopefully they
  will do that but my main concern was that the American situation may have
  changed, and it may have.
        40.      But before that you have spoken about the possibility of inter-
  ministerial consultation in New York in April chaired by Jan Pronk in advance
  of COP6 Part II, to give it its full title.  What is the purpose of that
  meeting in April in New York?
        (Mr Prescott)  Michael, you went to that one.  Is that the sustainable
        (Mr Meacher)   Are you talking about the next CSD conference?
        41.      The Jan Pronk meeting in April.
        (Mr Meacher)   The extended bureau at the end of the Commission for
  Sustainable Development which is 17-20 April?
        42.      Yes.  What is it for?
        (Mr Prescott)  You attended that.
        (Mr Meacher)   No, we have not come to it but I would expect to be going
  to it. 
        43.      The meeting in April, next month.
        (Mr Prescott)  I am sorry.
        (Mr Meacher)    One or other of us will be going.
        44.      What for?
        (Mr Prescott)  The President has a new paper and we will discuss the
  Pronk paper and that will be starting again.  When we come back we will hear
  the opinions through the Civil Service, who meet at these meetings, as to what
  exactly will be the American position.  If their position is we are not just
  going to have an agreement for developed countries and it will have to be
  everybody then the whole thing is completely opened up again and I do not
  think we will get any agreement signed ahead of the next conference.
        45.      Are you going to lay the foundations for COP6 Part II or is it
  to see whether there is any point in COP6 Part II, in which case will it go
        (Mr Prescott)  It will go ahead.  At the meeting of the Executive of the
  European Groups you have still got to take into account the Umbrella and the
  developing countries.  We have agreed now that the conference that would have
  taken place in May should be extended to July at the request of the Americans
  in order that they may make their assessment.  Our meeting in April in that
  sense is an opportunity to look at the Pronk paper, see what the latest
  position is of the Americans and adjust ourselves ready for the meeting in
        (Mr Meacher)   There is a whole series of preparatory meetings, "prep
  coms" as they are called.  We had an extended session after the EU Environment
  Council a fortnight ago precisely to discuss climate change, the latest
  information, to take note of latest positions and how best we form an alliance
  partly to keep America on track, if possible, with developing countries, with
  other big countries like Russia and certainly keeping our lines open with
  China, etc.  We all tried to concert tactics in preparation for the next
  meeting.  That is exactly the same purpose a month later in New York in April.
        46.      Having said all that, what are the prospects for the meeting in
  Bonn in the summer?
        (Mr Meacher)   I think really everything does depend - I hate to say this
  - on the American position.  It is true, as John said, that we can ratify
  Kyoto, we need 55 countries and 55 per cent of total global emissions
  represented by those countries to ratify.  We can do that without the US but
  it would be an extraordinary thing, in my view, to allow the world's largest
  polluter to go on polluting and the rest of us tighten our belts in order to
  meet these targets.  There is something extraordinarily bizarre and perverse
  about that.  That is why it is so important to keep America on track.  We just
  do not know at this point where these contradictory signals coming out of
  Washington are going to lead to.  I cannot believe that the United States is
  going to walk away totally from Kyoto.  If they do they will have to return,
  in my view.  It will not necessarily be to Kyoto but to something similar. 
  I find it very difficult to believe that given the movement in public opinion
  amongst industrial leaders and the fact that republican senators have said to
  us "it is not that we like Kyoto, we like climate change, but this is
  something we have got to address".  There are undoubtedly persons at top level
  positions in the administration who believe that this is a serious issue that
  the United States has got to be a partner in.
        (Mr Prescott)  And there will be a different Presidency on the European
        (Mr Meacher)   That is also true.
                              Mr Savidge
        47.      And possibly on the American side.  Sorry.
        (Mr Meacher)   It is a mosaic and each time the kaleidoscope changes. 
  It is very difficult to say.  I do not think we would do it if we thought that
  we were bound for failure.  We do think there is a good possibility of success
  but I would not put it too high.
                              Mr Loughton
        48.      Minister, when you last gave evidence on climate change
  negotiations in 1999 you said that the major problem was the prospects for
  "hot air" trading.  What has happened on that?  Has it been overtaken by more
  important events or put on the back burner or what?
        (Mr Prescott)  It was an essential issue.  This is a very good example
  of the trading emissions, "hot air", etc.  In all those areas they were the
  things that clinched it at Kyoto.  People signed up on the basis that you
  could do emissions trading or CDMs, etc.  I think it persuaded an awful lot
  of industry to take part and they could see there was a possibility due to the
  experiments the Americans had done in this area on emissions trading and
  trading actually achieved.  BP here were doing some of the internal trading. 
  That was quite an important gain.  Frankly, those things will not be lost but,
  of course, you need an international treaty to be able to trade in it.  It was
  an essential reason why a number of people signed up.  The "hot air" issue was
  one of the difficulties about Russia.  Russia got - I perhaps ought to be
  careful about my words - a very good deal out of it but that was because it
  was tired at the end and everybody wanted an agreement.  Now they are well
  placed with "hot air" to want to do the trading but you want an international
  agreement for it.  
        (Mr Meacher)   "Hot air" remains a problem but, to see it in perspective,
  Russian "hot air", because of the looseness of their targets, might involve
  something like 300 million tonnes of extra COř and they are getting all the
  financial benefit of the credits.  If you then look at sinks, and of course
  sinks has overtaken "hot air" as the big essential loophole, I have already
  mentioned the figures for sinks at the top estimate threshold are between one
  and three-quarters and two billion tonnes, so it is a very different scale,
  but "hot air" still remains a problem.
                              Joan Walley
        49.      I want to try to draw out lessons that can be learned from what
  has happened.  The way that the discussion has gone so far, I realise that we
  have got to draw a line under what has happened and when the meetings come
  back in July we have really got to start afresh.  Given the fact that we have
  got a new US Presidency and a different European Presidency as well, I just
  wonder given the various concerns that have been set out about, for example,
  principles like contraction and convergence, which I know our Environment
  Minister has been very involved with, do you think that things could change
  so much that things that might have been impossible or perhaps not even
  thought of at the earlier stages of the debate that we have had are things
  that could be brought up afresh in readiness for July?
        (Mr Prescott)  I do not think we actually go back to square one
  completely.  The fact that we had Kyoto means that the world has basically
  accepted that targets have a role to play, albeit it is the developed
  countries to begin with.  The big key often was to try to find the connection
  to the developing countries and that was what we were working quite strongly
  on until it broke down.  We have those targets and we have the mechanisms by
  which countries are prepared to make their adjustments and changes which we
  have been talking about, whether it is "hot air", CDMs, emissions trading, all
  those kinds of things, and people have accepted that these are the mechanisms
  that can help achieve those targets, they were written into Kyoto.  Therefore,
  we have that and are hoping that is not thrown out because eventually it was
  to applying to developing countries but the first stage was to make sure it
  applied to the over 40 developed countries.  The big question now is going to
  be if the Americans stick to their line of saying it has got to apply to
  everybody immediately then I think the reaction of the developing countries
  where you have to get consensus will be to go back to quite a strong exchange
  between the parties, between the developing countries and the rich countries,
  and we will go back to the old arguments we were having before Kyoto.  That
  would be sad.  That would be a step backwards, I do not think there is any
  doubt about that.  It will hang on what the general positions are.  Since this
  is quite a global position, I think, for countries like America the argument
  is "do you want to lead" and the Americans usually like to lead. I can
  remember the conversations that Michael and I had in the later stages of
  negotiations in Kyoto and the real importance for the Japanese was that they
  wanted to be less than the Americans and the importance for the Americans was
  they wanted to be less than the Europeans and it was always at what per cent,
  so whatever level you went to could we have that relationship and we had to
  say to the Americans "if you do not want to lead the world any more, we will
  do it".  
        50.      Given the whole changed position now of the American Presidency
  and given, if you like, the scope that there is for even more UK leadership
  in trying to reach some kind of agreement, what has been your response?  Have
  you had an official response?
        (Mr Prescott)  From?
        51.      Have you actually given an official response?
        (Mr Prescott)  From the Americans?
        52.      To the Americans on the fact that Russia has now changed its
  stance completely and is not saying what was said by Christine Whitman at an
  earlier stage?
        (Mr Prescott)  Our position is for the Prime Minister and Foreign
  Minister to obviously engage in a dialogue with the American administration
  and say "look, we think this is the position".  We were very encouraged by the
  Environment Minister G8 meeting but since then we have had the American
  President give his opinion and we will continue to engage with them at all
        53.      If one of the things that has changed across Europe is greater
  understanding, what scope is there between now and July, for example, for that
  special relationship that our Prime Minister has with America to use that
  special relationship to try to bring about greater public awareness about the
  importance of the Kyoto Protocol and the importance of it being ratified and
  the importance of America taking a key role in that?
        (Mr Prescott)  I think public opinion and the NGOs are quite powerful in
  these matters really and the changing opinion in American public opinion is
  the same as it has been in Europe.  They are conscious about the weather
  considerations and what they see on the television and that has made a
  difference in America as it has here.  No doubt the President will want to
  take that into account.  They do not need any encouragement, the people are
  very committed to this.  Where it would be quite strong was if the American
  President was to say "as far as I am concerned, I am not doing it just for
  America, it is going to be every country" and that would be read by everybody
  who sees that as a step backwards in agreement unless you can get those
  countries to agree.  We have used a lot of energy and time particularly on
  major countries like China and India.  We have travelled a lot to those
  countries to argue the case with them to find agreement prior to these
  conferences, but they feel it is a bit of a cheek if the developed countries
  start to lecture them on what they should be doing about greenhouse gas
  emissions, COř, all that.  They say "you did it, just show you are going to
  do something.  Yes, we do want our industrialisation but do not start telling
  us what we have to do in the first stage until you show you are prepared to
  do something about it yourselves".  I find that to be a very powerful argument
  and we do have to make that stand, it was accepted by all the developed
  countries.  If we are now throwing that away, or if America says they are no
  longer going to accept that, that is a serious setback, there is no doubt
  about that.  You have got to remember the other timetable is I think it is in
  2002 that we have Rio 10 when all the nations will come together and talk
  about what a wonderful world and how we have got to save it for our children's
  children.  Hopefully that will put pressure on them to get agreement but it
  is so easy to slide into rhetoric.
        54.      Do you think that in the meantime in terms of Rio plus ten there
  will be scope for Europe to go ahead and supply ratification irrespective of
  the US?
        (Mr Prescott)  Again, I have to say to my European colleagues in this
  sense that it is fine to be in the vanguard and say "we want 15 per cent", and
  the person who pushed that very hard to the President was the Dutch Minister
  and she did not last six months after because they found that very difficult
  to achieve, but there is one thing about rhetoric and another about targets
  to achieve them.  Britain has given its programme and in the programme
  produced by the Commission it showed that we were well ahead of any country
  in setting in hand the programmes to achieve the targets that we had agreed
  in the UN and in Europe.  Most other countries have not even begun to
  implement those policies.  There are very big questions.  We are taking a lead
  and we show that we do it by the policies and we have tried to highlight that
  in the documents before you.
        55.      Some would say that the way we have been able to meet those
  targets, much of it has been to do with dash for gas and now we need to start
  going much more quickly down the routes of alternatives.
        (Mr Prescott)  In the first stage it was more to do with smash the pump.
        56.      In terms of the US and what we can do between now and July, is
  there any scope for the Prime Minister being able to perhaps have some special
  meeting with the President to discuss this?  Is there scope for the US
  electricity companies in this country to have some kind of meeting here
  whereby we can perhaps ask why they have been lobbying so strongly with their
  US links against what we are trying to achieve on Kyoto?
        (Mr Prescott)  I hear a great deal of European arguments in this country
  but when we were negotiating we were a much more powerful force being a
  European continental negotiator than we were as a European nation.  It was not
  the Brits up front, it was the fact it represented the European case, quite
  a powerful case, and that is a powerful influence in any international
  negotiations.  Anyone who is involved in those negotiations knows that to be
  true.  I think at the coming Stockholm conference where the Prime Ministers
  are meeting under the Presidency of Stockholm, they will certainly be talking
  about that.  There is a great opportunity for Europe to lead the way.  In
  fact, I think it did play a very powerful part and without Europe we would not
  have had a Kyoto agreement.  There were individual contributions and we might
  talk about the divisions but at the end of the day it was Europe as a nation
  of European nations with its powerful influence that brought that about.  What
  we have is a margin of disagreement between ourselves, but there is more going
  for the agreement.  The leaders are very much committed to it.  Under the
  French presidency, they made a very strong statement about it and I think we
  have a chance of leading in that way.  We should take it and I think we will. 
  We spent so many years in these negotiations.  If you just say to the
  developing countries, "We are not doing it now unless you guys do it", forget
  about any agreement.
                               Mr Grieve
        57.      I did wonder whether the US or the United Kingdom position were
  really so far apart.  The government here has taken a number of decisions. 
  One is not to tax the use of energy in the domestic sector, so we have not got
  carbon taxes.  Secondly, the desire to see a reduction in electricity prices
  for domestic users.  Thirdly, we had the whole business of a moratorium on gas
  fired power stations.  Curiously, looking at those three issues on carbon
  emissions, those strike me as being rather compatible with the sort of noises
  which President Bush himself has been making because, if you look at what he
  has been saying, apart from the dislike of Kyoto as a mechanism, the, perhaps
  rather vague, utterances he seems to have been making seem to highlight
  exactly the same points and concerns which are a desire to see a reduction in
  carbon gas emissions but a dislike of fiscal mechanisms to achieve it because
  of an anxiety over economic consequences.  Do you share that view or do you
  think that you are in fundamental disagreement with President Bush and the
  American administration in terms of their approach?
        (Mr Prescott)  I do not know what his view is.  We must wait and see. 
  We had a great deal of agreement with the previous administration under Vice-
  President Gore.  Without his initiative, we would not have got a Kyoto
  agreement because at the end of the day it boiled down to Japan, America and
  European negotiators agreeing a package.  If he says that the developing
  countries have to do exactly as the developed countries before there is an
  agreement to ratification, I think you have a real problem, but I will wait
  to see what happens.  How you achieve your targets can be done in different
  ways.  They are being done in different ways in Europe and perhaps in America. 
  Is he saying he rejects the targets?  As I understand it in one case, he has
  said that he rejects the Kyoto targets.  That is going right back to square
  one.  If you say, "I do not want to do the same things as you do", who would
  want to destroy their car industry which previous administrations did,
  frankly, but it did give us that environmental advantage.  There is no doubt,
  if we were ahead as we were in most other countries of achieving those
  targets, it largely became because of the change of the use of coal.  I had
  to recognise that was one major contributing factor to Britain achieving its
  targets.  The Americans might find it very difficult to impose the kind of
  European fuel cost to their cars but there might be other ways of doing it and
  that is what trading is very good for.  We were concerned and the Europeans
  were.  You can do it all by sinks and trading if you want and do nothing about
  anything in the domestic economy.  What we are strong about, if we are doing
  it in our domestic economy, so should you and that was one of the differences
  between us.  There are different pathways to achieving the objectives.  If the
  American administration is saying to us that the targets at Kyoto are not
  acceptable either, you do not have an agreement on anything.  We have an
  agreement.  We have all signed for it.  We have to wait and see whether
  America will say they are not going to agree it.
                              Mr Savidge
        58.      With the President's letter, I take a less happy view of it than
  Dominic does.  When I see a letter that starts by saying, "My Administration
  takes the issue of global climate change very seriously", but then goes on to
  make the point, "... I oppose the Kyoto Protocol ...", reneges on its only
  environmental campaign pledge, says it will give priority to commerce, costs
  and consumers rather than to carbon reductions and says, "We have incomplete
  scientific knowledge", I have to say if it was anybody else who had written
  that I would be questioning either their intelligence or their integrity. 
  Since it is the allegedly elected President of the United States, I could not
  possibly do that or ask you to do that but do you not find a certain
  inconsistency between the initial warm words and what he then goes on to say?
        (Mr Prescott)  I am reminded that, when President Reagan came, there was
  an awful lot said about him but he did achieve some remarkable things in
  certain global negotiations.  I had a similar view about Thatcher at the time,
  but using conventional opinion is not necessarily right.  It is the early
  stage of the administration.  They are having to take into account all sorts
  of things.  Since they have asked for the July meeting, we should do them the
  courtesy of waiting to see exactly what happens.  The President has to deal
  with all sorts of things, commitments etc., but since he has asked for July
  and since the environment person appointed, who Michael met, has no problems
  about signing at Kyoto, assuming the debate is going on, I would wait to see
  the conclusion of it.  I would like to see that they will go along.  If they
  accept Kyoto targets, I would like to see them say that they have extra
  responsibility as a developed country.  If they can accept those two
  propositions, we have a chance of working out an agreement.  We need to work
  out an agreement, quite frankly.  Most of the world and most of our electorate
  knows something has to be done.  Something has to change.  I will wait to see
  those forces exercise their pressures on an American President or even the
  European president.
                               Mr Grieve
        59.      Have you been having direct dealings with people like Christine
  Whitman of the EPA, who seems to have adopted the new administration, a point
  of view which in theory would seem to me to lead inexorably towards the Kyoto
        (Mr Prescott)  I could not go to that conference but even during the
  negotiations in the conference I did think the Americans played a considerable
  part in it and I do know that they wanted to find an agreement and I was in
  personal conversations with Vice-President Gore about that, because they came
  to an agreement at Kyoto and we had the same exchanges of what the American
  commitment was for an agreement.  I was convinced they would do an agreement
  at The Hague as they did at Kyoto.  Despite everybody saying the Americans
  would not go to zero, they did a good job and that could have happened on this
  occasion.  It is a new administration; they represent the American people now
  and we should treat that very seriously and listen to what they have to say. 
  We were encouraged after Michael's discussion at the G8, but we have to wait
  and see.
        (Mr Meacher)   I think that is right.  Let us be perfectly frank about
  this: there is a power struggle going on in Washington.  There are very
  different elements with different views of climate change.  The state
  department was more pro climate change at Kyoto than, say, the domestic,
  economics department.  There is a struggle and it is not clear at this stage
  how exactly that is going to be resolved or what the balance of forces is
  going to be in July.  A good deal depends on this new negotiator but decisions
  may well be taken at a higher level, at President or Vice-President level. 
  That is where the power is being wielded at the moment, but we have to see
  results and we have to keep open the possibility of an agreement.  We cannot
  responsible simply write off what the Americans do because they are so
  important in terms of a generation of greenhouse gas emissions.  I repeat what
  I said earlier: this is not just an environmental issue.  This is a
  fundamental issue of foreign policy relations between all the major countries
  of the world.
        (Mr Prescott)  The key will be who they appoint as negotiator at the end
  of the day because the President is not going to be involved in this from day
  to day; it is that negotiator.  We will measure that.  There has always been
  a conflict between the state department negotiations and the Environmental
  Agency in these circumstances.  We have found it before but it is usually the
  negotiator who is the key.
        Chairman:   Thank you very much indeed.  That was a very useful session. 
  Thank you once again for coming along at relatively short notice, considering
  all the other things you have to deal with today.  In return for me saying I
  look forward to what you have to say about the environmental audit report, we
  expect a favourable response.