Examination of Witnesses (Questions 40
- 59)
WEDNESDAY 24 OCTOBER 2001
RT HON
MICHAEL MEACHER
AND SARAH
HENDRY
40. I hope I have not unintentionally snatched
something that somebody else was going to talk about. There is
a process of audit and precise science here which is going to
need to be agreed across the world, otherwise what we will get
is a huge amount of haggling and argument, with people producing
their own scientists saying, "this is what our position is",
and we end up sending it to UN inspectors to examine it. (Mr
Meacher) As I say, first of all, there are real uncertainties
about trees, because young trees do absorb carbon, older trees
do not. Also, they may fall into the ground in the normal carbon
cycle or they are burned and, of course, you then get the worst
result, they are no longer saving carbon, they are generating
it. The question of methodology is a very difficult one and the
intergovernmental panel has got its own scientists trying to get
agreement internationally about how these things are counted.
Perhaps Sarah Hendry might like to say a word about methodology. (Ms
Hendry) All I was going to add was that even beyond the detailed
rules that we will be negotiating on different mechanisms in Marrakesh
there will then be detailed methodologies that will have to be
worked out by the different enforcement branches, for example
the CDM Executive Board, which give advice to the Convention.
All that still remains to be done and to be tied down.
41. That sounds like the "all that remains
to be done" is huge? (Mr Meacher) It is. (Ms
Hendry) There is a lot.
42. If we do not have total consensus to whether
the climate change is taking place in the way we understand it,
to get some degree of consensus on measurement methodologies is
going to be an incredibly long process. What progress has been
made so far? (Mr Meacher) I think there has been further
work. There have been recent statements by scientific bodies which
have tried to refine this question but a great deal of further
work does need to be done. The point I really want to make is
we are talking about the first commitment period, that is 2008
to 2012, so we do have a period of time in which that work can
be done, and I think it can. (Ms Hendry) I agree there
is a lot of work to be done. Some preparatory work is being done,
some thinking on what you call baselines, which are about determining
the additionality of projects under the various mechanisms, has
already been done, but I agree there is still a lot to be done
Chairman
43. My thinking of the virtue of planting trees
was dissipated by the fact that I burn logs, I wonder whether
I ought to be doing trade with myself, how many trees do I need
to plant to justify the logs I burn? (Mr Meacher) You
should not be generating doubt more than you strictly need to,
Chairman. Log burning, that is another issue.
Mr Mitchell
44. You have just depressed me, as somebody
who has reached the tree age of stopping absorbing. If you succeed
in all that, because it is a large, difficult argument of the
hypothetical. I just want to move on to a clean development mechanism,
that seems to me to promise a line of development. In view of
the claim in Science magazine, that the developing countries
would be spending $1.7 trillion in the next 15 years on new electricity
generating capacity I wonder if the provision, which is not financed
yet, it is going to be small-scale in any case, is going to be
totally inadequate? Are these countries going to end up with fossil-burning
power stations? (Mr Meacher) We are doing our level
best to try and prevent that. As you say, the industrialisation
of the developing countries is going on fast, I do not think any
of us want to slow it down, because that is their route to prosperity
and the quality of life that we have and I presume we all want
them to have it, but we want them to take a different route from
the one that we took. The purpose, as you say, of a clean development
mechanism is to find an alternative way of providing energy for
those economies which minimises fossil fuels and encourages enormous
expansion of the clean development mechanism. The significance
of it is shown by the fact that in 20 years, approximately plus
or minus, the emissions of the developing countries will actually
exceed those of the developed countries. It is exceedingly important
that they are brought into the system, that they accept, not just
voluntarily make reductions, the disciplines we are imposing on
ourselves in making this shift away from fossil fuels to renewables.
There are, of course, immense benefits in doing this. The point
about renewables, unlike fossil fuel, is that once a system is
in place it carries on forever. Solar power, which is the ultimate,
which is not going to become commercially tappable probably for
15 or 20 years, is literally infinite in the energy which it can
provide. We do need to encourage and incentivise them to go down
that route as much as possible. China has enormous coal reserves,
either to get China to use alternative fuel sources or to develop
a clean coal technology, which, again, some companies want to
develop. RJ Budge in this country certainly want to develop it,
they want to have a pilot plant, and if that could be made commercially
viable that is again a way of tapping those enormous coal reserves
without over damaging the environment. The clean development mechanism
is very important, it could be seen as a major new driver for
a different world economic order over this next century. I would
not put it less than that.
45. I agree. Our own role in setting things
up is inadequate, to say the least, look at what happened to the
wind power, look what has happened to tidal power and look what
has happened with solar panels. We need to make a bigger contribution
and effort in our own backyard before we can encourage this in
developing countries. (Mr Meacher) That is absolutely
true. The Government has set a 10 per cent renewable target by
2010, in other words at least 10 per cent of the generation of
electricity by 2010 in the United Kingdom must come from renewable
sources. We are still a long way off from achieving that, I think
we are about 2.8 per cent at the present time, something of that
order. We are also trying to develop good quality combined heat
and power, that is CHP, and, again we have a 10,000 megawatt target
for 2010. We are, I think, slightly below half that at the present
time. We do need to do a lot more and we can do a lot more, particularly
in onshore and offshore wind farms and bio-mass as well as the
other elements we have not mentioned where there is considerable
potential. The development of bio-diesel and bio-ethanol is good
for agriculture and good for the environment.
46. Can I ask about nuclear power as well, the
EU stood firm on refusing to allow nuclear power plants to be
constructed in the developing countries, these are a way of avoiding
fossil fuel problems, which you are primarily concerned with,
for what scientific reason was nuclear power precluded? (Mr
Meacher) It is not a scientific reason, it is perfectly true
that the generation of nuclear power stations whilst it is not
devoid of CO2, because of input, it is obviously at a very low
level indeed. The reason for rejecting it was that it was not
regarded as a long-term sustainable technology. This is very,
very controversial. There are strong views, Canada, for example,
are extremely keen to see credit generated from nuclear facilities
included and the great majority of the EU, 13 out of the 15 countries,
are absolutely adamantly opposed. The United Kingdom and France
took, I shall put it more eloquently, a more balanced view, but
the overwhelming view—
Chairman: That is how you would describe it,
a more balanced view.
Mr Todd
47. Sat on the fence. (Mr Meacher)
There are two sides to this argument. The overwhelming political
view, it is not scientific, it is a political view, is that nuclear
should be out. That, after a lot of discussion, was in the end
agreed.
Mr Lepper
48. Can I take up a point Austin Mitchell has
made. Our own energy policy has important bearings on reaching
our own targets and contributing overall to global targets and
yet within government, as I understand it, it is the DTI which
has the overall responsibility for that policy. Do you see any
problems between that split of responsibility, here you are on
the global platform arguing a case and negotiating, from the point
of view of your department, and yet the very area of internal
domestic policy, which has an important bearing on what we are
contributing, rests with another department? (Mr Meacher)
I think David Lepper is giving me an opportunity to make a bid
for other territory which, presumably, includes not only the energy
industry but also transport, because transport is the largest
single source of rising CO2 emissions. I do not think there is
a problem. I think there is a strong argument for saying the division
is right, for this reason, I think that the split between sponsorship
by a ministry and regulation should be observed in terms of different
departments, there are a number of examples in Whitehall where
that is not so. In principle I think it is right that a department
which sponsors a particular industry should not be the same one
that regulates it. It is not a firm or universal rule and Chinese
walls can operate but on balance I think the DEFRA's, or as it
was the DETR, responsibility for energy efficiency, which is basically
a regulatory mechanism to improve the use of energy, should be
separate from the department that sponsors electricity and gas.
Mr Jack
49. You mentioned in glowing terms the question
of combined heat and power, can you explain to me why in the context
of the consideration by the House of the last Finance Bill, for
example, I continue to receive representations from companies
like British Sugar telling me they were unable, because of the
operation of the Climate Change Levy, to justify further investment
in what appeared to be quite a substantial development in the
field of combined heat and power. There appears to be a conflict
between the environmental tax and your desire to see CHP expanded. (Mr
Meacher) I do understand that. We are anxious to see a development
of CHP, it has a major contribution to make. There are certain
institutional barriers at the present time which are making that
more difficult. We have given a derogation from the Climate Change
Levy.
50. Is that shorthand for the Treasury institutional
barrier? (Mr Meacher) On this occasion it is not. I
will explain what those barriers are, the Treasury are not responsible
for this. We have given exemption for the Climate Change Levy
for good quality CHP, the definition is a technical one. We are
aware that that does not apply in the case of exports of CHP to
other industrial users, and I think that is what British Sugar
are concerned about. We are proposing, shortly, to bring forward
a new CHP strategy, which we will publish. All I can say to you
at this point is that we are intending to address some of those
barriers. We are looking precisely at the issue you have raised.
Mr Todd
51. The relationship with developing countries.
We explored opportunities for trading, another approach would
be to say that the main reason we have this problem is that the
developed world indulgently used fossil fuels at a time it was
industrialising and that the correct approach is to provide straightforward
aid to developing countries, not to trade emissions, to provide
for appropriate projects which would protect our environment.
What is the balance between those two mechanisms or is there a
balance or does it only provide one way traffic on that? (Mr
Meacher) Both are important. There are four issues which were
basically raised at Bonn, as I say, there was the question of
a flexible mechanism, the question of sinks compliance and the
last one is aid and support for developing countries, we do recognise
that as an important area with regard to the whole Kyoto system.
52. That aid is not necessarily linked to some
saving that the developed world may achieve through that? (Mr
Meacher) No, it is not.
53. It is not a traded aid? (Mr Meacher)
No, it is not. It is in the form of money for technological transfer,
for capacity building and adaptation. Those are the three headings.
The amount and, again, this is arbitrary, can be less, which perhaps
some developed countries would like, or more, which the G77 want.
The amount that we agreed at Bonn, and a political declaration
was made by the EU and a number of other major countries, excluding
United States, Japan and Australia, of $410 million being made
available for these powers. As to whether that is adequate or
sufficient is an open question.
54. Over what time scale? (Mr Meacher)
With regard to the first commitment period.
55. Was that broken down by nation state or
trading block. Do we own part of that $410 million. (Mr
Meacher) We are certainly contributors, according to a formula
agreed within the EU.
56. What figure of that is ours? (Mr
Meacher) I am trying to recall. I cannot recall. Rather than
just make a stab at the figure, it is roughly what you would expect
relative to that total. I would prefer to drop you a short note
to say what it is.
Chairman
57. I am sure somebody behind you could make
a phone call and jog your memory before the session is finished. (Mr
Meacher) We will get the information by courier pigeon before
the end of the session.
Mr Todd
58. What mechanism is in place to ensure that
we meet that? Is it a longish time scale, where one could be talking
about not paying that out for some seven or eight years. (Mr
Meacher) All of this is geared to the first commitment period,
that is the target frame. Developing countries could certainly
expect that money to begin to be delivered at an earlier stage.
59. An earlier stage meaning? (Mr Meacher)
As soon as may be. No doubt this subject will come up again at
Marrakesh and they will be saying, "you agreed $410 million,
when are we going to start seeing it?" (Ms Hendry)
The parties to the agreement are meeting in December hopefully
in Washington.
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