Examination of Witness (Questions 92-99)
MS HEIDI
BACHRAM AND
MR ADAM
MA'ANIT
1 DECEMBER 2004
Q92 Chairman: Good afternoon. Thank you
very much for an extremely pungent written submission, which we
have enjoyed reading. Could you possibly explain precisely who
you are and who you are representing this afternoon?
Ms Bachram: The submission was
mostly written by our partner, The Corner House, Larry Lohmann.
We contributed to parts of that submission and we are from the
Transnational Institute project called Carbon Trade Watch.
Q93 Chairman: You are both from the same
organisation.
Ms Bachram: Yes.
Q94 Chairman: Okay, thank you. You are
very welcome. We get the impression from your written submission
that you are not terribly keen on emission trading schemes, is
that fair?
Mr Ma'anit: That is very fair.
Ms Bachram: That is very fair.
Q95 Chairman: You say that there are
numerous more effective, more efficient, more egalitarian alternatives,
including regulation, taxation, support for existing low fossil
carbon economies, various alternative schemes for creating and
distributing property in the earth's carbon cycling capacity.
That is a very clear position, but does it represent a basis on
which we can actually move forward to get international agreement?
Mr Ma'anit: It depends. Inasmuch
as the UK government is willing to engage with emissions trading,
it would. It depends on how far we want to go with it. In international
negotiations that option is there; it does not mean that we have
to take that option in the Kyoto Protocol. It is a voluntary act;
we do not have to engage in emissions trading. What emissions
trading does do though is distorts the primary point of this whole
exercise of climate change policy, which is that we need to reduce
emissions at source. That should be a primary focus of our efforts
and if emissions trading can be demonstrated to show that reductions
at source happen across the board, then we would be in favour
of it. Unfortunately, to date there has not been a sufficient
body of evidence to suggest that any emissions trading scheme
in existence or proposed will achieve that. By its very definition
emissions trading allows for some sources to increase their emissions
and that has knock-on effects. One of the misleading angles about
emissions trading is that we are only talking about greenhouse
gases and because we are only talking about greenhouse gases,
those gases do not have localised effects on communities in which
these factories are sited. There are many co-pollutants involved
in the combustion process which do have local effects and are
a part of the process of production of greenhouse gases. Any increase
in emissions at source will involve an increase of those co-pollutants,
many of them extremely toxic and with damaging effects on human
health: carcinogens fluorocarbon compounds, polycyclic aromatic
hydrocarbons, fine particulate matter, etcetera. Just today, we
read a report that the asthma incidence arising among children
in the UK has increased fourfold since the 1970s. This is a public
health crisis and we have to start looking at ways to reduce emissions
at all sources, not just one here and increase somewhere else.
Q96 Chairman: Reading through your submission,
I kind of got the impression that you object in principle to emissions
trading because it involves commerce. Would that be correct?
Mr Ma'anit: That is not fair.
The commerce angle only distorts the relationship. It is the question
of what actually happens on the ground that we are concerned with.
We are concerned with weak environmental regulations; we are concerned
with weak oversight of factories and the emissions at each site;
we are concerned about the verifiability of emissions reductions.
We have already seen that the data we have at the moment, in terms
of our requirements for reporting to the EU and to the UN, are
grossly inefficient. You yourself tabled a question recently in
parliament about HFC emissions. We have discovered that HFC emissions
are actually 40% higher than we previously thought. This is a
huge problem. The only thing we know that works for sure, guaranteed,
is effective government regulation of emissions at source. Anything
else complicates the matter.
Q97 Chairman: That is interesting because,
actually one of things I felt, having read your memorandum, was
that you were good at critique, but pretty short on solutions.
Obviously the context of this whole inquiry is that we have a
serious problem. What we are struggling to find is a solution
which is going to work. If you reject emissions trading, as you
do, in favour of some other thing, we have to be sure that the
"some other thing" works. What sort of chance in hell
is there that an international tax regime is going to be put in
place that is acceptable to all the parties concerned? Is that
credible?
Mr Ma'anit: Maybe not an international
carbon tax regime, but certainly there is a huge momentum for
an international tax on speculative flows, for example, which
has a lot of support, mainstream support even in many governments
in the European Union. That is not unrealistic. Another realistic
option would be to look at fossil fuel subsidies; this is something
that even the World Bank admits is a huge problem and needs to
be dealt with. Fossil fuel subsidies in the EU alone amount to
$15 billion a year annually; the UK's contribution to that is
something like one point two, one point three on average each
year. Those are distortions of the market; they are not market-based
mechanisms.
Q98 Mr Challen: These things are not
mutually exclusive, are they? I think we might well support all
of these things, including ETS, if that delivers what we want.
If that were the case, would you still maintain your opposition?
Do you think that there is some underlying reason why emission
trading schemes make it more difficult to obtain these other results
in other areas such as fossil fuel subsidies?
Mr Ma'anit: We have to look at
why we are even talking about emissions trading in the first place.
The reason why is because industry in the United States originally
had felt that the regulatory burden placed upon it was too much
and there needed to be something a bit more flexible, something
that allowed industry to be competitive, to be efficient, to engage
in commerce, but without the regulatory red tape. This gave birth
to the existing trading schemes in the United States, including
the RECLAIM programme, the sulphur dioxide trading programme in
the Los Angeles area and Safer Trading with Sulphur trading, which
was part of the title for our Clean Air Act in the United States
and now we are talking about it here. The problem is that what
we have seen in the United States' schemes, for example, is that
rather than complement regulatory discipline, emission trading
schemes have subverted regulation, in other words, regulation
has disappeared from the agenda and has been replaced by an emissions
trading package. For example, in the LA RECLAIM scheme 10 years
of work in terms of achieving smog reduction commitments in the
LA region has been rolled back almost overnight by the decision
to move to an emissions trading scheme. Meanwhile what we have
seen from the evidence from the RECLAIM programme was that the
emissions trading results were heavily fraudulent, a number of
cases were involved with direct fraud in the market, in fact no
emissions had actually been reduced and all the existing regulatory
disciplines that were in place have been rolled back. This was
a dramatic loss. The scientific advisory panel advising on this
scheme resigned en masse in protest at what was taking
place and we see this across the board. We see this with all the
existing emissions trading schemes in place in the United States:
mandatory pollution trading now; a lot of pollution trading being
devised. It is instead of government's duty to regulate directly.
Q99 Chairman: Obviously there are people
who believe that it has actually been pretty successful, particularly
in relation to sulphur.
Mr Ma'anit: In the case of sulphur,
that is a myth, it is a mythology and this is part of the problem.
On the sulphur trading scheme, a New York Times investigation
in 1998 and another investigation in 2003 found that sulphur dioxide
emissions had gone down in the United States, not because of the
emissions trading system but because of the switch from coal to
gas and because of legally mandated pollution technologies, controlled
technologies, that the States had imposed on the sites. These
accounted for most of the reductions in sulphur dioxide and recently
the EU Environmental Protection Agency has admitted that sulphur
dioxide emissions have actually increased by 4% in the last year
alone in the United States. So part of the problem with all this
data that we are dealing with from emissions trading schemes is
that a lot of the data is voluntary; it is voluntarily produced
by industry itself to report on its emissions portfolio. We see
a huge problem and a capacity problem within the Environment Agency
here in the UK to deal with monitoring of emissions. They themselves
admit that they cannot visit all sites. In some sectors, for example
sectors involved in metals processing, less than 1% of the sites
were physically visited by an inspector.
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