Examination of Witness (Questions 100-119)
MS HEIDI
BACHRAM AND
MR ADAM
MA'ANIT
1 DECEMBER 2004
Q100 Chairman: We are coming on to this.
Given that we have just heard from Aubrey Meyer that emissions
trading is a kind of integral part of his vision of C&C, what
in brief is your opinion of the C&C proposition?
Mr Ma'anit: Inasmuch as C&C
is useful as a form for negotiation about the equitable distribution
of the atmosphere commons, in terms of governments slicing up
the pie, it is useful. As long as it related to emissions trading,
it is not.
Q101 Joan Walley: Given that we are where
we are, we are actually in a world which is post-Kyoto and there
have been all the discussions about which country is going to
ratify Kyoto and where we are with that, I still do not really
understand what your approach is to the post-2012 framework in
terms of following on from Kyoto. What are you actually advocating?
Mr Ma'anit:, First of all we want
to re-focus the priorities of government policy on domestic reductions
at source.
Q102 Joan Walley: Can I just stop you
there? Therefore you are looking at it without any international
agreements, you are looking at it country by country by country
outside of an international treaty.
Mr Ma'anit: Not necessarily. It
is certainly a worthwhile process to engage with. Some of the
aspects of the Kyoto negotiations have led to increased awareness
about climate change as a problem, have committed funds to research
in the scientific community, etcetera. We are not opposed to that,
but no one can argue that the existing commitments in the first
Kyoto round are going to produce any kind of significant results
in terms of dealing with climate change. We have to do better.
In terms of the question that this panel is looking at and this
Committee is looking at, in terms of the UK's leadership role
or potential leadership role, because I do not think it does play
a leadership role, it would be one where it actually engages itself
domestically and demonstrates that it can do what it sets out
to do. In other words, it can make that 20% commitment by 2010,
it can make that 60% reduction by 2050 and it can join a green
league of countries like Costa Rica and Iceland and many others
which have demonstrated that they are transitioning very rapidly
into a carbon free future.
Q103 Joan Walley: I am still not clear
what you are saying. Are you saying that leadership only matters
if it is taking place in a domestic arena? Or are you saying that
that leadership which could produce results in a domestic arena
could only be making a difference if it were within an international
global context? Therefore, are you saying that leadership is needed
in both levels at one and the same time?
Mr Ma'anit: Yes, both levels.
You need the credibility. If Tony Blair's pronouncements about
making 20% reductions by 2010 etcetera are fulfilled, then he
will have greater credibility in terms of negotiating on the international
level.
Q104 Joan Walley: If there is no international
level agreement saying industrial competitors in every other country
are taking no notice whatsoever, they are just merrily, merrily
consuming away, how is that going to deal global problem that
we face?
Mr Ma'anit: The presumption is
that one country can fix the global problem. What the UK government
can do is fix the UK government's contribution to that problem.
Collectively, as countries are prepared to make commitments about
climate change, they can do so through international negotiation,
but those negotiations have their limitations. There is only so
much that can be done on international levels. There is always
going to be horse-trading involved, there is always going to be
bending over backwards to accommodate Russia, for example, to
ratify the Kyoto Protocol in the United States and Australia.
Q105 Chairman: You are not going to escape
that.
Mr Ma'anit: Exactly, but we have
to do better.
Q106 Chairman: You have to do it on a
silo basis nation by nation, because you run straight into the
problem with the competitiveness argument. If the UK does everything
in the absence of any kind of international framework, then you
just get businesses relocating somewhere else and polluting as
much as they like and that does not achieve anything.
Mr Ma'anit: But if we had an international
framework to reduce fossil fuel subsidies for example . . .
Q107 Joan Walley: Who is going to achieve
that, if you are saying there is no scope for leadership and individual
countries should look after their own, tend their own garden as
it were, like something out of Richard II almost.
Mr Ma'anit: No, what we are saying
is that the focus of the energy should be on achieving those goals
which it sets out. So if the UK does not achieve its 20% reduction
promise by 2010, it will lose credibility in international negotiations
for being able to challenge anybody else about their commitments.
Q108 Joan Walley: What I am trying to
understand is what you are advocating, in respect of the international
global arena. Who should be negotiating on the international level?
Should anyone indeed be negotiating on the international level?
Mr Ma'anit: Everyone should constantly
be negotiating at an international level, but we have to not rely
entirely on it. In other words, the future of the earth in a sense
cannot depend on the result of the Kyoto negotiations. More has
to be done and more can de done. I mentioned the fossil fuel subsidies,
for example. If there were a global agreement with UK leadership
from Malingai and the G8 negotiations next year on removal of
fossil fuel subsidies or phasing them out by the year 2010, that
would make an enormous contribution, not just to eliminating and
balancing the market in terms of the distortions that subsidies
place and the competitiveness of renewable energy industry, but
also in terms of the CO2 emissions reductions which eliminating
fossil fuel subsidies themselves would create and that would be
an enormous step forward. Another one would be, for example, the
G8 commitment to provide one billion people with renewal energy
by 2010. This is something that it does not look as though we
are even vaguely close to achieving, but if there were a concerted
effort on the part of the government to do that, then we would
be in the right direction.
Q109 Joan Walley: Are you saying that
you would prefer more limited agreements, for example, with individual
countries like, say, India or China, developing countries, and
forget about global agreements through Kyoto altogether?
Mr Ma'anit: We are not saying
forget about global agreements through Kyoto. We do not, for example,
even though the fiscal mechanisms are there and they are there
at the behest of the United States, necessarily have to use them.
We can do these reductions at home, we do not need to rely on
them externally and if we do, then that just creates a lot of
distortions in the marketplace. All we are trying to say is that
these commitments that we are making internationally, do not have
to be the be all and end all of what we do.
Q110 Joan Walley: I am just talking about
those international commitments and you mentioned the US just
now. How far do you think the UK approach should be governed by
the need to bring the US on board?
Mr Ma'anit: I do not think the
existing system, through the Kyoto agreement for example, was
much help in convincing in the United States to get on board.
As Aubrey mentioned, the Byrd-Hegel resolution legally prevents
the United States from ratifying any agreement which would harm
the economic competitiveness of the nation and does not include
developing countries in the negotiations. It would be something
that I think would be certainly more useful if we had the ability
to demonstrate "Look we've done it. It didn't hurt so bad.
Why don't you try it" kind of approach; the sort of green
league idea that we have a number of countries who are getting
together, who are demonstrating best practice in terms of implementing
renewable energy strategies in their economies and who can then
show to the world that this system works and that it is not something
to be frightened of.
Q111 Joan Walley: Just finally, if I
may, you have mentioned the G8 and you have talked about what
the UK might achieve in terms of its own domestic agenda, but
what do you think could realistically, most ambitiously, come
out of both the UK's presidency of the G8 and of the European
Union presidency as well? What would you like to see? What do
you think the UK could achieve?
Mr Ma'anit: I think one thing
that the UK should do is refuse to engage with emissions trading
and should set an example by making a commitment to making reductions
at source. If it could do that through the European Union system,
for example by phasing out the EU emissions trading scheme, by
dealing in the EU emissions trading scheme from the Kyoto Protocol,
which exists as a linking directive, by making a firm commitment
to remove fossil fuel subsidies on the EU level, which is something
much more doable than on the international level, I think we would
go a long way to getting where we want to be.
Q112 Mr Challen: We have had a couple
of literary references this afternoon, one to Dylan Thomas and
one to Richard II, so I will introduce the third which is the
title of one of Kierkegaard's better known works, Either/Or.
I am just wondering whether this is an either/or situation, where
you are talking about emissions trading in a rather bad light
and perhaps this is industry trying to pull the wool over our
eyes and working this scheme to defraud us of our future, or whether
we have to have all the other things that you mentioned: more
regulations, taxation and so on. If emissions trading operated
under C&C, I take it from your submission that basically that
might be operable. Is that correct?
Mr Ma'anit: It would be operable:
that does not mean that we would agree with it.
Q113 Mr Challen: You still would not
agree with it.
Mr Ma'anit: No.
Q114 Mr Challen: So it is an objection
in principle to emissions trading altogether.
Mr Ma'anit: Yes, because it distorts
the relationship between the gases produced, the pollution produced
and the source. In other words, a reduction is virtual and it
can be anywhere in the world. There is no way of knowing whether
it really happened or not, the verification is very ineffective,
the regulations are very weak, the data is constantly changing,
our estimations of what the base line would be or would not be,
the horse-trading involved and all that pressure which exists
within the system . . . We have already seen a huge scandalous
outcome from the first phase of the UK emissions trading scheme
in which £250 million was shunted off to industry. We have
to stop that because this is the kind of thing that happens with
emissions trading and is beyond control. Once you have "marketised"
and "commoditised" the product and you allow corporations
to engage and play and gain the system, you lose control over
government's ability to regulate industry at source any more.
You have now given them rights: they have rights to pollute and
they have earned those rights and to take those rights away from
them becomes a very difficult exercise.
Q115 Mr Challen: Once again, that is
not mutually exclusive is it? If it is a cap and trade scheme,
and surely nobody would want to promote ETS if it were not cap
and trade because it would seem to have very little purpose and
possibly very little future, all that human activity which you
have described, the foibles of humanity, if it were cap and trade
and year-on-year, seen to develop over time, producing better
results with a reduction in carbon emissions, what is wrong with
that?
Mr Ma'anit: Again, with a cap
and trade system you allow in theory some industries to increase
their emissions. For example, if it is based on baselines, those
baselines can be hedged, you do not know what the future is going
to be five years from now. In the case of the UK scheme, we saw
that industry that was already legally mandated to make reductions
through the EU's integrated pollution control and pollution prevention
control systems, was actually counting those towards their baselines
and their agreements with the UK government and they were receiving
rewards for that. This is something that clearly cannot go on
and is a fundamental aspect of all carbon trade systems that we
have seen. There is always this kind of distortion, because we
are relying on our ability basically to know what the future is
going to be, to know what business is going to do five years from
now.
Q116 Mr Challen: If it gets the necessary
result at the end of the day, is that not worth pursuing? Could
we not perhaps still characterise those aspects which you have
described as being the teething problems of introducing such schemes,
trying to get everybody on board is not always easy, surely that
is something which over time will be resolved.
Mr Ma'anit: No, because if you
look at teething, all this market that exists at the moment and
the largest in scope has been the sulphur dioxide trading system
in the United States and I just stated previously that the EPA
has admitted that emissions have actually gone up 4% in the last
year and that is the outcome of a very, very tightly defined cap
and trade system that everyone is singing praises about in the
halls of governments, but in actuality on the ground has led to
increases of emissions in many sites, usually poor communities,
the lowest 20% income brackets in the country, which has basically
spawned the environmental justice movement in the United States.
Q117 Chairman: Has it actually led to
increases?
Mr Ma'anit: It has.
Q118 Chairman: Has it failed to mitigate
sufficiently? Has it actually itself generated increases?
Mr Ma'anit: It has itself shown
increases and that is partially to do with the nature of the market.
One of the reasons is because of banking. The banking systems
that are in place in the US S02 scheme are very convoluted and
allow for lots of leeway in terms of how things are counted and
when. The other problem is that those emission increases have
to do with specific increases at certain sites and those communities
that live by those sites are adversely affected as a result. We
have to work out a much more comprehensive approach to dealing
with pollution and that is an across the-board reduction of emissions
at source. There should be no source that is allowed to increase
its emissions by any means.
Q119 Chairman: May I just get this clear?
Sorry to interrupt. Are you saying that the increase in sulphur
emissions in America recently is as a result of the emissions
trading system?
Mr Ma'anit: Yes.
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