Examination of Witness (Questions 340-358)
PROFESSOR STEVE
RAYNER
15 DECEMBER 2004
Q340 Sue Doughty: Within the area of
emissions mitigation, and this whole point that 10 countries are
responsible for most emissions, do you think that we should be
focusing the attention on just getting agreements between those
countries, rather than trying, as you suggest is a bad idea, for
going for lots more countries who are not actually the main culprits
in the case?
Professor Rayner: I think there
is a lot of room for bilateral and multi-lateral agreements among
the arrangements that link together those leading industrial economies
and emerging economies, particularly around the issue of energy
technology. We think energy technology is the key here, as I said
before. You can have a trading scheme, you can have a carbon tax,
all you do essentially with those is put up the price. You are
banking therefore on the notion that the technological innovation
will be stimulated by that increase in price. As the previous
speaker indicated, you could have a time lag of a decade, two
decades before you start to get sufficient bite in there, to even
begin to stimulate a reversal of the precipitous decline in Energy
R & D that we have seen happen over the last 30 years, where
we have seen a 50% drop in both public and private sector investment
in Energy R & D. Let us be clear here, we are not talking
about inventing technologies de novo, we are talking about
a suite of available technologies and enhancing them to the point
where they are economic alternatives. Very often that means bringing
them up to the point where they can actually be mass-produced
at lower cost. The other thing that I think is important to emphasise
here is that even an ideal market solution, if you believe in
it, will not deal with the problem of the displacement of polluting
technologies. With the exception of sperm whale oil the world
has never abandoned an energy technology that it has used; we
still use as much biomass on a global scale today—fuel wood
and cow dung, which, incidentally, is very hard to see how you
will get fuel wood and cow dung into a global Emissions Trading
Programme, the monitoring challenges are quite remarkable. We
still use as much fuel wood and cow dung today on a global scale
as we did 100 years ago. So it is not just the question of bringing
in new technologies at the top end, in the industrialised world,
where you have some kind of a bite from a tax or permit system
driving the price up, but how are we going to take those technologies
out at the bottom that are highly carbon intensive? Basically
what happens at the moment, you just simply relegate those down
to being the technologies of default for the poor.
Q341 Sue Doughty: Given your criticism
of the feasibility of bringing in an international Emission Trading
System, do you think that there is any chance of implementing
a system that brings in traditional capital trade, or do you think
that we are wasting our time even trying?
Professor Rayner: I think cap
and trade at a global level is a non-starter, for a variety of
technical and institutional reasons, not least of which the one
that you have already alluded to earlier this afternoon, which
is the point that at a global level there is very little disincentive
to countries to renege on the treaty if it becomes inconvenient.
I think that is quite different from when you have something like
the situation like the European Union where there are sufficient
other ties binding those signatories together, that it makes it
very difficult to exit from an agreement where you have basically
lots of areas for pressure from other buyers in other countries.
I think Emissions Trading can be useful at a regional level, where
you have those stronger ties, but at a global level it is a non-starter.
I think also that the notion of Emissions Trading could be very
important domestically to sell to voters the idea that we are
going to have to make some significant capital transfers in the
form of technology transfer to less industrialised countries,
to allow them to leapfrog the carbon intensive phases that we
have actually gone through ourselves in the industrialised world.
Q342 Sue Doughty: So given that situation
it is all looking quite bleak. The UK has its agenda for the next
year, 2005. What do you think the UK can achieve next year?
Professor Rayner: I think whatever
can be done to reverse this precipitous decline in energy in R
& D would be really important. Basically there are again about
10 countries in the world that perform the vast bulk of Energy
R & D and clearly the G8 group represent the bulk of those.
So I think anything that can move in that direction will be terribly
important. This is not something that I think can be simply left
to the private sector. Not only have we seen a decline in Energy
R & D over the last 20, 30 years we have also seen that the
private sector component of that has become much more conservative
in that time than it was before. So I think this is something
that would really be the key. I think the second thing is to develop
this other track, which is that of adaptation to Climate Change.
Basically the problem of Climate Change, it seems to me, is very
much one of how many more poor people in developing countries
we are prepared to stand by and see go hungry, get sick and die
young than we currently stand by and see go hungry, get sick and
die young. And how many more species and marginal ecosystems we
are prepared to say goodbye to? If you look at the very long haul
one might say if you are not worried about either of those two
categories we will just wait for endogenous technological change
over the next 100 years to take us away from carbon anyway. So
clearly the adaptation agenda and taking care of those vulnerable
populations and those species is the other critical plank here.
Q343 Mr Thomas: In that context I wondered
what you would say about a need to engage the largest single emitter
of greenhouses gases, which is the United States of America, because
a global trading system is not engaging them, Kyoto is not engaging
them? Do you think it should be the aim of the UK government to
try to engage the Americans in some sort of global system, come
what may, or, as you seem to have suggested so far, that it is
not worth doing that and to try to find a different approach?
Professor Rayner: As you may know,
if you have looked at my biographical note, that in fact I spent
over two decades living and working in the US, much of that time
attempting to influence US government on their climate policy,
with less success than I would have liked I might add. A few years
ago I had the pleasure of advising a former UK environment minister
in New York on this whole question of the US and one of the things
I pointed out was that in the US the political culture does not
in fact look to the Federal Government to take the lead on these
kind of issues. Quite honestly, the Civil Rights Movement and
Federal Government's leadership is an historical anomaly. For
the most part American political culture is that the Federal Government
is there to provide defence and basic infrastructure, therefore
it is not necessarily the most promising point at which you would
want to articulate policies of this sort, and in fact there is
much more potential, as I pointed out at that time, to articulate
with state governments. As I mentioned in my written submission,
the State of California, de facto, can set appliance efficiency
standards. Nobody is going to make a separate product for California
and for the rest of the United States. You have the precedent
where you see the States of New Jersey and New York produce very
detailed climate action plans for their States, and indeed are
involved in the development of a regional Emissions Trading System
for the North-eastern and mid-Atlantic Seaboards in the United
States. Those same States have also been making moves towards
litigation against utility companies to recover the costs of damages
from greenhouse gas emissions. I think that the threat of litigation
in many cases for US companies is actually one which carries much
more weight than the risk of some kind of piecemeal Federal legislation.
So I think there is a lot of room to bring the Americans in, but
the trick is to do it without necessarily getting into a state
of believing that you have to have the diplomatic nicety of having
the US Federal Government sign up to the kind of arrangements
that have been much more favoured in Europe. So I am actually
optimistic about the ability to bring America in. Heaven help
us, even ExxonMobil, Exxon which was for many years the primary
force denying the science of Climate Change, has given up that
line of argumentation and has currently invested $100 million
in Stanford University for the development of new technologies.
Q344 Mr Thomas: You have given us evidence
along these lines and we have also had similar evidence that does
show that the characteristic of the US has not been engaged in
Climate Change is nonsense and there is a lot of research and
development and there is a lot of individual State actions there.
Professor Rayner: The science,
incidentally, was developed in the US Department of Energy.
Q345 Mr Thomas: Yes, a very useful website!
How can we mix all this together into some kind of global approach
because although you may not be advocating necessarily a Global
Exchange Mechanism, is there not a need for some kind of global
approach—because this is a global problem—that does
show that the countries of the world are signed up both to the
facts of Climate Change and to the need to take action on it.
You have a more clumsy approach, if you like, but should we be
trying to do it in some way, shape or form?
Professor Rayner: I think certainly
the Framework Convention is an important symbolic symbol. I was
trained as an anthropologist, so when I say something is symbolic
I am not dismissing it, symbols are terribly important foci. I
think Kyoto can have some of that symbolic importance, although
I think, as I said earlier, we have fetishised it as almost as
an acid test, as "Are you pro or anti climate?" rather
than, "Do you think that this is an effective mechanism for
getting where we want to be?" I would favour a much more
pragmatic approach generally. There was a stage in the development
of the climate regime where there were proposals for what was
called a policies and measures approach, and basically that was
an approach which allowed countries to declare what kinds of "policies
and measures" for implementation of those policies they were
going to follow, and to put in place a reporting mechanism. The
importance of that is that it focuses on what countries actually
do rather than commitments that they might make for some future
emissions reduction period. It also has the advantage of giving
us a range of strategies that can be applied from which there
could be some worldwide social learning about what works well
under what circumstances and what does not work elsewhere, or
what might work in one place that does not work in another. So
in other words, by having a broader set of strategies we may well
actually learn how to deal with the issue much faster than this
rather awkward and painstaking process of incremental reductions
depending on building this rather elaborate trading scheme which
is going to require a lot of technical monitoring and institutional
finesse for it ever to pay off.
Q346 Mr Thomas: You put a lot of emphasis
in your evidence, and you refer to it now as well, on social learning
and also on Research and Development. Turning in particular to
achieving that, you would have heard the previous witness suggest
that investment—and I assume from what he was saying that
Research and Development was part of that—had been incentivised
by clear targets and a clear political context to operate within
those targets. You seem to be suggesting a much more fuzzy approach
to all this. Can you be clear or confident that that would incentivise
people to invest in the right technology to deal with Climate
Change?
Professor Rayner: I do not think
it necessarily has to be fuzzy, I think it has to be much more
multi-stranded and, in a sense, pluralistic. I think what I would
suggest is that an analogy might be something closer to a Marshall
Plan than to a market and I think if anybody had actually insisted
on doing a benefit cost analysis of the Marshall Plan before its
implementation we would never have done it. I think there are
very few people around who would suggest that the world would
be in a better shape today if we had not done it. I think you
can do that in a way that actually does say to countries, "We
want you to devise policies, we want you to declare your measures,
we want you to set benchmarks and we want you to report on your
progress against those benchmarks," and basically to have
a regime that evolves in that way.
Q347 Joan Walley: That is all very interesting,
the way that we have been concentrating on the nuts and bolts
of all of this, but I want to move a bit more towards hearts and
minds in terms of how we are going to achieve this, how can we
carry the public with us and have that political awareness? You
say something quite interesting about taxation having drawbacks
and suggested that it makes it an easy target for political opposition,
simply because of its transparency. How do you reconcile that
comment with the need for greater understanding, without which
we cannot bring about any of these changes that we really need
to see?
Professor Rayner: My remarks on
taxation are based on obviously very prominent things like the
rebellion against petrol tax here in the UK and about President
Clinton's attempts when he first went into Office to introduce
some rather modest tax on energy, which was defeated politically
as well. It is right to say that it is about hearts and minds,
and one of the things that I would emphasise, that I draw out
of my written remarks, is that science is not going to tell us
what constitutes dangerous Climate Change. It is quite wrong thinking
to believe that science can tell you that here is the point at
which you need to do something. Yes, there are spectacular things
like switching off thermohaline circulation, and if we wait for
that to happen as an indicator it will be way, way too late. So
what is an adequate indicator? How many people are going to have
to die? Well, we are already told that there is a very high level
of deaths from diarrhoeal dehydration, malaria and so on. So basically
it is not the science, it is going to have to be mobilising public
values that is going to be the trigger. There, I am afraid, I
am very sceptical that you are going to get widespread support
around the world, particularly in the United States, for emissions
mitigations at first step. That is why I want to advocate focusing
on adaptation. If people in their communities, in their families,
in their local landscapes identify something that is precious
to them, and you can point out to them how that is going to be
threatened by uncontrolled Climate Change, they then will have
an incentive to mobilise, to try to protect that thing, whether
it is a feature of the landscape, a building or whatever. In that
process I think people are then empowered at the community level
and at the local level and indeed the individual level by the
notion that there are things that they can do which will have
traction on this Climate Change impact. They will also become
aware that there are limits to the extent to which you can protect,
and I think through that process you have the possibility then
of the politicisation and it will lead people to say, "Now
I understand the scene, how the mitigation agenda is not just
something for government, it is not just something for big business,
it is something that I actually have to get involved in and support
and create the political will for government and big business
to actually move in this direction." So although it may be
counter-intuitive—and in fact for many years when I was
living in Oak Ridge, Tennessee, in the United States, you could
not talk about birth control with Southern Baptists because it
was thought it would encourage experimental sexual behaviour,
you could not talk about climate adaptation to environmentalists
because they believed that it would perpetuate the idea that it
was okay to keep emitting, and I think that was quite wrong-headed.
I think counter-intuitively is where you can start to mobilise
people on the ground.
Q348 Joan Walley: That is helpful because
I took it from your evidence that you were talking about taxation
as one possible way forward, but if not taxation looking at Emissions
Trading because it was less transparent, in a way, and might be
easier given that there is not that immediate public recognition
about what is precious and therefore how lifestyles have to change
to maintain and safeguard what is precious, then we have to go
down this other route. I just wondered where that fits in with
your whole concept, which has come through very clearly in your
evidence, that the real solution is this adaptation of new technology.
Professor Rayner: I certainly
did not want to give the impression that I am favouring carbon
taxation. In that section of my evidence I was trying to outline
what the alternative to an international cap and trading system
might be. An alternative might have been some kind of international
arrangements for carbon taxation; and then the third possibility
is what I call variously the "clumsy approach" or more
taking the policies and measures approach.
Q349 Joan Walley: You talked earlier
on about the Marshall Plan. Some of us on this Committee had the
opportunity to meet Lester Brown in the not too distant past.
I just wonder about our political and social institutions being
adequate to be able to process the changes that are going to be
needed and whether or not, with this whole emphasis that we currently
have on short-termism, we can structure our societies to adapt
to these things without something like the need for radical change,
where we have no choice whatsoever but to adapt to some terrible
catastrophic consequences?
Professor Rayner: I am not quite
catching the question.
Q350 Joan Walley: The question is really
how adequate are the political and social institutions that we
currently have at the moment to deal with the scale of the challenge
that we have if we are going to deal with the whole problem of
Climate Change?
Professor Rayner: I think the
problem is that we do not actually engage a sufficient variety
of our political institutions and particularly, if I may say so,
in the UK one of the things that rather shocked me, coming back
from the US, was that I had forgotten over 20 years the extent
to which there is in Europe generally and in the UK in particular
a very strong culture that it is the government's responsibility
to take care of everything. That is quite different, interestingly
enough, from the general default cultural assumptions that you
find predominating in the United States. So whereas in the US
I think you might say that there is a deficit in government involvement
in climate issues, whereas there is a fair amount really, relatively
speaking, in terms of the philanthropical NGO sector on the one
hand and business on the other, you might say that in the UK that
we tend to focus too much on government putting all the pieces
in place and not doing enough to engage the private sector and
the NGO community and civil society in moving forward here on
policy. Just as I would advocate for a more pluralistic approach
at the global level I would say the same thing applies at the
domestic level.
Q351 Joan Walley: You say that our social
and political institutions effectively have to change to be able
to respond to this challenge that we face?
Professor Rayner: I think we have
strong institutions in government; I think we have strong business
institutions. We are a bit weaker here on civil society but they
are by no means absent. It is not that we need new institutions
to come into being; it is that we need to engage all three sets
of institutions in a more constructive way. There tends to be
also—forgive me if I start sounding like an anthropologist
here—when you are dealing in either of those sectors, a
natural tendency to look for solutions in the direction of more
of the problem that is wrong. So if things are not working out
in the private sector basically you say, "We need to get
the government off our backs and allow us to be more exuberant
in our creativity," and the government will say, "No,
we have to get the rules right," and the NGO sector, "We
have to open up to more public participation." So in a sense
each of those kinds of segments of society has a natural default
bias towards a particular set of policy strategies. My argument
is in fact that the Emissions Trading Strategy, for example, in
some ways purports to be a market strategy although in many ways
it is a way of dressing up a regulatory structure in a way to
make it more palatable to people with that sort of market bias.
What we need to do is to recognise that we need to have policies
that are advanced using all three kinds of strategies. You just
cannot rely on the market, you just cannot rely on the government
and you just cannot rely on people to volunteer. If you can bring
all three together you have a lot of creativity.
Q352 Mr Francois: Professor, you talk
about international competition as being as important as cooperation
and about the need for wholesale modernisation in energy markets.
How do you think governments can practically encourage that kind
of activity?
Professor Rayner: How can governments
stimulate Energy R & D?
Q353 Mr Francois: Yes, as one example
of that. But your thrust was that you were talking about competition
and you wanted to see wholesale modernisation in energy markets.
How can governments help bring that out?
Professor Rayner: Once again,
I think there is a combination of things that need to be done
there. One is the encouragement of genuine competition in energy
markets; I think it is, if you like, the exuberant individualist
strategy, but I think there is important room there for direct
government investment in R & D, for providing tax incentives
and other kinds of stimuli to the private sector to develop those
technologies to the point where they are practical and affordable
substitutes for fossil fuels. I think there is also much to be
done in respect to communities in terms of popularising ideas
about using energy more efficiently in the home, about stimulating
moves away from large, gas guzzling cars to vehicles that are
quite capacious and capable of 60 miles a gallon. To some extent
the system here in Britain where we have a road tax that is differentiated
in relation to emissions is certainly a smart move in that kind
of direction.
Q354 Mr Francois: Also you refer to the
threat of civil liability. I do not know if that is partly because
of your experience in the United States. You talk about there
being potentially quite a powerful incentive to reduce emissions.
Professor Rayner: Certainly in
the US, yes.
Q355 Mr Francois: But is it not ultimately
the threat of financial penalties to companies, whether it is
through the courts or through compliance penalties associated
with trading which are ultimately going to force them to act?
Professor Rayner: I think clearly
profit is what motivates companies, yes. Whether it is an incentive
or whether it is a penalty ultimately you are looking at the bottom
line. On the other hand, I think once again it is not companies
that are the only actors; there is also huge potential for changing
the kinds of demand that companies are responding too. For instance,
we are beginning to see the emergence of the sort of celebrity
elite who are competing with each other for whose car gets the
most miles to the gallon rather than whose car gets from 0 to
60 in the shortest possible time. The interesting thing about
that is that you are still having competitive consumption, you
are not turning around to people and saying, "Change your
entire world view," but you are changing the things which
people are competing about from things which are environmentally
damaging to things which will bring about environmental improvements,
and there is a lot of room to do that on the demand side as well
as on the supply side with companies and so on.
Q356 Mr Challen: I would like to briefly
return to the issue of developing countries, which we touched
on earlier, because certainly the comments you were making you
were not entirely comfortable that trading was going to be effective
in view of the problems with developing countries. We were discussing
some of the things that we are not even touching on at all, as
you were saying, about burning wood and dung. What more should
be done in terms of capacity building, to look at those countries
where really, according to you, we are not going to make a lot
of impact?
Professor Rayner: Let me be clear,
I do not include China and India as countries that are not making
a lot of impact; they are going to make a huge impact.
Q357 Sue Doughty: The less developed
countries.
Professor Rayner: There are a
lot of countries, both developed and less developed, that are
not presently or in the next 50 years likely to be the major contributors
to greenhouse gas emissions and build-up of concentrations. With
respect to major developing countries, particularly China, India,
Indonesia for reasons of population and coastline, and Brazil
because of its forest resources and its particular place in Latin
America, are going to be terribly important countries. One of
the interesting things is that we have seen a remarkable growth
in China over the last 20 year, which has happened without the
increase in carbon intensity that we would have predicted 20 years
ago. It is still considerable but it is much less than we had
actually anticipated. If we look at India, it is a country which
actually has a fairly considerable indigenous technological capacity.
There are all manner of opportunities where we can cooperate with
those countries—Brazil is another one with major technical
capacity—to develop paths which will allow those countries
to have their economic growth without the kinds of levels of carbon
intensity to which they would be committed if they were to proceed
with the kinds of technologies that we would have taken for granted
20 years ago.
Q358 Sue Doughty: Looking at the less
developed countries, the ones following on behind them, some way
behind them, what can we do there?
Professor Rayner: I think the
truth of the matter is that those countries need to be supported
in their development and that will mean that if they are not to
simply follow in the path of becoming this lowest level where,
as I mentioned earlier, the default technologies that everybody
else has given up become deposited; then we are going to have
to have to make some positive decisions to transfer technologies
and invest in more cutting edge technologies in those countries
than would otherwise be the case. In other words, we are going
to have to make some capital transfers, but I would like to see
those capital transfers made in technology, not in cash—cash
has a way of leaking out of the system, unfortunately.
Chairman: Thank you very much indeed
for this interesting session and to thank you also for your witness
submission—it was interesting to read.
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