Examination of Witnesses (Questions 60
- 69)
WEDNESDAY 8 DECEMBER 2004
MS SARAH
WYNNE, DR
ALICE BOWS
AND DR
KEVIN ANDERSON
Q60 Mr Mitchell: One man's hurt is
another man's grief.
Dr Anderson: Certainly; yes. Certainly
the policies we need will have to have some teeth and certainly
some people will have to change their behaviour. By definition
that is going to have to happen. We will have to change our behaviour
both in terms of how we utilise energy, both as industry and as
domestic consumers, and, furthermore, how we use the technologies,
and what technologies we are prepared to purchase and whether
there is a premium on those technologies. Of course the premium
is only what we pay for the price of the technology; it could
well be that has lots of other savings further down the line.
Again, in terms of costs, we often have to turn these things on
their head and perhaps stand back a bit from where we normally
look. You referred earlier to the high costs of some of the renewables.
Perhaps they are high costs, but what do we compare them with?
Do we compare them with fossil fuels? What are the costs of security
for fossil fuels? We are all aware of one or two incidents that
we are involved in at the moment in maintaining fossil-fuel security.
These are high costs that some of the renewables would not by
definition have. The gas-lights in Siberia, I would guess, will
have very high security costs, probably far higher than maintaining
off-shore wind-turbines or a biomass that has indigenously grown.
We need to really stand back and look at the costs, not the environmental
costs, but some of the real security costs, in a more holistic
sense.
Q61 Mr Mitchell: You were talking
about improving the building, this particular building. There
is no real cost in that. There is no hurt there. It is just better
design, is it not?
Dr Anderson: Better policies.
The design is there, we just need the policies that say you cannot
sell or purchase these types of light-bulbs. Why are B&Q selling
more of these? It is because everyone is fitting them in their
kitchens and using far more energy than they were before. Fit
10 of these and take out one of the old incandescent light-bulbs.
This is a regressive step, not a positive step. We clearly need
policies that require people, and I would not say by force, so
that in five years you phase out the sales of this type of light-bulb,
in five years you phase out incandescent light-bulbs, in 10 years
you have a fuel economy constraint on your cars. Even in California
now—and Gray Davis was going to do it before—Arnold
Swartzenegger is thinking of carrying on and having a minimum
fuel economy for his cars. I think it is about 21 miles to the
gallon, so I would not recommend it, but it is an example.
Q62 Mr Mitchell: There has been some
discussion today about carbon sequestration. Has that got potential?
Can it be made to work?
Dr Anderson: It can certainly
be made to work. If we cannot be bothered, as I think we are probably
unlikely to be, to respond to the cheap and easy demand solutions
that are available to us, we will have to look for other options,
high-tech, high-cost, high-impact options like carbon sequestration.
Most of the supply options are always like that. Certainly the
technology is there for sequestration, for carbon capture and
storage. We are already doing it. In Norway they have been doing
it since 1997 at, I think, about a million tons per annum.
Q63 Mr Mitchell: Would you explain
what they are doing in Norway?
Dr Anderson: In Norway it is a
particularly unusual example, in the sense that there is a tax
on the carbon dioxide emissions from off-shore oil platforms and
it was cheaper for one of their platforms to take the carbon dioxide
that was coming up with the gas and inject it back down the reservoir.
The scope for carbon capture and storage is quite significant
in the UK, and worldwide it is certainly significant. Technically
there are some problems that need to be overcome, but they are
not ones that we will not be able to deal with. In terms of efficiency,
it is going to add a considerable reduction to the efficiency
of the system, probably a 10 to 15% reduction in efficiency. If
you bear in mind what David King said in terms of 60% of the energy
goes up the chimney anyway, you only get 40% useful out, you lose
8% in transmission, you lose 15% in carbon capture and storage
and then you start to think that James Watt was not quite so bad,
and his steam engine had about 3 or 4% efficiency. We are 100
or so years on and we have not improved our net efficiency much
more.
Q64 Mr Mitchell: Is your message
to us to do the simple things, the easy things first?
Dr Anderson: Without a doubt we
should be going for the demand options. They are not sexy, they
are not big, you cannot wander round them and go and visit the
engineers that are doing them in the same way that you can with
small domestic or household light-bulb appliances, but, in my
view, that is where the real solutions lie; it is certainly where
the low hanging fruit is. There is no reason why we cannot be
moving in that direction now whilst we look towards some of these
more far-sighted options, some of the renewables, carbon capture
and storage, for example?
Q65 Chairman: Can I follow on that
line of inquiry. Some time ago Sheffield Hallum University produced
a chart, a graph, which attempted to show where the public got
the best value for money for the use of the tax-payers' pound;
and I think in CO2 savings, if my memory serves me
correctly, loft insulation came out as number one best buy. It
has also been said that in comparison with other energy saving
techniques, renewable energy is bad value for money in terms of
the amount of public pounds going into things like wind energy.
Do you know of any work that enables you to make a rational comparison
as to where public investment should go to achieve the best effect
and the best value in terms of CO2 and other gas emissions,
reductions thereof?
Dr Anderson: There are a number
of attempts already at doing that. I do not have them with me
here, but I can get those to you without any difficulty. In fact
the Government has done a number of these itself, I believe.
Q66 Chairman: It would be very helpful
to us because, if you like, you have put a menu before us, but
in public policy terms you have to make some choices, and it would
be nice to know whether we are making the best use of our investment
in that area at the present time. In your evidence you have discussed
the concept of domestic tradable quotas. Do I gather from that
that we would all be allocated our own carbon quota, a bit like
having a ration-book walking around and we could spend so much
in the way of our own little quota and then we would have to go
and buy it from a person like Mr Simpson, who is incredibly energy
efficient in everything he does? Is that how it works?
Dr Anderson: Put very simply,
that certainly is the case. My colleague and myself have been
working on this for several years, and about a year or so ago
we were still considered to be complete mavericks in the energy
policy field, but now this is an option that is being seriously
considered. It is as you have broadly explained. You would look
at the carbon emissions budget for the UK, which we have in relation
to the targets which the government has set, you look at those
targets, you divide those annually and then you split that amongst
the adults in society, to use the poll tax rhetoric, the Duke
and the dustman get the same allocation. Alan Simpson, I am pleased
to hear, a more frugal user of energy, will no doubt have surplus
units that he can sell to the more profligate members around this
table, including ourselves here. So there would be a market that
would help us incentivise more efficient behaviour. Furthermore,
if you look at the Energy White Paper, roughly 10% of households
are in a position of fuel poverty and a smaller number in what
is called vulnerable fuel poverty, and it would certainly aid
those people in fuel poverty as well because they would by definition
be lower users.
Chairman: I do not want us to spend the
rest of our limited time discussing it, but I can see, given the
enormous range of variables in that equation, an administrative
nightmare. What you have described is the energy equivalent of
the social security system.
Q67 Mr Mitchell: It assumes that
all households have equal energy efficiency.
Dr Anderson: No, it does not.
Q68 Mr Mitchell: If you happen to
be living in an older house, rather than the house Alan is building
in Nottingham, we will need a lot more?
Dr Anderson: That may well be
the case. Again that incentivises the move to more modern houses,
but you have to bear in mind that you would allocate out initially.
You would not have a 60% reduction on day one. You are only talking
about a 1¼% reduction, in emissions per annum to reach the
60% target if it is a growing economy. When you look at that,
about 60% of the population would be better off in year one; their
allocation would exceed their current emissions. I think the very
important comparison to make is not with the norm but is with
what is the alternative? We all saw what happened with the fuel
protest. There was a 2p rise in Brent crude, which was put down
to be a tax in the end, and the country ground to a halt. That
was, I would guess, an administrative nightmare. Is the idea of
everyone having a little swipe card—it could be Mr Blunkett's
ID card with a carbon bit superimposed on it—any more complex
than trying to deal with the complex iterations and the rebate
scheme you would require for fuel poverty people than trying to
reduce emissions by 60% using a carbon tax?
Chairman: I will put that down as stimulating
thinking. I have just had a message on my electronic pager that
tells me that in a few moments we may all have to disappear to
vote. Therefore, I do not want our final set of witness, the Biosciences
Federation, to escape without a little questioning. I am sorry
to bring matters to a slightly premature halt. There is one question
about biofuels that I would like to write to you about, because
we would like to explore that. Can we thank you for your excellent
and very interesting written evidence and stimulating replies.
Q69 Alan Simpson: Can I ask, if they
are writing to us, whether they can give some thought to whether
there is a compelling case for changing energy markets so that
we sell less consumption or non-consumption rather than increased
consumption? It is particularly important, given the discussions
about the rural areas and whether the extension of the gas network
and the huge capital cost makes any sense at all if the industry
were required to deliver non-consumption or renewable consumption?
Dr Anderson: You may know that
Edison did that 100 or so years ago with light. He never sold
electricity, he sold light. He actually did that service provision
100 or so years ago.
Alan Simpson: I would like to hear a
bit more about it.
Chairman: Bring on Edison. Thank you
very much indeed for coming to see us.
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