Examination of Witnesses (Questions 267
- 279)
WEDNESDAY 19 JANUARY 2005
MR ANDREW
LEE AND
MS CATERINA
CARDOSO
Chairman: I am sorry you are tail-end
Charlie on a rather late running day. For that I apologise. We
will do our best to get through as many of the points that you
kindly raised in your written evidence as we can and to that extent
on behalf of the World Wildlife Fund may I welcome Mr Andrew Lee,
the director of campaigns, and Caterina Cardoso, the climate change
programme leader. Mr Hall is going to commence our questioning.
Q267 Patrick Hall: I see that your
brief emphasises that one of your tasks was to try and maintain
biodiversity, etc. in the world and protect habitats. Clearly
climate change is a threat to the world biodiversity, especially
the long-term effects of climate change, but surely we have already
got climate change locked into the system which is happening right
now so there are immediate and short-term effects. Looking through
your evidence, I think it is fair to say that the emphasis is
on dealing with the long-term effects of climate change. I have
not seen anything in there which suggests that we should be doing
things immediately. What I would like to know from you is how
much your organisation thinks we should be doing now to adapt
to existing climate change and would that effort divert resources
from dealing with the long-term effects, which is where clearly
your emphasis seems to lie?
Ms Cardoso: Both these need to
be tackled because unfortunately climate change in parts has already
occurred and there is nothing we can do about that. It has already
occurred and low-lying nations, biodiverse regions such as the
Arctic, for example, really need that we develop adaptation strategies
and that is the way our organisation goes and the way we think
the Government should go as well. However, any efforts towards
adaptation should not distract attention from long-term mitigation.
We do not gain much by adapting if we do not do something to mitigate
as well because, for example, if we go above two degrees adaptation
would not be useful any more. So we actually have to deal with
the climate change which has already occurred. That is just a
fact of life. But we have to avoid the worst dramatic impact that
would occur with more than two degrees.
Q268 Patrick Hall: Yes, but you can
see that from the political point of view and maybe the public's
point of view the evidence of changes already occurring can have
a tremendous impact, such as flooding, a greater incidence and
intensity of flooding, as we have had in this country recently.
So if there was political pressure to invest heavily in trying
to prevent flooding, adapting to existing climate change, does
that not risk preventing us from looking at the long-term threats?
How would you seek to overcome that if you accept that premise?
Mr Lee: I think there is a difference
between fiddling while Rome burns and actually raising the very
real issues of what kinds of impacts are going to occur. A recent
report we were looking at in WWF suggests that two billion people
who rely on water from the Himalayan glaciers could be at risk
in terms of their water supply in the future with this two degree
scenario. That work does need to be done. There needs to be work
done both on mitigation of the impacts that will happen anyway,
but perhaps more importantly to mobilise those issues through
the heads of those governments to apply pressure back on the emitting
countries, whether those are the developed countries, Europe and
the US, or China, for example, and actually bring home the real
impacts as well as looking at some of the short-term measures
which will have to be done anyway if some of those people are
not going to suffer. It is a slightly different issue to, "Do
we put more money into Boscastle?"
Q269 Patrick Hall: I think we have
got to get to a position where people see the relevance of both
and I do not think people in Carlisle would see a flood protection
scheme now as fiddling whilst Rome was burning. What we have to
do, surely, is to try and ensure that such investment is capable
of dealing with more incidents and greater incidents in the future.
My concern was that perhaps your emphasis being only on the long-term,
certainly in this evidence, you are not assisting in getting the
measures that are needed now linked in if this construction, for
example, is capable of dealing with the effects of longer term
climate change rather than just the short-term.
Mr Lee: Just to be clear, WWF
is doing both and we are looking in the UK at how rivers and the
coast could be managed by working with natural processes to adapt
to climate change rather than just use a concrete solution, which
still protects the residents of Carlisle, incidentally. But also
globally we are looking at our entire programme of investment
now to see whether we are investing money in places which are
going in any case to be irrevocably changed by climate change.
So we are conscious of trying to keep our balance, if you like.
Q270 Mr Mitchell: Why do you think
Government is not even reaching our domestic targets?
Mr Lee: Well, I would sum it up
really by saying three things, some of which has been mentioned
here today. One is about political will. We think it is not so
much knowing what to do as actually the political will to do it.
That is compounded by departmental muddle. It is about the interface
between different Government departments that has come up today,
but also I think sitting behind all of it are what I would describe
as the bogus fears about competitiveness which are being put against
really very solid climate science. I think this myth needs to
be exposed.
Q271 Mr Mitchell: It is a cost and
a burden, is it not?
Mr Lee: Well, there is no evidence
in the long-term. If you look at the work of people like Adair
Turner now and other very well respected people, I would have
to say where is the economic case that has been put anywhere effectively
that taking the sorts of actions we need to take to tackle climate
change will damage the economy?
Q272 Mr Mitchell: But that assumes
that everybody else is doing it. The economic case for not doing
it is that there is a burden now.
Mr Lee: Yes, and that is where
you get into the importance of the EU leadership and the global
leadership so that countries are moving together exactly so you
do not get that competitiveness.
Q273 Mr Mitchell: The countries will
not move together, will they?
Ms Cardoso: I would like to add
something to that in relation to competitiveness. As far as the
powersector is concerned, for example, the competitiveness issue
is not applicable. The power sector in the UK does not suffer.
It does not have to compete with the power sector in the rest
of Europe, so that is not an issue. The fact is that in the National
Allocation Plan and the Emissions Trading Scheme the power sector
could have delivered considerably more than what it did. The targets
were very much weakened due to pressure from the power sector
and they do not have a problem of competitiveness. So that is
something which we are still trying to figure out why it happened.
Q274 Mr Mitchell: You said it was
political will. Political will derives from the electorate, otherwise
governments are scared of doing things either because it imposes
costs on people or duties, or because it does not feel the public
is sufficiently concerned. That is a chicken and egg situation,
of course, but it could be that the public has heard so much about
it, then doubts have been cast by others on the need and then
people are not convinced. A delay until the public can be either
convinced or the situation becomes irrelevant might be advisable.
Can you convince the public to accept a burden which a middle-class
consumer, a middle-class household, a middle-class market might
well feel is entirely appropriate? This is extending it far wider
than that.
Mr Lee: I think this is where
I would bring the issue back. You were mentioning earlier, Chairman,
loft insulation. If you say to people, "Are you prepared
to make big sacrifices and potentially lose jobs to tackle climate
change?" that is a very different question to saying, "Would
you like to have somebody come into your house and work out how
we can fix it so that it uses less energy, you save money and
it's better for the planet?" Very few people are going to
say no to that. That is what we are talking about. When we talk
about energy services, which is the jargon word, that is what
we are practically talking about for me living in a terraced house
in Hampshire and I think there is a great danger—you talked
about over-complicating—of actually over-dramatising the
level of change. This point about step-wise change year on year,
a lot of these things are common sense and a lot of them save
money. We are convinced in WWF that a lot of them provide opportunities
for innovation and for new business. What they do not do is ensure
that everybody who is currently a player will necessarily be a
player in the future, that is the difference, because we are talking
about transforming a market, maybe new companies coming in, maybe
existing companies changing their portfolio of what they do away
from energy supply to services. I think a lot more needs to be
done to present what a low carbon lifestyle would look like, what
it would feel like, so people can understand what we are really
talking about.
Q275 Alan Simpson: Can I just pursue
that, Chairman? Back to your terrace. Does it not mean that the
nature of the energy market, the nature of the changes that they
face is that the people who knock on your door have to come from
companies that are not saying, "Look, sign up with us and
we'll give you 10% less, or 12% less, whatever it is," but
instead are saying to you, "Sign up with us on a five year
service contract and we will supply you with the energy, insulation
and conservation measures and energy saving equipment, fridges,
whatever, such that we will make money out of your non-consumption
of energy"? Is that not the trick that we have to find?
Mr Lee: This is what we looked
at with this ILEX report, which Caterina could talk more about,
which looks at exactly what the power sector could do.
Q276 Chairman: Would you like to
develop that point, because I want to ask you about the power
sector. But if there is more that you think they could do, please
tell us.
Ms Cardoso: Yes, there is quite
more that they could do. The whole thing, for example, about energy
services is, as you say, there would be an argument. Another thing
they would do, for example, is convince the Government to set
the policies which make the gains from energy efficiency more
visible. For example, at the moment if somebody actually invests
in energy efficiency in their house such as insulation they reap
the benefits but when they try to sell the house they gain nothing
with that. But, for example, if actually that was something that
was incorporated in the value of the house—and Government
policies can do that—it would be completely different. Again,
for example, in terms of rental accommodation if the landlord
does something to improve the efficiency of the house the house
is more comfortable but he cannot really charge a higher rental
because of that. So there is a huge problem in terms of information.
People do not know what they are gaining and they are not policies
that actually make those gains more visible and more up front.
You gain after five years. How do we actually make those gains
appear straight away at the first capital investment?
Q277 Chairman: Let me just follow
that up because some people in the street I live in installed
some solar panels. They were then told by the local authority
to take them down because they did not fit in with the fact that
it was in a conservation zone. But the real question which occurred
to me was, why on earth did they invest in them when their timescale
of payback might take 10 years and that at the domestic level
is a real problem because a lot of the investment you might make
in low energy equipment you will never get your money back in
terms of lower energy usage before you move house. How should
we tackle that issue?
Ms Cardoso: It depends. One way
will be, for example, capital grants, the same thing they are
doing for the commercial sector, to actually have it for the domestic
centre as well. That would be a possibility, that it could be
discounted through other means. That would be one way of tackling
that issue. I guess still the main thing is about the information
because there are certain areas in which people will live, for
example, for longer than five years. I would say it takes at most
two years to actually reap the benefit of insulation and other
boiler insulation, etc.
Chairman: Insulation, yes, but the more
expensive investment, no. Mr Mitchell wants to come in.
Mr Mitchell: Well, no, I want to put
a question to the Chairman. Did they take it down?
Chairman: Yes. Unfortunately, they had
to take it down.
Q278 Mr Mitchell: I have got another
question. What Alan says is, I think, very interesting because
we talk about changing markets and I think that is the aim. Rather
than changing individual aims and objects, psychology or whatever,
persuading people, you change markets by subsidy, by finance,
by intervention. What Alan is suggesting, I think, is a five year
deal with the customer that they will invest in measures in that
house which will reduce his consumption and that will be an arrangement.
You also need some degree of subsidy or support for things like
solar panels so that what you say does not happen, that people
installing them actually take a loss. There is no incentive to
a long-term investment because the market will not support it.
We have to change the whole financing really rather than the psychology.
Ms Cardoso: I would say that we
have to change both. We need to change the finance. For example,
at the moment packages in terms of financing these kinds of things
are extremely difficult to get. There is also a matter of psychology.
But at the end of the day I think the easiest way of going through
this is really through the Emissions Trading Scheme because this
gives the incentive to companies to begin to change the way they
look at energy. This is what Friends of the Earth were saying
before. At the moment they are very much trying to sell as much
energy units as they possibly can. The moment that there are incentives
that will change the market. The incentives actually say, "Well,
for each energy unit that you sell you are actually going to incur
a cost unless you produce it through renewable energy." They
are going to change the whole way they look at the market and
that is going to be the trigger. I think, going through the households
is quite complicated in a way, whereas we have five or six major
power companies in the UK. If we can change them by giving them
the right incentives by putting a price to carbon, I think that
is perfectly possible.
Q279 Chairman: Let us just pick up
on this because I am a bit confused about this power company argument.
On the one hand you said earlier as far as the Climate Change
Levy was concerned it had been mitigated by representations from
power companies. On the other hand, not all that long ago London
Underground was plastered by notices about "London Electricity
if you want to buy green energy." They were making a virtue
out of selling you the electricity more expensively, although
it is a homogenous commodity. So on the one hand they are trying
very hard to sort of wave the green banner and wrap themselves
in an environmental wrapper, saying, "We're responsible,"
and yet you are telling us they are being irresponsible by the
lobbying they are doing. From the nuclear point of view, they
have nothing to lose. They would love the whole country to increase
the investment in nuclear power because it is CO2-free
and we could take a trick straight away. The gas people must have
felt relatively virtuous because they are part of the dash for
gas and reduction in CO2. So that leaves us with the
real problem, which is the coal-fired power stations. You say
in your evidence that there could be very significant contributions
to CO2 reductions from the energy sector, so would
you like to develop the argument, wrapping in the question of
green credentials? Which bit could make the biggest reductions
and how should they do it?
Ms Cardoso: Which power sector
companies could do the biggest reduction?
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