Examination of Witnesses (Questions 420
- 434)
TUESDAY 11 MAY 2004
FRIENDS OF
THE EARTH
Q420 Judy Mallaber: The department
launched this new customer service team in November 2002 which
is expected to provide prospective customers with specialist advice
and support about the ECGD and how to use them. Does that meet
your requirements? Has it made any difference?
Ms Griffiths: That is a good first
step. I cannot tell you whether it has made any difference. I
guess it is still very new, but again I think that is quite a
reactive approach; that is still waiting for people to come and
talk to you rather than explicitly going out and soliciting that
constituent's views. It is very good if ECGD is developing in-house
expertise on these issues and putting that there for people to
access, but I think it needs to go the extra mile and be more
proactive.
Q421 Judy Mallaber: What would that
involve them doing? Would it involve them going out and assessing
the market and then going to companies?
Ms Griffiths: As I said, perhaps
consultation with the relevant companies in the relevant sectors
and then, again, looking at screening out the competition and
the unsustainable fossil fuels.
Q422 Chairman: Could you give us
any examples of relevant companies and relevant sectors of renewable
energy technology in which there is any kind of proof that it
works?
Ms Griffiths: That renewable technology
works?
Q423 Chairman: Yes, on a scale that
would require ECGD underwriting. You keep going on about renewable
energy technologies. Apart from wind-power and bits of biomass,
which you might not like, I am at a loss to know what energy technologies
you talking about?
Ms Griffiths: We are advocating
a change in ECGD's portfolio; so we are advocating that ECGD supports
these new industries.
Q424 Chairman: Which new industries?
Ms Griffiths: There is huge potential
for wind-power, both on-shore and off-shore, and solar power.
Q425 Chairman: But you cannot store
the sun's power?
Ms Griffiths: We are by no means
under the illusion that ECGD tomorrow can stop supporting fossil
fuels and start supporting renewables. That is why the extractive
industry's review, for example, talks about a phase-out by 2008.
It has to be an incremental thing, but it has to be undertaken
more proactively if we are going to get anywhere; so we need to
see some bigger steps forward on this. This is what we are basically
saying.
Ms Ellis: If you consider climate
change is a serious issue, then what needs to be invested in is
alternative energy and renewable energy. Maybe that energy source
is not perfect and is not as advanced in its development as the
traditional fuels like oil, mining and gas, and yet how does it
develop, how does it improve, how does it become more efficient?
Because of investment and because of subsidies. The question was
asked earlier about is it ECGD's—
Q426 Chairman: I am sorry, you are
suggesting that we sell untested technologies to other countries
and that we use state funding to do that?
Ms Ellis: No, we are suggesting
that you invest in companies where technology is tested and renewable
energy is effective in order to, in the long-term, allow those
companies and—
Q427 Chairman: You have not been
able to give me examples?
Ms Ellis: The ECGD must create
a more level playing field for renewable energy in the energy
market generally. If you let me finish on my previous point of
subsidies, it was asked if it was ECGD's job to have a phase-out
role of oil and mining projects--
Q428 Judy Mallaber: My question was
whether it was their job to go out finding export markets?
Ms Ellis: Exactly. I would turn
that on its head and argue is it the ECGD's job or any international
financial institution's job to continue subsidising an unsustainable
energy sector which can find finance in the private sectors. I
would argue that it is up to international financial institutions,
as a subsidy, to assist in the energy sectors which are slow to
develop, which need assistance to ensure a sustainable energy
source for the planet.
Q429 Judy Mallaber: I think we are
just trying to pin this down: because the theory is fine and we
can all be with the principles and what we want to do in terms
of sustainability, but where I am having some difficulty is that
the new customer service teams had 2000 inquiries from different
companies, but those companies that might be getting into sustainable
energy in this country are not developed, surely, very far in
terms of the market they have developed in this country. Realistically,
are the companies there at the moment that will be able to take
advantage of any opportunities overseas, where therefore there
might be a role for ECGD? That is what I am questioning. If they
are not developed yet in this country are we a bit premature in
suggesting that, whatever our principle about where we would want
to go, those companies are there available to take advantage of
opportunities overseas?
Ms Griffiths: At the World Summit
on Sustainable Development in Johannesburg the UK Government called
for public financing of renewables, and so it is incumbent upon
us to find mechanisms to do that.
Q430 Judy Mallaber: It is not a mechanism.
What kind of companies are we talking about? That is what I am
not clear on?
Ms Griffiths: We are talking about
a whole range of smaller and medium-sized enterprises, but also
companies like Amec. They invest in wind-power. I would be interested
to know what they say on the exporting of wind-power and how they
see their portfolio changing over the next 20 years; and I think
it is the Government's role to be leading that change rather than
responding to it from industry, because industry is showing that
the change is not happening enough. We all know about the whole
complexity of political issues that are tied up with oil and we
need to be moving away from that. We need to find ways to do that.
I think if ECGD cannot find a way to move away from supporting
unsustainable business and towards supporting sustainable business,
including renewables, but also including many other things, then
we need to think about whether there is a realistic role for ECGD
in the 21st century.
Q431 Judy Mallaber: My question is
not whether ECGD should be prepared to support those companies,
it is whether those industries and companies are in a position
at the moment to be able to take advantage of opportunities overseas
and to find them. It is not whether they should be supported if
they are there and can be helped. I do not think there will be
any problem about that?
Ms Griffiths: I am not an expert
on the UK's renewable industry, but it would surprise me if there
were no companies ready to take advantages of overseas opportunities.
We are a world technological leader in many areas and we also
have many of the big companies living here in London. I know that
all the big oil companies are investing in looking at renewables,
as are companies like Amec, and I am sure that they will be ready,
but you need to put those questions to them.
Q432 Chairman: I have to say, with
respect, it is incumbent on you as the advocate of this argument
to give us examples of the kind of companies that would benefit
from it. I truly appreciate you might not have to hand that information
today, but if you could provide us with it, it would be of some
assistance?
Ms Griffiths: We will do our best.
Q433 Chairman: Because we spend a
fair amount of our time of looking at energy issues in the round,
I have to say that we have not encountered these companies. You
may have more luck than we have, because we are talking about
companies that have technologies which are mature, or which are
maturing, which are operating in markets where there is no element
of risk at the present moment and therefore are capable of selling
into these countries and, thirdly, having established both a market
and a technical competence, that they would be prepared and willing
to take the risk, and it is the risk which the ECA is prepared
to insure against and subsidise against, that these companies
would be prepared to do that in the kind of countries that you
think are necessary. If you can find these examples, I would be
delighted, because I think we could then have an expert push.
I have to say, I think we are going to find it rather difficult.
Ms Griffiths: Okay. If we can,
we will submit some evidence on that in writing, but I would say
that I do think this is somewhat getting the cart before the horse,
because until ECGD and other western ECAs show that they are going
to be no longer willing to support unsustainable power projects
the opportunity will not be created for British business to take
advantage abroad. It is a bit of a chicken and egg situation,
but I think it is incumbent upon ECGD to do everything it can
to start creating those opportunities because, whilst ECGD is
still supporting so much oil and fossil fuel projects the opportunities
for alternatives just do not come up.
Q434 Chairman: I think on that note
we will finish there. Thank you for your information. If you could
send us that additional stuff we would be grateful?
Ms Griffiths: We will do our best.
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