Examination of Witnesses (Questions 253-259)
RT HON
DAVID MILIBAND
MP AND MR
HENRY DERWENT
19 JULY 2006
Q253 Chairman: Secretary of State, can
I start by congratulating you on your appointment and saying how
much we welcome your acceptance to our invitation to give evidence
this afternoon. We look forward to what I hope will be a long
and constructive dialogue with you and a positive relationship.
You inherited the Climate Change Programme when you came to this
department as Secretary of State, as has already just been published.
Since then we have had another very important document in the
form of the Energy Review and we hear that you had a pretty substantial
input in the later stages of that document. Would you like to
tell us a bit about what you did in terms of achieving the outcome
of the Energy Review that we saw when it was published last week?
David Miliband: Thank you for
the welcome and the invitation. My approach to all the select
committees I dealt with in my previous job has been to be as open,
engaged and constructive as possible and I would certainly like
to continue that with the EAC in that spirit. Any difficult questions
will be referred to my left here, to Mr Henry Derwent, who is
the Director of climate change in Defra and is known to some of
you for the international work he has been doing overseas in the
domestic side of things. I think you are right, if I may say so,
to recognise that the Energy Review is a very significant building
block for policy and sits alongside the CCPR, the Climate Change
Programme Review. Tempting as it is to suggest that I rode into
town on this white charger and had the effect that you were intimating,
I will not succumb to that temptation. What I found from my involvement
in the Energy Review after 8 May was that both Alistair Darling
from the DTI and myself but also other Cabinet colleagues up to
the Prime Minister were determined that it was going to be a cross-departmental
affair; that there should be real engagement from all departments
and that we should live up to both of the drivers that were at
the heart of the decision to have an energy review, on the one
hand, security of supply and, on the other hand, the climate change
challenge, the carbon gap. Certainly Defra's input was primarily
on that second side. For the eight or nine weeks that I was involved
it was a very cooperative process at ministerial and official
level.
Q254 Chairman: We have another review
that we are looking forward to, the Stern Review, which could
also be extremely significant in terms of policy formation for
climate change. Can you tell us whether there is likely to be
any new direction from the Stern Review and also when it might
see the light of day?
David Miliband: I cannot remember
if you have already interviewed Nick Stern.
Q255 Chairman: We have not. Some
of us have talked to him privately but we have not had a formal
session.
David Miliband: I hope it will
be an important document. I have met Nick Stern once since I came
into post. I think it would be wrong to describe it as a policy
document in the first instance. It is a document of economic analysis
with, I hope, strong pointers to policy. I have not seen the draft,
so it would be wrong to say it is going to be covering these half
a dozen areas. He is obviously determined to look globally as
well as locally at this to survey all the evidence that exists
about the economic effects of climate change, of mitigating it
and adapting to it. I also know from talking to him that he is
having real engagement around the world, not just in the UK, but
in the industrialised world and the developing world and, together
with Sir David King, provides a very strong UK scientific and
economic input into the international discussions that are going
on. In terms of timing, we obviously have the Gleneagles dialogue,
the second session in Mexico, at the beginning of October and
the Nairobi conference of parties in November. I know that Nick
Stern wants to have an influence on both of those so I would guess
he is looking to do it sooner rather than later but obviously
not, I would guess, this side of the summer. I would guess in
the third quarter of this year.
Q256 Chairman: It could be before
Parliament adjourns after the summer recess?
David Miliband: You would have
to go into the details with him. I really do not know.
Q257 Chairman: It will be very valuable
to have an authoritative study of the economic effects of climate
change. Will it explore the alternative merits of financial instruments
and regulation, for example? There has been some interesting input
from some business leaders recently about that.
David Miliband: I think it would
be wrong for me to speculate. It will look at anything that is
relevant to the economics of climate change and how to react to
it and mitigate it. I have had one meeting with him so it would
be wrong for me to say, "This is in and this is out."
I am sure he would be an excellent witness to have before you.
Q258 Dr Turner: Looking at the Climate
Change Programme, clearly you have little choice to accept that
we are not going to meet the original 20% by 2010 target. Can
you think of anything that is there, lurking in the Energy Review
somewhere, which might help us get there?
David Miliband: There is a very
long answer to that but let me try and make two or three points.
First, the baselines are shifting. The baselines shifted even
in the few months after the publication of the CCPR, which meant
that the original estimate of a 15 to 18% reduction on 1990 levels
that was predicted by the range of items in the programme review
became a 13 to 16% reduction. There was a three million tonne
shift in the baseline. Thanks to the decision the government took
in respect of the European Union Emissions Trading Scheme, on
the eight million tonnes reduction in the permitted level of carbon
emissions, the level of the CAP, the final projections were 16.2%
so we are nearly at the middle of that. Obviously without that
decision it would have been significantly lower. Secondly, in
the Energy Review some of the changes are very long term. For
example, in respect of the Energy Efficiency Commitment, some
of them only kick in after 2011 so they are not going to affect
the 2010 target. In other areas, there is greater potential but
I do not want to bank it. For example, in respect of energy efficiency,
depending on what you think about consumer reactions to higher
energy prices, about the change in public mood about energy efficiency,
depending what you think about the future of gas prices, there
is a range of factors that could impact on whether we end up at
16.2 or higher or not. It is probably important to point out thirdly
that the projections of the Energy Review for the extra impact
of the items in the Energy Review which are significant, between
19.5 and 25 million tonnes of carbon off as a result of the Energy
Review, those figures are for 2020. We are being cautious in banking
some of those Energy Review commitments for now. As we move on,
we will stay true to what Margaret Beckett said in the publication
of the review. We believe it is right to have stretching targets,
not easy targets and that it is right to strive to get as close
to the 20% as possible.
Q259 Dr Turner: We have a very long
term target of 60% by 2050 and it is probably reasonable to say
that the trajectory towards that target is almost as important
as the target itself. If the initial trajectory is too low, that
itself is problematic. Do you think there is a danger that we
are falling below a desirable trajectory towards that target?
David Miliband: I think that is
a really good point. As I understand the science and the economics,
the longer you postpone action, the sharper the reduction has
to be by 2050 and the greater the cost. That is a strong argument
against failing to act and hoping for the best. There are two
balancing things here. On the one hand, the point often made is
that there are easier things to do and harder things to do and
you can do the easier things in the short term. The other point
is technology will move on and that will give you chance to do
the things that are harder and you have to balance them correctly.
I certainly think it is important that we see the trajectory to
2050 and recognise its importance and we do not delude ourselves
that everything will be all right later because of technological
change, although I do not discount that. The trajectory is important.
What the decisions of the Energy Review allow us to achieve is
what the CCPR called substantial progress by 2020. Substantial
progress was I think defined as between 19 and 22 million tonnes
of carbon reduction on CCPR levels. On the basis of the Energy
Review, projections were between 19 and 25. I stand to be corrected
by Henry or any of you if those figures are not exactly right.
I think that does constitute substantial progress but it is right
that we have that trajectory as our lodestar or test.
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