Examination of Witnesses (Questions 40-59)
IAN PEARSON
AND MS
DAGMAR DROOGSMA
17 OCTOBER 2006
Q40 Joan Walley: Presumably, you
have the added problem of front pages of the national media criticising
ministers for making journeys by air when they are attending the
very meetings to try to get this flagged up?
Ian Pearson: We have to live with
that. I do not think that the article in the Independent
was the fairest one I had ever seen. We will not get international
agreement by email. Maybe the Independent has a better
way of doing this, but I think that to get round a table and meet
people has to be the way forward and we need to continue to do
that.
Q41 Joan Walley: How long do you
expect the preliminary negotiations as to what may happen post-2012
to take? Do you think that you will complete it at Nairobi? Will
it be part of another ongoing series of talks?
Ian Pearson: I would love to say
I feel confident that everybody is going to Nairobi with the expectation
that there will be a long-term international agreement, but I
do not think that is the case. What we can realistically expect
from Nairobi is to advance some of the discussions and shared
understanding so that hopefully we agree an adaptation work programme
and fund which will be an important issue for developing countries.
We will need to discuss the distribution of the clean development
mechanism, which will be a major topic at Nairobi, and the whole
issue of technology transfer. Earlier I mentioned the need for
low-cost carbon solutions in developing countries. More will need
to be discussed in Nairobi in relation to that, but I do not yet
sense that there is an international consensus on new targets
at Nairobi.
Q42 Joan Walley: There is a contradiction
in the sense that in relation to manufacturing the more we can
achieve in the UK or perhaps Europe to reduce emissions there
is a danger that much of that will be displaced to India or China
in advance of any of the new clean mechanisms having been adopted
as a means of manufacturing there. Effectively, we will be keeping
our side of the bargain but that manufacturing is being transferred
to other countries where global emissions are going sky high until
we have the new mechanism in place. How do you think we can ensure
that we have that kind of commitment from industry, perhaps linking
it with the WTO as well, in the core of the new negotiations that
need to be part of this ongoing annex and further negotiations
post-2012?
Ian Pearson: I fully understand
the concerns here. We cannot just focus on what are sometimes
called end-of-pipe solutions. Just closing down a UK manufacturing
plant because we impose onerous regulations on CO2
emissions and seeing that same activity transferred elsewhere
where there are no such regulations does not do the world any
good. Clearly, we need to make sure that we are not in a position
where, for instance, ceramics companies in the Stoke area transfer
production to China which uses less energy efficient and more
polluting technologies and then claim CDM credits for it. That
does not seem to me to be a sensible way to do things. One of
the benefits of the EU emissions trading scheme has been that
it enables the least cost solution to reduce CO2 emissions
to take place within a European context. I think that that has
been very beneficial. I am proud that the UK was the world's first
country to introduce an emissions trading scheme and was the lead
architect of the EU ETS. I see those trading mechanisms as playing
a part in the future. One of the debates that I believe we need
to have is how we can expand those trading mechanisms and how
the EU ETS can link in to trading schemes in other countries in
future, how it links in with the clean development mechanism and
what we need to do with regard to that post-2012 because we will
need to do more in that area.
Q43 Joan Walley: Are you putting
that on the table in respect of Annex 1 discussions at Nairobi?
Ian Pearson: I am not sure whether
discussions will go in that particular direction. A lot of the
focus will be on the adaptation work programme and fund. I am
sure that there will be a big discussion on technology and the
fact that at the moment Africa hardly benefits from the CDM. Some
of that is to do with the fact that there are not major CO2
emissions in a lot of countries in Africa. The exception are South
Africa and one or two other countries. The CDM has been used in
big projects in China and India and African countries think, rightly,
that it is not necessarily fair to them or helping them. We need
to find a way to address that issue.
Q44 Dr Turner: How optimistic are
you about progress on the Kyoto Protocol in the ad hoc working
group at Nairobi? Do you know what sorts of things are on the
agenda, and how much resistance do you expect from the G77?
Ian Pearson: I believe that at
Nairobi there will be a big focus on adaptation overall. There
is certainly a strong feeling on the part of developing countries
that they should not be expected to make commitments and sign
up to targets, but overall I believe there is a recognition that
sooner or later nations together will have to tackle this problem.
How far we get at Nairobi with some of these discussions on whatever
track, whether it is the convention dialogue or the ad hoc working
group, we will have to see. I do not have big expectations, but
I believe that we will continue to have a dialogue and build a
consensus. The more people who are exposed to the increasingly
alarming science the more they will recognise that there is a
growing sense of urgency here.
Q45 Dr Turner: You have already said
that you are fairly pessimistic about the prospects of developing
a post-Kyoto Protocol. Do you say there is a brighter chance of
getting progress in the working group to make Kyoto stick and
produce results?
Ian Pearson: I am not sure I used
the word "pessimism". I said that I did not believe
we would do the big deal at Nairobi that needed to be done in
the future. The meeting is not really set up for that purpose.
Clearly, there will be a discussion amongst Annex 1 countries
as to whether they are meeting their current Kyoto targets. You
are right to highlight that as an issue, because we need to make
sure that the commitments which countries have made are honoured
and delivered. It is legitimate for people to say, "How can
we even talk about what happens after Kyoto if we are not going
to deliver on Kyoto?" We are doing it in the UK, but we need
to face the fact that some countries are way behind in terms of
meeting their Kyoto targets. I am sure that that will be pointed
out during the course of the two weeks of plenary meetings and
negotiations at Nairobi.
Q46 Dr Turner: What about the countries
that have not even signed up to Kyoto? What will you do at Nairobi
about the Americans, Australians and so on—the biggest per
capita polluters in the world?
Ian Pearson: We continue to have
a healthy dialogue with the United States on this issue. As you
know, it is not the case that nothing is happening in the United
States when it comes to tackling climate change. We have seen
the recent announcements in California in terms of the Bill that
that state has introduced and the proposals for an emissions trading
scheme with the north east states of the US.
Q47 Dr Turner: But the federal administration
is not involved.
Ian Pearson: Yes. Let us not neglect
the number of American cities that have signed up to Kyoto. There
is no hiding the fact that we have an issue with the federal government
and there is no desire on my part to do so. I believe that a lot
of people are saying, "This administration does not seem
willing, and has not proved willing, to do anything at a federal
level in terms of targets and commitments. Let us see what the
next administration does." A number of other countries are
basing their negotiating stance almost on what happens after the
next US presidential election.
Q48 Dr Turner: If the Grand Old Party
continues to hold the administration that may not be a good strategy?
Ian Pearson: I do not want to
speculate on American presidential elections. I just want to make
the point that there is a growing recognition on the part of people
and politicians within the United States that America needs to
do more. If we can get to a stage where America wants to play
a leading role in climate change negotiations I think that will
be enormously helpful in terms of delivering a positive outcome.
When one looks at the fact that 20% of global CO2 emissions
are attributable to the United States there is no doubt that one
needs the US on board.
Q49 Joan Walley: To go back to Nairobi
again, there is a sense that everything is really a vicious circle.
We need to be there. Where is it we need to be? What is the overall
objective? I think the Prime Minister said it is essential that
all countries sign up to a stabilisation goal and we also have
a framework for binding targets but also a route map, if you like,
to get there. From where I sit it is very difficult to see which
of those is likely to be the first one that can be agreed as a
result of what takes place in Nairobi. How do you see this panning
out?
Ian Pearson: As a government we
certainly believe that we need a goal for stabilising CO2
emissions. The position of the European Union is that we need
to avoid dangerous climate change by making sure we can limit
the maximum increase in temperature to below 2C. What comes
first, whether it is practical action or agreement on an overall
framework with targets, is an interesting question. I am not quite
sure what the ultimate answer will be. What we have tried to do
in the United Kingdom through the Gleneagles dialogue as well
as the UN process is to talk to countries and encourage them to
take practical action on the ground. In Mexico agreement was reached
with South Africa to deliver some practical projects. We have
other projects with key countries. The EU's project with China,
heavily influenced by the UK, on near zero emissions coal is I
think very important as a demonstration project for the future.
I think that it has to be a mix of continuing the debate and discussion
about a stabilisation target, the whole international framework
and encouraging practical actions as well. One has to have both
targets and a strategy that include a set of specific measures
to enable one to reach those targets. That is why I believe things
like sectoral approach and discussing deforestation and aviation
are very important in that context.
Q50 Joan Walley: At this stage it
is very difficult to see just what is achievable. What is achievable
will depend upon how we shape the very complicated architecture
that we need. I want to return to the memorandum that we received
from DEFRA about the discussions which took place in Bonn. I believe
that some countries felt that Kyoto perhaps needed to be abandoned
or replaced with something else. Can you tell us which countries
those were, or whether or not that is still an issue?
Ian Pearson: My colleague was
at Bonn.
Ms Droogsma: What became clear
in Bonn was that there were some different positions as to what
the future should be. On one extreme there were a few countries,
for example Saudi Arabia and India, that felt that nothing had
to be changed and it was fine as it was. We should just keep the
Kyoto Protocol and that is it. At the other extreme, countries
like Japan and Canada felt that we really needed much more, and
probably something quite different, to face up to the challenge.
There are a lot of models in between. As the Minister said earlier,
what the meeting in Bonn showed is that at the moment we are still
coming from very different angles. The challenge is to bring those
angles together, which takes time. That is why one needs dialogue
not just within the UN framework but within Gleneagles as well
to make sure one gets the consensus moving towards one point.
Q51 Joan Walley: In terms of what
is possible at Nairobi, is it the case that Kyoto can be amended
somehow or other to take on board the different perspectives of
different countries and the lack of clarity, or do you think that
at some stage for political reasons we will have to negotiate
a completely new Kyoto Protocol?
Ian Pearson: We have Kyoto and
I do not believe there is any substantial wish to change it and
rip it up. Countries like Canada say, "Well, we should never
have signed up to the commitment that we did. There is no hope
of making it. It was the fault of the previous administration
in signing up to it and we will not be held to that as a target",
but elsewhere there is a strong feeling among our Annex 1 parties
that Kyoto was important as a landmark and we need to deliver
on it. The key point is not to reopen the Kyoto commitments but
to say that we should deliver on them and, at the same time, start
to discuss what the new commitments and a framework that is bigger
and more ambitious than Kyoto will look like. Let us make sure
that we have all the countries involved in this and that some
of the things missed out at Kyoto, like aviation, are tackled.
Q52 Chairman: Just looking at the
post-Kyoto phase and what we may build on it, what is the latest
government thinking about contraction and convergence as a long-term
goal? We face a good number of options now, but a lot of them
would be quite consistent with a long-term commitment to achieving
contraction and convergence?
Ian Pearson: I know that Colin
Challen would have raised this issue with me had he been here.
Our view is that if the Kenyans decide to table contraction and
convergence for discussion at Nairobi we will be very supportive
of it, but we see it as one of a number of models that potentially
can provide a way forward. You will be aware of Brazil's historical
responsibility proposals. There are other ideas around at the
moment. I think that the best summary of our position is that
we want something that works. We are interested in all ideas and
want to see whether there is a consensus on any particular elements
of those ideas as a way to move forward. Certainly, contraction
and convergence has its good points. There are some countries
that do not like it and have major problems with it; similarly,
there are those in favour and those against some of the views
expressed by Brazil, for instance. We need to try to navigate
a way through. Whether it is contraction and convergence or other
models that are taken forward I do not think that it is something
about which we should be specific at this point. It would be wrong
to try to champion one particular model. We need to look at a
whole series of models and try to find out what offers the best
opportunity of working with that critical mass of people who want
to sign up to it.
Q53 Chairman: Given that the Kenyans
decide to table a discussion about contraction and convergence,
would you not want Britain's position to be rather more precisely
defined than you have just said?
Ian Pearson: No. I think it is
a good contribution to the debate that we need to have, but it
is not necessarily the answer. There could be other and better
approaches. At this point in the discussions I do not think it
is right for the policy stance of the UK Government to be seen
to be strongly backing one particular model over another. What
we want to do is try to play a leading role in brokering a deal.
I do not think one does that by trying to force a model on some
countries that just do not want it.
Q54 Dr Turner: To return to the debate
on frameworks, is not the debate about which countries will accept
what binding targets? Is there not a very real problem that there
are countries which will accept targets only if they think they
can easily achieve them, so you have only soft targets that do
not make the contribution that we need?
Ian Pearson: The fact that a significant
number of countries are not on course to meet their Kyoto targets
does not lead me to conclude that countries signed up only because
they thought they were soft when they were negotiating the Kyoto
Protocol. I do not particularly agree with the view that countries
will sign up only to soft targets. The fundamental point I make
is that it is one thing to agree or not agree a target; it is
quite another to deliver a range of actions which will get us
moving in the direction that we need to move towards. It may be
that a mix of countries agreeing to formal targets and countries
agreeing to take action may be a way forward in future. I think
that we need to discuss some of those issues at Nairobi and subsequently.
Q55 Dr Turner: The other matter which
creates an impasse is that there are still countries which feel
that any action on climate change will be at the expense of their
economic development and cannot see their way towards the principle
of de-coupling CO2 emissions from economic development.
How do we break that particular impasse?
Ian Pearson: The UK has some really
good experience here. Since 1997 our economy has grown by 25%
and we are on course to hit our Kyoto targets. We have employment
levels that are among the highest in our history. I think we can
say that when it comes to de-coupling economic growth from CO2
emissions it has largely been achieved here; we can point to our
economic success as proof of that. At a sectoral level—transport
and aviation emissions—there is still a problem, but it
is quite clear that this can be done. It is equally obvious to
me that when we look at developing countries, particularly some
of the poorer ones, there are real prospects for them to leapfrog
the UK in terms of the way we developed and our experience in
technologies. They can immediately jump to low-carbon solutions
in a way that we did not do when we were industrialising in the
nineteenth century and for most of the twentieth century.
Q56 Dr Turner: Do you anticipate
that Stern's report might give useful ammunition in getting across
these messages?
Ian Pearson: I think that the
Stern report will provide extremely useful ammunition and some
powerful arguments about why it is in everyone's interests to
take action now rather than delay. I hope that with the combination
of Stern, the availability of technologies and funding through
the World Bank we can see some of the poorest developing countries
immediately setting out on low-carbon growth paths.
Q57 Joan Walley: If we go back to
the comments at the start of our proceedings, it would be very
helpful to have the Stern report published before Nairobi.
Ms Droogsma: To add something
to that, Sir Nick Stern will give a presentation in Nairobi in
a convention dialogue on the first day, so it is imperative that
it is published. That will be a major opportunity for all 189
countries in the room to be told about the findings.
Q58 Dr Turner: That would be very
helpful. You made it clear that you did not expect a post-Kyoto
framework to begin to emerge at Nairobi, but in what timeframe
does the Government see that happening or is working towards?
Ian Pearson: We want to see international
agreement as quickly as possible because we believe that this
is an urgent issue that needs to be tackled now. One cannot realistically
put any particular timescale on it because we are just one of
a number of countries that are involved in a complex international
negotiation. All I can say is that we will do everything we can
to build an early consensus on what that post-Kyoto framework
should look like.
Q59 Dr Turner: One element as far
as Europe is concerned is the effort to establish a price for
carbon. How do you see carbon pricing fitting in to a post-Kyoto
framework?
Ian Pearson: The price for carbon
is really important for the future. At the moment the price is
set in the market through the emissions trading scheme, and that
is probably the best way to do it. But I want to see it evolve
so that there is a world, not just a European, price for carbon.
That is why the ability to extend the EU emissions trading scheme
is important. One of the negotiating objectives of the UK Government
is to make it easier for other countries to link in with the EU
emissions trading scheme in future. Obviously, we need to ensure
that we have a carbon price which those in the market who are
making long-term investment decisions know will be at or around
the right level to bring forward investment decisions in low-carbon
technologies. That is an important way to ensure that we get a
roll out of carbon-catching and carbon storage and other key technologies
that we will need for the future. But at the moment I recognise
and accept the fact that there is some market uncertainty about
the long term price of carbon. The more we can do to bring certainty
within Europe and wider the better it will be in terms of moving
forward the whole agenda.
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