Examination of Witnesses (Questions 20
- 39)
WEDNESDAY 8 MARCH 2006
PROFESSOR DAVID
BANISTER AND
MR ROBIN
HICKMAN
Q20 Ms Barlow: Carrying on from that,
do you think the DfT and the Government within this issue as a
whole are trying to do too many things? Would it be better to
concentrate maybe on one or two things? If they were concentrating
on one or two things, which policy area or transport issue do
you think would be the most important in the area of reducing
carbon emissions?
Professor Banister: To achieve
the sorts of targets we have been talking about, it is not a matter
of one or another, it is a matter of putting probably five or
10 very substantial packages of measures together. Having said
that, I think the two areas we see where you can get the most
immediate benefit is through some form of road pricing, and perhaps
road pricing on environmental grounds rather than congestion grounds.
That would mean that if you were using a clean vehicle in some
way then you would pay less than if you were using a vehicle which
was using more fuel and making more emissions. If you had more
people in your car or your vehicle then you would pay less than
if you had just one person in it. So it would be done on that
sort of basis. The other is to look at the possibility of reducing
speed limits. If people kept to speed limits and if speed was
reduced on motorways and if within cities stop/start driving was
reduced, then that again has potentially very substantial benefits.
Mr Hickman: Technology has traditionally
been seen as the "silver bullet", that all we need to
do is concentrate on technology and it will solve the emissions
problem, but we try to demonstrate that that is not the case.
Even though it is critically important, and we are not denigrating
the importance of it at all, we think there are a number of measures—and
that is why we list all the policy measures and all the policy
packages—and we need to work on all of them. So it is not
a matter of just working in two or three fields, this requires
work in a number of fields, and that includes working outside
the transport sector—DfT cannot independently solve this
problem for us—it includes matters of education and where
education facilities are located, because that impacts on travel,
it includes health and land use planning. So it is real multi-disciplinary
thinking that we need here.
Q21 Mr Hurd: Just a question on the
speeding statement, which I am sure is absolutely right and clear,
but just in terms of the practicalities of that suggestion, which
appears to fly in the face of everything in the real world, do
you have any comment on the practicalities of enforcing or persuading
such a measure? There are a million people out there—
Professor Banister: I know, and
the car industry is wonderful at selling dreams as well as to
the way you do it, but if one is interested in the CO2
emissions side of it then broadly speaking the faster you travel
and the further you travel, the more resources you use. So the
way to effect change there, apart from making more efficient use
of everything, is to slow things down and to make distances shorter
rather than longer. Some may say that there is a basic human desire
to travel further and faster, in which case perhaps transport
cannot contribute anything to CO2 reductions. We are
optimistic, at least I am, and I think that we can.
Q22 David Howarth: Just to pick up
on one thing you said, you mentioned road pricing immediately
rather than tax. Do you have any views as to the differential
between road pricing on the one side and taxation on the other?
Professor Banister: Again, it
is not one or the other, it is both of them. On the tax side,
again it is perhaps looking at the possibilities of making the
differentials between clean vehicles and polluting vehicles, or
cleaner vehicles and dirtier vehicles (because all vehicles still
pollute) much greater. I think the present Vehicle Excise Duty
has a variable, it is about £100 difference between the lowest
and the highest. That needs to be a much greater differential
if it is actually going to have an impact. The company car tax
situation seems to me to be more sensible. That seems to be working
with a bigger set of differentials. The taxation system will still
be there, but the advantages of using some form of road pricing,
particularly perhaps if it is used on an environmental basis,
is that you are making people pay essentially for the use of that
vehicle rather than necessarily owning that vehicle. So if you
use that vehicle you are creating pollution and if you are creating
more pollution you will pay more, whilst much of the taxation,
certainly the fixed taxes, is based on the ownership of the vehicle
rather than the use of the vehicle.
Q23 David Howarth: Fuel tax, of course,
is useful.
Professor Banister: Yes, fuel
tax relates to both the size of the car and the use made of that
car.
Q24 David Howarth: Can I just ask
you whether there are any differences between two different sorts
of road use, private car on the one side and road freight on the
other? Overall, I think you are saying that behavioural change
works better than technological change, but is there any difference
between freight and private car use when it comes to those two
sorts of approach?
Professor Banister: I think on
the freight side there is quite a lot of potential—and it
makes good business sense to the hauliers—for using technology.
We have mentioned the problem of empty lorries and it is not difficult
to work out ways in which you can ensure that lorries are actually
having much higher load factors than they are at present. Many
freight companies make extensive use of logistics and other forms
of technology to allow them to schedule things as efficiently
as they can, but there are one or two other things which are happening.
One issue is called dematerialisation, which is that the loads
being carried are becoming much smaller and lighter. They are
higher value per weight. So we are not carrying a lot of manufacturing
stuff around, that is mainly produced overseas and brought into
the country. A lot of the freight on our roads potentially is
much higher value and lighter, so that again may or should lead
to less transport in the sense that you can carry more of the
smaller product on a load, computers or whatever it is, than if
it was a much bigger load. The other area is looking at local
sourcing and that has been happening, for instance, within the
motor manufacturing sector within Germany, where they will source
products locally and have lower inventory levels so that they
can actually supply things within a very tight time horizon. That
means that a lot of the goods are actually produced locally for
assembly into the car, or whatever the output actually is. So
it is thinking about how we can use not just the transport system
but how we can source things locally to reduce the requirements
for transport. I think there are many things which are actually
being done and again this will, in part, make some contribution.
We say with freight that there are about a million tonnes of carbon
we are looking at there, so there is quite a potential within
road freight for that sort of change.
Mr Hickman: In the freight sector
the behavioural technological dichotomy is less clear than in
the individual travel sector, possibly. You could argue it both
ways, but I think it probably is. Logistics, planning, load matching,
miniaturisation, they are all partly technological measures and
partly behavioural, consumer choices. People in the freight industries
would have to choose those technologies and they are very inter-linked.
Q25 David Howarth: But in terms of
the overall priority, you would put private car use higher than
freight or more even?
Mr Hickman: I think we need to
act on a huge plethora of sectors and both of those are sectors
we need to act in, so I would not prioritise.
Q26 David Howarth: Could I just move
on to aviation, which has been mentioned briefly. What do you
think the prospects are of significantly reducing emissions from
non-domestic aviation by 2030?
Professor Banister: Minimal. Do
you want me to elaborate?
Q27 David Howarth: You could give
the reasons for your answer, I suppose.
Professor Banister: Our study
did not actually look at aviation. We looked at domestic aviation
but not the big growth area in international travel. As I say,
this is an example of travelling further and faster, so you are
using more energy. There do not seem to be so many technological
alternatives short term within the aviation sector. There are
various sorts of schemes, but I do not think they will actually
come about within the sort of ten, 20 year time horizon. The way
in which to increase efficiency there is perhaps to build larger
planes, which is being done, and this relates to the way in which
the airline industry measures its efficiency, which is in terms
of per seat or per passenger carried. There are also strong reasons
environmentally, as we well know, why the taxation system within
the aviation sector does not operate as it does elsewhere and
VAT is not paid on new planes and on various types of tickets
as well. So where you have a situation where you have an affluent
society and you have cheap flights, you are going to get a huge
growth in that market. To constrain that either by substantially
raising the cost of air travel or by making people a lot poorer
in other ways is not an attractive option. So we have a situation
potentially, I suppose, whereby within the UK ground sector we
could perhaps move very substantially towards setting an example
to the rest of the world in terms of reducing our CO2
emissions in transport, but the air side of things will, by the
year 2030 or maybe a bit later than that, more than outweigh all
of those potential savings. So in a sense that is the hardest
problem to actually address.
Q28 David Howarth: How about the
suggestion of putting aviation into the EU Emission Trading Scheme,
which I think the Government is setting some store by?
Professor Banister: Yes, and I
understand the minister has also suggested putting surface transport
in there as well, last week. Yes, that would help, and I think
some of the airlines perhaps might even be in favour of that.
The problem there is that I think we would see that as a sort
of mechanism in terms of allocating whatever the total amount
of carbon credits there are among different types of users, whether
they are aircraft, whether they are surface transport people,
power stations or factories, or whoever else is in the ETS. The
opportunity is there, I suppose, to actually push that overall
level down very substantially. My guess is that would mean that
the air transport side would probably continue to think it worthwhile
to buy those ETSs and it would be the other sources, the power
stations and the factories, which are the ones which actually
reduce their emissions. So if you want to direct a strategy at
transport, it might not achieve that aim. It would certainly raise
the cost of transport, but it might not achieve the CO2
reduction targets.
Q29 David Howarth: So you are saying
that a single measure will not cut emissions very much and other
measures are needed. Those measures are going to be on the behavioural
change side because you cannot see any technological change coming
forward, but those changes are so unpopular you cannot see them
happening. Would that be a fair summary?
Professor Banister: I think that
is the political reality, yes.
Mr Hickman: There are two issues
we hide away at the end of this (VIBAT) executive summary: oil
price rises and carbon rationing. Carbon rationing, a very radical
measure, might contribute to lower emissions from the air sector.
So if everybody had an equitable carbon ration and they could
choose to spend it how they wished, then that might engender some
cultural change and people would travel less by air. But the other
thing looming is potential increases in oil prices, so if we do
reach "peak oil" production in the next few years and
oil prices do go through the roof then that would have a major
effect on the air industry. So those two issues are perhaps the
only way that air travel would reduce.
Q30 Emily Thornberry: If I could
just follow that up so that I understand what you are saying.
You are saying that if politicians do not want to be seen to be
putting up the price of air travel directly by taxing it, they
put it into the carbon trading scheme, but the airlines are likely
to buy it so in any event the prices will go up. So that is a
way of increasing the price of air travel and therefore, hopefully,
stopping so much use of that without the politicians being seen
as directly responsible for that?
Mr Hickman: I suppose so, yes.
Q31 Emily Thornberry: It is a good
plan!
Professor Bannister: I am beginning
to understand how you think! Could I just make one more point
on the oil price? The oil price rise which has recently occurred
I think is important for a series of reasons, one of which is
that it begins to make the alternative fuels option quite attractive
in terms of using biodiesel or bioethanol. At the moment if oil
prices are about $30 a barrel it is not economic but if they are
$60 or $80 a barrel it begins to become more attractive. The problem
for most types of producers for them to switch to that sort of
production of alternative fuels is the uncertainty about global
oil prices. So if they go down again tomorrow then everything
changes. We have not talked about it, but we mention it in the
report, alternative fuels is one quite major way to actually reduce
the carbon content of fuels. There are huge problems in terms
of the scale of production required and the implications of that,
but I think again it is perhaps an issue which needs to be thought
about and decided whether this is something which can be progressed.
In certain countries and in the US they are very much thinking
of this as one way forward, using biofuels.
Chairman: There is a couple of points
I want to cover, if we can, but also in fairness to the next witnesses
who are waiting patiently here I think we ought to wrap up in
the next seven or eight minutes if we can. Is there anything more
you want to say about oil prices at this point?
Q32 Mr Chaytor: Yes. On the oil price,
two things really. Your point about the uncertainty over oil prices
and the impact on the growth of biofuels, is that not an argument
for the use of variable fuel duty, ie the idea that fuel duty
goes up as the oil price comes down, because that would then produce
a fairly predictable and stable overall oil price over a number
of years and deal with the issue of biofuels?
Professor Banister: It could do.
It depends on the scale of the change, but that would be one way
to take out the volatility or potential risks.
Q33 Mr Chaytor: Your judgment is
that oil that is $60 to $80 a barrel makes the development of
a biofuels industry completely viable, or more viable?
Professor Banister: Yes. It makes
it much more attractive, yes.
Q34 Mr Chaytor: And for Government
to establish a form of variable taxation to maintain that particular
level of oil prices?
Professor Banister: Yes, that
would be quite sensible.
Q35 Mr Chaytor: Can I just ask you
another thing? In the VIBAT report where you list the different
elements of the policy packages there are the two components at
the end in the second scenario of personal carbon quotas and increased
oil prices and both of them theoretically deliver the 25.7 million
tonnes of carbon target which you set, but how can that be because
presumably that is based on a certain assumption about the oil
price, is it not? What is the assumed oil price which in itself
would deliver 100% of your 25.7 megatonnes target?
Mr Hickman: We worded that quite
carefully and we said they were enabling measures, so they were
in addition to all the other policy packages.
Q36 Mr Chaytor: It says here that
they could contribute 100% of the total target?
Mr Hickman: Yes, as an enabling
measure with, and alongside, all the other policy packages. So
you could not just introduce personal carbon quotas and get 25.7
million tonnes of carbon saving or increase oil prices and get
the same. You would have to do that alongside the other policy
packages.
Q37 Mr Chaytor: Without the personal
carbon quotas, do the other policy packages stand up? What is
the added value of the personal carbon quota?
Mr Hickman: That is a difficult
question.
Professor Banister: The way we
saw both of those is, as Robin said, as an enabling mechanism.
One way in which you could actually try and achieve it is to give
people an allocation of carbon credits depending on the level
of emissions you are prepared to have and then they would use
them, and if they wanted more buy them. The discretion is then
left to the individual in terms of whether they wanted to use
it all in one air flight or whether they wanted to use their bicycles,
or whatever it was, to carry out their everyday life, or if there
was a market created whether they wanted to buy more. But that
was really putting the onus onto the individual to decide how
they wanted to use it.
Q38 Mr Chaytor: My question is, even
if there was no personal carbon quota system, would the aggregate
of all the projections for the other 11 budget lines here still
add up—
Professor Banister: That would
be sufficient in the second scenario where the target level is
lower than in the first scenario because there is less travel
allowed under that.
Q39 Mr Chaytor: There is no need
for a personal carbon quota?
Professor Banister: There may
not be, yes. I think the personal carbon quota is just there to
say it is one thing that a lot of people talk about as being one
possibility. To actually introduce it at the level which would
be required to achieve this again may be quite difficult politically.
We have not really explored the ins and outs of that, but it is
one of the approaches which could be used to achieve the objective
if you wanted to. There are many ways, particularly the second
scenario, of actually putting the packages together to get roughly
the level of saving one is looking for.
Mr Hickman: Our stance really
is that within each of the policy packages there is a huge level
of change required and to engender that change—a lot of
it is cultural change for individuals—you may require radical
enabling measures and they may include carbon rationing and they
may include higher oil prices. On oil, in one of the background
reports we do try and estimate what a different level of oil price
might mean in terms of a million tonnes of carbon saving. If we
have $60, which is the level oil prices are at at the moment,
it would save something like 1.3 million tonnes of carbon, $80
would be 6.4 MtC, and then $100 would be 10.7 MtC. So they would
enable change of that order of magnitude, and they are based on
DfT elasticities which they use for oil prices. Again, this is
an area which needs a further look at and we have not really covered
it in much detail.
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