UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 981 - i

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

ENVIRONMENTAL AUDIT COMMITTEE

 

 

Reducing Carbon Emissions from Transport

 

 

Wednesday 8 March 2006

PROFESSOR DAVID BANISTER and MR ROBIN HICKMAN

MR STEPHEN JOSEPH and MR JASON TORRANCE

Evidence heard in Public Questions 1 - 83

 

 

USE OF THE TRANSCRIPT

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Oral Evidence

Taken before the Environmental Audit Committee

on Wednesday 8 March 2006

Members present

Mr Tim Yeo, in the Chair

Ms Celia Barlow

Mr Martin Caton

Colin Challen

Mr David Chaytor

Lynne Featherstone

David Howarth

Mr Nick Hurd

Emily Thornberry

Mr Edward Vaizey

________________

Memoranda submitted by University College London and the Halcrow Group

 

Examination of Witnesses

 

Witnesses: Professor David Banister, the Bartlett School of Planning, UCL, and Mr Robin Hickman, the Halcrow Group, gave evidence.

Q1 Chairman: Good afternoon and welcome to the Committee, the first public session of our inquiry into transport. We are delighted to see you here. We have read "Looking over the Horizon" with interest. I wonder whether, just to kick things off, you would like to say how the study came about and in particular how the 60 per cent by 2030 was the chosen benchmark?

Professor Banister: Certainly. Could I just introduce myself? I am David Banister from University College London and together with Robin Hickman from the Halcrow Group we ran the VIBAT project, which was sponsored by the Department for Transport under their New Horizons programme of last year. The New Horizons programme is quite small-scale research projects which are intended to look further forward, looking at new ideas, a bit more blue skies than most of the work that they carry out, and we very much welcome the opportunity to participate in that programme. The study itself had this very simple brief, which was a 60 per cent reduction in CO₂ emissions, that was the target, by the year 2030. 2030 was selected because it was sufficiently far into the future that it allows us to think a little bit more "out of the box", so it is not looking just necessarily at trends, it is looking at ways in which we can look beyond trends and looking at what we call trend-breaking futures. We do not want to be too far ahead because then it becomes much more uncertain. We do not want to be too close because we are fairly confident about perhaps what might happen in the next four or five years. The 60 per cent target was one which we felt was sufficiently challenging and what effectively it is is the target which has been suggested by RCEP, the Royal Commission on Environmental Pollution, but their time horizon is over a longer period of 2050. So we felt that was a challenging one and we felt that looking at the transport sector on its own was one way to look at the possibility within that sector of achieving our targets. We realise that it is a global thing, it is not just transport which is the problem, but we are looking at the possibilities within the transport sector. So it is assuming, for instance, that there is a fair share argument there. That was the thinking behind that.

Q2 Chairman: Was there a sense of commitment on the Department for Transport's side? Was that a process and a target which they were driving you towards?

Professor Banister: Yes, they were happy with that target, relaxed with that. They did not want anything tougher than that because I think, quite rightly, they thought that would have been extremely difficult to achieve, and I think they were relaxed with 60 per cent rather than, say, 40 per cent because they felt that was something we ought to be looking at, at the extremes. I should say also that the project was testing the methodology as well as looking at possible futures.

Q3 Chairman: Do you want to say anything about the fact that you have got these two models there? Did you approach it in that way because of discussions with the Department?

Professor Banister: They knew that we had done previous work using a similar methodology in a variety of other studies, principally within the European Union, and looking there at alternative futures and they were interested in looking at the possibility of using scenario-building methods, which are the sort of methods we have been using, rather than the more traditional forecasting methods which look to where we are now and how we got there and then project that forward using certain assumptions. What the scenario-building approach does is to try and look at alternative futures and what you are trying to do there is to develop different types of futures based on different assumptions, whether they are growth assumptions, whether they are more socially-based or technologically-based assumptions. So you have different futures of a city, or a country in this case, which are seen to be desirable in some sort of way. Once you have got a broad view of where you might want to be, whether it is pushing the economics or the social side of it, you then say, "Right, we know where we want to be. We know where we are. How can we get from where we are to where we want to be?" That is the backcasting approach and the backcasting approach does more than that in the sense that it then tries to build up, as we have, a series of policy packages, a series of options which together can actually move in the direction of the position you want to be in. It also looks at the ways in which those policies ought to be sequenced. What do we need to do now if we are going to achieve something in 10 or 15 years' time? What can we leave for another five years or ten years? It gives you some sort of insight into the way in which that can actually be achieved.

Q4 Chairman: Coming back to the present for a moment, the Department for Transport is signed up to a 20 per cent target for 2010. Given your experience with the Department, do they really feel committed to achieving that? Is it something which they seriously envisage taking place?

Professor Banister: This is a bit of a poisoned chalice, I suppose, but if you want my view on it, I would say that in the transport sector they have got no chance of achieving that target. If we look at what has happened in the recent past, we have had (as we put in our note to you) both an increase in absolute terms within the transport sector in terms of CO₂ emissions and transport's relative share of the total CO₂ emissions has also increased, in both cases substantially, and increasingly as we get nearer to that date it will get much harder to reach that sort of objective.

Q5 Chairman: Is it harder because this is the result of lots of individual choices, that they are not very susceptible to policy instruments in terms of being changed?

Professor Banister: I think if you are going to actually make any real progress here we have to think beyond looking at simply doing one thing and this will cause something to happen, "We will raise the price here and see if that will actually make a difference." What we really need to be beginning to look at is the way in which we can creatively bring a different range of policy measures together. So I think what has been underestimated is the nature and the scale of the change which is actually required. The small incremental policies will not make very much difference. It is really putting things together that will begin to have an impact. I think one crucial part of that is also that we are not very good at explaining to people why we are doing things in a particular way. To actually get people to support what you are doing is crucially important in this area. If they realise that the environment is a problem, if they realise that they are contributing to that problem, are they then prepared to do something, not necessarily a very substantial change in their lifestyle, but are they prepared to do things which will make that work slightly differently? That would lead to a net benefit. So it is the part of communication, trying to get people to buy in, to get involved in the process of seeking positive solutions.

Mr Hickman: If I can come in on that, the VIBAT study tried to set up a dichotomy with two different images of the future and one is based on technological change, the other mainly on behavioural change, and we tried to use the study to show that technological changes would not get us out of the hole that we are in in terms of carbon emissions. I think this demonstrates quite well that that is the case but, as ever, it is not that simple. Technological change is also highly interlinked with behavioural change, so if we are looking to reduce vehicle fleet emissions to 140 grammes per kilometre average or less, below 100, that is also predicated on consumer choices. So they have to buy Toyota Prius-style cars, hybrids, et cetera. So that is where the difficulty in achieving targets like this comes in. All these things are interlinked and they are very complex.

Q6 Mr Hurd: I am interested in your comments about the need to communicate. Can you point the Committee to any recent research which eliminates the challenge? I am aware of an old Department for Transport survey, for example, that found only one in eight people make any connection between flying and climate change. Are there any other kinds of surveys or research which you could point us to to illuminate the challenge?

Professor Banister: There are two things I can point you to. There is a report which my colleagues behind me may actually know about. Lynne Sloman did a report which looked at various options and looked at the way in which different types of measures have been introduced and what their actual impact was and the different approaches which had been adopted. She had a scholarship, I think an 1851 exhibition scholarship, and this was the outcome of that. The second is some very interesting work which has been pioneered by people in Germany, a guy called Verner Barouge(?), and he has worked on what they call "travel blending" where they go and actually talk through the possibilities with families. It has been used in Australia and in Germany. I do not know about in this country, but perhaps not to such a great extent. They talk through with the people what their travel patterns are and ways in which they could actually make those more environmentally sound and reduce the use of cars and shared journeys and use public transport, those sorts of things. What they found was by doing that and then going back at various points in time the people did change what they were doing and they did maintain that change. So it was not just a temporary change and then doing what they did before, it was actually that they thought, "Well, this makes sense and we'll keep on doing it." I think that is the sort of way in which at that level of detail one can actually begin to make progress.

Mr Hickman: Lynne Sloman we mention in our key references at the back of the VIBAT executive summary. Less traffic where people live, which was done for Transport 2000. There is other research done in Aberdeen, the Gillian Ann Able work, where she tries to segment people as to whether they are susceptible to mode shift. So they look at car-dependent people who will not change (the typical Jeremy Clarkson type), people who are susceptible to change, and then people who are most likely to change. There are four groups which they segment, which is very interesting and which is worth looking at.

Q7 Colin Challen: You said in your evidence, and indeed in the VIBAT report, that there is a plethora of past trend and future projection figures for carbon currently in circulation. We have different sources using different methodologies, different measurements, different modes and breakdowns within modes, and so on. Is all that confusion and all that information a barrier to really making progress?

Mr Hickman: Yes. We thought getting a baseline together for this study would be very easy and would take us a couple of weeks, but it actually took us about three or four months and we ended up using a combination of different sources. Netsend data is probably the best data which we used for the historic trend 1985 to 2005. For the projection we used Transport Statistics Great Britain, which goes up to 2020, and then we had to extrapolate to 2030. So there is actually no projection of transport trends and carbon emissions past 2020, no accepted projection. The Department for Transport was actually very helpful and it did a run of its national traffic model and we used that to look at what effect the Transport White Paper 2004 is likely to have, and we show the graph in the executive summary. So we used a combination of sources, but they are all very different. They have different area bases, Great Britain, the UK, England and Wales, so we had to use various assumptions putting them together. They have different assumptions embedded within them. The DfT projections have the ATEA voluntary agreement embedded within it and a Transport White Paper policy thrust, whereas the Defra and Netsend data does not, so it is quite difficult comparing the two.

Q8 Colin Challen: Is there any way in which researchers are beginning to coalesce around one sort of methodology? It seems to me that if there is a great deal of conflicting information, possibly, or information which does not quite add up, we want to get a proper grip on the problem and therefore want to have the proper policies to do this.

Mr Hickman: As I have said, there is a number of resources. Within the limited budget which we had we tried to put them together as best we could, but I think further research needs to concentrate on the first step of that and concentrate on getting together a robust baseline which Defra, DTI and DfT sign up to and then a robust projection for 2030 and 2050.

Q9 Colin Challen: Do you see an indication that they are about to sign up to some kind of clear baseline, or is that just what you would wish them to do?

Mr Hickman: That is what I would wish them to do, but I am not sure whether they are working on that.

Q10 Colin Challen: Are there any particular gaps in the information which you think ought to be filled, which need more research?

Mr Hickman: There is a whole list of things we mention in the study. One is the baseline. Two is an inventory of measures. We identify 120-odd measures you could use on the transport side which could contribute to carbon reduction, but then into the robust inventory of measures, a look at good practice and the likely carbon reduction, the potential that each of those measures has. You need to look at good practice guides from around Europe and elsewhere, where you can look at what other people in other countries have managed to do in terms of carbon reduction in the transport sector. Also, a difficulty looming in this type of research is something we did not really tackle, which is looking at potential synergies, additional effects, unintended effects, rebound effects, all these problems which can be very significant in the future. We did not really tackle those in our work.

Q11 Colin Challen: With all these things, if you were tomorrow to get a huge hand-out of cash from some research council, what would be the most important thing you thought needed dealing with, the most pressing?

Mr Hickman: I do not think there is one pressing thing, there is a number of things: those four issues I mentioned, but maybe the most important thing is looking at the incentives to elicit change, how we can actually get the public and everybody in this room to sign up to this level of change, so the incentives required to make major change.

Q12 Colin Challen: Are you looking for a gold standard, if you like? I have found from our experience that trying to pin down carbon emissions is extremely difficult. The individuals do not have the information and then they will go onto the internet and find 12 different websites for the same purpose but with different figures. Would the search for a gold standard be the Holy Grail?

Mr Hickman: It would be incredibly useful if people could have some store in something like that, yes.

Q13 Colin Challen: But there is no indication, so far as you can tell, from the DfT or anybody else in Government actually working together to obtain that?

Mr Hickman: I cannot answer that. I do not know what DfT are working on in their research programme. They might be doing something along those lines.

Q14 Colin Challen: There is a good chance you would have heard about it if they were, I would imagine! Has anybody seriously challenged or questioned your figures?

Mr Hickman: No. We would like them to. We would like them to see whether we are coming up with the right levels of change. We think they are pretty robust in terms of the level of change. I am sure the figures would vary if people use a different methodology to look at what impacts alternative fuels, hybrid cars or road pricing would have. I think this area is incredibly important. At the moment they have had a £50,000 piece of research done on it. It needs a lot more rigorous thought developed. We think our recommendations and our results are pretty robust as far as our study and research allowed. Other research institutions like ITS Leeds have done similar work and they are within the same sort of range, so we are very happy with our level of contribution that we show for each policy package.

Professor Banister: I think there are two issues. One is the research issue, and yes, I think more research is needed, but I think the messages are clear. It is not one of these things where we would suggest, "Let's forget about it for a while and do more research on it." If one is going to have serious policy action, it is clear the scale of change which is actually required and it is clear that there are certain things which need to be done, and those things need to be done sooner not later if transport is going to make any contribution. So I would see a two-edged approach. One would be better quality research which has good quality evidence, but also from a researcher's point of view if things are actually put into action it makes our life much easier as well to actually get much better analysis done. For example, with the road congestion charging in London a lot of the exam paperwork done before was very much based on a lot of, in some cases, fairly heroic assumptions. We now have good quality data for three years after it has been introduced, so we can be much more secure in the sorts of projections we can make and the sorts of analyses we can do, so please do not take this answer as saying, "Don't do things," take it the other way.

Q15 Mr Caton: The figures you present in your study, even though they do not include emissions from non-domestic shipping and aviation, are very challenging. Are the business as usual projections which you make a worst case scenario?

Professor Banister: Our business as usual is the nearest we were able to come to what the expectations of the Department for Transport were. They were moderated at a later stage because there were some new assumptions or some new policies which were put in as a result of the White Paper which would dampen down the forecast, but basically the business as usual situation is expecting that over the period we were looking at, to 2030, there would be a 35 per cent increase in travel over that period. If you are looking at past trends, it is less than what has happened in the similar period going backwards, so we would expect those to be a reasonable starting point. One of our scenarios, the new market economics one, is close to the business as usual. You should also be aware that over this period population will be increasing by about nine per cent, so that again will be adding to the amount of travel which is actually undertaken.

Q16 Mr Caton: You do divert from DfT's projections in their White Paper. You clearly believe there will be no decline in emissions from transport between 2010 and 2015, whereas the White Paper felt there would be. Why do you take a different position and why do you think the Department has got it wrong?

Professor Banister: One thing is that embedded within, in my understanding, the Department's forecast there is the Acer agreement, which is a voluntary agreement with the motor industry that all new vehicles by 2008 will have an emissions profile of on average 140 grammes of CO₂ per kilometre travelled. The current new vehicle stock has a figure of 171 grammes of CO₂ emitted per kilometre travelled. It is, in my view, very difficult (if not impossible) to reach that voluntary target at the date at which it is actually expected. At the present time, the latest figures from SMMT (the Society of Motor Manufacturers and Traders) suggests that 15 per cent of the new car market reaches that target, and that is the 2005 figure. To get that up to 100 per cent by 2008 is impossible, but that is part of the explanation, I think, unless I have misinterpreted it.

Mr Hickman: No, we do not make a judgment on DfT and whether we think their projection is correct or achievable, or not. The way we set up the study was to have a baseline projection to 2030 based on current acceptance of what the right projection would be, which we got from Transport Statistics Great Britain, which is widely acknowledged as useable, acceptable and robust. Our 60 per cent target comes from historical trends, so it is 60 per cent for 1990 levels of emissions. So they are just both shown to show the level of change required. DfT's projection is added in to show what they think is achievable through the Transport White Paper. So we do not make a judgment on whether we think that is likely to happen or not.

Q17 Mr Caton: In the two models you present when do emissions start to fall off and which gets us there quicker?

Mr Hickman: In one of the background reports we look at phasing implementation and what is likely to happen in five, ten, 15, 20, 25 years' time, but most of the work just looks at an end state in 2030. So within any of this work we do not go down that route and say which would take us there more quickly, but there are things which are mentioned which have a longer lead-in time like land use planning if you are trying to increase densities around the public transport network. Land use planning takes a long time to achieve, so typically you will have a one or two per cent change in the urban area of land use, so you can see what the lead time is to change urban forum densities, et cetera, but we do not really explore that to the extent that we could.

Q18 Ms Barlow: Your figures put road transport as the greatest challenge, and we are going to look at aviation and rail transport later. Do you think focusing on the carbon emissions from public transport, whether coach, bus or train, rather than improving the use of public transport distracts from the real issue? Should not the whole focus of attention be on private cars and rail freight as real contributors to a threatening trend, at least at the beginning?

Professor Banister: My guess is, yes. I am not quite sure if I have understood your question, but the main area we are looking to for improvement -

Q19 Ms Barlow: Do you think that the focus should be on making public transport more attractive rather than on the actual carbon emissions of public transport, because private road use and road freight is surely a greater danger in terms of carbon emissions, so we want to go away from that on to public transport?

Professor Banister: Yes. In terms of that second part, yes, the main target is the private car and road freight. That is where most of the emissions come from, but in terms of public transport I would argue that clean public transport is a major contribution to the quality of public transport. In London now we have a very modern bus fleet which meets and matches the strictest European standards in terms of emissions. They are new buses and that again improves the quality, so again that makes it more attractive to people. I think perhaps what the London buses should be doing is also selling the bus, as well as being new, comfortable, reliable, on its environmental profile as well. That would give an added incentive to people to use it. I think in most cases in public transport we should be using the best available technology to improve that, and again that would improve its attractiveness to the user, but the main concern is trying to look at ways of reducing carbon emissions from the private car and the truck business. Just following on from what Robin was saying to the previous question, I think there are many ways of doing that and some of them do not need that much pain. One way to increase efficiency all round is to improve the occupancy levels. If we have a full car, environmentally that is probably quite a good situation. If we have a full train, a full bus, or full anything, that is what we are looking at. One way in which the freight sector, for instance, can begin to look at itself and see how it can improve is to reduce the amount of empty running which exists within the freight sector, lorries which are carrying nothing and not doing anything in particular except getting back to where they start from. If we can organise things and the technology allows us to do that, we can with not very much pain reduce our levels of car-dependence and emissions consequently as well.

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 ten 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 and 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 is 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, it is a number of fields, and that includes working outside the transport sector - DfT cannot solve this problem for us - and 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 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 advantages 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 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!

Mr Hickman: I am beginning to understand how you think.

Professor Banister: 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 is 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, i.e. 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 as seen by -

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 package 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 megatonnes 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 per cent 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 per cent of the total target?

Mr Hickman: Yes, as an enabling measure with all the other policy packages. So you could not just introduce personal carbon quotas and get 25.7 megatonnes 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, and then $100 would be 10.7. 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.

Q40 Mr Chaytor: One final question. Realistically, where do you think the oil price will be between now and 2030 and where do you think it ought to be to achieve the kinds of carbon reductions we need to survive?

Professor Banister: The first one is impossible. I am not into the futures market, but my guess is that it will be quite high in the future, maybe this sort of level but maybe rising. In terms of the desirability, we could do the calculations (I do not think we have actually done them) to say, "What sort of level would it be to achieve the total carbon saving, given the elasticities?" I do not know what the price would be there. One could work that back, if you wanted us to.

Q41 Mr Chaytor: But nearer $100?

Professor Banister: I think the higher figure, yes. Higher than that figure it would be, because at that figure that gives 10.7 million tonnes of carbon reduction and that is not halfway towards what we are actually looking at.

Q42 Mr Hurd: Which European countries or cities would you point us to as having made satisfactory or impressive progress in terms of the kind of behaviour change you are advocating? The answer is not Barcelona, by the way.

Professor Banister: I was going to say London, because I think in light of the nature of your inquiry you do not want to travel, so I think London would be a good place to go to, but failing that I think somewhere like Sweden is probably one place. Sweden has been making good progress on looking at alternative fuels, looking at flexi-fuel vehicles, which means that vehicles can use a variety of different fuel sources, including biofuels, and Saab have been working on that. They also have in many cities in Sweden, or the four major cities, low emissions zones where they restrict polluting vehicles from coming into those cities. In Stockholm for instance, they have had, I think, for ten years now since 1996. There is also Stockholm itself, which has a congestion charging scheme which is in operation until the summer, similar to the London one, in the central part. They have had again the sorts of reductions in traffic that we experienced in London after congesting charging and something which I feel the London scheme has not made as much of as they should have done is that there has been about 20 per cent reduction in CO₂ emissions from transport since the introduction of congestion charging. So as well as having traffic benefits, it has had environmental benefits.

Mr Hickman: Unfortunately, there is probably not one city that you can go to and look the future in the face. You have to go to a number of cities and see where they achieve good practice in particular areas. So you might go to Strasbourg and Montpelier to see good public transport planning, and you might go to Freiberg to look at how they integrate new transport systems into new developments on the edge of town. You can go on and on. You can go to Sweden to look at alternative fuels and the introduction of hybrid technology. So you have to look at a number of cities in a number of areas.

Q43 Mr Hurd: Very briefly, your PP1 low emission vehicle policy package is hugely ambitious. What reaction, if any, have you had from the motor car industry to that? What discussions have you had with them in terms of the practicality of going further down that route from the very low base we are at at the moment?

Professor Banister: I would agree with the very low base, because for every Prius sold in this country there are 50 SUVs sold, so 3,500 versus 179,000 is the order of magnitude. So ministers may be setting an example, but that needs to be rolled out to the nation as a whole. We have had discussions with the low carbon vehicle partnership people to actually do a bit of follow-up work where we would be talking through with the industry itself as to what the problems or barriers as they see it are rolling out over this time horizon, hybrid vehicles on the sorts of scales we are suggesting to meet those targets. We are still in negotiation about that, but we would very much like to engage with the industry to see what they see the problems and the potentialities are. At present the costs are higher but with economies of scale and that sort of thing, with mass production, it would bring the price down and that may then again become much more attractive. But maybe they will argue that those sorts of vehicles at present are only very much seen as niche vehicles, they are not seen as something - you mentioned JC - which the watchers of Top Gear will actually want to get behind the wheel of. So again that is part of winning the hearts and minds in terms of saying, "Here is a car which actually has a low emissions profile and has pretty much the performance of any other similar sort of car in that area of the market."

Q44 Mr Vaizey: I cannot believe that the other car manufacturers have not seen this as a huge opportunity, because I think Toyota is rolling it out to the Lexus brand, and so on. Is it proprietary technology? Are they just behind Toyota in terms of their research?

Professor Banister: Toyota's view is that they are about two years ahead of their competitors. They are licensing the technology. The hybrid is one technology. You can still make quite a lot of headway, as it were, with the lean burn engines, with the conventional engine, and this is the way in which some other manufacturers are going, like Citroën are at the moment, where you can produce a car which has an emissions profile which is slightly worse than the Prius but it is in the same sort of order of magnitude, round about 100 grammes of CO₂ per kilometre. So there are other ways in which it can be done, but naturally these cars are small and they are lower performance cars, and this again may not appeal.

Q45 Mr Vaizey: Just on the difference between private and public, because most of your policy packages are focused on private car use as being the way you can make the biggest reductions, I always thought that the high-speed rail links, and so on, would take a huge amount of traffic off the roads, but your document seems to think that it would have a negligible impact?

Professor Banister: We did not mention this before, but I think high-speed rail has a role certainly within the UK and within, say, from London to Brussels and Paris and that sort of distance. In terms of competing, we are there, and you can see that in terms of the market share which Eurostar has now obtained, about 60 per cent on the Paris line and about 50 per cent on the Brussels, and presumably that will increase when the link into St Pancreas is open.

Q46 Mr Vaizey: Can you put a figure on the contribution that Eurostar has made to CO₂ reduction in the way we have on the congestion charge? Can you estimate it?

Mr Hickman: Yes, one could. It depends on all sorts of things like load factors and things, but the problem there again is that all that may be doing is releasing slots at Heathrow, which will then be used for long-distance routes or other routes.

Q47 Mr Vaizey: So is that your point about high-speed rail links?

Professor Banister: I would see high-speed rail working probably in conjunction with, and maybe then one is in another debate looking at whether we need extra runway capacity within the London region, for instance, if we made better use of high-speed rail to substitute for the shorter distance air flights. I think the other point is that where you are in a market where something of the order of 90 per cent of travel in terms of distance travel at least and something of the order of 95 per cent of energy use is on road as it were, and car, then to actually get any sort of significant switch to rail or something means massive growth in the capacity of the rail system. So if you wanted to move 10 per cent of that 90 per cent across, it would probably mean doubling the amount of capacity that you need to do it. It will help, but I think it is the order of magnitude that it is actually doing, so you need to direct it at saying, "How can we reduce the amount of travel which people are undertaking in cars and private cars, particularly single occupancy cars, particularly cars which are using large amounts of fuel?"

Q48 Mr Chaytor: The Secretary of State has recently suggested that surface transport now be included in the EU Emissions Trading Scheme. What are the implications of that and if that suggestion was accepted, how long would it be before it could be incorporated?

Professor Banister: I think in terms of the timing, as I recall it we are talking about 2008 at the very earliest, but my guess is we are talking about a longer term, 2010 or even longer than that, because the first round of the ETS scheme runs until 2008 and then there is a second round in which they may bring in air and possibly now the suggestion has been floated by the minister to include surface in there. My guess is probably that it may take longer than that to actually get that involved, but the view I expressed earlier was that probably within that scheme it is the areas of transport that would be prepared to pay premium prices for the ETS, for the right to pollute, and it would be the other sources of pollution like the power stations and factories that would be prepared to sell some of their credits.

Q49 Mr Chaytor: In terms of Britain's position within Europe, because of our high dependency on the private car we would be in some difficulties there because of the targets that we would have to meet?

Professor Banister: Perhaps, yes, but it may - and again I think this is another big issue - begin to give the right sorts of signals to industry and to individuals to begin to do things differently. One thing we would want to emphasise is the lead time which is necessary in much of this sort of change. Things like pricing and behavioural change can or should be able to be effected in relatively the short term. When we are talking about the land use and planning side, we are talking about the medium term. If we are talking about the hybrid technology, we are talking perhaps of 2025 as the earliest year in which that might be rolled out as a major sort of component of the vehicle stock rather than it just being a niche. It has a huge way to go and it is the time that a lot of these changes need to take place. What is needed are the right sort of messages to industry, whether it is through legislation or through the taxation system, or whatever, to actually get them to move in the direction in which one is trying to go.

Q50 Mr Chaytor: So even if the technical work was done to enable surface transport to be incorporated in the ETS by 2010, it would be many years afterwards before it would be possible to see significant reductions as a result of that?

Professor Banister: Certainly the technology, I think, will take quite some time.

Mr Hickman: Alongside incorporating air and surface transport in a scheme like ETS you would need to work on the policy packages so that you are actually ratcheting down carbon emissions for transport. Again, that is not the silver bullet, ETS. Even though we would welcome surface transport and air being in there, it is not going to solve the problem. You need to work on the different policy packages.

Q51 Chairman: The picture you paint is not an entirely reassuring one! The twin tracks of technological change and behavioural change are obviously not mutually exclusive in any way and given that it is probably easier to get quick progress on technology than it is on behaviour, would it be fair to say that that is worth doing anyway and it might, during that process, help the awareness-raising work to be done, which then might make it easier to sell behavioural change as a complementary step?

Professor Banister: My response is that I think we need to be working on both equally strongly from day one, but we need to be working on the behavioural change as well. We need to be out there. People are becoming more aware, they are concerned about the environment and the quality of the air and they are concerned about CO₂ emissions. Let us try and then take that to the next step and say, "These are things you can do now." As I was saying, some very simple things like slowing down or sharing a car, or looking at ways in which rather than making five short trips you just make one tour, or something like that. Use the bike to go and get the paper on a Sunday rather than the car when it is running cold. These sorts of things are often quite small, but at least that is beginning to get people to make small changes and that will hopefully build up. Some of the technology is potentially readily available, but the question there is rolling it out on a scale which is actually really going to meet the sorts of challenging targets which have been set. That will take some time and what one does not want to enter into is the trap that technology will have the answer at the end of the day. I do not think it will do. It will have to be based on people doing things differently. So I think we need to be moving on twin tracking from day one.

Chairman: Thank you very much. I think we have covered some useful ground. We are grateful to you for coming in and we are looking forward to the rest of our work on this subject. It is very challenging.

Memorandum submitted by Transport 2000

Examination of Witnesses

 

Witnesses: Mr Stephen Joseph, Executive Director, and Mr Jason Torrance, Campaigns Director, Transport 2000, gave evidence.

Q52 Chairman: Good afternoon and welcome. You will be familiar with the Committee. You have been here listening to the discussion so far. Is there anything you would like to say about whether the VIBAT study is really going to have an impact on how the Department thinks or acts on policy?

Mr Joseph: Good afternoon. I think VIBAT ought to have an impact on the Department for Transport. Whether it will or not I think is an open question actually. I would make a couple of points about it. Firstly, I think the scenario-planning approach which VIBAT took is something which the Department for Transport ought to pick up and do something about, not just in relation to climate change per se but in relation to, for example, different crude oil price scenarios. You have already heard from the VIBAT authors what happens if you get to $100 a barrel. I have heard AMNESS talking about it going much higher than that. In a situation where 99 per cent of the fuel used in transport is carbon-related, that is going to have potentially a very large impact. So doing some scenario planning in general would, I think, be very valuable. Secondly, I think one of the things which comes out of VIBAT which is very important is the whole discussion around behaviour change, and in relation to the discussion you had just at the end of their session one of the things we took from VIBAT was that in a sense there is not a kind of dichotomy between technology and behaviour change. Let us assume that the main route you are going to take in relation to reducing transport greenhouse gas emissions is around improving car technology. That involves some significant behaviour change, and I think in fact the VIBAT authors said that. Therefore, there is not a kind of non-behaviour change scenario out there. There is only a scenario which involves behaviour change in terms of what kinds of cars people buy and how they use them. We would argue that it is possible to change both of those, and you do need to change both of them. My impression, by the way, is that the Department for Transport was playing down VIBAT and saying that it was a very interesting piece of research, it was a very interesting testing of the backcasting technology, but that they are not particularly interested in its conclusions on climate and greenhouse gas emissions.

Q53 Chairman: Is that because they have not quite got the nerve to really address the issues with the urgency and scale of measures which are needed?

Mr Joseph: My feeling about the Department for Transport is that their default is to think about congestion and possibly productivity, with the environment as a sort of distant third, and actually social inclusion is probably a distant third equal, so they are not particularly interested. Although the Department is signed up formally to the climate change PSA target across Government - and you may want to cover this a bit more later - we have not seen the evidence that the Department is really driving forward on this.

Q54 Mr Caton: Following on from that, this Committee has already received a lot of evidence about the scale of the challenge we face with the increase in carbon emissions from transport and you have made it clear in your written submission that you are not very impressed with what the Department for Transport has actually achieved so far. Notwithstanding that, do you feel that they have a grasp of the scale of this challenge?

Mr Torrance: I would say clearly not. Just looking at the canvas on which we are operating here, between 2000 and 2010 transport emissions are set to rise by seven per cent according to the DTI. This is also bearing in mind that traffic is increasing by two per cent a year and UK carbon emissions from all road transport increased by 5.4 per cent between 1990 and 2000. So we see an incremental increase and things very clearly are getting worse rather than better.

Mr Joseph: I think there are other reasons why the Department has not grasped the scale of the challenge, and it should do. Let us suppose that climate change was not an issue, that somehow we were not worried about climate change. As we have already discussed in relation to oil supplies, the scenarios seem to be that because of increased demand from emerging economies such as India and China oil prices will increase rapidly. Until very recently the Department for Transport was working, as we understand it, on all its forecasting on the basis of a crude oil price of $23 a barrel. I do not mean a central forecast, I mean the only forecast continued over time. Although we understand they have revisited that, we are completely unclear what forecasting they are using. The second point is that as we have seen, for example, with hurricanes in the United States, it is possible for either natural or political factors to interrupt supplies and produce significant oil price spikes and instability. In both those cases, transport would be very hard hit. Just to take one very current example of something which the Department for Transport recently put out, they produced draft guidance on the consideration of rail closures. You might think that the idea of having a railway line is so that if oil prices suddenly doubled or doubled over a period of five to ten years the case for having a railway line might be rather stronger than it is at the moment. That is nowhere in that draft guidance and it is an example of what I would describe as the Department for Transport being environment blind, or at least blind to these kinds of issues.

Mr Vaizey: That is an interesting point, because it is happening with our commuter services as well in the South East and I think it goes exactly to your point about congestion. They are looking only through the congestion prism. They want trains to run as efficiently as possible and therefore the best way to make trains run efficiently is to have as few of them as possible! That is the solution they have come to.

Q55 Mr Caton: Do you perceive that the failure of DfT to tackle this is their belief that the changes which are needed are so radical that they will basically scare the electorate away from them?

Mr Joseph: I think at a political level there is clearly concern, and I guess it would be shared across all parties, particularly in relation to the fuel protests of 2000, although it is noticeable that we have had significant increases in fuel prices, up to £1 a gallon in the last year, without those kinds of protests re-emerging substantially. But I think it is also that at a technical level there is a kind of belief that transport behaviour is simply immutable, that as people get richer they drive more and there is nothing you can do about any of that. I think the problem with that is that increasingly it ignores a wide body of technical evidence that travel patterns can be changed, not in the sense that everybody gives up their car overnight or that everybody has to, but that you can change enough behaviour by enough people to make a significant difference both in terms of congestion but also in terms of carbon emissions.

Q56 Mr Caton: Of course some of the changes to policy which would help reduce transport emissions lie outside the DfT's power, things like urban planning, fuel duty, Vehicle Excise Duty. Do you detect any real joined-up Government or even a joined-up approach in tackling this issue?

Mr Joseph: Occasionally. We have, for example, seen a joint programme between the Department for Transport and the Department for Education in terms of promoting school travel plans, and that has been a joint initiative. I think there is some kind of coalition around, for example the renewable transport fuel obligation was something which was done jointly with the Treasury, the Department for the Environment and the Department for Transport, but it is quite clear that in some of the very big areas there are some significant kinds of disjunctions. I think certainly until recently the most obvious one was having, for example, a commitment to 60 per cent new households in Cambridge under the sustainable communities plan with no plan for any extra rail investment on any of the lines out of Cambridge, let alone re-opening the east-west rail link or other kinds of lines, or, for example, you could have a situation where on the one hand the Office of the Deputy Prime Minister was promoting the Northern Way, the regeneration of the cities across the north of England, and on the other hand the Department for Transport is busy turning down tram schemes in those cities which might actually enable them to develop in a more sustainable way. So we see a disjunction in those things and because the Department for Transport tends to be very rooted in economic modelling and appraisal there is a sense that the appraisal methodology does not pick up some of these issues.

Q57 Mr Caton: Thank you. As we have just heard from previous witnesses, the rise in emissions is not because we are using dirtier transport, quite the opposite, it is about more and longer journeys and ultimately, as they have said, a behavioural problem. Do you think the projections for increases in road and air transport used in the VIBAT study are sound?

Mr Joseph: I do not think we are in a position to judge those in detail, but they are, I think, based on the Department for Transport's and the Government's own forecasts, so in that sense they are sound. There may be lots of reasons why they may change, for example oil price changes, but I think they are a good basis precisely because they are based on where the Department for Transport's and Government's forecasts take you.

Q58 Mr Caton: The two models which they offer, the technological and the behavioural, do you think they are sound as well?

Mr Joseph: I think they are very useful for illustrative purposes just to give a scale of what different kinds of packages give you. We think that actually it is possible to do rather more detailed scenarios and we have recently commissioned some work from a consultant who is going to do rather more detailed work on different kinds of scenarios and also to go rather more local. For example, he is going to do some work for us on what a 60 per cent reduction in transport greenhouse gas emissions in outer London would look like, so we can get a sense of a suburban area out of London because it has very good traffic data. So we can actually get a real sense of what that does. We think that is necessary, not just because for technical reasons you can do more detailed data, but actually from the point of view of where we, and particularly you, are coming from we need to explain to people what reducing carbon emissions from transport actually means in practice. One early example the consultant has raised is, for example, filling in the gaps between the ordinary London bus network with more flexible demand-response transport to reduce the very large growth in escort journeys by car, which is one of the big growth areas in outer London. That is a piece of work we are doing on a budget which is even smaller than VIBAT's. We think it would be worth the Department for Transport doing a lot more of this kind of work, of getting down to detail rather than producing national transport models in the rather broad sense.

Q59 David Howarth: Can I bring you briefly back to the way the Department works, because you mentioned the rather extraordinary decisions of the Department to do with Cambridge, which I am very familiar with. One of the impressions we always have in Cambridge is that it is far easier for the Department to spend money on roads than on any form of public transport and that there is an institutional problem. I do not know whether you have any similar insights, but part of the Department which spends money on roads is hived off and has a budget and it wants to spend money on roads, but the other parts of the Department which are responsible for other parts of transport policy are less independent and more susceptible to spending restrictions?

Mr Joseph: I think it is certainly the case that roads are a kind of default measure in the Department and actually if you want to see that in practice you can look at an arcane but potentially very influential process which has just been finished, which is advice from the English regions on regional funding allocations, which I suspect has been going on below the water line, so to speak. Regions have been asked to give advice on the priorities within the regions and they had to give advice on the basis of which trunk road, local road or local public transport schemes were worth having and rail schemes were completely excluded on the grounds that the office of the rail regulator had to go through a detailed exercise to allocate precisely the different costs of the railway to each individual line and region before you could even think about doing that, which we thought was specious really. There are some good rail projects out there which could stand comparison with road. So I think that is an example of where, as I say, the default has been road and rail has tended to be neglected, but I think it is also the case that what you had there were priorities given to big schemes and one of the points we have made in our evidence, and which was also made by the previous witnesses, is that there is emerging evidence that actually doing lots of small-scale schemes actually gets you further in dealing with a lot of transport problems than a few big infrastructure schemes. The danger is that the Department, which tends to be to an extent capital rich and revenue poor and that is mirrored with local authorities, will tend to ignore that evidence or rather find it very difficult, with exceptions like the school traffic plan which I mentioned earlier.

Q60 Mr Chaytor: Is there scope for improving the use of targets with the Department for Transport and what are your observations about their current PSA targets?

Mr Joseph: On targets, I think that at the moment the targets they have got are specific around congestion, perhaps more specific than they have been. There are some quite specific ones around air quality. On climate change their only target is to contribute to the wider Government target and it is unclear to us that that is enough. We think that whether within that PSA target or just within the Department itself, it needs to set its own targets for the transport sector, or at least to come up with ways of measuring the progress on that, otherwise it will tend to push responsibility onto other Government departments, including the Treasury in relation to taxation, in relation to emission standards and the Department for Trade and Industry and also onto other sectors.

Q61 Mr Chaytor: But would not the Department's argument be that they do not have control over the key levers, such as taxation? It is interesting that in your submission you respond to the question about what specific steps the Department for Transport should take by listing here the tax reforms, which are the responsibility of the Treasury. Is not the Department's defence that they do not control taxation and therefore they cannot be held accountable for specific carbon reduction targets?

Mr Joseph: Actually, we start our answer to that question of tax reforms. We were very careful to list nine areas. The first one is tax reforms and it is the case that there are things which are outside the Department's control and it goes back to the answer I gave earlier abut joined up Government, or lack of it, but it is also the case that there are things within the Department's control, levers which it is not pulling and which it could do. I give a very good example, actually. It is nearly a year now since the Department for Transport was joined up to the PSA target on climate change and within that year one of the critical things it could have done something about and did not was the local transport plans. Every local authority in England has to produce its next five year local transport plan. Submissions go in to the Department at the end of this month. In the guidance on the local transport plans, which came out last summer after the Department was associated with this, there are four shared priorities: accessibility (which is around social inclusion), better public transport, air quality and safety. Climate change and carbon dioxide emissions are treated as, "You can think about this if you want to." What individual local authorities do about transport in their areas will be a determinant of what the transport greenhouse gas emissions are not just in five years but well beyond that. This is an example of where the Department for Transport had a lever available to it and did not pull it. In other cases the Department has levers which it has, as it were, pushed in the wrong direction in relation to its approach to road building and aviation. You have had evidence in fact from our Salisbury group about what that means in practice on the ground in an individual case where what ends up happening is that in the case of an individual road scheme which it is admitted will increase carbon emissions this is treated as irrelevant because it is only such a small part of the national picture and, as the group rightly points out, if everybody takes that view then of course there will be a big increase in transport emissions.

Q62 Mr Chaytor: Is the logic of your position that carbon reduction should be the absolute number one priority for the Department for Transport?

Mr Joseph: It would be nice if it was seen as a priority, actually. There are clearly other things. As I said earlier, we are concerned not just that carbon emissions and the environment are treated - well, local air quality is a priority, but many environmental issues, particularly carbon emissions, do not seem to be given the priority they deserve by the Department, but also that social inclusion is not. The kinds of spending which actually happen at the Department seem to overwhelmingly benefit richer people and the richer fifth of the population and the kinds of spending, for example, on supporting bus services in deprived areas seem to take a back seat, or indeed tackling traffic problems in deprived communities. The indictment of the Department, I think, is not just that it is environment-blind, it is distribution-blind.

Q63 Mr Chaytor: You refer to some of the problems of methodology in terms of the way that rail projects are assessed, for example, because you said that current appraisal of rail projects does not include the full benefits of rail. Could you just develop that and give us an example of how that works?

Mr Joseph: Yes. We have had a detailed report done on this by a firm of consultants called Scott Russell Railways, who know this territory intimately, and their point was that a large number of benefits have not been assessed. In some cases it is simply things like improved personal security does not get factored in. Those who read the Evening Standard will have seen how important that is in the London context. We know that that is very important and the critical point which those consultants made was that when the Scottish Executive, in looking at the expansion of Edinburgh Waverley station, kind of took the brakes off and allowed them to consider a wider range of factors they were able to justify a much larger scheme at Edinburgh than a traditional cost benefit analysis would.

Q64 Mr Chaytor: So is there a dialogue with the Department about that, or did the Department reject the criticism?

Mr Joseph: What seems to have happened is that the Department has in practice changed the appraisal guidelines on rail whilst saying that it has not and not telling anybody about it. The last comment I had from the consultant who did this work was he knew that it had changed. He was working through two projects using the new appraisal guidance and he would let us know in a few weeks whether it was good or bad, because it was so complicated he did not know himself!

Q65 Mr Hurd: Your memo states that without action on road and air transport it will not be possible to meet the targets, but the memo is silent on aviation. Quite simply, do you think that the European trading system is the solution?

Mr Torrance: I think our previous witnesses pointed to dangers in the ETS being seen as a panacea. Let us remember that we are looking towards 2012/2013 and by no stretch of the imagination is it a dead cert really. We also have an aviation industry which is, by the Government's own recognition, set to treble by 2030. We see incredibly low cost air flights in the context of public transport costs going up while road and air costs are going down. So in that context I think it is very difficult for people to make responsible travel choices and I think it is incredibly dangerous for us to put all of our eggs in one basket and look to the ETS solving all of our problems really. It is an industry which is increasing rapidly, is subsidised up to, some say, £9 billion a year through tax breaks and already accounts internationally for about three per cent of carbon emissions.

Q66 Mr Hurd: Do you have a view on what other eggs might change behaviour?

Mr Joseph: Yes. There is a number of other measures. For example, the aviation industry, unlike in other European countries, is zero rated for VAT. I do not mean that the tickets are zero rated, I mean the industry is zero rated, which means they can claim back all the tax of VAT from everything down to the printing of leaflets and tickets. That is a potentially rather large effective subsidy to the industry. So there is a number of other fiscal things which can be done in relation to creating a slightly more level playing field with slightly more real pricing of aviation.

Q67 Mr Hurd: Do you think it would make a difference? If you can fly to Malaga for £19 today and the impact of all you are talking about means that the cost goes up to £60, do you think that actually people will stop flying to Malaga?

Mr Joseph: Let us start with the Aviation White Paper and the forecast underlying that of a tripling of air passengers by 2030. Friends of the Earth and the Tyndall Centre for Climate Change, which is one of the recognised experts in this area, use the Department for Transport's own model to run some alternative assumptions and that showed that just a 15 per cent increase in average air fares stabilised growth. It actually did stabilise growth, so you do not need a very large increase in air fares in general to choke off some of that growth. We also think that there is an issue about looking for alternatives, because actually we recognise (as indeed the Prime Minister said the other day) that beating people over the head and saying, "You can't fly anywhere," is not a terribly politically attractive proposition. There are two possible answers to that. One is to frame it in the way that the French have started to do, which is that you are contributing to international development; in other words, "We are taxing you but we are putting the money into something which a lot of people would consider to be a good idea," and people can see that. The second thing is to look at alternatives. You had some discussion earlier about high-speed rail. We are interested - and we do not know the answer yet - in whether high-speed rail could actually reduce the need for expansion in short haul aviation, particularly in the South East airports. We think anyway that there will be a case for high-speed rail just on the basis of rail capacity grounds and also for better rail links to airports. It is quite clear that Heathrow will not be able to expand anyway, even if it does not get good rail links in. So we would want to look at what you could use those rail links to do. One of the problems with the entire transport debate, particularly some of the transport forecasting that goes on, is that it seems to take place in a world in which the internet and other kinds of communications technology have not been invented, or at least have no impact on travel. Anecdotally one hears evidence from businesses that they have started to look and that the finance departments have started to look at the costs they are paying out in terms of flying people around the world for meetings and that actually in a world where video conferencing technology is now much better than it was even two or three years ago there are cases where it might actually be worth reducing those things. In other words, having people flying all over the place is now no longer going to be as critical for the competitiveness of the country as it might have once seemed to be.

Q68 Chairman: Just going back to fiscal incentives for a moment, we touched on those earlier on and I know you make the point that it is only one of nine answers to the question, but I rather sympathise with each of the four tax changes you do mention. I think they are all attractive and to the point. Realistically, the Treasury looks less and less interested in using tax policy for environmental ends. It is increasingly reluctant to do that. Do you think there is much chance that they are going to do any of these things, say in the Budget?

Mr Joseph: We have made the argument, for example, on Vehicle Excise Duty that there should be a top band for that, but we noted very interestingly that so have the RAC foundation and it may be that that will make it slightly more acceptable for the Government to move in this area. I think it is interesting that the RAC foundation were able to say, "Look, there is a case for a top band, balanced by reductions at the other end." So it may be that a rather larger coalition, though not a formal coalition, saying this would be helpful in that respect. We certainly think that the possibilities around a graduated purchase tax scheme would be worth considering and it would also be possible, we think, to look at a kind of trading scheme which involved manufacturers of vehicles over 140 grammes per kilometre having to buy permits from those making vehicles under 140 grammes per kilometre. We also think there is a case for looking at other incentives, things like, for example, mileage allowances for business use of private cars, which at the moment give you 40 pence per mile flat rate up to 10,000 miles. I have heard people even within the car leasing industry saying that environmentally this does not make any sense at all and that you could graduate that either in terms of more pence for the first few hundred miles and then tailing off at the other end, or through carbon emissions, or something. So we think there are lots of things they could do and we note that the Chancellor has said that climate change is one of his five challenges for the comprehensive Spending Review, which implies that they are doing rather more work in this area and showing more interest, so we live in hope.

Q69 Ms Barlow: In your memo you have attempted to assess your nine groups of steps in terms of their possible carbon savings. Could you quickly run through them and tell us which you think would be the biggest help in dealing with the carbon challenge?

Mr Joseph: I think the big one we have highlighted is number two, the incentives for changing travel patterns, simply because there is now good evidence not just on congestion but on the Department's own website there is a decent piece of research which says that this range of measures in relation to influencing particularly business and commuter travel, and also personalised journey planning, could have a really large impact. It means it is 16 per cent of a contribution to the PSA target and an equal 31 per cent to the emissions currently expected from a combination of all the ten year plan policies and the EU emissions. The key point about that is that you could start it now and you could expect to get something by 2010 and roll it out. The benefit/cost ratio is good, and so on. So I think we would put that in as one of the core ones. We think that freight is important simply because the carbon dioxide emissions for freight have been rising. I noted the comments made to the previous witnesses about speed management. There is just one thing which we did not put in the evidence and perhaps should have done. One estimate we have seen is that if you enforce the motorway speed limit of 70 mph at 79 mph (in other words you are not enforcing it at 70 but at near 80) and enforce it rigidly, you would reduce CO₂ emissions by four per cent from transport, which is big. Similarly, reductions of speed limits on single carriageway roads from 60 to 50 mph would have some significant benefits. I do not think we have got to hand the quantification on that. There were some press stories about speed limits, which the Department for Transport firmly put back in the box, but we think there are some benefits from those. The motorway limits, I accept from the previous discussion, are potentially politically quite difficult, but the 60 mph to 50 mph on single carriageways has good road safety benefits as well as carbon emission benefits and would not, I think, be regarded as a big problem politically for a lot of people. So I think we would pick out speed and freight, and longer term things like road-user charging. The evidence from London is clear on this and, as the previous witnesses said, that is planning. In relation to public transport, walking and cycling, we do think these are important and we think the Department needs to think about this in terms of networks of public transport and cycling, and so on, rather than individual schemes and that is what does not happen at the moment.

Q70 Ms Barlow: Just to go back to the VIBAT study, you have talked about a change of perception and a change of attitude in terms of transport, in terms of road users in particular. Cutting out how far it goes, do you think that an improvement in cleaner vehicles and cleaner fuels would in time go far towards the 60 per cent target?

Mr Joseph: We do not know more than VIBAT says. I think VIBAT has done some of the work on this. The work which we are getting done will, I think, go into this in some more detail and we will be interested to see that.

Mr Torrance: I think there is one additional point. Involving people in making a conscious choice over their carbon use, purchasing low carbon vehicles and using alternative fuels I think can only be a really good thing and encourage people to look at other ways in which they can reduce their carbon. So I think there is a wider behavioural change aspect really, which should not be ignored.

Q71 David Howarth: Perhaps I should mention before I start that I am a member of Transport 2000, so I should declare that as a sort of interest. At least, I think I am a member. I feel my subscription might be overdue!

Mr Torrance: We will check on that!

Q72 David Howarth: Can I come back to the point you were making about the contributions of the nine policies. You mentioned public transport last and you and I have been campaigning for public transport for a very long time. If you look at the VIBAT study, you will see that they are talking about road pricing, slower speeds (as you mentioned) and alternative fuels rather than public transport. I was wondering whether you would like to respond to the view which some people might put forward that public transport is now lower down the list of priorities as a way of dealing with carbon emissions from transport and these other matters are higher up? Do we have to change our tune, or can we carry on with campaigning for pubic transport?

Mr Joseph: I think we should certainly carry on campaigning for public transport. We have had a bit of work done by the Professor of Transport Strategy at the Open University. He did a presentation for us the other day, which we can let the Committee have, which is about rail investment and the links with sustainability. His conclusion was that better rail services are good and that actually for certain types of journeys they are very good indeed. He said that for an electric commuter rail journey to work you get really significant savings, which work out at 0.65 megajoules per passenger kilometres going by train, compared with 3.04 for a medium sized car. When pressed, he pointed out that if you took a top of the range Land Rover with one person in it you are talking about a factor of seven times that. His argument was that it very much depends. Load factors are critical, so full but not over-full trains are good, and the point which the VIBAT people made, compared with cars, where load factors have actually been falling. That is important, but also what else you do. If people commute by train but do the other 80 per cent of their journeys exclusively by car, then you have not really gained an enormous amount. So it is about rail as part of a wider package. If you take Cambridge, for example, and the way Cambridge develops. If it develops so that people do the commute out of Cambridge by train, or indeed even by guided bus, but then the patterns of settlement are designed in such a way that basically you cannot do anything other than drive to places in order to get there then you will not have gained very much. So I think, in typical academic fashion, his point was that it depends, but I think his point was also that if you build rail into it as part of a broader package then it is very sustainable and does contribute.

Q73 David Howarth: But then the other question becomes prising people out of their cars and onto other transport, and the costs of doing that. Would you still stick to your previous position, which would have been mine, that it is certainly worth spending the money on doing that and that you can do that at reasonable cost to get the improvement in carbon emissions from the use of rail?

Mr Joseph: I am sorry, you go with road charging as well as public transport?

Q74 David Howarth: The question is the cost of getting modal shift and whether it is worth spending the money on getting that modal shift as opposed to spending the money on setting up road pricing schemes, enforcing speed limits and subsidising alternative fuels?

Mr Joseph: Firstly, I think that you need to do a mix and certainly I do not believe in practice that any road charging scheme would come in on its own; it would need to be part of a package which would include better public transport, as it had done in London and other cities which have been doing it. Secondly, one of the frustrations about campaigning on public transport is that there are lots of very small but effective things which can be done, including in some cases marketing it and telling people that it exists, which can have a hugely beneficial effect in terms of increasing load factors and also actually doing a mode shift. The point about the personalised journey planning which I mentioned earlier is that the evidence was that even in a city like Perth in western Australia, which is very low density, just doing a very strong programme of giving good information to those who want it (which I think typically was about half of the households which were asked) about the transport options available to them produced a significant reduction in car travel and a significant mode shift, but that meant that the public transport had to be there to start with, if you see what I mean. There is no point in telling people that they could use buses if there were no buses there. The point we make is that there are things in terms of small pieces of infrastructure which make better use of the network we have got which would be very effective and very cost-effective in terms of actually getting people out of cars.

Q75 David Howarth: The other option which you mentioned briefly is reducing the need to travel, which raises the question of the planning system, and so on. Could you just say a few words on how you see the potential of that compared with the other possible options?

Mr Joseph: Again, it is not an alternative, it is something which needs to happen over the longer term. It also needs to be something which is built into transport policy generally. I think the contrast here is between the Netherlands, where I have seen articles in the technical press about Rotterdam having empty trams running around, and they proclaim this because they have a policy which is that before a single person occupies a new housing development the tram is there. By contrast - and this is a fact which I gather is true and this is going back a bit but I think it is still an example - the decision to designate Milton Keynes as a new town in the 1960s was taken at the same time as the decision to shut the Oxford/Cambridge railway line, the same week, announced by different departments, you see. So it can be done right and there are some examples in this country where it is being done right. There is in Kent a fast-track scheme, which is a guided bus scheme being built around some housing development. The housing development will have relatively low levels of car parking, but every house will also have a screen by the front door which will tell them in real time when the next bus is coming. That seems to us to be an example of getting it right and of doing the integration. Sadly, that seems to have been an entirely local initiative with no kind of national policy or guidance behind it, but it is an example of what you can do if you try. There have been some very interesting plans produced for Harlow which are about extending Harlow and doing that in a way which actually makes what I think the current Minister for Communities and Local Government has called "having local facilities within pram-pushing distance of new development." The problem is that if you just, for example, took a congestion-based road-user charging scheme the danger is that you would price up city travel and price everybody out to developments outside the cities. Therefore, you need to have a kind of land use dimension to what you do if you are going to approach sustainable development properly.

Q76 David Howarth: What you are saying is that that land use plan has to be combined with an expenditure plan, that the two things have to go together and preferably in the right order?

Mr Joseph: Yes, that is exactly right, and I think the Government is busy finding this out or slowly learning this lesson in relation to the sustainable communities plan, possibly not quite fast enough.

Q77 Mr Caton: You have mentioned this afternoon the importance you put on freight and in your submission you say that transfer from road and air to rail and water all need to be part of any serious climate change strategy and then call on the Government to promote investment in rail and inland coastal water freight infrastructure. Passenger rail seems to be at or near capacity, at least in many parts of the country, and it is hoped to further increase passenger numbers in the future, so is there really room, even with investment, for a significant shift from road to rail, and if there is that room what sort of scale of investment are we going to need to put in?

Mr Joseph: I can answer this because the Rail Freight Group has just done some forecasting in this area, which I think is available now. Firstly, there is room on the network, partly because peaks for rail freight are not the same as peaks for passengers. Secondly, if you look at where the freight growth is going, the flows which you want to particularly deal with, particularly the growth in deep sea container traffic (which I gather is one of the big growth areas with the China, et cetera, factors in there), the priority is link supports and there are some well worked-up schemes which involve increasing the gauge and enhancing the capacity for things from, say, Southampton and Felixstowe to the Midlands and the North. That suggests that you would be able to improve the capacity for freight. For example, the Felixstowe story is that at the moment freight from Felixstowe goes via London and gets mixed up with the congested London commuter traffic and that a cross-country route is there and the work is being done on upgrading it and it awaits funding in the way we discussed earlier. That has the double benefit of providing a good freight route across the country which can mix in with the local passenger trains which are there, taking a lot of that through freight out of London, where there is not capacity, so that the two can co-exist. The other point is that in a lot of cases there are routes which can be used. Some of it is about putting in loops which freight trains can go into to allow passenger trains to pass and putting in that freight capacity. A lot of it is small-scale, it is not great big pieces of infrastructure. There are options which do involve big projects, such as the Central Railway Project and similar ones which involve whole new freight routes, but that is not necessarily where the action is, so to speak. It is these kinds of initiatives which are about raising bridges and tunnels to take larger freight trains, perhaps longer trains, and creating freight by-pass routes. That seems to be the factor and that allows freight to grow. The point we make here is about grants. Actually what is happening at the moment, perhaps another case where the Department for Transport is going in the wrong direction, is that grants for rail freight are actually being cut at the moment, or have been cut and I think the plan is to cut them further. These are small-scale items and we are talking tens of millions rather than hundreds of millions here, and they have been very effective in terms of promoting mode shift to rail for some freight traffic. I think rail freight is something which can grow and it can grow without very large amounts of public spending.

Q78 Mr Chaytor: Just another question on freight. A point made by Professor Banister in the earlier part of the session was that the shift of manufacturing to Eastern Europe and the Far East had resulted in changes to the nature of freight in the UK and lorries were carrying smaller, lighter packages, and so on. Is that the case, because on the assumption that people are still buying cars and washing machines and radios, I cannot understand why there would be less freight containing those products simply because they are manufactured abroad? They have still go to be delivered from Dover to Scunthorpe, have they not?

Mr Joseph: They have. What it means is that the patterns change. I understand that actually the Rail Freight Group has the same kinds of things in it, that traffic tends to be lighter goods, more consumer goods, less heavy manufacturing and travelling further distances. But what it also means is that traffic from the ports becomes very critical and that is travelling inland, hence the discussion about Felixstowe and Southampton, and indeed Immingham as well. The fact that it is moving longer distances ought to favour rail actually in principle. It means that it is moving in boxes rather than big wagons and you are moving away from the situation where things like coal and aggregates are partly moving heavy freight around between manufacturing sites and more to finished products of one sort or another.

Q79 Mr Chaytor: I can understand how we are moving less coal within the United Kingdom, but I cannot understand how we are moving fewer cars within the United Kingdom, because surely it is just a change in the nature of the journeys?

Mr Joseph: We are moving finished products from the ports to manufacturing distribution points rather than moving bits of steel and aluminium.

Q80 Mr Chaytor: Less freight containing the components as part of the manufacturing process, even though there must be equal or greater freight moving the finished products?

Mr Joseph: Where we are seeing a large growth in freight because of globalisation is in things like food. We have done a detailed piece of work, which informs some of these freight recommendations about, for example, regional sourcing of food, which was about carbon dioxide emissions from food. The story there is not necessarily straightforward because in some cases it is, for example, more efficient from a CO₂ point of view to grow tomatoes in Spain where they do not need glasshouses and transport them here rather than expend the energy growing them here. But in many cases the equation does work in the other direction and it is in general better to do this. That project which we ran has turned into a food and climate research network and there is some detailed work on this, if the Committee wants to pick it up and see it, which is about the trade-offs on food transport. What is unambiguous is that air-freighted food is really not good at all from the carbon dioxide emissions point of view and the growth in it is not good. One of the things which we have suggested in relation to fiscal measures and aviation is that air passenger duty should be extended to air freight on the basis of, say, 100 passengers per plan to try and put some kind of fiscal brake on that growth in food and particularly to give priority to some kinds of domestic agriculture. That is not to say that all international food is a bad idea. Actually, the work suggests that taking apples by ship is not actually a bad idea, even with the refrigeration, because of the bulks involved, and so on, but that with air freight fruit comes out really not very well.

Q81 Mr Chaytor: So South African apples are good, but Gambian mange tout is bad, is that right?

Mr Joseph: That is the kind of thing, yes.

Q82 Chairman: Just wrapping up, on the Government's request to the European Commission to explore including surface transport within the Emissions Trading Scheme, what is your view about that?

Mr Torrance: I think there are very similar problems associated with bringing surface transport into the ETS as there is with looking at bringing air transport into the ETS. It is not a panacea by any means and it is way off really. The answer, as we have said and Professor Banister stated a number of times, is that what is really necessary is a number of small measures rather than one kind of catch-all measure. As far as we are concerned, bringing road or air transport into an ETS is far from certain in terms of it actually happening and in actually producing the kinds of results we want.

Q83 Chairman: Given that is the case, it seems to me a perfectly reasonable analysis. Do you suspect this may be a ploy to try and deflect pressure to do something more unpopular and radical?

Mr Torrance: My suspicions are heightened on the air transport front, as you may well guess. I am certainly aware of the road transport discussions around entering the ETS being a much newer discussion, but certainly in my belief it is a deflective move of the aviation industry for more meaningful reductions in carbon to be explored really.

Mr Joseph: I think there are some key questions. It depends what the cap is, the overall cap for the ETS, and the level and the assumptions made at which either air or surface transport enter the ETS. Secondly, as my colleague has said, it very much depends what else is done and what happens between now and then. Thirdly, there are some things which could be done as well which might be more effective. I have mentioned already the idea of a car trading scheme where manufacturers of high emission vehicles buy permits from other low emission vehicles and we think that that has in some ways more promise because it is simple and effective in terms of giving manufacturers some serious incentives to build and market lower emission vehicles.

Chairman: Thank you very much, both of you, for coming in. It has been another interesting session and we are grateful for your support and look forward to carrying on the dialogue.