Examination of Witnesses (Questions 220
- 231)
WEDNESDAY 7 DECEMBER 2005
MR RUSSELL
MARSH, DR
DOUGLAS PARR
AND MS
GERMANA CANZI
Q220 Dr Iddon: What is your view
on liability? How would you like it clarified?
Mr Marsh: Well, I think given
the lifetime and the scales in terms of years we are talking about
of CO2 staying stored, the Government has to play a role at some
point. Obviously after the generation and the company has finished
with the plant and is effectively moving out of the site, the
Government clearly then has to say that it cannot see any other
way of the liability being held.
Q221 Dr Iddon: Is that agreed?
Ms Canzi: Yes.
Q222 Margaret Moran: To ask you the
same question as we asked the industry, what is your view on the
UKCCS Authority or do you have one?
Mr Marsh: I have not thought about
it. It sounds like it might be a good idea, but I have not really
thought about it.
Q223 Chairman: Could you give us
a response to that?
Dr Parr: Well, I can say what
I think now which is that if this technology goes ahead in the
UK, then there will need to be either something like a CCS Authority
or a section within the Environment Agency or some other regulatory
agency which will need to have the expertise and the focus to
do verification on the companies' analysis of the stability of
the formation and other monitoring and verification activities.
There will have to be something that is a separate, new thing.
Now, whether it is under the Environment Agency or it is separate,
I do not really have a view, but clearly there will need to be
something.
Q224 Chairman: But we should consider
that?
Dr Parr: Yes.
Q225 Adam Afriyie: I must admit,
first of all, I am surprised by your bashfulness on your ability
to affect public opinion considering you have been invited here
to speak to a Select Committee. Who would have thought this ten,
20, 30 years ago? It never would have happened, so I am a little
bit surprised by your bashfulness. I think you have a lot more
public influence than perhaps you imagine. Just to narrow it down
a tad, climate change, CO2 emissions, acidification of the sea,
these are issues which affect everyone on the entire planet, they
will affect everyone in the United Kingdom, so do you think it
is fair that just industry bear the carbon capture and storage
costs? I do take your point about insulation and other ways of
reducing energy usage, but on this particular point is it right
that industry bear the costs rather than the Exchequer or the
country as a whole?
Dr Parr: Well, my position would
be that this is a major issue for the fossil fuel producers and
that they should bear the costs of sorting it out, and I think
the best way of doing that and signalling that that is what needs
to happen would come through a tight cap and a high cost of carbon
emissions in the Emissions Trading Scheme rather than something
that is as technology-specific as CCS support. I think if we had
a tight cap, all sorts of other technological possibilities would
emerge, but let's not go down there; it is the right way to do
it.
Ms Canzi: We agree with that.
We would definitely be unhappy if a lot of public money were to
go into this. We accept that there should be some incentives and
we think that the best incentive is to have a tight cap on the
Emissions Trading Scheme.
Q226 Chairman: And to include carbon
within that?
Ms Canzi: Carbon capture and storage?
Q227 Chairman: Yes, for that to be
included.
Ms Canzi: Yes, but the cap has
to be tight enough and at the moment it is not.
Q228 Adam Afriyie: On balance, do
you think that the UK policy should favour renewables over carbon
capture or one particular area of insulation over carbon capture?
Is there a balance in your minds as to which way the incentives
or disincentives should be laid down by Parliament?
Mr Marsh: I think I would go back
to my initial point. I think in the short term we should not lose
the focus on needing to support and doing more for renewables
and energy efficiency. Picking up the point that both Doug and
Germana made about the Emissions Trading Scheme, if you get the
signals right in the Emissions Trading Scheme and you get a long-term
signal in the Emissions Trading Scheme, that will give the incentive
and the certainty that the CCS industry and other industries need
to make the investments now, so you will not actually be looking
at, and necessarily having to pick, a particular technology and
that is the advantage of doing it through the Emissions Trading
Scheme.
Dr Parr: My view on that would
be that although it is better to have carbon dioxide underground
than in the atmosphere, the best way to deal with it is not to
produce it in the first place, so we would very clearly prefer
renewables and energy efficiency measures over carbon capture
and storage.
Ms Canzi: That is our view as
well and any public money that is spent should be prioritising
these two technologies.
Q229 Adam Afriyie: Sort of related
to that, you would not differentiate in terms of incentives between
what is, I guess, carbon-neutral and carbon abatement technologies?
Is that right?
Dr Parr: Could you clarify that
for me?
Q230 Adam Afriyie: Carbon abatement
meaning wind, nuclear, carbon capture and so on as opposed to
carbon-neutral in terms of the incentives. In terms of the way
the Government is incentivising the various alternatives that
are out there, should they be looking to be carbon-neutral or
should they be moving towards carbon abatement, as I say, the
examples being nuclear, wind, carbon capture and so on?
Dr Parr: Could you define what
you mean by "carbon-neutral"? What sort of measures
would that involve?
Q231 Adam Afriyie: I guess the net
effect of producing energy which does not produce carbon.
Dr Parr: I am not sure I see a
huge difference between them, to be honest.
Mr Marsh: No.
Adam Afriyie: Well, there is an answer.
Chairman: I think what we will do is
write to you with this question because we are interested in looking
at where the incentives should be because I think in terms of
our report, we need to make some clear recommendations about the
balance between incentives and where the market comes in and whether
in fact it should be left entirely to the market which is what
has been suggested in other ways. You have made a very clear statement
about the carbon trading scheme and industry seems to support
that view again, but we will come back to that. I am afraid we
have to finish now, so can I thank you very much indeed for coming.
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