Examination of Witnesses (Questions 79-99)
MR RUSSELL
MARSH, MR
STEPHEN HALE,
MS JULIE
HILL AND
DR DOUG
PARR
23 JANUARY 2007
Q79 Chairman: Good morning and welcome.
I think you are very familiar with the Committee so I can dispense
with introductions. Perhaps I can start straight away with Stern,
which I think the Green Alliance described as a challenge not
just to the international community but to the UK Government that
commissioned it. Are you able yet to detect any changes in government
thinking or actions as a result of Stern? I ask that question
in the context of this inquiry which is a Pre-Budget Report and
the first big opportunity for the Government to respond to the
Stern report.
Mr Hale: The first thing to record
from anybody who gives evidence to you on the subject is to emphasise
the starting point that was there and was clear before Stern,
which is that we face here a profound global emergency and we
have a very short period of time, the next few years, in which
to secure action domestically and trigger action internationally
to drive global emissions reduction in perhaps ten years. That
is the context, and Stern has amplified that argument, but the
foundation has been clear for some time. From our perspective
we agree with the Government that the primary target of the Stern
report is the international community. It is a global problem
but clearly it has profound implications, firstly, for the Government's
domestic policy but, secondly, also for the Government's international
policy on climate change and related issues. From our perspective
on the domestic front, there was some encouraging shifts in the
Pre-Budget Report but in overall terms we found it rather disappointing
as a follow-up to Stern. We are aware that the policy mix here
is much broader than environmental tax. Trading, for instance,
is increasingly recognised as absolutely essential to this regime.
We have laid a lot of emphasis and published this report, looking
beyond Stern, at the Spending Review because on the domestic agenda
we have taken the Chancellor and the Government at their word
when they say the Spending Review is a potentially profound and
strategic moment for the Government in terms of its future direction,
not coincidentally around the time when the Chancellor is likely
to become Prime Minister. We see that as an extremely important
moment, from an intellectual and policy basis, to set out the
new direction. Just a brief comment on the implications for the
Government's international thinking, we would welcome much of
the initiative that the Prime Minister has taken in terms of raising
this issue. Without him it is probably true to say that climate
change would not, once again, be a heads of government issue as
it shouldbe. There are two serious weaknesses in the approach.
First of all, it has been much too US-centric and relied on a
shift in the US and it should be more European-centric. Secondly,
and this is very relevant to your work and to our report, the
international diplomacy has to be backed much more aggressively
by real resource and serious spending both domestically and internationally.
If we are going to bring China and many other players into this
regime, then we have to start backing up our diplomacy with hard
resources. Stern had a lot to say about the need to spend now
and save in the future and we support that.
Q80 Chairman: Can you be more specific
about the spending implications in terms of the Spending Review?
What do you see as the shift in departmental priorities and spending
programmes that would be required to do what you want?
Mr Hale: Again we would look at
it in broad terms. There needs to be a step change across the
policy areas and across departments. If you take the aspirations
the Government has signed up to in Europe for European emissions
to fall by 30% by 2020, then that means the UK will have to go
much further given the mix within the EU. I have heard the Commissioner
suggest that the UK needs to reduce emissions by 40% by 2020.
At present the policy framework does not, in any of the areas,
have the ambition or the strength to drive us to that kind of
speed of emissions reduction. We think you need changes across
the board on trading, on tax, on spending and on regulation. In
spending terms, I think obviously there is a research and development
element to this but we do not see that as central. It is more
using the pricing framework, the tax framework and the regulatory
framework to drive investment in the private sector. From our
perspective there are a whole number of areas in which there needs
to be a step change.
Q81 Chairman: What about Greenpeace
and your reaction to the PBR posts?
Dr Parr: There were some good
things particularly as part of a package that is hopefully going
to deliver zero emission homes by 2016. There could be other things
to stimulate that further but, as an example of integration between
departments showing that the Treasury and DCLG working together
to deliver something, we think it is a good example. It is a pity
it is not replicated elsewhere. It is certainly not replicated
in transport or waste. I am not particularly convinced it is being
replicated in planning, although obviously steps have been taken
there. We do have a sense of disappointment about it because Stern
and other news about climate change over the last year has for
us marked a noticeable shift in the sense of importance and significance
that climate change confronts us with in the business community
in the public sector and amongst the general public at large.
This is very noticeable but we do not find that reflected in government.
Q82 Joan Walley: You were talking
about the step change that is needed. What I would like to do
is zoom in on the Treasury, because you have had experience of
working inside government, and ask you about what you were saying
just now about the culture inside the Treasury. We have had government
saying we have this policy of shifting taxation from taxing goods
yet the proportion of green tax has gone down. We have the right
rhetoric but in practice it has not delivered. Why do you think
that is? Is there anything inside the culture of the mandarins
inside the Treasury that is preventing this? Could we have greater
optimism now? What is your insider's view?
Mr Hale: I did work inside government
for four years but obviously not within the Treasury but I did
have a lot of interaction with them. One of the points I made
in the forward to our paper on the Spending Review is I do think
that the Treasury has in general used its power negatively in
government rather than positively. They have used their power
to block proposals that have come on the environment from other
parts of Whitehall more often than they have used it to generate
new and innovative ideas. I am sure some of the brightest brains
in Whitehall are in the Treasury and they are perhaps capable
of coming up with smarter approaches than are being generated
elsewhere in Whitehall. I do think the approach so far has been
more negative than positive. I think there has been a shift, over
the last couple of years in the run-up to the G8, to a new political
environment more recently and post the Stern Review but clearly,
in overall terms, it is still very disappointing. I would say
there are three specific reasons: firstly, I think there is a
belief in government and in the Treasury that the UK is already
leading the world in this agenda and so there is not a strong
case for going further. Secondly, there is a lack of conviction
about the prospects of there being a global climate deal. If the
UK is signing up to minus 30% by 2020, with implications of more
action in the UK, then it is logical, sitting here in 2007, to
strength the policy framework across the board to drive us towards
those targets and that is not happening. There are different reasons
for that but it seems to me there is a lack of conviction about
the prospects for global action on climate. The third reason is
a perception that the business community would not support a more
ambitious approach. There have been important shifts in the attitudes
of the business community over the last couple of years as new
coalitions of businesses have emerged, partly triggered by the
G8 process. In some case you now have some very loud, and certainly
visible and keen to engage with government, business groups setting
out a different perspective to government on climate change policy
and that ought to be the trigger for much more ambitious actions.
Q83 Joan Walley: Do you think that
the Treasury is in the process of converting to a "can do"
culture?
Mr Hale: I did not say that. I
said that there were a number of reasons. I felt there is movement.
I think there is continuing movement. If you read the Chancellor's
speech on the day of the launch of the Stern Review, that is probably
the most ambitious speech and the strongest speech the Chancellor
has made on environmental issues and, from a Green Alliance point
view, going forward rather than backwards but if you read the
Chancellor's speech in acknowledging, at the outset, that we now
need to bring the environment alongside our economic and social
objectives, de facto one recognises that over the last nine years
that has not been done. There is a shift. It is more important
to look forward, from our perspective, to see if the policy framework
moves to reflect that. I would just make one other comment. The
focus of your question is on taxation but the focus of my answer
and our interest is actually much broader. It may be that in the
future as an instrument tax is less important than it was in the
past. Trading is going to come to do a job in a number of areas
that the tax system actually cannot achieve. While tax has certain
benefits, emissions trading does give you certainty of environmental
outcome which is critical in this area. You cannot predict confidently
the environmental impact of a tax but you can do so with a trading
system. That is a strong advantage and it seems to me that much
of the public debate about the Stern Review did lead us into tax,
perhaps partly because David Miliband's letter was leaked on Sunday
just before the launch so you had a lot of public comment and
media comment about taxation, but actually Stern was putting trading
well up ahead of taxation as a policy leader.
Q84 Joan Walley: That is a point
well made and that is something I hope, when we reach the conclusions
in our inquiry, we can really look at. Before we finally leave
the tax issue, I can see why you could have public outcries about
certain increases in tax but there are some benefits that could
be gained, for example where we have seen in Ireland taxes on
plastic bags and all that kind of thing. That would be something
much easier for the Treasury to do and yet they have shied away
from that kind of thing because of this fear of public response
and vested interests.
Mr Hale: I agree with that. I
am not talking down tax as an option, I am just making a comparison.
In the waste area we in Green Alliance have worked very hard to
make the case here and elsewhere for a shift in tax. We think
Landfill Tax in particular is absolutely vital to our future ambitions
there. If you look at the transport area, we need to have much
stronger incentives and the framework that affects whether people
buy a car, what form of transport they chose to use and whether
they then choose to drive that car. Whether it is car purchase
taxes or vehicle excise duty, there are lots of different tax
systems that will need to be used to drive change in the sector.
Q85 Joan Walley: Looking at where
we are now and where we need to be and your experience from working
inside Defra as well, do you feel with the change that you want
to see towards use of tax instruments but also looking at the
whole trading culture, there is a culture inside government and
Defra to match that? Do you feel that public support for a shift
of emphasis is changing?
Mr Hale: I think David Miliband
sometimes quotes John Maynard Keynes who says "When the facts
change, I change my mind." In this case the facts have been
clear for a very long time but what is changing is the politics,
both the political profile of this agenda; secondly, public attitudes
towards this agenda; and, thirdly, business attitudes which are
shifting in a very positive way towards both voluntary business
actions, the kind of remarks from Marks & Spencer and Tesco
in the last week, but also support from business for government
action. I think there are shifts going on at all of those levels
and that is the thing I hope is going to drive culture change
and policy change in Whitehall.
Q86 Joan Walley: Can I ask Greenpeace,
because I know you have done a lot on this, as a Committee we
are very interested in your aviation model group SPURT. Do we
need things like humour as well to change public attitudes and
awareness? Was it successful?
Dr Parr: SPURT was an attempt
to be humorous about what we see as a distinctive business lobby.
There are sectors of business, and Stephen has given examples
of retailers, that have shifted. British Telecom is now looking
to source its electricity from renewable sources for a further
few years, et cetera. Those who are dug into the existing system,
energy companies, some waste companies and certainly the airlines,
are definitely a regressive force. They like the status quo very
nicely. SPURT was a way of trying to bring that humorously to
the fore and act as a stimulator for discussion about what this
was all about and the role of aviation because we see it as a
significant threat. I think these kind of tactics and communications,
particularly with humour, have definitely a role as well but the
focus has to be on providing the kind of structures that deliver
change.
Q87 Joan Walley: Do people get it?
Dr Parr: Certainly people I dealt
with thought it was very funny. Possibly my cohorts are not a
perfect example of the British public but a good few people were
laughing at it but there was a real point to it as well.
Q88 Joan Walley: Can I move on to
this promised carbon committee that we are going to have? What
do you think government should be looking at in its design which
is going to be the tanker that is going to set on course the future
developments of successive governments in the future? How do we
make sure that we engineer it in such a way that it is going to
be fit for purpose?
Mr Marsh: We are not very keen
on tanker analogies at the moment! The two key things would be
we need to be seen to be independent and credible. I have seen
a number of different proposals including the Conservative Party
proposal for their climate change bill and they have indicated
that the committee should be made up of some government-appointed
representatives and representatives recommended by the Royal Society.
From our point of view, we need to be looking at something like
that in terms of the strategy. The carbon committee can only have
value if outside of government it is seen as being both independent
and having some clout and people feel that it is not just plain
dancing to the Government's tune but actually making recommendations
to government and actually has the clout that government has to
take notice of. The Government is saying "We are not taking
on board its advice because", and it can give you a good
reason, or in actual fact its recommendations have to come to
be parliament and be voted on, so I think the suggestions that
were put around by a number of different groups, including the
Conservative Party's own climate change bill, would be the sort
we would be looking for. Whether or not we would say "Yes,
it should certainly be the Royal Society who you go to for independent
advice and recommendations to the committee", that is up
for discussion. Certainly it needs to be seen to be independent
and not dancing to the Government's tune.
Q89 Joan Walley: Do you think it
could help take the political football out of environmental issues?
Do you think it should do that?
Mr Marsh: I think it could. It
depends how the committee is constituted and how the people who
go on the committee are put onto the committee and how it is constituted
in terms of the powers that it has. Are you ever going to take
the politics out of it? It is unlikely that you would ever have
a committee that is completely independent of politics. Even the
Conservative's suggestion was that half the members of the committee
would be nominated by government. I do not think you will ever
be able to make it completely non-political or non-partisan but
you should be able to get at least some level of independence
and some level of credibility from external people so it is not
just government saying this but there are some external people
looking at this and you can see both what recommendations the
committee has made and the reasons why the Government at the time
has not taken them up. The Government has to give very good reasons
or there is a process of going through for the committee's recommendations
to be taken up. It has to go through parliament or the Government
has to report back and give very good reasons as to why it has
not taken up the recommendations.
Q90 Chairman: Could I take you back
to the point about the importance of trading as an instrument?
I recognise the force of the argument that tax can produce changes
in behaviour but you cannot predict the volume of change. We have
just completed an inquiry but not yet published it on the EU ETS.
One of our clear concerns is that is the first really big international
practical example of trading. It is somewhat flawed in phase 1,
and even possibly phase 2, by inadequately tight limits. Specifically
on aviation, which we hope will come in although it will take
time to negotiate the details, it seems crucial as a litmus test
to its credibility that the limits on aviation when it goes into
trade should be very tight so they are consistent with the downward
path in carbon concentrations. It seems to me there is a risk
if you do not get that right the credibility of trading as an
instrument, which I believe is potentially a very valuable one,
could be seriously toned down.
Mr Marsh: That is completely true
and we have to be very careful. As we move forward with the emissions
trading scheme it needs to be seen to get tighter and to be delivering
more carbon emission reductions in coming years, otherwise we
do run the risk of the whole concept of trading not working. Yes,
it has role but it has to be based on tight caps that do actually
deliver emission reductions and do actually make a difference
to carbon emissions.
Mr Hale: The central flaw in the
scheme, as it is currently designed, is the Commission has not
got sufficiently strong powers either to set uniform caps in a
uniform way across Europe or to impose caps, so you get a tussle
between Member States and the Commission. It was very welcome
in a speech quite recently that Ed Balls accepted the argument
for the Commission having stronger powers in the future design
of the trading scheme. That is absolutely essential.
Dr Parr: We do support emissions
trading and we do see it as a useful tool but I support everything
Russell said on the need for a tight cap. In this instance we
would see there would be value in the European Commission setting
an overall cap for Europe within which individual national allocations
could be decided. We obviously want to see more auctioning and
other details, but on aviation we are of the view that actually
there would be more value in having an aviation trading system
that is closed from the rest of the emissions trading system otherwise
we do not see that the cost of emissions trading would necessarily
impact on the upward trends in passenger numbers and aircraft
emissions. We would like to see a closed system and, therefore,
bring transparency to the contribution that aviation is making
to climate change emissions rather than putting up the price of
people's electricity bills, which is more likely to happen if
it is connected to the main system.
Q91 Chairman: To take it one stage
further, if there was an EU wide cap, and if in those sectors
where it was possible to have 100% auctioning without undermining
the competitive position of individual industries, say for example
power generation or aviation, you would not need national allocations
at all. You could just auction within the EU which would guarantee
a sustainable carbon price and a downward market.
Dr Parr: Yes.
Q92 Dr Turner: Before we leave trading,
do you think that surface transport should be included in a future
phase of the EU trading scheme?
Dr Parr: I am a bit of an agnostic
on that at the moment. We see it as having a fairly low demand
with fuel price at present because the need for road surface transport
has become embedded in people's everyday lives and it is quite
difficult to tackle. I would say that emissions trading, although
we support it as a tool just like we support environmental taxes,
would never be enough on its own. One of the weaknesses that we
think was evident in the Stern Review, although it has made good
points, is that it focuses insufficiently on what I would call
infrastructure policy. If you say that in general in developed
nations climate change is about energy use—and energy use
is about infrastructure, either roads, power systems, power generation,
homes, buildings, et cetera, then there needs to be a much greater
focus on infrastructure policy and getting infrastructure right.
In the case of transport, that means, firstly, the planning system
following the sort of model that the Dutch have been operating
for nigh on 20 years, obviously the usual improvements in public
transport and so on, but also a focus on the things that go about
on the roads, the cars. That is the kind of infrastructure where
the UK and Europe have not been nearly strong enough in driving
down on the obligations on manufacturers to produce a fleet of
cars that has a lower level of carbon emissions than it currently
does. On emissions trading: part of the solution; agnostic on
whether road transport should be in there. If it was it might
do some good, but really the focus for road transport needs to
be elsewhere.
Mr Hale: We are agnostic verging
on sceptical. If you look at the tax system at the moment, you
could argue that in fact the costs are already presented as users
of public transport and drivers and clearly the price signal is
not proving strong enough to drive down emissions from the sector.
I worry about the idea that we imagine that a trading system in
the future is going to take us forward on transport. I do not
think it will be a major contributor on surface transport. If
you take the example of road pricing, which is often presented
as the key potential shift in transport policy, actually at the
moment that debate and the design process is very much focused
on congestion. Unless the overall tax burden is increased, it
is quite likely that road pricing could increase emissions from
the sector rather than reduce them. That is evidence to me of
the need to be more radical in how we think, both in terms of
technology, and other things that Doug was hinting at, and in
terms of the pricing system.
Q93 Mr Chaytor: Moving on to waste,
Green Alliance published your zero waste statement at the back
end of last year. Could you tell us what you think are two or
three absolutely key issues to move towards a zero waste society?
Ms Hill: We identified at least
the ten key actions but perhaps if I concentrate on the ones that
are relevant to Treasury competence and thus PBR. One of the overriding
points is that we think waste and resource user suffers from severe
political neglect, the consequence of which has really been that
the Government as a whole, and particularly the Treasury, do not
have a vision of the UK as a resource efficient economy. We do
not feel the Treasury has yet fully bought into the idea of resource
productivity being as important a determinant of economic wellbeing
as labour productivity. If we are taking the message of Stern
seriously, we would see the need to measure ourselves by our resource
productivity as much as by a lot of these other economic measures.
Reading things like the Treasury's challenge document which talks
about the challenges for the comprehensive Spending Review and
indeed the PBR, what comes over is a slightly begrudging acceptance
that recycling may be a good thing economically and environmentally
but it does not go as far as to say we have to make this shift
from being a very linear economy, in terms of resource use, to
a much more cyclical one. We are a severely linear economy. We
extract, produce things, consume them and discard them extremely
rapidly. Some estimates suggest that as little as 1% of resources
may be still in the economy after six months, which clearly has
severe environmental consequences and economic consequences that
are buried in the fact that we do not concentrate enough on this
wastage. There is economic wastage and we do not see it but in
the long term there are severe environmental consequences associated
with that pattern of use. In our discussions with the Treasury
we feel this vision of a more cyclical, resource efficient economy
has not hit home. It seems to imply to them vast short-term cost
and they do not see the long-term benefits in the same way that
Stern characterises the long-term benefits of tackling carbon.
We are left with a slightly grudging acceptance of more recycling
and EU landfill targets and that is it. The consequences of that
have been an unwillingness to deploy what are really some rather
obvious fiscal instruments. The Landfill Tax that was elaborated
by Peter Jones is the obvious one. There is a clear case for raising
that faster and quicker and further which has not yet completely
been accepted. There is also, in our view, a clear case for the
charging of householders. I am fairly sure the Treasury has a
view on it which is not wholly positive. The other element is
possibly product taxes, which again are to us a clear way of signally
the relative resource merits of different products. So, we have
lacked an overall vision, we have lacked deployment of some of
these critical instruments and we have, therefore, left ourselves
with very few direct mechanisms particularly for tackling business
waste. We have clear mechanisms for household and municipal waste
because of LATS to meet EU targets on biodegradable waste but
we have no equivalent for industrial waste. The Landfill Tax is
the only direct instrument and, as we have heard, it is not enough.
We have not taken producer responsibility to nearly the lengths
that other countries have done or have used that mechanism properly.
That is our view of the deficiencies.
Q94 Mr Chaytor: The product tax would
be a variable VAT reflecting the relevant environmental damage
inherent in the product.
Ms Hill: There are a number of
possible models and mechanisms in use in different places all
of which bear scrutiny. VAT exemption is one, higher VAT for certain
products is another, and eco tax which allows a differentiation
between project types, for instance disposable and non-disposable
razors—some countries have levied disposable razors to the
point where it has become uneconomic to have them and they disappear
from the market—or a levy to fund greater recycling such
as those used on containers like Tetrapak. There are a number
of models but the overriding point is the need to use these kind
of instruments to single out what are better or worse products.
No product is wholly good and probably none is wholly bad but
there are things that we now want to discriminate between and
that is an obvious way of doing that.
Q95 Mr Chaytor: Your analysis about
the difference between a linear economy and a cyclical economy,
does that have implications for the conventional way in which
GDP is constructed?
Ms Hill: It does in the sense
that there is a government objective to decouple GDP from waste.
GDP in itself is a measure of one thing, a measure of one aspect
of the health of the economy. Certainly the history of developing
nations has been that waste production mirrors the growth of GDP.
According to OECD analysis, there is almost an inevitable growth
in waste as GDP increases. There is an explicit government objective
outlined at the beginning of the Strategy for Sustainable Consumption
and Production to decouple those, that increasing economic wealth
should not mean increasing waste of resources. Frankly this Government
has done nothing to make that a reality. There are some signs
that waste growth is slowing for reasons that nobody quite yet
understands. It may be that we are measuring more accurately,
and in the past we have slightly over-measured so the figures
coming in now for household waste are more accurate and slightly
lower than expected. Until we have a trend on that data for three,
four or five years as opposed to one or two it would be very hard
to say whether that is a genuine slowing. Industrial waste is
very much linked to economic activity so the fact we are losing
our manufacturing base will be one reason it is going down. It
does not necessarily imply better resource efficiency. There are
a number of things we might want to measure. The overwhelming
point is that on the long-term basis we must improve the value
we get out of every single bit of resource if we are not to breach
environmental limits of which carbon is one. It is not a bad proxy
for resource efficiency in some places but there may be other
environmental limits or resources we come up against and we want
to be looking at those as well.
Q96 Dr Turner: You have advocated
variable charging by waste authorities for household waste. What
impact do you think it would have on people's behaviour patterns?
Ms Hill: The evidence that is
coming from other countries, and the OECD has published quite
extensive case study evidence of these mechanisms in play in other
countries, is that it does improve recycling rates and, depending
on the way the charges are applied, can give net benefits to householders.
Whether it works in the same way in this country depends very
much on the conditions under which it is applied. We think there
are pre-conditions for making these schemes successful. It is
not an automatic mechanism. One thing is obvious: it must be easy
for householders not to pay the charge which means it must be
easy to recycle. We have to keep reminding people that the proposition
here is being charged for waste not put out for recycling. Well
organised doorstep collection services for the different recyclates
are a prerequisite to being able to escape the charge and recycle
better. We have to devote more resources, or at least be on alert
to the need to devote more resources, to fly tipping because again
evidence shows that there can be an increase in that, perhaps
a short-term and not disastrous increase. We must not allow people
to opt out of local authority waste collection, as has been the
case in Ireland, and therefore lose people altogether from the
system and lose the data that the system is generating. It is
not an automatically beneficial mechanism any more than a council
deciding to collect more recyclers. It has to be done properly.
Q97 Dr Turner: How do you think the
public are going to respond to it? There has been a little controversy
about the idea of councils putting microchips in everybody's wheelie
bins to monitor how much they are throwing away. Clearly you would
need some sort of measuring system if you were going to have a
variable charge system. What do you think the public reaction
is going to be and can you meet it?
Ms Hill: I would hope the reaction
to the bugs in the bin is one that will pass. I suspect that was
largely due to the element of supposed secrecy attached to it
and it was clear that communication to householders from some
of the councils trialling it was not good. On the other hand,
there were some councils trialling it that made it perfectly clear
what they were doing and it was no big surprise. The story about
the secrecy was overblown. I think when people think about how
far their personal habits are monitored in other ways, by the
supermarket store cards which know exactly what people buy whereas
the chips in the bin know how much you throw away not what you
had for dinner, this is something that can be addressed. I think
the longer term aim is to get people to buy into the whole notion
of being a resource efficient society and we should not want to
be a throw-away society. When we did the press surrounding of
the Zero Waste Report and floated this idea of variable charging,
the overwhelming response from householders who contacted us was
"This is not our waste; it is the supermarket's waste. This
is not our fault. This is imposed on us. Do something about that."
That sense of producer responsibility for waste, packaging particularly
but other kinds of waste, has come very much to the fore which
is why we feel the time has never been better for the Government
to act on the notion of producer responsibility and make that
much more real and biting than it has been to date. We know of
countries on the Continent who make the producers of waste share
the cost of municipal collection and treatment on the basis that
it is their waste, it belongs to the companies and it is not the
householder's fault or responsibility to necessarily deal with
it. We have to change our attitude to producers.
Q98 Chairman: In the earlier session,
which you were not able to be here for, we touched briefly on
microgeneration. I know you have argued for more focus on SMEs
to get a bigger chunk out of decentralised generation. Can you
enlarge on that point?
Dr Parr: Microgeneration is often
seen as being something for the individual household but I would
say where we see the big environmental benefits in terms of carbon
would be slightly larger scale schemes, blocks of flats, small
communities. There is, at least according to the community not-for-profit
group Energy-for-All, a real hunger out there for communities
to try to do something about climate change but they are not entirely
sure what or how, et cetera. There are various barriers put up
by the system, both planning, financial and so on. When I say
SMEs, it is perhaps a simplification. Although there would be
companies who would be involved in this scheme, it would also
mean not-for-profit enterprises rather than simply businesses.
It would mean in some cases public sector, like we have seen in
Woking, but at a smaller sale than the national utilities, considerably
smaller, but still at a larger scale than the individual householder.
That is where, particularly when applying combined heat and power
in small, but not micro, turbines for windmills as an appropriate
sites when the wind really does blow, I think a local scale generation
could play a big part.
Q99 Chairman: Is there a role for
the developers here as well to take the initiative more than in
the current system?
Dr Parr: In terms of the volume
developers, their business is construction and I do not think
they will be wanting to get into the generation business, operation
and maintenance and so on. I think with planning authorities there
probably is a role in ensuring rules, like the Merton Rules and
beyond, that there is the availability of that infrastructure
that can deliver energy, including biogas, to deal with some of
our waste issues. I do not see it as being for the construction
industry but they could play a very important role in brokering
a partnership so the space was made available and made ready for
the relevant infrastructure to be put in. I would also say that
another important aspect of the developer's role is in the possibility
of heat networks. With a heat network in a development, new or
old, you have one central plant that is providing the heat. At
the moment that would almost certainly be gas but as time goes
by other fuels would become available, biofuel, hydrogen, whatever
it happens to be. Then you have the flexibility of being able
to switch fuel as necessary rather than having 200 different houses
where you have to change individual boilers to get the environmental
advantage. The value of community small scale developments run
by a small organisation is clear.
Chairman: We are running out of time.
Thank you very much for coming in. I am sorry you had a disruptive
morning but it is good to see you and it is very much appreciated.
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