Examination of Witnesses (Questions 124
- 139)
TUESDAY 27 FEBRUARY 2007
MS SHELAGH
WHITLEY, MR
MATTHEW BRANDER
AND MR
PAUL MONAGHAN
Q124 Chairman: Good morning and thank
you for coming in. I think you have probably heard most of the
previous exchange. Could I start with the same sort of general
question about what you think the role of the voluntary offset
market should be in terms of Britain's overall response and our
strategy on climate change more generally?
Mr Monaghan: We have heard some
debate from the carbon offset providers to say that we should
begin with carbon offset and we have heard submissions from the
likes of the Carbon Trust that it should be the last thing people
should do. The way we have always approached it is that it should
be done in parallel because to leave it to the end probably means
waiting 50 years. To take as an example, the Carbon Trust say
when you address all your emissions do not do offsets until you
have addressed all your direct and indirect emissions, and that
means your supply chain. If you wait until you have addressed
your supply chain you are talking 25 or 30 years. Look at Tesco:
Tesco said they would put carbon labelling on their products.
What they have actually said is that they will put money into
research for three to five years and then consider the output
and then think about it, so you are talking about five to seven
years before you even see the labelling emerging before the carbon
reductions take place. You have to have carbon reduction in parallel
to energy efficiency, in our opinion. We say that as someone where
arguably no corporate has done more on climate change than ourselves.
In addition to the things we have put in our submission, we have
just announced a £1 million investment in renewables for
schools, we have announced money going into the creation of secondary
workers' co-ops for biomass, we have announced all new format
stores rolling out with voltage optimisation as a standard consideration.
We are saying as well as all that you need carbon offset now.
To me it is a bit of a common sense position and that applies
whether you are a corporate or an individual.
Ms Whitley: I would agree with
that in terms of the fact that both activities have to happen—real
in-house reductions on the part of corporates and real individual
reductions—at the same time as offsetting. Also, if you
are thinking about it in terms of long timescales, there are a
lot of measures that can be taken now that are cost-effective
that both companies and individuals can be taking and there are
long-term policy frameworks, and we know that there are a lot
of technologies that will not be cost effective until quite a
long way away in terms of carbon capture and storage and other
major technologies that we think will be needed to have deep reductions,
and offsetting plays a role in between those immediate actions
that we can take and the long-term actions that we can take, both
in terms of allowing individuals and sectors to take actions that
they are not able to through existing regulation and also for
technologies to be disseminated to countries that may not have
access to them now. There are a lot of technologies that exist
and are more common practice in the developed world which can
be disseminated to the developing world through offsetting. A
lot of that will be in the next 10 to 20 years when the big technology
solutions have not been resolved yet; offsetting will play a role
there.
Mr Brander: One thing I wanted
to add, when you posed the question to the last panel it was in
terms of the UK climate change programme and I just wanted to
bring that up on a point of clarity. In terms of meeting the 12.5%
obligation, the voluntary offset market is additional to that.
Most of the projects that are funded by the voluntary offset market
are outside of the UK and so are on top of that 12.5% target.
I guess there are two things from that. It does not contribute
to meeting the UK climate change programme target of 12.5% but
it is a positive step in addressing global emissions.
Q125 Chairman: Following on from
that point, how do you respond to the criticism, as we discussed
in the previous session, that it validates people's polluting
behaviour and people will buy the offsets and go on polluting?
Mr Monaghan: Can I say I do not
think there is any evidence for that anywhere. I think it is one
of those things that gets said and there is no evidence offered.
We have heard people here previously talk about how there is counter-evidence
to that. At the Co-op we have been tracking ethical consumers
probably more than anyone over the years and we have produced
the ethical purchasing index. The two things I would observe from
that is that when we heard all the stats before how much the two
businesses were growing here they never told you the absolute
numbers, it was all about percentages. The sales to the personal
sector in the UK are really tiny. The big growth is to corporates,
it is to people like Marks & Spencer and HSBC who offset their
operations. The growth to the personal sector is tiny. It is growing
but it is tiny and I know that to be a fact. One of the things
that worries me about some of the tone of the debates is the proportionality;
regulation should be proportionate. I would suggest to you that
the numbers of individuals who buy carbon offset in this country,
the market for that is probably £2 to £3 million in
terms of worth in the UK. That is not a big nut to consider. One
of the things I would say from the Co-op is that we have been
very good at kick-starting ethical consumers in certain markets
and then when the big boys come along we tend to fall away and
that is bad for us but it is good for society. If you take something
like the Forestry Stewardship Council or Fair Trade, when they
were set up there were lots of competing standards around for
what was essentially sound sourcing and sustainable forestry,
and then over time the NGOs came out with a standard. There was
Fair Trade and the Forestry Stewardship Council. Then industry
came up with their own standards and the different standards were
all competing. We only reached that situation with the carbon
offset market in late in 2006 when we had the Climate Group, which
is essentially business providers, saying here is our standard.
We have the gold standard which is the NGO standard, which is
a tougher standard, and then we have offset industry itself coming
up with its own little standards quite soon and then we have the
Government coming in now with a potential standard. I would suggest
if the Government came in seven years ago to the FSC debate or
the Fair Trade debate it would have been counter-productive and
I have a feeling if we let competing standards play their way
through the market, like we have in other areas, we will see the
cream come to the top and I would probably suggest it is the gold
standard. One of the reasons we are having this debate is that
the gold standard has not been out there long enough to have all
the providers demand it as a way through. If we look at the gold
standard, we have only got, the last I saw, anything between 10
and 15 signed-off projects in it, but they have got a pipeline
of nearly 200 coming through because what is happening is people
are now saying we need this. I think that all the projections
that are taking place in the personal sector will not take place
if a lot of the negative media coverage we have seen for carbon
offset continues. I think it will kill the market and even the
Government standard will not help with many of the problems with
CDM such as the over-reliance on HFC 23, and all the debate that
is going around that will kill it.
Q126 Chairman: The different stage
which this market is at at the moment, though, there is nothing
inherently unhealthy about having more than one standard kicking
around. The Climate Group would argue that what they are proposing
through the VCS is better than having nothing and in a sense it
is up it the buyer to demand how robust the integrity of the schemes
they are investing in is.
Mr Monaghan: From my perspective
I have been buying offset since 2000 and for a long time until
2006 we were probably one of the biggest purchasers of carbon
offset in the UK. There were no standards for us to work towards.
What became necessary was when our primary provider, which was
Climate Care, provided us with projects, we would choose the project
and we would visit, so I spent last week for example in Uganda
and the reforestation project in Kibale not just checking on the
deforestation aspects but also the social aspects of the communities
around those projects. The other thing that worries me slightly
about some of this is a bit like the "food miles" debate
which is very related, where we have seen Defra in many instances
welcome Tesco and M&S and others saying they will reduce the
amount of air freight coming into the country from two% to one%
or whatever, and then we have seen a reaction from DfID which
is, "Hang on a minute, that is cutting off exports from the
likes of Kenya," and the whole debate has become a polemic
in the space of something like two months. I feel that same has
happened with the carbon offset debate. It is great that everybody
is into carbon now and climate change, et cetera, but it is happening
in many ways a little bit too fast, and we are all rushing around
putting regulations on carbon offset that are not even being considered
for things like micro generation. I sit on the Building Research
Establishment's Sustainability Group and I am aware of all the
claims that are out there that solar panels work on moonlight
which are being marketed in this country right now. Passive solar
has been around for 30 years and we are not talking about standards
for passive solar but we are for carbon offset, even though the
passive solar market to the personal sector is probably 50 times
what the carbon market is in the UK, so it is a proportionality
question in this whole debate; can we allow the varying standards
emerging at the back end of 2006 some time to play out and see
which way this goes. They are the people who know and ultimately
the consumer will be king. Do not worry about the corporates looking
after themselves. The corporates will do their own due diligence
on products; I can guarantee that.
Q127 Chairman: That point is very
well made. What do you think of the Environment Agency's decision?
They have calculated what their footprint is and they have said
they are going to put that money into a carbon reduction fund.
Do you think that is a smart thing to do?
Mr Monaghan: Bonkers. I just do
not understand the philosophical position. If what they are saying
is you only do offset for the things after you have done everything
else, implicit in that is that you have not done everything else
because if you are creating a pot of money to do further energy
savings, I guess they are setting a payback period of two or three
years hypothetically for investment and what they are saying is,
"Ah, we will create another pot of money if it goes to three
and a half years we will invest in it." These are hypothetical
decisions. I think that is about the Environment Agency being
scared to buy third party carbon offset. That is what that is
about.
Q128 Dr Turner: Ms Whitley and Mr
Brander, you say in your submission that you believe the voluntary
market will play a critical role in engaging and educating individuals
about the carbon market. The RSPB do not entirely agree with that
and they told us last week they were worried that the carbon offsets
currently do quite the opposite of this, and that is certainly
my personal experience of what people think when they talk to
me about carbon offsets. They actually believe that when they
buy carbon offsets they are directly reducing emissions whereas
in fact that is not strictly the case at all. So how do you reconcile
this with your own view of what work needs to be done to create
public awareness of what carbon offsets actually mean in practice?
Ms Whitley: That is a point I
was going to bring up because I think that in terms of a role
that government can play there is a very wide variety in terms
of carbon offset providers in terms of what information you can
get about projects. You can get basic facts both about climate
change and also about project accounting—future value accounting—which
is an area that was touched on earlier. There is a potential role,
perhaps not a regulatory role but some kind of educational role
that government can play in terms of either requiring or asking
retail offset providers to give that information. There was a
study done by an NGO called Clean Air Cool Planet in the north-eastern
US which did not rank offset providers but did a top 10 list and
gave a comparison of one against the other. The main areas that
it focused on was information provision of projects and information
in terms of education on climate change. It is an important role
that offset providers can play. It does not necessarily need to
be regulated but it is something that could be asked of them.
I think in terms of consumer awareness of the reductions that
are achieved by offsets, it is a difficult point, and that is
where it seems as though the Government is looking to leapfrog
over a lot of areas. There is a real lack of understanding of
the basic issue of climate change among the general public. There
is a lack of understanding of carbon, carbon markets, what offset
is, and it is a very small segment that are choosing to buy offsets
and I would say they are probably quite a well-educated section
of society in terms of carbon but there is a wide swathe of people—and
there has been market research done—where there is very
little understanding of the issue of climate change, and I think
getting that understanding in place before looking to regulate
the offset market is critical and also if the Government is thinking
of personal carbon allowances or other forms of regulation that
type of baseline education is going to be critical as well.
Q129 Dr Turner: Do you want to add
to that, Mr Brander? Do you think your organisation should be
contributing to this process a little more?
Mr Brander: One thing that ECCM
does is build carbon calculators—and you will see them on
things like the Sky web site and on the BP web site—where
people can go on and put in details of their activities and they
are given a quantification of their CO2 emissions. Obviously offset
companies use similar things to educate people about how much
they are emitting and how much they may want to offset. Five years
ago no-one really knew and generally a household would have no
conception of how many tonnes of CO2 they produced per year. Tools
like that help people look at where emissions are coming from
and build on carbon numeracy. Who knows, maybe in 10 years' time
people will know the carbon cost of their activities in the same
way that they know their monetary cost.
Q130 Dr Turner: Mr Monaghan, your
submission states that you plan to become the first food retailer
in the UK to sell offsets through your shops. It makes a change
from being asked whether you have got your dividend card.
Mr Monaghan: Yes.
Q131 Dr Turner: What steps are you
going to take to ensure that the public actually understand what
they are buying?
Mr Monaghan: Currently we have
started to retail at the back end of 2006 carbon offsets in our
travel agents. We started there because if there is one area where
you want to start thinking it is air obviously. What we do as
part of the normal sales process where people are sat in the office
as opposed to over the Internet, where there is a face-to-face
conversation, we have trained our staff now as people are talking
about the sale, to talk about whether people are aware of carbon
emissions (and given that they walked in the shop to buy a holiday
it is highly unlikely they are going to walk back out of the shop
based on that conversation) and would they consider offsetting
the holiday. We have done that. We are also later in the year
going to start retailing it in all our 3,000 food stores. In this
sense it is a different sales environment and we are selling fridge
magnets and we will be saying if you want to offset a typical
basket of food produce for a year, we will create unique points
of sale. All of this for us is experimental. I would say since
we have been doing this since 2000 we have learned a lot. We have
learned that at first our language was overly jargonistic and
we were missing the consumer. We have missed them so many times
over so many years it is unbelievable. It really is quite difficult
to have this debate. Do not imagine there is this massive personal
carbon offset market in the UK because there is not. You heard
it from the British Airways anecdote; the sales are tiny.
Q132 Dr Turner: You also say that
you see offsetting as a part of the solution to climate change
but not a panacea. Therefore does it follow that at the same time
as selling offsets to your customers you will be giving guidance
about actually reducing their own carbon footprints, and how important
do you think that is?
Mr Monaghan: I think both are
equally important. For me, it is not one or the other, it is about
being in parallel. As we sell offsets, we discuss energy efficiency
and in eco insurance we discuss about making sure your tyres are
properly blown up. We discuss energy efficiency with mortgage
customers and we have produced free energy surveys for example
since 2000 for our customers. When people take a mortgage it advises
them on different ways to reduce emissions and energy efficiency
and there are energy efficiency loans. These are all part and
parcel of the offset package. I would defend offsetting to the
hilt. It strikes me the position we are in, the numbers, if we
do need a 90% reduction by 2060, which we do, we cannot wait 20
years for everyone to get their houses in order and consider offset
at the back end. I will be honest with you, I am running round
in our business now finding things to offset to put more money
into carbon offset programmes to suck CO2 out of the air. All
I am interested in is that. The climate is not bothered where
the CO2 reduction comes from; I just want to get that CO2 out
of the air and I want to get as much possible.
Q133 Mark Lazarowicz: Could I draw
your attention to the Declaration of Members' Interests and support
from the Co-operative Group. On that point about the timescale
does not that emphasise the argument that the calculation of the
carbon savings should be linked to the activity which causes the
carbon consumption either before that event takes place or alongside
it or at least within a very short period o time, because if we
need action now there is no point in having carbon savings over
a longer period, and certainly they need to be valued in such
a way as reflects the fact that the savings are required at the
time of the emissions and not a long way in the future.
Mr Monaghan: Yes where possible,
the timescale should be as short as possible and ideally the consumer
should know where the money goes in an ideal scenario.
Q134 Mark Lazarowicz: Is that not
quite essential to the consumer making informed choices?
Mr Monaghan: I think it is impossible
to deliver in every instance because if I as a purchaser come
to Climate Care and say, "There is a hundred grand, each
year and every year for three years and you know it is going to
happen and I want you to tell me the projects," the number
is big enough and the continuation of business is long enough
for me to have quite a strong leverage in that relationship. However,
if an individual consumer walks into one of my shops and says,
"I will buy a £7 piece of carbon offset," there
is no way in a supply chain one can allocate that to a specific
project and to a specific timescale. As a principle, what you
have just outlined should be the starting point to aim for and,
to be honest with you, every consumer would want that as a starting
point. They would like to see which project it was. I envisage
a time when people do not just choose carbon providers, they choose
projects, but the market is nowhere near where it needs to be
in terms of scale to deliver that right now.
Q135 Chairman: Technically you could
have a situation where you build up little shares in projects.
If you are a consumer who has only got seven quid to spend and
you are rather keen on wind farms in Mozambique, you could go
in electronically and add seven pounds to that one, and someone
else could come along and says they want to do something in the
Asian Pacific. There is no technical reason why they should not
do it, it is just we have not quite got there yet.
Mr Monaghan: For example, when
we started retailing we are not taking any profit out of this.
We are doing this because we really believe in the market and
we are going to start retailing these things. What Climate Care
and other providers say to me is, "How much carbon do you
think these people are going to buy, so I can have a project ready?"
and I have to say I do not know. I can project what I think they
will do but I do not absolutely know what the sales will be in
which part of the country and at what point of the year. Because
of that when I market my carbon offset projects now through the
Co-op we talk about what things have happened historically as
an example of a project, not where the money will definitely be
going because I could not guarantee that and, rightly, I would
be up before trades descriptions if I start saying X will go to
Y and it does not transpire. There is a logistical difficulty
with promising things in the future as with anything in life.
Ms Whitley: The idea is to model
the voluntary market on CDM and we work both in compliance and
voluntary markets. In terms of the CDM projects a lot of the additionality
proof is financial additionality and you prove financial additionality
because you needed the potential revenue from carbon credits to
finance the project so a lot of projects have bank loans or shareholder
loans that are contingent upon the funding coming in from carbon
credits that have not been produced, verified or issued. The only
way that the project can start and be additional is if that money
is there, so you almost have to have this future timescale between
when the money is paid and when the emissions are issued in order
to get that additionality proof. It is important to keep that
in mind for the voluntary market as well.
Q136 Mark Lazarowicz: Okay, that
is another issue.
Ms Whitley: The projects are quite
similar in terms of the financing of the voluntary and compliance
markets.
Q137 Mr Caton: We have had conflicting
evidence about Defra's consultation proposals with regard to transparency
of information. I think you have argued that they are too onerous
and do not compare with others like green electricity or ethical
investments. However, the majority of submissions we have received
point to a lack of consumer clarity and say that better information
would lead to increased consumer confidence in the market. Do
consumers currently have enough information and would what be
the best way to guarantee and maintain the quality of that information
if not through the Defra code?
Mr Monaghan: I personally think
it will be through the emergence, the cream rising to the top,
of NGO standards. If you look at ethical consumerism, the consumers
go for the standard backed by an expert charity related to that,
so if it is testing animals it is BUAV, if it is organics, it
is the Soil Association, if it is the Forestry Stewardship Council
or Marine Stewardship Council, it is the World Wildlife Fund,
et cetera, et cetera. I think what has happened now at the end
of 2006 is the gold standard has emerged. It is backed by WWF,
Friends of the Earth, Greenpeace, et cetera, and I know I am pushing
round now with Climate Cares and others saying how many of my
projects can be gold standard going forward. I will not be asking
how many of my projects will be government standard. I will not
be pursuing this Government standard under any circumstances if
it is what it is, which is certified emissions reductions if it
means I am propping up the EU Emissions Trading Scheme because
the way I see it is that the EU Emissions Trading Scheme is wrong
because I could easily save money by buying a tonne of carbon
through the EU ETS. It is trading at about €1.50, and I am
paying £6 right now roughly, which is the full corporate
rate, to Climate Care to buy my carbon. I could save masses by
going to EU ETS but I refuse to do so. One thing that worries
me is if we are all forced into ETS and the CDM are we propping
up a market which the bottom is going to fall out of quite soon?
Never mind the individual projects that that market is supporting—€1.50,
that is a quid a tonne.
Q138 Chairman: That is a problem
in phase one but looking at the prices of phase two that problem
is going to go away.
Mr Monaghan: The Government standard
is supposed to be in place by September. What if we have a Government
standard in September that says you are all going to ETS and CDM
and the bottom falls out? This is a standard that is supposed
to build consumer confidence. It has not been thought through.
Mr Brander: One thing we have
become aware of is offset providers who are already offering the
Government-compliant offset standards and offering phase one EUAs.
Obviously someone in the market has moved quickly and they have
said this is what the Government is endorsing and they are offering
that to the market. An EUA now does not represent any kind of
emissions reduction, there is a glut and industry broadly has
too many.
Chairman: We will have something to say
about that when we publish our report on the ETS.
Q139 David Howarth: Can I raise a
couple of other factors that might affect consumer confidence
and whether you think there needs to be regulation to offset those
problems, as it were. The first is we were told last week by FERN
that the average administrative cost of an offset company is 57%
and only 43% of the funds actually go on to projects. Does that
not raise the kind of problem that charities have when people
learn that their administrative costs are high, that people then
start to lose confidence in that charity? In fact, in a way, the
whole offset market is a sort of charitable enterprise. It sells
feeling good in exchange for giving money. Is there not a case
for some regulation there—there is the 30% cap in Germany—or
at least compulsory information?
Mr Monaghan: I think yes and we
have argued in the past that we think carbon offset sales to the
personal sector should be VAT exempt across the piece because
we do think, by and large, it is a charitable purchase and it
would send a signal to stimulate the market much more than any
government standard would, to my mind. I would take anything that
FERN said with a pinch of salt, to be honest. They are absolutely
anti-offset, even good offset. There is good offset and bad offset
and I think we are all probably against bad offset and some of
us, hopefully, are for good offset; they are against offset per
se. I cannot say where they have sourced those figures. They sound
dubious to me. I personally think it is too early for regulation
and I say that as somebody from a corporate that is normally out
there calling for regulation. There was the whole company law
review and the OFR and we were the ones arguing for mandatory
disclosure of CO2 emissions in the business review, et cetera
and I am sat here before you saying for this market at this point
in time it is the wrong point for regulation. I really believe
that quite strongly. I think it could kill and confuse the market
and would stop the experimentation and it would kill all the projects
in Africa right away and Africa would disappear off the offset
map.
Ms Whitley: I would say that is
something to keep in mind. I think is transparency is very important;
not regulation but encouraging transparency. So if you have a
sense of the administrative cost that goes into different projects,
the problem is that it is in small scale projects in countries
like Africa that have higher administrative costs per tonne of
carbon. You are dealing with doing rural surveys as opposed to
going to one meter in a factory and taking reading, so your administrative
costs per tonne are much higher. As a consumer, I might go into
a market and say, "I don't care, I want a tonne of carbon,
I want low administrative costs, I do not mind if there is an
HFC credit, that is what I am going to buy." There are other
consumers who want to do solar PV in a village in Tanzania and
they will be happy to have a 50% administrative cost if they know
that is what they are getting and that is what required. It is
about transparency and understanding and having consumers understand
that sometimes those administrative costs are required in order
to get these good projects done.
Q140 David Howarth: The other area
is future value accounting, which you have already mentioned and
Mr Lazarowicz has mentioned. Is there not a paradoxical effect
of the Defra code that people will suddenly realise that this
is what has been going on? I think it is generally accepted that
consumers have no idea this is how the thing works. That itself
might lead to a crisis of confidence about whether people are
really getting offsetting or it is only something that might happen
in the future, and we might find that is a situation that they
would not like and that would then led to some kind of argument
for some regulation around that?
Mr Monaghan: I do not think it
needs regulation; I think it needs further consideration, and
in the same way we have a discount in the finance all the time,
which I am sure is where the idea is coming from, we probably
do need discounting of carbon projects which are going into the
future if only because of the risk. The longer the project is
in the future before it reaches fruition there is more risk of
something happening—political risk or technology risk, et
cetera, and disrupting it. So it is something the industry needs
to tackle and I would see it being tackled in a gold standard
mark two because if you look at the Fair Trade standard, the Soil
Association standard, the Forestry Stewardship Council, where
we are now with those standards is not where we began; they have
progressively toughened over time. I can see that coming in in
a mark two.
Q141 David Howarth: How would that
work for the time question? There is a whole range of possibilities
on the time question. You could say, taking an extreme view, that
only already produced savings count. That would be a very strict
view. Then you could have instead of that it has got to be saving
within N years and N could be any number between one and 100.
How would you see that standard developing?
Mr Monaghan: Personally I believe
there is a role for reforestation in carbon offset and it should
be around the 20% mark given that 20% of climate change emissions
are due to tropical deforestation. I also think, and I know this
is RSPB's position, that the Climate Change Convention, the Kyoto
Protocol should start from a baseline for developing countries
of what their current forestry emissions are and subsequently
committing them to a net that it does not go below because otherwise
you have could have a situation where one national park is being
deforested whilst another is being reforested. As a system there
is no additionality and until we draw forestry in that is not
going to happen. It can happen and I have seen it happen in Uganda
and the RSPB and others are quietly involved in these projects
because if you go to things like the Bigodi Wetlands National
Reserve their logo is all over the project because of all the
revenues and the wetlands and what is happening there. I do not
think it is fair to expect the gold standard by the NGOs to deal
with everything right away like you would not expect micro generation,
et cetera. Again it is proportionality. I could not believe it
when I saw mandatory regulation actually being actually discussed
given the size of this market and given what I know to be the
abuses in other markets, whether it is micro generation, the Forestry
Stewardship Council, organics—there is a massive dispute
over organic salmon and whether it is worth buying and nobody
is talking about regulation.
Q142 David Howarth: Regulation has
two functions. One function is to stop abuses that already exist
and you are right the market is not very big and therefore abuses
are perhaps not that great in impact. The other function of regulation
is to get markets going so that people have enough confidence
to enter the market in the first place. Those are the two points
I was trying to raise, problems which might come up where regulation
might help to keep the market going.
Mr Monaghan: I am not aware of
an ethical market that is growing without the backing of the NGOs.
It will not be the governments that make people believe in the
market; it will be the NGOs. Government can say what it likes,
that is the truth. Whether it is BSE or salmonella, it will be
what the NGOs say. The NGOs are saying it is a gold standard.
If this government standard comes out—I find it quite difficult
to understand why we are in the place we are, to be honest, and
I am assuming it is just because of the temperature of the debate
around climate change right now that everybody is rushing to be
busy. It needs sobriety and we need to stop and think where we
are taking this market. It needs time to experiment and to grow.
Q143 Chairman: You also say that
you think that a Defra standard would impact negatively on the
existing standards that have been developed by NGOs and indeed
by the industry. Does that characterise your position correctly?
Ms Whitley: I think the idea of
trying to create a Defra standard as the de facto standard in
the market, so promoting a mark and promoting to the public that
it is the best offset product; that is a danger. The developing
of a standard in itself is not a danger in that there are a number
of standards already out there, as has been mentioned before.
I do agree that it will become one of many standards and the consumer
will choose which standard they want to go with, so in that way
it will not be damaging, but I think if the Government were to
put a lot of marketing and educational campaigning around this
one standard that could be damaging.
Mr Brander: One thing on the Defra
proposal is it is trying to create a standard for people who are
very interested in a very tight compliance-like voluntary offset
market, so it is things like the tonne-for-tonne issue where people
want to have absolute assurance that when they buy a tonne of
carbon that is what they are delivered, and the Defra proposals
are ignoring a potential other side to the offset market, it would
probably be better termed as a reductions market, where there
are consumers out there who are aware of climate change, they
want to do something positive about it and they want to invest,
a bit like a charitable donation, in a project which reduces climate
change or reduces emissions somewhere and forcing the whole market
down a compliance like route ignores this other more charitably
motivated side of the market where there are people who just want
to invest in emissions reduction projects, and whether they are
forestry projects that have high sustainable development benefits,
that perhaps have 90% assurance of delivering the offset that
they think they will deliver, there is that side of the market,
and I think Defra has missed that with its one standard which
is driving everyone down a compliance-type route.
Q144 Chairman: Is there much difference
between making a charitable donation to an NGO which is carrying
out generally good work in terms of sustainability and going into
an offset which does not have any real kind of measure?
Mr Brander: No, they are very
similar.
Q145 Chairman: That does not matter?
Mr Brander: It depends on your
motivation for making that donation. If your motivation is to
absolutely make sure that you have offset your emissions, then
it does matter that there are those assurances, but if your motivation
is that you just want to do something positive about reducing
emissions and also your motivation is to do something climate
change related which also has sustainable development benefits,
then the fact that it is like a charitable donation fits perfectly
with your motivation.
Chairman: Are there any urgent questions
that my colleagues to ask the witnesses? We will draw it to a
close in that case. We might just want to follow up one or two
things in writing if we may to deal with points that we have not
had time to deal with today. Thank you very much for coming in.
| 
