Select Committee on Environmental Audit Minutes of Evidence

Examination of Witnesses (Questions 86 - 99)



  Q86  Chairman: Good morning and welcome to the Committee. I wonder if you could introduce yourselves, because I know you are all relatively new to the job, and say a bit about how you got there and where you are at.

  Mr Brearley: First of all, I would just like to say that I am very grateful to the Committee for inviting me and my colleagues here today to talk about the work of the Office of Climate Change. As you all know, I am Jonathon Brearley, Director of the OCC; this is Tom Taylor who has been leading on our analytical audit; and this is Robin Mortimer who has led on the development of the draft Climate Change Bill. As you know the OCC is a relatively new organisation and therefore this is a great opportunity for us to set out where we are and what we have been doing to date. Like all parts of the Civil Service obviously we need to give private advice to ministers; but our aim is to be as open as possible and to share our analysis essentially as widely as possible. First of all, what the OCC is: the Office of Climate Change is a cross-departmental unit which reports to ministers and officials from six departments with the strongest interest in climate change, and reports to Treasury and Number 10. Those departments are: Defra, DTI, DCLG, DfT, DFID and the Foreign Office. As set out in my letter, we have three main functions. The first essentially is supporting and improving management arrangements for climate change policy and delivery across Government. Secondly, running time-limited policy-focussed projects: these are usually staffed by a mix of officials from different departments and over time we would like to get people from outside Government actually working on those projects as well and we do have one person doing so now; and essentially these projects are run in a manner very similar to other organisations, such as the Prime Minister's Strategy Unit and aim to put up choices to ministers to consider collectively. Thirdly, we do consolidate existing analysis and essentially identify where we think more work might be needed and that work is on going. In addition to all these functions we do have a smaller role which is working across Government acting as advocates on climate change and presenting to other departments about climate change issues and how that might affect them. What I would like to do is just run you through our work programme to date. First of all, we have been setting up unified management arrangements for climate change and energy within Government; we have been consolidating existing analysis, which I mentioned. That has already reported on science and there is a publication on the Defra website which sets out essentially our summary of the science but otherwise is ongoing. We have run policy focus projects on: the draft Climate Change Bill; an ongoing project on household emissions—how we address carbon emissions from households; decarbonising of heat supply—how would you carbonise the supply of heat; the future of EU Emissions Trading particularly Phase 3; and we have carried out a small project on aviation offsetting which fed into the offsetting guidance issued earlier this year. Overall our aim is to support Government to deliver on what I think is a very challenging and, as you all know, a very important issue. As I mentioned before, we very much welcome ongoing dialogue as we do so.

  Q87  Chairman: Thank you very much. Could you just say how you worked with the Interdepartmental Analysts Group, and how you think you may work in the future with the proposed Committee on Climate Change which will be established?

  Mr Brearley: I think the Interdepartmental Analysts Group essentially is made up of analysts from across Government who work on emissions. They are spread across a number of different departments and indeed a number of different organisations, like the Carbon Trust and Energy Savings Trust et cetera. Their job essentially is to coordinate with each other and ensure that emissions projections are consistent following a set of guidelines issued by Defra. Our job essentially is to, first of all, consolidate all of that analysis and to check where we are in terms of the Government's progress; but, secondly, considering a coordination role. Essentially the IAG is a group of analysts who come together to discuss issues. There may be a case for the OCC to play a small role in helping those analysts coordinate with each other, ensuring that where analysis of one part of Government changes that is reflected in similar analysis in another parts of Government. Our relationship with the Committee on Climate Change I think is still an ongoing question. Clearly the Committee on Climate Change will need access to a huge amount of data, and a huge amount of analysis. What we do not want to have necessarily is duplication between what Government does, what the OCC does and what the Climate Change Committee does. At the moment we are thinking essentially about which models of Climate Change Committee might allow us to do both.

  Mr Mortimer: We are working very closely with the IAG on that and the Committee. We are looking at a number of alternatives. One really important issue is not to duplicate existing Government analysis; and also to recognise that quite a lot of the analysis which will be needed by the Committee will have to be done by Government in any case; so the Department for Transport is always going to want to have a transport model which would be relevant to the Committee. We are looking at a number of different models ranging from one where the Government effectively acts as an intelligent customer for the Committee's advice and another where more is outsourced to the Committee and have not arrived at a conclusion on exactly the shape of this model as yet.

  Q88  Mr Chayter: From the point of view of the world outside, businesses and local authorities, does not the establishment of a new body actually confuse or fragment the issue further? Can I ask, are you now responsible for all Defra's work on climate change?

  Mr Brearley: Absolutely not.

  Q89  Mr Chayter: There are some responsibilities still fragmented within the Department, quite apart from the division of responsibilities between departments? The thrust of my question is: do you see this as a major problem, the creation of a new body; is it not going to confuse the world outside; and what are you doing to try and provide a coordinative approach across Government departments?

  Mr Brearley: First of all, just to be clear the OCC is not part of Defra but actually stands between departments. We do not lead on policies.

  Q90  Mr Chayter: You are not formally part of Defra?

  Mr Brearley: For pay and rations we are.

  Q91  Mr Chayter: You are located in the same building.

  Mr Brearley: We are located in the same building but are governed by six departments and funded by six departments. Our business is to support those departments to work together. We do not run policy as, for example, Defra does in parts of the Climate Change Policy, as does the DTI. I think what the OCC offers is a much more coordinated approach by Government. If you think about what we have done on the Government's arrangements, we have created a single energy environment group which is going to be supported by two cross-departmental groups to allow that to happen. I think essentially the work of the OCC should lead to a rationalisation and a simplification of what is there, rather than a duplication.

  Q92  Mr Hurd: Talking about the 2010 target, the 20% target, two questions arise from that. As I understand it in 2005 emissions were approximately 6.4% down on 1990 levels, which is just over a quarter of the way to the target. What do you think are the key lessons that we should learn from the difficulties this country has had in achieving that 2010 target? Secondly, it seems to have taken Government a very long time to realise they were off-track in terms of meeting that; in fact they were making quite optimistic announcements about it back in July. What lessons should we extract in terms of the efficiency of the Government forecasting machine?

  Mr Brearley: I think looking at the NAO analysis they were very complimentary about a lot of the analysis the Government carries out. I think we need to recognise that our analysis is scrutinised by the United Nations and scrutinised by an external panel of experts. Given that, projecting your emissions has a number of uncertainties which are extremely difficult to manage. For example, the prices of fuel et cetera all have quite significant impacts on what we do. In terms of the 2010 target I think Government recognises already it is going to be very, very difficult to meet that target. I think we need to focus much more on the long-term and how we get to 2020. Tom has been doing some work on the analysis and perhaps could comment on that in more detail.

  Mr Taylor: I was surprised at quite how complimentary the NAO report was on the analysis, not because I had any preconceived ideas about the analysis here but perhaps because of my background working on other areas, like benefit fraud and benefit process where you do not typically encounter such favourable NAO reports. I think it is quite clear that the analysis has improved from the original programme work that was done in 2000. The NAO acknowledged that is more consistent; it is more comprehensive; and it is much more robust; and there are clear signs that there is a more cautious approach to the estimates that have been taken both in the projections and the policy appraisals.

  Q93  Mr Hurd: What about key lessons to be learned in terms of meeting these targets?

  Mr Brearley: I think one thing we do need to do is strengthen the accountability we have around our targets, and that is exactly what I think the Climate Change Bill aims to do, both in terms of embedding our longer terms targets (and essentially that is the game we are in—it is delivering against our longer-term targets) but also in setting a pathway to get there. Essentially Climate Change Committee is something I think will fully strengthen that.

  Mr Mortimer: I think that is right. Part of the answer is the Climate Change Bill, for two reasons: one because I think it will create a new policy framework within which trade-offs will have to be made. I think those will become more explicit, with the Committee producing very explicit advice on both what the trajectory should be but also on what the spread of effort across different sectors of the economy should be, and between domestic effort and overseas effort. I think all of that will become much more transparent and I think that will change the context in which Government makes policy towards meeting the targets. The second point would be, as Jonathon said, the accountability framework. You are right that, in a sense, we are four years away from 2010 at which point it becomes more obvious that 2010 is more challenging. I think by setting out a 15-year framework, which the Climate Change Group proposes, there will be an annual process of review looking 15 years ahead, and therefore the level of scrutiny on how far the UK is on-track or off-track with its budget will be that much greater. I think the Bill offers quite a lot towards the question you are asking.

  Q94  Mr Hurd: I think the Committee would like some reassurance that a system of projection in the 2003 Energy White Paper which was telling us we were on track to meet the 2010 target (when in fact at best we are likely to achieve about half of it in terms of domestic reductions) has been improved to such a significant extent we can rely on it in the future?

  Mr Brearley: Taking your first point on domestic reductions, I think the way we define reductions in our emissions in the future has to include what happens within EU emissions trading in the future and perhaps in global trading if we get there. Therefore, in terms of when we assess where we are, I think we do need to take into account essentially what is part of those systems. For example, EUETs covers 50% of our economy. I think that over time we have to learn lessons about how we manage our analysis better; and essentially how we can begin to improve on the things we are doing by looking back on our projections and essentially comparing those against what was forecast in the first place. As Tom has said, the NAO has been very complimentary about our work and we should not under-estimate the difficulties in doing so.

  Q95  Colin Challen: The Climate Change Bill sets down a target of 26-32% cuts by 2020. To what extent are you focusing on that new range of potential cuts? What policies do you think will be required to meet them, and how will that set of proposals be informed by our previous targets?

  Mr Brearley: I think that the Energy White Paper will come forward with a series of proposals which will take us to that range you mentioned for 2020. It is probably not for me to pre-empt that. Clearly there is an awful lot for us to do to get there, but that is part of the Government's process.

  Q96  Dr Turner: You say you anticipate that the Energy White Paper will save your office the necessity to work out anything else. Are you confident in that, because the Energy White Paper will basically address the question of electricity generation; that is only one part of the CO2 imaging economy. Does it not need something to deal with the rest?

  Mr Brearley: Yes, I think we do need to deal with the rest of the economy and it is probably not for me to pre-empt the Energy White Paper's projections either. There is plenty for us to do to get to 2020, but also there is a big question about how we get beyond 2020. If you think about the investment cycles for most industries, including transport and heat generation which I mentioned before, there are very long investment cycles to get us to a place where we can begin to reduce emissions. Therefore, there is lots of work.

  Q97  Dr Turner: If someone else is going to do all the work finding the policies that may or may not achieve results, what are you going to do?

  Mr Brearley: My point is that there is an awful lot to do to get us to not only our 2020 but our 2050 goals. The OCC will contribute to both of those. Part of our work is feeding into the Energy White Paper.

  Q98  Mr Chayter: What do you think are the most urgent priorities that Government has to take on board between now and 2020? Can we talk about the specifics? What are the areas of emissions reductions that we have not yet done enough about that you believe from your point of view have to be priorities and are achievable between now and 2020?

  Mr Brearley: I think as we all know there is more to do in electricity generation and work is ongoing. I think the OCC is beginning to look at the supply of heat and supply of gas and what can be done to decarbonise those. To be honest, it is too early for us to say how much is possible by 2020 simply because that is a very early piece of work but clearly there is potential there. The transport sector, which is the other big part of the UK economy, I think is very difficult and very challenging and it is going to take a long time to change round. In terms of the OCC work I would argue there is potentially more we can do with heat. As I say, electricity generation is where a lot is happening and where we should be focussing a lot of our effort.

  Q99  Mr Chayter: Are you just writing off the transport sector?

  Mr Brearley: Absolutely not.

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