Examination of Witnesses (Questions 60-79)
DR KEITH
ALLOTT, MS
KIRSTY CLOUGH,
MR JOHN
LANCHBERY AND
MR MARTIN
HARPER
21 NOVEMBER 2006
Q60 Chairman: We are hoping to have
a session with him in due course. On emissions trading, he does
say that post 2012, post Phase II, the shape of the ETS could
be very influential in how global trading might or might not evolve.
What is your judgment about how important the success or failure
of the ETS is in terms of the global process of tackling climate
change?
Mr Lanchbery: It is very important.
It is the only operational scheme of its size certainly in the
world and, as the Environment Agency said, it is the only one
that trades between different countries, albeit as part of the
Union. So it is very, very important that it succeeds, which is
why we have all been very disappointed about the over allocations
for the first phases which brings it into disrepute.
Dr Allott: I would entirely agree
with that. Just to spell it out even more, there are two processes
which are now running which will very much determine the credibility
of the ETS. Firstly, the decisions on the Phase II Allocation
Plans: we are expecting the first results of the Commission's
thinking on that within the next few days, and then there is the
review of directive for Phase III, both of which are happening
right now, and both of those processes will be critical in determining
whether the EU ETS is actually going to deliver on what we want
it to be seen as, which is, and as Stern sees it, as a nucleus
of a future global trading scheme. The basic principles of the
ETS are right in terms of the framework of mandatory absolute
caps. We are concerned that if ETS fails because of lack of political
will, with a short-term focus that fundamental principle, for
instance, will be lost and we will then have a global trading
regime built on a much slacker framework.
Q61 Mr Caton: Can we look at UK emissions
targets now. The Government says that Phase II of the EU ETS will
save eight million tonnes of carbon a year from the UK, but that
is calculated on the basis of business as usual projections if
we did not have an emissions trading scheme. What are your views
on using those sorts of projections rather than looking for absolute
cuts?
Mr Lanchbery: We should not. It
is a bizarre way of reaching a target to do a business as usual
projection, lop a little bit off it and then say you are trying
to meet a target. If you are going to meet an emission reduction
target, you need an absolute budget of emissions which decreases
over time so that your budget in the end is exactly the same as
the target you are trying to get to. It is absolutely bizarre
to use a projection, except to inform you of how much you would
have to do (what is the difference between what you might do and
what you need to do), but you need to set allocations to the EU
ETS on the basis of an ever reducing absolute budget for carbon.
There is not another way to do it. Projections do not take you
to your target.
Dr Allott: We entirely agree,
and I would also point out that continuing to rely on business
as usual projections, which assume a business as usual world in
the absence of the ETS, is an increasingly bizarre and untenable
approach. The ETS exists; therefore it forms part of the business
as usual world; they are caught in its logical loop.
Q62 Dr Turner: At the moment it seems
difficult to think that the operation of the ETS so far has saved
a single tonne of CO2 from being emitted anywhere in
Europe, let alone determining whether it has been saved in the
UK; but when Defra announced the Phase II allocations they said
it would help reduce the UK's carbon emissions from the 16.2 level
that we are at by 2010 as compared to 1990, in other words, the
revised figure in the last climate change policy statement. Was
Defra justified in making that claim?
Dr Allott: The basis for that
assumption is, firstly, that there is a robust emissions trading
scheme around the whole system. An emissions trading scheme is
only as strong as the weakest link. Every part of that chain needs
to be robust. Behind your question there is the issue about where
the emission reductions take place and whether they take place
within the UK or in another country, and that is a difficult question
to reconcile with the national cap. The truth is that once you
have an international trading scheme you start to lose control
over where your emissions do come from. Whether Defra is justified
in making that claim, I think the jury is out, and a lot will
depend on what happens in the next few weeks in terms of the Commission
holding a line on the allocation plans that we are currently seeing.
It is clear that the current overall picture is not good. We are
getting positive signals from the Commission in terms of the line
they are going to take, but clearly this is a high level political
thing. We are getting positive signals from the DG environment,
but this is a much wider high level political issue in all the
aspects of the Commission, and some parts of the Commission take
a different view.
Q63 Dr Turner: If the ETS Directive
is acted upon literally, the Member States have to accept national
allocation plans that are in line with the Kyoto targets, but
it does not really actually say how much it would work in practice.
What wording or mechanism do you think the UK Government ought
to be pressing for the Commission's review of this directive?
Do you think it is sufficiently explicit to work?
Mr Lanchbery: No. It certainly
has not worked, so therefore it is not sufficiently explicit or
certainly not sufficiently mandatory. We would like to tighten
that up considerably, at least to say that the allocation should
be directly proportional to, or better than, that Member State's
target. A better way still would be to have an overall EU cap.
Let us assume that the EU, as a whole, agreed to a 30% reduction
by 2020. If you did that, then that would be the level below the
1990 levels at which the allocation would be set. You would have
to have a burden-sharing arrangement of some sort to divvy it
up, but you could do that. At the moment, you are right, the directive
is quite loose. I think at the time it went through the Council
and Parliament they were actually being quite reasonable, and
they said this covers about half of European CO2 emissions,
very roughly, and there are measures you could take in other sectors.
So, in some countries perhaps they really are going to tackle
the transport, domestic sectors and make the most of their emission
reductions in those sectors so the traded sector would not have
to do very much, but, frankly, that was wildly optimistic thinking.
The place where the biggest reductions can be made faster is mainly
the sector covered by the Emissions Trading Directive and the
transport and domestic sector have been politically harder to
touch, so it was perhaps a bit idealistic, if not naive, of the
original drafters to put the wording in the way that they did.
Dr Allott: I would agree with
all of that and also stress the importance of the targets, and
in fact more than just a single target, which we think would be
absolutely necessary, which would be at least a 30% cut for the
EU by 2020. This is being proposed by at least three major countries
at the moment, the UK—Gordon Brown confirmed this at the
time of the Stern Report—also Germany and France are supporting
this target. The big question will be whether the EU as a whole
signs up to it next spring Council. That would provide a very
strong framework. We would like to go further than that and actually
see an elaboration of the carbon budget idea to give a clear trajectory.
Q64 Dr Turner: Given the tenor of
your remarks, do you have any optimism at all that the ETS is
going to deliver significant carbon savings?
Dr Allott: We have optimism that
it is the right basic mechanism, but the mechanism is only as
good as the targets that are set, and that is a question of political
will. It is clear, as you say, that it is not delivering significant
emission reductions, if any, in Phase I. That is to do with the
cap-setting process. It is also to do with the fact that the rules
for Phase I were very confusing because there were no Kyoto targets
in place in Phase I, the benchmark was that Member States had
to show that their cap was set to be on a trajectory to deliver
the Kyoto target, so the trajectory can take any shape that you
like. Now we have an absolute benchmark, which is the Kyoto targets,
and we are really hoping that the Commission will stick to its
guns on that and get very tough. It does have a benchmark and
this is the crucial few weeks to determine the shape of the scheme.
Mr Lanchbery: You mentioned when
you were questioning the Environment Agency the possibility of
a carbon tax, but in fact what has happened with the EU Emissions
Trading Scheme is that because they have set the caps very low,
or very high rather, it is the equivalent for the carbon tax of
setting the rate at 0.01 pence. It is how you use the instrument
properly that is the question and how you set the targets rather
than the instrument itself which, like Keith has said, we think
is basically sound although it has some deficiencies.
Mr Harper: May I add one point
about this. I suppose, as the UK Government is toying with the
idea of introducing a carbon budget, the ETS is going to be the
personification of why it is so important to make sure that the
target is linked to caps and therefore the policy measures try
to make a contribution to those targets, and until one has that
carbon budgeting system in place, then any one policy measure
could not necessarily be deemed to be making a contribution. I
think the classic case with the Emissions Trading Scheme is that,
unless it is directly linked to a target which determines the
cap, as the Chairman said in his statement to the Environment
Agency, then I think it will have its credibility undermined,
which I think we all fear but we are all optimistic that there
will be the political courage coming from the different Member
States to try and put that in place.
Q65 David Howarth: Can I go back
to the question of auctioning allowances. I will be interested
in any comments you might have on the exchange of the Environment
Agency, but also there is one specific thing in the WWF memo to
us about how much money the Government might make out of auctioning
allowances, and I would like to put on record how much you expect
the Government to make out of auctioning allowances and what might
be the best way of spending that money?
Dr Allott: The first principle
of auctioning is that it is clearly the most environmentally and
economically efficient way of sorting out this allocation process.
We have got ourselves into a terrible mess, and what was initially
designed to be a simple market mechanism has become incredibly
complex and bureaucratic: because as soon as you move away from
auctioning you have to start having all sorts of special rules
to deal with new entrants, plant closures, plant modification,
a whole range of other things start coming in which makes the
system very complex. You have perverse incentives from grandfathering,
you have the difficulty of benchmarking, a whole range of things
come in. Auctioning is clean and simple, it does also provide,
as the Environment Agency was saying, an internalisation of the
carbon cost into all decisions, both existing plant and for new
plant, which is precisely what we need to see in terms of influencing
behaviour and sending long-term signals to companies when they
are making investment decisions, and so, on all those bases, we
think it ticks an awful lot of boxes, if not all of them. In terms
of the revenue raising aspect of this, the positive side of that
is that if you assume an EU allowance price of about 15 to 30
euros, which at the time we submitted the memo seemed a reasonable
amount—clearly this moves up and down, but if you assume
that range—with 7% auctioning as proposed by the UK Government,
that would generate between roughly 250 and 520 million euros
worth of revenue per year in Phase II. Clearly, there are very
interesting questions about how you use that, though in the statement
the Government also announced the Environmental Transformation
Fund, although the linkage in the text was not direct. We are
not quite clear whether all of that money is going to be spent
on those things the Environment Agency mentioned, but we think
that is basically the right way forward: to recycle the money
so you have a positive feedback. You are using the revenues from
pollution to pump-prime the solutions to this problem, the lower
carbon technologies. There is a debate to be had, especially when
you move to higher levels of auctioning, about the need for compensation
for some sectors which may be exposed to international competition,
and we fully accept that there are some sectors, although we think
it is greatly overplayed, where it is an issue and I think, subject
to state aid rules, there needs to be some creative thinking about
the use of the revenues.
Mr Lanchbery: Can I add to that,
the reverse of auctioning, of course, is grandfathering, which
is what we mainly have at the moment, although not entirely grandfathering
for Phase II. That has led to massive windfall profits, particularly
for the generators, which has not really caused a scandal here,
but it has in Germany. They are furious about the huge profits
they have made from giving away the allowances, especially when
there is an excess of them, so it is a bit scandalous. The second
point is that generators in the UK are increasingly coming round
to auctioning—not the German generators, I hasten to add,
although they are the same companies, so you do wonder why they
have one opinion in the UK and another one in Germany! Nevertheless,
the UK generators are tending towards that view, for all the reasons
Keith outlined. If you do take early action, then you are rewarded
for it; you do not have all these perverse incentives to keep
a plant open longer and longer.
Dr Allott: One notes also that
if you have anything less than 100% auctioning, at least for a
particular sector, then you lose many of the benefits, because
one of the big benefits is the simplification. So, if you were
to have 50% auctioning across the board, then you are not getting
rid of the issue of how you deal with new entrants and planned
closures. You may be thinking of putting up full auctioning for
the power sector, for instance, and then that sorts that sector
out. There are ways through this, but I think 100% auctioning
for a sector is the way to think about this.
Q66 David Howarth: And you produce
an enormous return on lobbying, do you not, so the rules become
very important, and lobbying becomes more important than economic
activity? Can I turn to the Environmental Transformation Fund.
I suppose the simplest way to look at the question is: is that
a misnomer? Is the amount of money that the Government is going
to make on its 7% auctioning enough to justify the name of the
fund, assuming there is a connection between the two?
Dr Allott: We would like to see
the details of how much money they are actually planning to spend
on the Environmental Transformation Fund and more details about
how they are going to direct it. Clearly, if they spend all the
revenues that we have tried to put a ball park figure on in supporting
non-nuclear low-carbon technologies (I think is the definition),
then clearly that could make a very significant difference.
Q67 Chairman: Given the importance
of making this whole scheme work properly and given the enormous
obstacle that anything other than auctioning represents to making
it work properly, do you think there is a realistic chance of
getting to 100% auctioning in Phase III?
Mr Lanchbery: There is a chance.
I am not sure if it is highly realistic, but there is a chance.
The UK's position is for 100% auctioning—they certainly
favour auctioning—and a number of other states are coming
round to that view, partly because of what Keith said. I was talking
to an Austrian person on the way back from Nairobi and he was
finding just doing all these things, like providing a new entrants
reserve, and all that sort of thing, administratively terribly
unwieldy from the Austrian Government's point of view. It does
not really benefit industry in particular. Although it gives them
initially a windfall, it does not benefit all industry, who also,
as you were discussing earlier with the Environment Agency, find
it administratively hard, especially small installations, and
so you would just remove all their benefits. I think governments
are increasingly finding that it would be rather worthwhile, certainly
from their point of view, to get rid of all these very difficult,
tricky things they have to implement with not auctioning. We live
in hope, but I am not quite sure how much hope.
Q68 Chairman: Where is the resistance?
First of all, these difficulties were not exactly unforeseeable.
They may not have been foreseen, but they certainly were not unforeseeable.
What was the objection in the first instance to having auctions
and what is the resistance now to moving very swiftly towards
it?
Mr Lanchbery: I know it is primarily
a business, but particularly some groups who have a reasonable
wealth, like the energy intensive people who use a lot of energy,
whose emissions are high, they would be quite hard hit by an auction
because they feel that they cannot reduce emissions. Having said
that, a lot of them say they have in the past made their organisations
more efficient. In that case auctioning will reward them for their
past behaviour, but they have tended to take a very blanket, overall
industry view and say, "No, no, no, we want reward for our
historical emissions", which is what is meant by grandfathering.
Dr Allott: I think there is a
chance of us getting towards 100% auctioning, we are certainly
pushing it very strongly, but within that there is a debate. I
think it is quite important to separate out the business group
into the power sector (the electricity supply industry), and the
manufacturing industry. They are very different in terms of their
size, their exposure to international competition, their ability
to pass on costs and make windfall profits. I think, as a bottom
line, we would want to see 100% auctioning for the power sector
which is, as John said, making huge windfall profits across Europe,
and we are starting to see some movement within that sector. There
is another debate to be had about the manufacturing industry where
they are exposed to international competition, but for me the
way through that is to have a discussion and a debate about the
use of the revenues.
Q69 Mr Challen: Carbon emissions
have risen from the power sector by 14% since 1999, largely due
to the increasing use of coal. Do you think that allowance prices
should rise in order to make coal more uncompetitive?
Dr Allott: I would like to see
that.
Q70 Mr Challen: How much would you
have to go?
Mr Lanchbery: As the Environment
Agency people put it, to get a high price you need a tight cap.
A tight cap would dominate the market. What has happened so far
is there has been a market failure, the instrument is not working.
If the instrument were properly applied, then it would dominate
the market and it would dominate the effect of increases or decreases
in fossil fuel supplies, but it does not. As the Environment Agency
guy said, the difficulty is that fossil fuel prices are far more
dominant in the market than the very small effect of the EU ETS,
which is again making the case for a much tighter cap on the scheme.
Dr Allott: I would like to point
out an interesting point about the UK's return to coal. The UK
is one of the countries in Europe where there is the greatest
potential for fuel switching between gas and coal—this is
one the of the stranger things that has happened—which has
allowed the UK to position itself as having done very well and
been one of the more aggressive countries in Phase I because our
emissions were above our allocation, unlike many other countries.
The reason for that is that we have rushed back to coal with a
vengeance because we were able to, because of the scope for fuel
switching, and they did that in the full knowledge of the carbon
price, in the full knowledge of their cap, and they decided it
was still economically justified to do that. So, to turn it round,
the UK's claim to be the good guys is just that the power sector
has rushed back to burning coal. If you look at the detail, again
splitting up the power sector from the manufacturing industry,
the manufacturing industry in the UK was just as over-allocated
as everywhere else in Europe. The emissions from the manufacturing
industry, which were based on a business as usual projection,
were considerably below the actual allocation. In other words,
we over-allocated, as did as everybody else, because we relied
on business as usual projections, and the UK's slight halo on
this in terms of, "We are the good guys in Phase I",
is simply because we rushed back to coal and so our emissions
were higher. It is a slightly perverse situation.
Q71 Mr Challen: Looking at coal a
bit more in the context of security of supply, that is a very
important issue, very often on the lips of DTI ministers, there
is equal importance given to that as to climate change issues.
How should that issue be managed within the Emissions Trading
Scheme particularly in relation to coal?
Mr Lanchbery: I should say, as
a preface, that a lot of the coal burnt is not ours. I cannot
remember the ranking exactly, but it is the Digest of UK Energy
Statistics produced by the DTI, and the three biggest importers
of coal, the three biggest suppliers of coal into the UK are Russia,
South Africa and Poland, so it is not our coal. If we are talking
about security of supply, I am not sure if we are any more secure
importing coal from Russia or South Africa than we are using imported
gas, which comes from Russia or Algeria.
Q72 David Howarth: Norway actually.
Dr Allott: I think an issue on
the future of coal is that coal does have a role. The existing
power stations and their lifetimes have recently been extended
to an extent which has surprised everybody by the number of power
stations which have opted in to the Large Combustion Plant Directive.
This means that they have decided to fit sulphur dioxide abatement
equipment, which allows them to run at an unrestricted load factor
for as long as they like[21].
Because of an unfortunate combination of circumstances, including
very perverse signals in the UK allocation plan detail, they have
been encouraged to opt in to the Large Combustion Plant Directive
which means that we are now committed to burning more coal to
justify those very heavy investments in abatement. That is the
first point to make. The second point is that, if coal does have
a role, and think it is a very open question in the future as
to how it should look, it should be on the basis of clean coal,
and that means carbon capture and storage. We and other environmental
groups have very serious issues around carbon capture and storage.
We think it may have a potential role as part of a global solution
to the climate change problem we are facing, but the first question
is: is it going to work? If it is going to work, we need to find
out as soon as possible. If it is not going to work, we need to
find out as soon as possible so we can devise alternative strategies.
So we see a role for it, especially for countries like the UK
to be at least making sure that we are exploring the technology
and finding out if it is a runner. The question then will be whether
the ETS is a vehicle to make sure that this happens or not. We
do not think it is. I think the way that we would like to frame
this would be in terms of—. We have talked about the Large
Combustion Plant Directive which sets timelines for abatement
and emission limits for sulphur dioxide. Maybe we need to think
in terms of a new Large Combustion Plant Directive aimed at carbon
dioxide with absolute deadlines for fitting abatement plant. Any
new plant would have to be fitted with carbon capture from the
outset and maybe deadlines for phasing in carbon capture for existing
plant if they want to carry on running. This is not necessarily
a pro carbon capture and storage position at all, it is an anti-unabated
coal position. Especially in the industrialised countries, where
we need to be moving towards very significant cuts in our emissions
of 80% or more by 2050, we simply should not be building unabated
coal-fired power stations.
Mr Lanchbery: I should add that
CCS is seen in general, I think, as only an interim measure, it
is at best an interim measure, so it would always be wiser to
go for energy efficiency or renewables of some sort, and, of course,
they are far more secure. Energy efficiency is ultimately secure,
of course, and so are renewables because they are all domestic.
So that is our concern, that CCS might divert people's attention
away from the real long-term options, although, as Keith has said,
it is absolutely clear that China and India are going to use their
coal, because they have got an awful lot of it, and so the problem
does have to be addressed abroad as to whether or not they use
CCS, and one suspects they probably should.
Dr Allott: I fully agree with
that point.
Q73 Mr Challen: Somebody is going
to have to use it. Forty per cent, I believe, of our generation
comes from coal, I might be slightly out on those figures, but
it is a huge percentage and will be for quite some time. You were
expressing doubts about CCS. Is that on a technical basis or for
some other reason?
Mr Lanchbery: It is mainly that
if the industry were prepared to develop the technology and deploy
it, then that is fine. If they want to do that, that is okay.
What we are concerned about is that they are mainly asking for
government or international money from the World Bank to develop
these programmes and we are concerned that there is always only
a finite pot of money and if they put it into CCS they will not
put it into renewables and energy efficiency, that is all.
Q74 Mr Challen: There are a lot of
things we do not want to put into money into, and nuclear is another
competitor for that honour.
Mr Lanchbery: Indeed.
Q75 Mr Challen: Forty per cent of
the UK's electricity generation, as I understand it, comes from
coal. We have heard about the one gigawatt a week in China, and
I do not know what the figure is in India. We are going to have
to have CCS whether we like it or not, regardless of these other
strategies, so should not the ETS encourage that through carbon
credits rather than us taking a sort of sniffy line about it and
saying, "We do not really like it because it is just a filling
in"?
Dr Allott: I think the response
to that would be to say that it may be the ETS might not be the
vehicle. If you do want to have CCS coming into play, the ETS
may not be the vehicle to deliver that. The analogy I would draw
would be on the model I suggested in terms of having some regulation
to remove unabated coal from the market, for instance, with energy
efficient appliances, perhaps having some regulation which could
remove the least efficient appliances from the market and then
some fiscal incentives to encourage people to buy the more efficient
appliances that are still on the market. That would be the model
for regulation to rule out unabated coal, and then the ETS would
provide the incentive within the acceptable boundaries defined
by that regulation. Just to come back to the security of supply
point, I think there are some issues buried in your question which
are to do with this energy gap question and coal's role and the
role for nuclear. Various pieces of work that we did for the Energy
Review showed very clearly that the energy gap is actually a political
choice. When we talk about "energy gap", it is always
an electricity gap. This is part of the problem that we have got
in terms of energy policy in this country, but, just talking in
terms of electricity, serious policies to curb electricity demand
and to also deliver on the stated targets on renewable energy
would essentially make that electricity gap, rather than energy
gap, virtually go away, both in terms of coal and gas, without
leading to ridiculous degrees of overdependence on imported gas.
Mr Lanchbery: As to whether the
EU ETS should encourage carbon capture and storage or, indeed,
nuclear, it is an interesting point in that, of course, if you
built a new plant and it is genuinely a zero carbon technology,
then your allocation under grandfathering would be zero; or, indeed,
if you are going to auction, then you would need to buy no credits,
and so it depends how it is introduced. If you are talking about
encouraging it through the clean development mechanism, that is
another matter, although I would not see CCS or, indeed, new nuclear
plant coming on within the period of the second phase of the EU
ETS.
Q76 Dr Turner: You do not seem to
have much confidence in ETS making any contribution to encouraging
CCS. The Carbon Capture and Storage Association tell me that they
have a raft of big projects ready to go which would be greatly
accelerated if the fiscal conditions were right, and at the moment
they are a rather cloudy screen. I am still not quite clear why
it is you think that putting in place a credit system for carbon
capture and storage in the ETS could not be part of that picture
and could not be useful?
Mr Lanchbery: If you had auctioning
it would not so much credit it as it would not debit it. So, if
you are going to build a conventional coal-fired plant, then you
would have to buy a lot of allowances and, if you were going to
build a plant with CCS which had no emissions, then, of course,
you would have to by no allowances. So it would, in that sense,
incentivise it. It would not penalise it, in other words, rather
than incentivise it, but it amounts to the same sort of thing;
so there would be a benefit, yes.
Q77 Mr Caton: Both your organisations
have close links with sister bodies in other European countries,
and so I guess you are in a good position to give us a bottom
up international perspective. Can you give us a picture of the
level of pressure on tackling climate change in other European
Union countries and, in particular, the state of debate on the
future of the ETS?
Dr Allott: One general observation.
I think it is rising very rapidly. John and I were at the UN Climate
Change Conference in Nairobi last week and in Germany (and we
will come on to Germany and talk about their allocation plan,
which is much less good than we might have liked) one of the things
that was very striking there was that the German Environment Minister
got by far the biggest round of applause (four minutes)—much
more than David Miliband—when he stood up and gave very
strong support for the EU as a whole taking on a 30% reduction
target by 2020, and he said that if the EU did that Germany would
take on a 40% target. So there is real movement happening around
Europe on this, and we just need to see it translated into real,
hard decisions on things like the ETS. I do not know if John has
any general comments, but Kirsty has got a very good picture of
some of the individual ETS related aspects.
Mr Lanchbery: In general we have
worked on WWF's work, and I know WWF have done quite a lot of
work on this, where we all belong, with most of the big development
groups, to a grouping called Climate Action Network Europe. We
have worked through that and that has been active in most of the
big countries and quite a lot of the small ones, but it is more
active, as in most environmental areas, in the northern European
countries—the Scandinavians, the Brits, the Dutch, the Germans—and
the activity declines as you go down, generally speaking. There
is very little activity in Spain, some in Portugal though. Most
northern European states have been pressurised to a greater or
lesser extent by the environmental groups and to some extent by
the development groups actually, and most southern European states
have seen little or no pressure.
Ms Clough: Following on from what
Keith has said about the German NAP, Germany is now looking at
its NAP, I guess on the basis of what was said in Nairobi last
week, but also there is an indication from the Commission that
it is likely to be rejected in the next few days anyway. There
are issues, I guess, with all the NAPs that have been submitted,
but some strong caps have been set eg Spain's cap. The Italian
cap in its initial draft was quite strong; that has now been watered
down somewhat, but it is still looking quite good. To highlight
an activity that WWF did, we created a statement that was then
signed by 50 economists across Europe showing support for emissions
trading as the best way to tackle climate change, and that was
delivered to the Commission a few weeks ago to try and show consensus
amongst that sector of the community. I can talk about some of
the other NAPs if you would like to hear about those too.
Q78 Mr Caton: If we could have that
in writing it would be useful for the Committee?
Ms Clough: Yes, sure.
Q79 Mr Caton: From your knowledge
and perspective, is there anything the UK should be doing now
to influence the Commission and perhaps the more reluctant Member
States to move forward at this time?
Dr Allott: On emissions trading
specifically?
Ms Clough: On Phase II?
21 Clarification from witness 27.11.06: This means
that they have decided to fit sulphur dioxide abatement equipment,
which allows them to run at an unrestricted load factor up to
2016 and potentially beyond if they then fit nitrous oxide abatement
equipment. Back
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