Examination of Witnesses (Questions 580
- 599)
WEDNESDAY 23 MAY 2007
RT HON
DAVID MILIBAND
MP AND MR
ROBIN MORTIMER
Q580 Chairman: It is cap not the
trade.
David Miliband: If you do not
trade, then what is the cap?
Q581 Chairman: I am just looking
from a hypothetical point of view of saying that the enabling
powers have focused really on trading schemes and asking the question
as to whether there needed to be a provision in the Bill that
enabled you to do other thing if in the future—
David Miliband: The answer I would
give you is (1) they are a distinctive method, (2) there is nowhere
else that allows you to cap and trade. So it is filling a gap
in the market. I think those would be the two main reasons to
give a straight answer to your question.
Q582 Patrick Hall: In terms of other
instruments, if as a result of the workings of the Committee and
the Government's response or consideration of what the Committee
is going to be saying over a period of years, it is thought that
the planning system should be further changed, presumably that
might be the recommendation from yourself or your successor, but
then it is up to others in government to decide whether or not
to move on that. So there would be possibly resistance or a time
lag, would there not? The only direct thing that this Bill seems
to be able to deliver on in terms of achieving outcomes is trading?
David Miliband: Let me put it
this way. If you have 100% of the economy's greenhouse gas emissions
covered by trading schemes, then you would guarantee that you
would live within your means.
Q583 Patrick Hall: Is that a goal?
David Miliband: I think "goal"
is too strong, but I think it is quite an interesting thought
experiment.
Q584 Patrick Hall: It is going to
be more than that soon.
David Miliband: It is already
more than that. It is already 50% of the economy. It is going
to be 50% plus 6 or 7% if you include aviation. Once you have
got the Carbon Reduction Commitment in, you have got another few
per cent. So it is growing. You could say it is a vision rather
than a goal.
Q585 Patrick Hall: Once you get into
personal allowances, that is massive leap into people's perceptions
of how they are tied into that.
David Miliband: Correct.
Q586 Patrick Hall: I think there
may be some fears of that?
David Miliband: I think there
is a lot of excitement about it.
Q587 Patrick Hall: Excitement amongst
some lobbyists; I am not sure about the public.
David Miliband: Lobbyists; I do
not know about that.
Q588 Patrick Hall: The public may
not be quite so keen.
David Miliband: You mean that
the public would not be keen on the idea that if they were environmentally
thrifty they should be rewarded for it?
Patrick Hall: How do you handle that,
yes?
Q589 Mr Cox: They might not be keen
on the intrusion that would be needed to monitor it.
David Miliband: That is a different
point, one which I have advertised myself. Equally, ten years
ago, if you had said that millions of people would have supermarket
loyalty cards, they might have been worried about that.
Q590 Mr Cox: That is voluntary.
David Miliband: It is voluntary.
None of that is a significant degree of information held about
people.
Q591 Mr Cox: No carbon allowance
scheme is going to be voluntary, but, as you say, it is a compelling
thought, is it not?
David Miliband: Actually there
are some voluntary carbon allowance schemes now. There are companies
setting up their own schemes.
Mr Cox: We are not talking about that,
we are talking about a government imposed scheme?
Q592 Chairman: Can we be clear that
under the powers of this section you could introduce by secondary
legislation personal carbon allowances?
David Miliband: I think it is
tricky. I think that that is on the edge.
Q593 Chairman: So, not ruled out.
We could do with a spot of clarification?
David Miliband: It is on the edge
is probably what I would say. We are clear we are really talking
about things like the Carbon Reduction Commitment about heat.
You can make the case that you wanted to get it in through this
mechanism, but I think if you wanted to do the personal carbon
card, you want to do it with a big song and dance and coverage
of its own.
Q594 Patrick Hall: I can hear The
Daily Mail screaming about this already?
David Miliband: I think if you
wanted to do a carbon credit card, you would want to do that with
full debate and engagement. You would not want to do it by the
back door.
Q595 Chairman: In the Bill you talk
about allowances under your trading schemes in Schedule Two. It
says: "The regulations must provide for the allowances to
be allocated free of charge." In terms of the announced carbon
reduction commitment, the message there is that that would be
achieved by a simple fixed price sale of allowances.
David Miliband: Give me the reference?
Q596 Chairman: We are on page 24
in Schedule II of the Bill, clause 5(3)(a) says: "The regulations
must provide for the allowances to be allocated free of charge."
How is that compatible with the announced carbon reduction commitment
proposal which says that there will be a simple fixed price sale
of allowances?
David Miliband: This is a good
point. I think you know from other investigations that the Government
is enthusiastic about auctioning of allowances, and we have made
provision for 7% of EU ETS allowances to be auctioned, but it
is done through the Finance Bill, not done through this Bill.
Q597 Chairman: Would you say that
again?
David Miliband: It will be done
through the Finance Bill rather than through this Bill.
Q598 Chairman: But it sort of sets
a precedent, does it not, that here is a scheme where you are
going to sell something, and you have just enunciated the enthusiasm
of the Government for selling, but the Bill says, in terms of
these allowances, they are going to be allocated free of charge.
There seems to be a policy incompatibility?
Mr Mortimer: I think it is simply
saying that this is not the legislative vehicle for doing auctioning,
that the Finance Bill would be the appropriate solution for that,
exactly as it has been used already for the EU ETS auctioning.
Q599 Patrick Hall: The Finance Bill
would do it?
David Miliband: This Bill provides
for all other aspects of setting up a scheme, but if it comes
to a money issue or auctioning, that would be taken through the
Finance Bill.
Mr Gray: When it says "free of charge"
it does not mean free of charge, it means somebody else will do
it instead?
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