Examination of Witnesses (Questions 800-819)
RT HON
IAN PEARSON
MP, AND MS
JACKIE JANES
7 MARCH 2007
Q800 Chairman: If we take the cross-departmental
discussions that, for example, must inevitably occur over something
like microgeneration, something which has caught the public's
imagination, what is Defra's role in determining the DTI's activity
in that area because they currently run the programmes that help
to fund microgeneration? We are going to talk about that in some
detail in a second but just in terms of Defra's role, the mechanism,
how does it work?
Ian Pearson: Defra works very
closely with DTI on the whole energy agenda. We worked very closely
at official level and at ministerial level last year on the Energy
Review and we are currently working very closely again in the
run-up to the Energy White Paper and we will talk to them about
the Low Carbon Buildings Programme and other programmes as well.
Q801 Chairman: Minister, you have
just described what you do but you have not told me how it works.
Is there a committee? Do ministers meet jointly? What is the decision-making
team? Who has the final deciding "yes" or "no"
on the programmes in question?
Ian Pearson: DTI lead on microgeneration
and that is very clear. Defra officials, like Jackie and others,
will regularly meet with their DTI colleagues to discuss policy.
Similarly, I will have meetings with Peter Truscott, and before
him Malcolm Wicks, and David Miliband regularly meets Alistair
Darling to discuss these issues.
Q802 Chairman: Coming back to the
target setting, you are the overall keeper of how we are doing,
because we have just discussed that. Do you look, for example,
at the DTI and say, "Look, guys, this is what we would like
you to take responsibility for with your microgeneration programmes,
X amount of savings of carbon dioxide" and then look to them
to justify that their programmes can do that?
Ian Pearson: If you look, for
instance, at the Climate Change Programme Review and how that
process operated, I was not in Defra at the time but I was on
one of the Cabinet committees where the Climate Change Programme
Review was discussed and it had members of all government departments
looking at the overall range of policy measures and how those
measures would help to achieve our climate change targets. Right
across Whitehall there is a process of involvement and clearance
when it comes to key policy decisions and documents like the Climate
Change Programme Review that are cleared across government and
involve ministers in a number of different government departments.
Q803 Chairman: That is a very nice
general description but let me bring you back to the question
I asked. If you take the microgeneration programme which involves
individuals being given an opportunity to work in that field,
when you looked at the way in which your track that you described
to us a moment ago towards achieving certain carbon savings was
moving forward, did you, as Defra if you like, take a segment
and say, "Right, that's the bit we want micro to do, we think
this is the potential and you, oh DTI, we want you to deliver
this number", or did it work the other way round, that they
said, "Oh no, this is what we can deliver to you"? I
am trying to get the idea of who is in charge.
Ian Pearson: Defra overall has
lead policy responsibility when it comes to climate change.
Q804 Chairman: So you are in charge.
Ian Pearson: But the process of
government is an iterative one between government departments
and that is why it is right and proper that we have ongoing dialogue
with ministerial colleagues on a whole range of policy initiatives.
Q805 Chairman: I know that but somebody
somewhere, even if it is not iterative, must sit down between
these two departments and say, "Here is the domestic sector,
let's have a look at what we think the potential is for energy
saving by a whole raft of citizen involvement matters" and
then you look at who is responsible and do you say, "What
can you achieve?" or do you say, "We would like you
to achieve this number"? I want to find out who actually
initiates the process of saying, "This is what we would like
you to do because we have got the overall target to achieve".
Ian Pearson: We clearly have an
overall target to achieve and that is the important thing to stress.
Q806 Chairman: Yes.
Ian Pearson: Then the decision
about how you divide up that target by different sectors results
as a process of discussion and debate within government and an
evaluation of different policy options. Officials will come up
saying, "These, Minister, are your overall objectives and
these are a number of different ways in which you could achieve
your objectives". Jackie might want to say something about
that.
Q807 Chairman: When you go knocking
on the door of your colleagues in the DTI and say, "Right,
look, these are the things you are in charge of. We think you
can do this, this and this in terms of carbon dioxide saving over
this period of time, yes or no, can you do it?" do you actually
work the number out? Do you start the process?
Ian Pearson: Sometimes yes, sometimes
some of the initiatives might come from elsewhere. The key thing
is the fact that there is effective co-ordination across government.
I know it is fashionable to say that government is not joined-up
but it is a lot more joined-up than most people actually recognise.
Q808 Chairman: Ms Janes, I sense
you want to contribute.
Ms Janes: It might be helpful
to give an official level perspective.
Q809 Chairman: Yes.
Ms Janes: We work out for the
household sector where we need to be by 2020 to deliver the reductions
that the Minister outlined and we break down the actions and behaviour
that we need to achieve. So by 2020 we need really all lofts and
cavities to be insulated. We estimate that by cutting waste in
households, like standby power, people leaving lights on when
they leave the room, there is a 10% potential for improvement.
We know that we need to make a step change in products, so to
push up from the bottom and regulate out the worst products and
incentivise people to buy better products through labelling, et
cetera. We also know that we need to start rolling out more
expensive measures like solid wall insulation and microgeneration
and, for new buildings we need the zero carbon aspiration to be
reflected in regulation by 2016. That is where we need to be by
2020. We look at what the obstacles are to reaching that goal.
Q810 Chairman: Which are? You might
like to tell us about some of those.
Ms Janes: The obstacles are multiple
and challenging. One obstacle is consumer inaction due to the
hassle factor, high upfront costs, and poor information. Often
consumers are confused because they are subject to multiple messages
coming from multiple sources and they do not have a framework
for assessing the relative value and impact of different measures.
Access to low cost finances is another issue, particularly for
more expensive measures. We then assess how the range of different
policy instruments can try and tackle some of those barriers so
that we can move towards where we need to be by 2020. Sadly it
is not as simple as saying there is one single approach to that,
you need a blend of instruments. You need the regulation to start
pushing up the quality of products on the market but you also
need grants and incentives to encourage people to go out and invest
in loft insulation or get their cavity walls insulated, but to
do that you need to provide them with effective information to
help them on that journey. In addition, because products are subject
to mandatory standards within the EU, we can work at a voluntary
level with the retailers and shops and the lighting industry to
try and get them to push above the regulatory minimum. We need
to work with a blend of instruments to try and achieve the kind
of step change we are seeking to secure. As we develop policies
we often create project boards. A project board will have members
from different government departments invited to sit on it. If
I use the Energy Efficiency Commitment as an example of a project
board, Defra is the lead department responsible for driving forward
the analysis but we have a board that meets every month to discuss
the policy issues on which Ofgem and DTI are represented. The
Treasury has been invited but they are unable to attend all the
meetings so we have separate brief catch-ups with them. Through
that process we discuss and evaluate policy and the costs and
benefits of it and expose it to scrutiny and challenge across
departments. On that basis we work up recommendations for ministers
which show how this instrument will play a role in taking consumers
on the journey we need to take them on and how this policy relates
to other instruments. With respect to the Energy Efficiency Commitment,
ministers have just agreed to allow all forms of microgeneration
into the Energy Efficiency Commitment so we need to look at how
that relates to policies on ROCs and how that relates to the Low
Carbon Buildings Programme. Are we giving multiple subsidies?
If so, is that a bad thing or is it, because microgeneration is
so costly, actually a positive thing? That is broadly how we work.
At periods like the Climate Change Programme Review and the Energy
Review we have big evaluations of all the policies and their relative
cost-effectiveness. One such analysis was published with the Climate
Change Programme Review last March where there was an evaluation
of the effectiveness of all policies ranking them according to
how much they cost per tonne of carbon to deliver. We have a group
called the Interdepartmental Analysts Group which involves officials
from the different departments which does this kind of cost benefit
analysis to constantly check the relative cost-effectiveness of
policies.
Q811 Chairman: Is that appraisal
by project in the public domain or something that you did internally?
Ms Janes: The CCPR synthesis is
available on the Defra website.[53]
Q812 Chairman: That is very helpful indeed.
Ian Pearson: It is actually in
the report.
Q813 David Taylor: Our inquiry is
called "Climate Change: the Citizen's Agenda" and I
guess the Minister would agree with me that to maximise the contributions
of individual citizens you need to bring opinion-formers on board
and the movers and shakers, the leading citizens, do you not?
Can I quote to you a snippet of Sky News from January.
I will reveal who said this in a moment. "I would frankly
be reluctant to give up my holidays abroad" in Sir Cliff's
villa I imagine is what he was referring to, and he went on to
say, in relation to climate change: "you can deal with it
through developing the science and technology". Do you agree
with your Prime Ministerial boss on that?
Ian Pearson: What I think it is
important to recognise, is that what the Prime Minister was saying
represented how many people in the United Kingdom think they want
to see technological progress and the best available technology
to help reduce CO2 emissions. and most people in the United Kingdom
do not want to give up their annual holiday. What we need to do,
therefore, is recognise where people are when it comes to the
issue of climate change but to encourage them to change their
behaviour. In Germany at the moment they are encouraging people
to holiday closer to home, that is a good idea. The key thing
is to ensure at an individual level we all try to reduce our CO2
emissions and we can make choices to fly less, we can make choices
to use less energy, we can make choices to have different ways
of getting around, using public transport more and using the car
less. What the right balance is will vary from individual to individual.
Q814 David Taylor: Is technology
more likely to reduce greenhouse gas emissions than eliciting
individual behavioural change, in your view?
Ian Pearson: I think we have got
to do all of these things.
Q815 David Taylor: Of course we have,
but let us not hide behind words; is it likely to contribute more
greatly, would you say?
Ian Pearson: I am not hiding behind
words, I am being very clear that we do need to do all of these
things.
Q816 David Taylor: Of course we do,
but what I am asking is what is the relative importance of those
two broad areas, technological investment or behavioural change?
Ian Pearson: Both are hugely important,
it is not a question of either/or. If it was a question of either/or
then we would not get anywhere close to reaching our targets.
Q817 David Taylor: No-one is suggesting
it is that. You are wriggling a bit here.
Ian Pearson: No, I am not wriggling,
I am trying to make you understand that we need to do both and
there are key technological improvements that we will need to
see, such as carbon capture and storage, that are going to be
absolutely vital if we are going to avoid dangerous climate change,
and so is behavioural change.
Q818 Lynne Jones: Can I just come
in there. Who should be responsible for this technological innovation?
Ian Pearson: A lot of the technological
innovation is going to be driven by the private sector. What we
can do as Government is provide the right sort of policy framework,
which encourages innovation to take place. Through government
research and development support we can also help foster some
of that innovation directly ourselves but a lot of it is going
to be business driven. We are already seeing a lot of innovation
at the moment where some of our best companies have been very
innovative in terms of taking carbon out of their business models.
What we have got to do is take action not just at a business level
and a technological level but at a household level as well.
Q819 David Taylor: Thank you for
that. Can we move on briefly to one area where the Government
has shown some enthusiasm, which is smart metering and information
displays. Why is our Government so cautious on this area when
state and national governments like Sweden, Ontario and Italy,
are taking steps to require their installation in all homes? Are
we not being a bit timid on this front, would you say?
Ian Pearson: I am a strong supporter
of smart meters, I believe this is a key enabling technology for
the future. I would like to think that in 10 years' time every
home will have a smart meter and every business will have a smart
meter as well.
53 See: http://www.defra.gov.uk/environment/climatechange/uk/ukccp/pdf/synthesisccpolicy-evaluations.pdf
and http://www.defra.gov.uk/environment/climatechange/uk/ukccp/pdf/sythesisccpolicy-appraisals.pdf Back
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