Select Committee on Treasury Minutes of Evidence


Examination of Witnesses (Questions 300 - 302)

THURSDAY 2 NOVEMBER 2006

MR SIMON BULLOCK, DR TIM JENKINS AND PROFESSOR ERIC NEUMAYER

  Q300  Chairman: One of the more revealing statements in Stern for me was that deforestation is responsible for more carbon emissions than transport, so the need for an international solution to this is obvious. As a Committee we are looking at the Stern Report and having a short inquiry into that. Are there areas that you would recommend to us that we should be looking at in Stern?

  Mr Bullock: I have one which is relatively buried. We have not got our heads round it fully yet, but they have a long section on the social cost of carbon, the price you assign to it. Currently, the social cost of carbon is used across government to determine what policies go ahead for a range of different things. The Aviation White Paper, the current waste strategy going forward, the recent code for sustainable buildings have all been using a social cost of carbon which, in our view, has been too low. What the Stern Report is saying is very complex but it appears to be saying that that figure is too low by a factor of three. If that is the case, that has a very large implication for the sorts of decisions that we make on things that have a big carbon impact like aviation expansion. To get to the bottom of what Stern is recommending or what should be recommended to UK policy, that is an area that needs looking into.

  Professor Neumayer: Deforestation is certainly important.

  Q301  Chairman: I think we are looking at it domestically.

  Professor Neumayer: The real challenge is to make the things that we know are bad—environmental pollution—much more expensive and to tax less the things that are good like people working. That is the biggest challenge, apart from any specific sector. You cannot solve this problem by looking at one sector and then the other sector. It is a cross-economy problem and you need to address it with adequate instruments.

  Q302  Chairman: Maybe we can look at the terms of reference and invite evidence. Perhaps you could write to us on that and give us your views. That would be very helpful. Your evidence this morning has been very helpful to us. Whilst this issue is very hard in many ways to generate in the public mind, it is important for the future of individuals and the country. We are grateful to you for taking the time to inform us of your views. Thank you very much.





 
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