Martin
Horwood: For once, I am reassured by the Minister’s
comments. [Interruption.] Maybe I am going soft,
at this late stage in the Committee. His comments about what is
possible under the new clauses are encouraging. If he is true to his
word, that will be a positive step. I was slightly worried that
nevertheless he went on to talk about schemes based on grid averages,
although I accept what he also said, that they could be varied for
individual participants. The use of grid averages as the baseline is
part of the problem. Once we have proper accounting for the source of
energy, it is difficult to see why we need the grid average baseline at
all.
Mr.
Woolas: If I used “reference points”, rather
than “baseline”, perhaps that would
help.
Martin
Horwood: I am grateful to the Minister but, again, if we
are accounting accurately for energy, that should in time remove the
need even for a reference point. Furthermore, if each energy statement
to a particular enterprise specified, from the energy company’s
side, what the source of that energy was, there would be a double
benefit, by preventing energy companies from claiming double credit for
green-tariff electricity, as we have discussed before. We will be able
to account for each unit of electricity coming in, and its source.
However, the intention behind the Minister’s comments is clear.
I am glad that he appears to be accepting that the carbon reduction
commitment has an anomaly at the moment and that, under the provisions
of the Bill, Ministers will be able to change or remove that anomaly,
to tighten up the scheme, which will be warmly welcomed in industry. I
beg to ask leave to withdraw the
amendment. Amendment,
by leave,
withdrawn.
Mr.
Woolas: I beg to move amendment No. 23, in
schedule 2, page 60, line 3, after
‘participants’, insert
‘or other persons authorised to
trade in allowances, credits or
certificates’. The
amendment makes a small change to the trading scheme powers in schedule
2 by ensuring that trading scheme regulations may make provision to
levy charges on third parties, as well as on participants, for the cost
of operating the trading schemes. As currently drafted, the Bill does
not allow us to do that. We need that power in order to operate such a
scheme. I hope that the amendment is accepted as a technical
one.
Gregory
Barker: Any amendment that judiciously enhances both the
role and the efficiency of the carbon markets will have our support.
The amendment appears to do just that. I am content to give it our
support. As
the Bill stands, administration of national-level trading schemes can
only be conducted by participants, such as devolved authorities or
central Government. Under the amendment, powers to run and charge for a
national levy scheme could be administered by a
group other than a national authority; a scheme could be run
by “other
persons authorised to trade in allowances, credits or
certificates”. That
presumably means that banks, brokers or local authorities could run a
scheme on behalf of or under contract to national
authorities.
The amendment
may be technical, but potentially it is a big little amendment. We are,
therefore, taking an awful lot on trust. Could the Minister clarify in
a little more detail which authorised persons he would envisage
carrying out such duties on behalf of national authorities? We see no
reason why the Government should run something when it could just as
easily be done, or done better, at local level or by the private
sector. I would welcome the Minister taking the opportunity to clarify
who the other authorised persons are intended to
be.
Mr.
Woolas: The answer to the hon. Gentleman’s question
is, predominantly, the Environment Agency. Let me clarify. The issue is
about who can trade within the scheme, not who can run the scheme.
Perhaps I should have made myself even clearer. If people trade within
the scheme, but a third party is not allowed to pay into it, we would
inadvertently be taking away a big United Kingdom industry growth area.
The type of organisation that we envisage being able to run the trading
schemes is the Environment Agency or a similar
body. 2
pm
Martin
Horwood: I am now slightly puzzled, because I had assumed
that the amendment was rather innocuous and that it would simply extend
the scope of those who can run the schemes to commercial organisations.
Like the hon. Member for Bexhill and Battle, I had considered that to
be a positive step. However, I am now confused, given that the
Government have in mind yet another of their agencies. Does the
Minister imagine that profit-making organisations could be involved in
convenient
circumstances?
Mr.
Woolas: Once again, I have learned the lesson that reading
out the next paragraph in the brief saves time in the debate. I am
sorry, I should have made matters
clear. As
drafted, paragraphs 9 and 19 of schedule 2 allow for third parties to
trade in allowances or certificates under a trading scheme. We believe
that that is necessary, so that a deeper and more liquid market can
develop as a result of the scheme than would be the case if only the
participants—the actual organisations and companies, whether
public or private, that were members of the scheme—were allowed
to trade. Those paragraphs make a distinction between third parties and
participants, and that is not replicated under paragraph 26 in
connection with the power to levy charges towards a trading
scheme. Participants
are those who have an obligation under the scheme, such as the company,
the Department or the supermarket, that are typically there to
surrender a particular number of allowances equal to their
emissions—indirect emissions, in some cases—to acquire a
certain number of certificates. Third parties are those who have no
obligations, but decide voluntarily as a business to trade in the
scheme’s allowances or certificates. I should
have explained that I am taking the provision under
paragraphs 9 and 19 and putting it under paragraph 26. If the hon.
Member for Cheltenham wants a debate on other agencies, we will come to
that. Amendment
agreed
to. Schedule
2, as amended, agreed
to.
Clause
46Relevant
national
authorities Question
proposed, That the clause stand part of the
Bill.
Miss
McIntosh: In their own words, the Government admit that
the devolution settlement on climate change policy is complex. Elements
of energy policy and international relations are reserve matters,
although generally energy policy is not reserved to Northern Ireland.
Environmental policy is devolved to varying degrees, and the devolution
settlement reflects that. The provisions in the Bill will be backed up
by a concordat that will set out the rules and responsibilities of the
different Administrations in more detail. If the concordat is not
finalised until the Bill has finished its passage through Parliament,
will we therefore not have the opportunity to scrutinise it? A climate
change Bill will be presented to the Scottish Parliament in the autumn,
so would it be a good idea to submit the concordat to the House for our
consideration?
Mr.
Woolas: The hon. Lady asks a fair question. We are trying
to define the national authorities that may make trading schemes under
the powers in the Bill. We are looking at future schemes, 30 years
ahead, and the clause sets out the scope of each authority, reflecting
the devolution settlements of each legislature. As the Bill’s
scope is UK-wide, it is right for each UK Administration to have the
power to introduce trading schemes, reduce emissions or encourage
activities that reduce emissions. That will ensure that contributions
towards meeting the targets and budgets in the Bill can be made by each
of the UK’s territorial authorities, and as the hon. Lady says,
that should be done in a way that does not cut across the devolution
settlements. Clause
48 and schedule 3—the other side of the coin with regard to
clause 46—will allow the national authorities to establish
trading schemes jointly. That is our preference over a single-country
scheme, as it provides for an increased number of participants, which
will give a deeper and more liquid market.
In the
interest of transparency and continued constructive relations between
the UK Government and the devolved Administrations, we expect to
publish the concordat when it is finalised. That is consistent with the
approach taken, for example, in the case of the bilateral memorandum of
understanding on fisheries between the Department for Environment, Food
and Rural Affairs and the Scottish Executive, which, I am told, is
publicly available. However, as the precise detail of the concordat
depends on the final provisions included in what, we hope, will become
the Climate Change Act, it is not appropriate to publish the draft
concordat ahead of Royal Assent. The answer to the question is yes, but
we can do it only after Royal Assent.
Question
put and agreed to.
Clause 46
ordered to stand part of the Bill.
Clauses 47
and 48 ordered to stand part of the
Bill.
Schedule
3Trading
schemes regulations: further
provisions Question
proposed, That the schedule be the Third schedule to the
Bill.
Miss
McIntosh: Schedule 3 goes into some detail. Not in the
Bill or in primary legislation, but in secondary legislation, enormous
powers will be given to the Secretary of State. The Government and the
Minister ask us to take a great deal on trust, and I wonder whether the
Orders in Council will cover such matters. For example, if the
Secretary of State proceeds with personal carbon accounts, will that be
subject to Orders in Council? If we proceed down the path of personal
carbon accounts for England, will they therefore also exist in
Scotland, Wales and Northern Ireland?
I make this
point in every Committee that I attend, but the point of standing for
Parliament and serving on Committees is that we are given the
opportunity carefully to scrutinise the enabling powers. When such
far-reaching, wide powers are placed on trust in the Secretary of
State, we have effectively devolved responsibility to the Secretary of
State without the opportunity to scrutinise the Orders in Council and
the powers therein.
I think that
the Minister said earlier that such measures will be subject to
affirmative procedures and resolution, but if that scenario was to
appear in relation to personal carbon accounts, would such accounts
apply, by Orders in Council, to the whole United Kingdom? I am
personally slightly sceptical about personalised carbon accounts, but
industry, the CBI and a number of other bodies have spoken on a number
of occasions about their concerns that business will be asked to take
the lion’s share of pollution and emissions-reducing measures.
My question is a probing one about the enabling
legislation.
Mr.
Woolas: I share the hon. Lady’s views. “An
idea ahead of their time” was the response of my right hon.
Friend the Secretary of State. Let me reassure the hon. Lady in two
ways. First, we do not consider that the Bill would be the appropriate
framework to introduce such a personal carbon-trading scheme, given the
robust scrutiny by Parliament that such a scheme would rightly
require. I
shall give the hon. Lady further assurance. Part 1 of the schedule sets
out the procedure to be followed where regulations are made by a single
national authority. It sets out the procedures for both Parliament and
the devolved legislatures, in which support for the regulations is
required. Part 2 sets out the process for regulation jointly made by
the Secretary of State and/or Welsh Ministers and/or the relevant
Northern Ireland Department. A separate arrangement applies to trading
schemes that involve Scotland, which is covered by part 3 of the
schedule.
Where the
affirmative procedure applies, if either House of Parliament or a
relevant devolved legislature does not approve the instrument, it
cannot be made. That should cover the hon. Lady’s point. If the
negative procedure applies, again if either House of Parliament or the
relevant devolved legislature resolves that the regulation should be
annulled, the instrument has no further effect and may be revoked by
Order in Council.
For those two reasons—common sense and procedural—the
provisions satisfy her point. I asked for that point to be made as
well. Question
put and agreed
to. Schedule
3 agreed
to. Clause
49 ordered to stand part of the
Bill.
Schedule
4Trading
schemes: powers to require
information Question
proposed, That the schedule be the Fourth schedule to the
Bill.
Miss
McIntosh: I would like to revert to my earlier comments,
without expanding too much on them. Reading schedule 4, it seems to
assume and set out certain types of trading schemes—relating in
particular to electricity suppliers and electricity distributors. The
Environment, Food and Rural Affairs Committee’s conclusions
questioned the EU emissions trading scheme already covering a large
proportion of heavy industries and representing about half of UK
emissions. Also, perhaps within that scheme, the Government propose to
introduce a new carbon reduction commitment scheme under the enabling
powers of the Bill. That raises an issue in addition to that of
personal carbon allowances, which might be introduced.
The Minister
could take this opportunity to answer the question of which sectors
might remain that would be suitable for an emissions trading scheme
established by secondary legislation. Can he think of any other
possibilities? As I alluded to earlier, the Select Committee went on to
conclude that the enabling powers perhaps should not be within the
legislation if there were no other trading schemes or if the Government
were unable to say which other trading schemes there might be. Without
further elucidation from the Government at this stage, it seems an
open-ended power. I would be grateful to the Minister for some
clarification. 2.15
pm
Mr.
Woolas: The schedule is designed to facilitate the carbon
reduction commitment and applies to that. The difficulty is that this
is legislation for a long time, so the hon. Lady is right to ask the
question. We envisage that the new powers will support the introduction
of the CRC, a cap-and-trace scheme, as I said, that will apply to large
non-energy-intensive organisations in the public and private sectors.
As I think I mentioned before, the powers may also be used to introduce
a household energy supplier obligation to succeed the carbon emissions
reduction target scheme, which ends in 2011. It is difficult, if not
impossible, to specify at this stage how the powers may be used beyond
that, as their purpose is to maintain flexibility in supporting
activities that will enable us to meet the targets set out in the
Bill.
The Bill sets
out the framework for 2050, so we take the view that it is important
that the powers to introduce further trading schemes exist, even if at
this point it is not known how exactly they may be applied in the
future. I hope that the procedural points that I made in answer to the
hon. Lady’s question on the previous clause also apply here. In
layperson’s terms, we do not know yet.
Question
put and agreed to.
Schedule 4
agreed to.
Clauses 50
to 54 ordered to stand part of the
Bill.
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