Examination of Witnesses (Questions 1-19)
RT HON
HILARY BENN
MP, MS ANNE
SHARPE, MS
MARIE PENDER
AND MR
MARTIN NESBIT
4 DECEMBER 2007
Q1 Chairman: Good afternoon. A warm welcome
to this Committee. We are delighted to have you here and grateful
for your time and for managing to rearrange the meeting that was
going to take place last week, although the debate in the end
was unfortunately dropped, was it not?
Hilary Benn: We are having it
this evening anyway.
Q2 Chairman: Do you want to introduce
your team?
Hilary Benn: Yes. Thank you very
much indeed. On my right is Anne Sharp, director of domestic climate
change and energy. On my immediate right is Marie Pender, who
is head of the climate change agreements and carbon reduction
commitment. On my left is Martin Nesbit, who is deputy director
in charge of emissions trading. Can I say what a pleasure it is
to be here today.
Q3 Chairman: We are delighted to
have you here. We have had a productive relationship with your
predecessors and we look forward to doing so also with you. Could
I start on the issue of progress towards UK carbon emission reduction
targets? In the 2003 Energy White Paper the Government was projecting
that we would achieve carbon emission reductions by 2010 of 19%
without taking account of any purchases of credits. Now you are
saying you will get a 16% reduction and that is after taking account
of purchase of substantial carbon credits from abroad. Why do
you think the progress towards that target has slipped so much
in the last four years?
Hilary Benn: It is the case that
those figures have changed in the way you have described. It is
the result of a combination of factors. We have to make faster
progress because even though in relation to the greenhouse gas
emission target commitments that we have taken under the Kyoto
Protocol—we are going to more than exceed those; indeed,
we are heading to 22/23% compared to the 12.5%—we are not
making fast enough progress on our own carbon reduction targets.
That is why the Energy White Paper set out further additional
measures when it was published earlier and that is why the Climate
Change Bill with, for example, the carbon reduction commitment
and the other measures that we are setting out are going to be
required because we have a long way yet to go. In truth, it is
a reminder to all of us that we have a very big task on our hands
and we need to make faster progress. What I think is changing,
if I may say so, is the recognition out there, not just on the
part of government but certainly the business community if you
look at the CBI taskforce report that came out last week. Things
are changing and there is a greater recognition that we need to
do a lot more.
Q4 Chairman: I am sure that is true.
In the four years since the previous Energy White Paper the scientific
evidence is getting even stronger that there is a widespread view
now that the targets for reductions need to be tougher than the
ones we have had. Also, there is a recognition that early action
is more cost effective and indeed more necessary in terms of the
overall carbon budget than later action. Given that there has
been a slippage on the carbon targets, are you happy for example
that while businesses now take drastic action the pre-Budget report
really did not step up to the plate very effectively. There was
not a great deal of radical stuff there of a kind which the market
might now be ready to accept?
Hilary Benn: I do not think I
would accept that that was the case. If you look at what we are
seeking to do in the UK, if you look at the list of measures that
was contained in the recent Energy White Paper, including the
carbon reduction commitment, if you look at what we are doing
on CERT, which will place the energy efficiency commitment, if
you look at what we are pressing for as far as the EU emissions
trading scheme is concerned, the lesson of the EU ETS is simply
that you have to get the caps right. In phase one the cap was
not good enough and we all know that to be the case but we were
learning and we needed to get this thing up and running. There
are going to be tighter caps in phase two, although that is subject
to the court case that is currently being brought by a number
of EU Member States that are not happy with what they are going
to be asked to do. We are supporting the Commission in wanting
time caps. There is the review of the ETS as far as phase three
is concerned and we await with great interest what the Commission
is going to come out and say in relation to that. As I am sure
the Committee will be aware, we have some pretty clear views as
a government about how it needs to be tightened and strengthened
further. The truth is we are all learning now about the need to
act more swiftly than we had thought was the case previously because
the time is less than we had thought. We all read the same reports.
As I talk to other countries, there is a growing awareness of
the scale and nature of the problem—we may come on to this
during the course of the evidence session—with a view to
Bali and where other countries round the world are. We need to
get on with it and we need to make sure that we do have the instruments
in place. If you look at all of them in the round, a fair assessment
would say that the Government is determined to make progress,
is creating the instruments in order to do that but we have to
learn and reflect and we may need to do even more. That is reflected
in what the Prime Minister had to say in his speech when he talked
about the target. Given the changing science, the advice now is
we may well need rich, developed countries to go up to 80% and
that is why we will ask the Climate Change Committee to review
this and to report back to us with a recommendation at the same
time that it is looking at the first three carbon budgets. That
is a significant change compared to where we were earlier in the
year when the draft Climate Change Bill was published.
Q5 Chairman: You just mentioned the
EU ETS. As a very specific point, when you go to the Environment
Council before Christmas, will you be supporting the European
Parliament's position on aviation?
Hilary Benn: On aviation, as you
know, the UK has been pressing very firmly for the earliest possible
start. Whether we will get that I am not entirely sure. I think
the current proposal is a 2012 start for EU flights and 2013 for
international flights. Secondly, we have been pressing for a baseline
that is 2004 to 2006. Whether it will turn out like that I do
not know. Thirdly, we want a reasonable level of auctioning. It
depends how it plays out because at the moment you have the Commission
starting at an auctioning level of about 3%. It is likely under
the present proposal to come to a slightly higher figure than
that. You have two different committees of the European Parliament,
as I recollect, with different figures that they wanted for auctioning
and I suspect they will end up meeting in the middle in some shape
or form, but we are very anxious to get aviation into the EU ETS
as quickly as possible for reasons I think everybody understands.
Aviation has to make its contribution, either by dealing with
its own emissions or making a compensatory offset elsewhere. It
is a gap in the international system currently and, as I think
everybody recognises, you can only deal with it effectively on
an international basis. It would be very nice if IKO got its act
together to do so but so far it has singly failed to do so and
therefore the EU ETS is the best hope we have and the best place
to start.
Q6 Mr Stuart: Can I bring you home
again? When your predecessor appeared before us in June he suggested
that the measures in the Energy White Paper would be sufficient
to take us to a 26% reduction in CO2 by 2020. Immediately afterwards
the Office of Climate Change clarified that by saying that, that
would be at the upper end of optimism and that would be including
the purchase of several million carbon credits from abroad. Can
you lay out what extra measures over and above those in the White
Paper that you are looking at introducing in order to ensure that
we do meet the projected savings for 2020?
Hilary Benn: The answer is we
are doing some work on further measures for precisely the reason
you lay out. I cannot tell you what they are going to be yet because
the work is being done and we will have to come back and look
at it as a government. It is a recognition of the point that was
implicit, Mr Yeo, in your original question which is, given that
more needs to be done in order to make progress and to meet the
targets we have set both for 2020 and for 2050 in the Bill, we
do understand that we are going to need to take some further steps
and we are currently—
Q7 Mr Stuart: Do you accept that
the performance to date has been disappointing and rather less
than has been suggested, nay promised, by ministers in terms of
actual measures that really do make a difference on the ground?
Hilary Benn: If you look at the
comparison in 1990 to what we are likely to get to in 2010, which
is around 16% on current implications, yes, it would not be achieving
the target that we had set but it is still real progress. In the
context of our evolving understanding of the world as a world
of what the challenge is and what can be done to meet it, you
do not have to go back very far to a time when people would have
said, "If you are going to continue that economic growth,
there will be an inexorable and equal rise in greenhouse gas and
carbon emissions."
Q8 Mr Stuart: You are fully satisfied
with the Government's performance?
Hilary Benn: I am trying to answer
your question. What I am saying is that what we have been able
to demonstrate as a country—and we are not the only one—is
that it is possible to have a continued economic growth and to
combine it with a reduction in greenhouse gas emissions. In the
last 10 years, the economy has grown by about a quarter in real
terms. Greenhouse gas emissions, I think I am right in saying,
have gone down by 7%. We have made progress but we need to make
further progress.
Q9 Mr Stuart: Is it acceptable to
rely so much on foreign credits, especially when often those credits
bought abroad have not led to any diminution in emissions in those
countries from which you have purchased them?
Hilary Benn: With a foreign credit
system, you have had to be satisfied that those are verifiable
and you have the whole Clean Development Mechanism and the arrangements
in place for trying to do that. Clearly, if a system does not
work and they are not responsible for real reductions—that
is why the CDM is structured in the way that it is—buying
foreign credits has a part to play. This is a global problem.
I know this is an issue on which the Committee took a view when
it was responding to the consultation on the draft Bill when it
was published. As you know, in the end, it will be for the Climate
Change Committee to give us advice as a Government about what
is the appropriate level at which to make use of buying credits
abroad.
Q10 Mr Stuart: Is that a cop out,
Minister? Surely it is a political decision as to how much of
our performance on the reduction of greenhouse gases should be
done at home and how much should be done abroad? Is it not a cop
out to try to suggest that this committee of experts is going
to have to make that decision for you?
Hilary Benn: No, it is not a cop
out at all. The Climate Change Committee is going to be a very
important, very influential body. We are giving it, under the
Climate Change Bill, a number of very important responsibilities.
I am quite convinced that this is the right way to do it. Buying
overseas credits will have a part to play. It is for them to advise
us as a government and then for the government to reflect on and
accept or otherwise that advice as to what that level should be.
Given that dangerous climate change is a global problem, in the
same way as within a country, if you do not make savings here
you have to make compensatory savings elsewhere. It seems to me
there is a philosophical and practical problem as far as the world
doing the same thing. What matters in the end is do we get overall
CO2 and greenhouse gas emissions down in order to avoid the dangerous
temperature changes that we are otherwise heading for. One of
the problems that we have currently, is that of course there is
not the international agreement on what it is we are trying to
avoid. It seems to me that when we get to Bali and then into the
process that I hope will begin after Bali the starting place has
to be: okay, folks, what temperature increase do you think we
should be seeking to avoid, because that has to be your starting
point whether you express it as degrees or parts per million concentration;
because then you can add up the commitments that countries have
made, binding or otherwise, and see whether they are going to
be sufficient to do the business or not.
Q11 Chairman: What is your view about
what should be the temperature increase in parts per million?
Hilary Benn: Two degrees is the
UK's position and that is the EU position.
Q12 Chairman: In terms of parts per
million?
Hilary Benn: If you look at the
scientific evidence, you want it to be low, 550, 480, 520, that
sort of order of magnitude. It is not an absolute scientific certainty,
given the advice that the scientists are giving us. It is quite
striking to me how many other countries actually have not yet
formed a view on that, in some respects maybe because if they
do form a view then certain inevitable consequences in terms of
the totality of what we need to do as the world will flow. The
really difficult bit of the negotiations once we get them going
hopefully with the right decision in Bali will be not just what
the rich and developed world does; the truth is even if all the
annex one countries went zero carbon by 2030 or so, the advice
I have been given says that we would probably be heading for a
temperature increase of about three degrees and then more if emissions
from developing countries continued to rise. We know that a large
part of the additional emissions over the next part of the century
are going to come from China and India. The really, really hard
part of the negotiation is going to be to get beyond the comfortable
words "common but differentiated commitments" to what
does that mean for the contribution that it is going to be fair
and reasonable to expect from developing countries as they reach
a certain stage of development. The truth is India and China are
in a very different position to Mali and Burkina Faso and we have
to address that as part of these negotiations because if we do
not, all the effort of all of the annex one developed countries—and
we do not even have the biggest economy in the world on board
yet; Australia has come on board which is great—it's not
going to be enough to deal with the problem and we know that.
Q13 Mr Stuart: Just to finish off
the offsets, if the Committee comes back and suggests, because
it has doubts about the standards and mechanisms to ensure that
there is a genuine reduction abroad, a figure of, say, no more
than 20% of our effort or no more than 10% of effort, would you
be open to that sort of advice?
Hilary Benn: It is a timely, tempting
offer to get me to tell the Committee now what decision the government
would give you when we get that advice. The honest answer is when
we get that advice we will consider what it says but I can assure
the Committee that the government is going to take very seriously
the advice that the Climate Change Committee gives us. That is
why we are setting it out and that is why we are giving it the
independence and the powers that we have.
Q14 Mr Hurd: Secretary of State,
can I pursue you a little harder on your response to the Chairman's
question about the government's position on atmospheric concentrations?
Is there not enough analysis now, not least in Stern's report,
to suggest that 550 parts per million and two degrees are incompatible?
In his own words, Stern said that 550 is not where we want to
be. Given that other countries have not made up their minds and
there appears to be some sort of problem on this crucial target,
is it not time for the government to be a little braver and bolder
in narrowing the range of atmospheric concentrations that we talk
about? Is it not time to ditch the 550?
Hilary Benn: The government's
commitment is to two degrees. As you will recognise, there are
areas of uncertainty as to what a concentration of parts per million
in the atmosphere produces in terms of temperature. To be seeking
to achieve no more than a two degree increase, which is the UK
and the EU position, is the right place. Obviously as the scientific
understanding evolves you get greater clarity, and I take your
point that we have a better understanding now than we had before.
With respect, two degrees is a pretty clear number. As the science
evolves we will have a better understanding of what that means
in terms of parts per million. The real problem is not how specific
the UK government is about the correlation between two degrees
and parts per million. The real problem currently is there are
lots of countries around the world who we will need to get agreement
with on what we are trying to achieve who do not even have a view
about what kind of temperature increase we can afford to live
with, which is why I set out a moment ago my view that a really
important place to start once we have got beyond Bali, as this
negotiation begins, is to say: okay, folks, what can you live
with? I was in India last week. I had to go and talk to the government
there because they are going to be hugely influential both in
terms of their increased emissions and in terms of the stance
that they take when we get to Bali and beyond. The government
in India reads the same reports. They realise they are going to
have 500 million to 600 million additional citizens over the next
40 or 50 years. They can see what may happen to water availability.
They understand what is now being said about the impact on crop
yields and what effect the melting of the Himalayan glaciers may
have on their society. I just think we need to encourage others
to think about what the impact is going to be on their own countries,
because we are all going to be affected each in our own way, and
then to put that into the negotiations when we start this process,
as I hope and pray we will once we have got Bali out of the way.
Q15 Mr Chaytor: What specific outcomes
of the Bali conference will need to be in place to be on track
for a solid, post-2012 agreement in two weeks' time?
Hilary Benn: The first thing that
we need is an agreement embracing all of the countries in the
world that we are going to engage in this process over the next
two years. Kyoto has delivered some things. The EU looks as if
it is going to be on course to achieve its targets. Some of the
countries are way off as we know. Kyoto is nowhere near sufficient.
The one really significant outcome would be all the countries
of the world saying yes, we are prepared to participate in this
process. That is the first outcome. The second outcome is that
we list in whatever the Bali declaration is what we recognise
have to be the component parts of an effective post-2012 agreement.
They have to be binding commitments to reduce emissions on the
part of the rich, developed countries and what contributions others
are prepared to make, going back to my point about the emerging
and developing economies. You need that for a carbon market. You
need a carbon market to get a carbon price. You need a carbon
price and a carbon market to get a flow of funds between the rich
to the not so rich world to deal with the technology and adaptation
that will not just come from the carbon market; it will also come
from funds from other sources, the World Bank, international financial
institutions, clean energy investment frameworks, the UK's own
environmental transformation fund. It is going to have to look
at what we do about aviation globally, what we do about shipping
and deforestation. That is the EU list. My view is we need to
look around the table and say: okay, are there any other issues
that you want as countries to have looked at as part of this process
between now and Copenhagen? The Saudis will put their hands up
and say, "We are worried about the impact on us of doing
these things." I think this has to be an inclusive process
to say, "Okay, we will look at that." It is a fine balance
between being straight and honest about the elements that we know
are going to have to form the basis of a post-2012 agreement on
the one hand and not scaring people off at this stage so that
they think, blimey, if I sign up to a Bali declaration to start
a process, I am selling my soul to sign up to a reticular shape
of agreement. That is the task that we have. If we can get the
process going, then we can sit down and start working out what
we are trying to achieve in temperature and parts per million
targets and see what you are promising currently. There is a gap.
Okay, how are we going to fill this?
Q16 Mr Chaytor: You have given us
a sort of shopping list and you have talked about the process,
but you have not talked about a framework or a set of principles
that might underline that shopping list. Why has the government
been unwilling to adopt a framework or be more up front about
a framework, particularly the framework of contraction and convergence,
because that does seem to underline what you are arguing for but
you are not prepared to admit that that is what you are arguing
for? Is that not a fair comment?
Hilary Benn: No, I do not think
it is fair. What I have just set out is a framework, with respect,
because it contains the elements that you are going to need if
you are going to have an effective agreement. The underlying principles
are that we have to get on with it. What we do has to meet the
scale of the task, given what we know about the science. We have
to have regard to equity. It is really hard to argue that in the
long term, whatever we define as the long-term, when countries
get to a similar state of development, if the world can only cope
with a finite amount of carbon and greenhouse gases being emitted—and
that is the case—and divvying it up on a per capita basis
seems like a pretty reasonable principle, what you are trying
to balance here is how do you start the process in a way that
is as inclusive as possible? There are many ways in which you
could get to that end point without resulting in countries saying,
"If that is what you are talking about, I am off. I am not
going to be part of this process." That is the negotiating
task in Bali. It has to be inclusive because if it is not and
countries stay outside then we are in trouble. The two fears I
have if I may be frank are, one, that countries will say, "They
are not moving so we are not going to move. If we get stuck in
after you, then we are sunk." The second fear I have is that
countries will look at the sanctity of the process that we have
currently within the UF CCC. We have the Kyoto track over here;
we have the convention dialogue over here and we must maintain
the sanctity of these separate, parallel processes. That is not
going to work. We have to construct a way of connecting the two
together by routes or gates or however you want to describe it
so that once this negotiation process is concluded we can try
and bring them together. Not all countries currently say that
they want to do that but, for me, it is not credible that you
can say the only thing we are going to discuss in Bali is why
have not the annex one countries fulfilled their commitments.
Even if they did fulfil their commitments, we are way off.
Q17 Mr Chaytor: What is the biggest
obstacle to progress in Bali or who is the biggest obstacle to
progress in Bali?
Hilary Benn: The fundamental truth
in all of this is that, if you look at all of the countries of
the world, they are all saying the same thing. To a greater or
lesser extent they will say, "Yes, we recognise the science
and the scale of the challenge" and so on and then they will
mutter under their breath or say more vocally, "But we are
worried about the impact of dealing with it on our economic development."
It is what China says. It is what India says. It is what Malawi
says. It is what the United States of America say. We have the
same discussions here in the UK. That is the truth. The difference
is countries are starting from very different points of view.
You have the States up here and you have Mali down here but it
is the same issue. That is why being able to demonstrate that
it is possible to decouple economic development from an inexorable
rise in emissions is so important, because then you open up the
conversation: "You can have the improvement in the lives
of your citizens", which India is desperate for. It has 5%
of its kids currently not in primary education, but it has a lot
more coming along stream as the population rises: improvements
in medical care, standards of living and so on. I think that the
biggest obstacle is that countries will not be willing to participate
in the process because they are afraid of what the consequence
is going to be. The biggest spur to participating in the process
is that people can see the trend we are all heading for wherever
we happen to live in the world and that no country will be able
to say to itself: we are okay because we are above sea level.
We are rich. It ain't going to affect us. It is going to affect
every single one of us.
Q18 Mr Hurd: You mentioned earlier
that the time is less than we thought. In that context, sticking
to Bali, Stern was surely right to place such emphasis as he did
on reducing deforestation as a policy to buy some time. What are
your expectations from Bali in terms of any agreement there? Will
the British government be going there with specific mechanisms
to propose?
Hilary Benn: I apologise if I
left deforestation out of my list in answering Mr Chaytor's question
because it should have been there. It is one of the uses to which
we are prepared to put some of the money from the Environmental
Transformation Fund. As you will be aware, we have already indicated
in relation to the Congo forest basin, because of the work that
Wengari Matai and others have been doing, that we are prepared
to put some money in there provided there are the right governance
arrangements working with the states that are represented in the
Congo forest basin, the first point. The second point is there
is the work that Johann Eliash is doing looking at market based
instruments that might have a contribution to make. The fundamental
problem in relation to deforestation is this: if you are the relatively
newly elected president of the Democratic Republic of the Congo
and you contemplate the vast riches of the country including its
forests, if the current incentive is, "If I cut this stuff
down and flog it then I will make money which I can then invest
in improving the health and education of my citizens", you
have an incentive to do that. What we have to create is a system
in which the incentive is reversed, in which countries can generate
revenue by not doing it and ensuring that those forests remain
as carbon sinks which we need in the world for reasons all of
us understand. That is the first thing, how we make that transition.
Secondly, there is the whole question of governance because if
you look at the problem of illegal logging, we have been working
in partnership with a number of countries including Indonesia,
the best way to make progress there is, one, to improve the governance
in the countries where illegal logging is a problem. With the
best will in the world, unless you have in those countries a certification
system for ensuring that timber that comes out has been legally
logged—and that is about enforcing the law—importing
countries like the UK cannot really help because a load of timber
arrives at Felixstowe and the Customs officer looks at it and
says, "And how am I meant to know if this is legally or illegally
logged timber before me?" If you know that it comes from
Indonesia and there is a system in place there which means that
any timber that comes out does have the legally logged certificate,
then the Customs officer can say, "Show us the certificate.
If you do not have it, you're not coming in." That is what
we have been trying to do through the forest law enforcement process,
pressing in Europe to have a mechanism in place so that we can
do our bit of the deal in response to individual countries having
put in place the right kind of governance. We will certainly wish
to discuss this as part of the discussions in Bali. One of the
things that we will need to have as the list of tasks to be dealt
with during the course of the negotiations will indeed be deforestation.
Q19 Mr Hurd: Has any of the £50
million fund for the Congo that was announced been spent?
Hilary Benn: Not as far as I am
aware because the big and important proviso is proper governance
arrangements. Given that this is a part of the world, as you will
know only too well, where there are problems with governance and
everybody wants to be satisfied that you have an effective mechanism
in place, my experience has taught me it is about trying to find
ways of reversing the incentives.
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