Examination of Witnesses (Questions 1-19)
MR SIMON
ROBERTS AND
MR JOSHUA
THUMIN
10 JULY 2007
Q1 Chairman: Good morning and a warm
welcome for you both. This is the very first evidence session
we have had on this subject although quite a number of us are
extremely interested in it and therefore have been thinking about
it for some time. But as it is the first one and you are the first
witnesses do you want to give an outline of how you think a personal
carbon trading system would actually work and what it would mean
for the individuals who are taking part?
Mr Roberts: That is quite a big
question. What I would say is that you would end up with a situation
where the government or an independent committee determined the
amount of emissions that the domestic sector was allowed to emit.
In most of the models of domestic carbon trading you then divide
those equally amongst the domestic population of individuals within
the household sector, and you can give them each an equal share
of that amount of carbon, rights to emit on an annual basis. People
would then submit those rights or give up those credits as they
used up energy through buying fuel, electricity, gas, or buying
petrol for cars or by buying air travel—those are usually
the combination of things that are included. You would also almost
inevitably have some kind of "pay as you go" systems
for those people who did not have access to their credits or run
out and they would be able to buy some on an open market. Individuals
would end up having to make decisions about the best way in which
they could reduce their carbon emissions. They would have to take
the carbon content of their purchasing decisions into account
and they would have a choice across these either to reduce their
own emissions or to pay someone else through the trading system
in effect to reduce it for them. This will effectively increase
the cost of their lifestyle if it is a carbon intensive lifestyle:
or it would reduce the cost of their lifestyle if it was a less
carbon intensive lifestyle.
Q2 Chairman: The tax system reflects
through varying allowances, extra allowances and so on, the different
position of certain individuals or indeed families and given that,
for example, people with certain physical conditions might of
necessity have to keep their houses at a warmer temperature than
other people, do you envisage that to make such a system equitable
and indeed acceptable it would be necessary to complicate it by
having a series of allowances or differences in the allocations
which reflected the different circumstances of the individual
people?
Mr Roberts: I think you can either
complicate the system, which is probably an approach you would
not want to follow through, or you look at ways in which you support
households that would find it harder, for example, to respond
to a limited allowance because of their need. You would look at
ways of doing that outside the system, as we do at the moment,
for example, with schemes for giving grants for insulation to
low income households; as deliberate intervention above and beyond
whatever system one has. You also need to remember that this is
not coming into a system which is fair and equitable at the moment,
as you are indicating that some people have more opportunities
to reduce emissions than others. What the cap and trade system
would actually mean is that those people who have most opportunities
to reduce and the lowest cost opportunity to reduce would take
those steps first.
Q3 Chairman: Do you think it is a
concept that would lend itself to having a pilot model, say in
a local authority area so that people could get used to how it
would work and it could be done without financial penalties for
a trial period?
Mr Thumim: I think there are some
problems with that approach, partly because one of the fundamental
definitions of a national personal carbon trading scheme would
be its compulsory nature and the fact that everybody was included,
which, by definition, would not be true of a local area pilot.
Two, you would have boundary problems with people going outside
and obtaining energy services with carbon content that they would
then use within the area, so it might be difficult to establish
and run. Also a lot of the public reactions to the system will
be based around the way it works and the way they interface with
it. With a pilot you would probably be in a situation where it
was a very sub optimal version of what you would end up rolling
out. So people's first encounter with this concept would be a
slightly rough and ready version of the system which you might
end up with, and that might contaminate public opinion unnecessarily.
A couple of examples of systems, whether you like them or not,
where that was avoided (so that any objections are not on the
way the system operates), would be, for example, the London Congestion
Charge where there was not a pilot and it works, and the introduction
of the Euro, which, whether you like it or not, was fairly operationally
smoothly handled and is a very geographically wide area system.
Mr Roberts: I think the key question
is what questions are you trying to answer with a pilot. What
you will not be able to answer is "do the systems work?"
because you will have a sub-optimal system that you have kind
of knocked together to try and create a transaction based system
for a local area. People have talked about annexing the Isle of
Wight for this benefit but I suspect the Member representing that
constituency might decide that that was not the best place to
do it, but the way you try and constrain it. But the transaction
system, which is actually the interface most people will have
with it and the ability to keep track of where they are with their
allowance and get feedback on it and think about products and
services so that they are labelled and all the other accoutrements
of the scheme, you hope would be put in place in order to make
people find it as easy as possible to act within a scheme. But
those will not be there within any pilot because it will be too
limited geographically. And I think there is a danger, as Josh
is saying, of contaminating the concept and people's response
to it when actually their response is to a poorly working operational
system. You could liken it to putting in ATMs before they actually
really work so that sometimes you get the right cash out of it
and sometimes you do not and sometimes when you go on the system
has crashed, and all those kinds of things. What people will get
is not a response to getting cash out of a bank by putting in
a card but actually a response to a system which was sub optimal
and not working properly, and I think you would contaminate any
assessment of the public's response to such a system.
Q4 Chairman: Do you think it is a
desirable idea?
Mr Roberts: I think it is best
to say that we are probably agnostic on the issue at the moment
because there are a lot of issues that need to be sorted out as
we identified in the report, the work we did for Defra. Having
said agnostic, as with all agnostics there is something about
it that is quite appealing and that is basically that it is very
difficult to see how you get individuals around the UK engaged
with the carbon impacts of their lifestyle and starting to have
to do something about it on a long-term sustained basis, which
is fair, and where the burden is not carried by those people who
have done cuts and where the cost is not borne by them while other
people who cannot be bothered to do something about their lifestyle
carry on without any implication for them. On that basis in terms
of actually constraining carbon in the economy it is one of the
few policy tools that makes you have to face up to that fact and
think about it, so it is quite useful from the political science
point of view. But on a medium to long-term basis how else do
you get 60 million people to think about the carbon implications
of what they are doing. It does it in terms of consciousness,
I think, in ways that things like taxes do not do because we are
rather used to money and we are rather used to dealing with fluctuations
in the prices of things which actually go up and down all the
time. What we are not used to dealing with is trading in our minds
a decision between whether I fly to New York or insulate my house,
and that becomes very interesting. It also takes away from the
issue any moral dimension about whether flying to New York is
better or worse than any other kinds of carbon emissions—it
just treats them all as equal and you make your decisions. If
you want to fly but live in a carbon zero home then that is a
choice you would actually be forced to make in the end or you
would have to be paying someone else to do it and paying for the
pollution that you are currently causing for free.
Q5 Mr Challen: I can confirm, Chair,
that I have already been upbraided by the Member for the Isle
of Wight for volunteering his constituency for a pilot scheme,
so that is pretty clear! If we did introduce personal carbon allowances
what kind of contribution do you think they could make to help
the government to achieve its overall carbon reductions target,
which is currently set at at least 60%?
Mr Roberts: It depends on how
tight politicians were prepared to set the cap, basically, and
over what timescale, but obviously if you have 42% of the emissions
being caused directly by individuals buying energy for their use
in the home or travelling by petrol or aviation in any system—and
I do not think the government has yet been entirely clear about
how it shares out the burden of achieving those reductions across
the economy—if you have a situation of 42% emissions which
need constraining then you need some mechanism for doing that.
If you set the cap effectively on the trajectory you want to achieve
you do not actually need to have another instrument to do it somewhere
else. You might know what instruments stimulate markets for any
of these services and so forth, but you could set it so that it
was actually on a trajectory from now until the target you want
to achieve on a drop down, steep curve, or a gentle start curve
or a straight line, whatever you wanted. There is a separate question
though: "are politicians prepared to sustain that?"
because it will get harder as you go further down and the costs
will go up, but it has the potential to do precisely that, which
is one of the reasons why it has that enticing element to it.
Mr Thumim: It is really important
to add that you must not confuse the instrument with the target
that is in place to deliver. So any target can be delivered this
way. You can deliver an increase in emissions with it by setting
the cap at 20% higher than current emissions. So the issue is
that it does create the thinking which faces up to the target
as a reality because that is what is exciting and perhaps kind
of scary about this policy idea, when you think it through you
actually think, "Hang on a minute, that is going to constrain
carbon emissions in the economy in all these different ways, there
can be a lot of effects from that, what are they going to be like,
do we like them?" That is completely separate from have we
got a carbon emissions target, do we want to cut emissions, and
it links them effectively. So the answer to your question is any
target, but the tighter the target the more profound the effects.
Q6 Mr Challen: The target we have
is up to 2050 but you have already referred to one of the problems
that we might have with such a system in that if you have a shallow
curve you might be able to introduce it more smoothly and iron
out any problems before people started complaining, but on the
other hand Stern reminds us that early benefits can be gained
by disproportionate effort at the very beginning. Do you have
any evidence that would show which kind of approach is the most
optimal?
Mr Roberts: No, is the simple
answer to that. I think it comes back to the political reality,
which is that the cap is set politically and not scientifically—although
under the Climate Change Bill there would be a committee, in theory,
which would be contributing to that process, but ultimately the
ministers decide. I think it is a question: "how are we going
to constrain carbon issues in the economy and achieve those reductions?"
And you need some policy tools to achieve that. What you get with
a cap and trade is some certainty over the fact that you are going
to achieve that; what you do not know is what the price of doing
that is going to be. It may well be, because we do not have a
lot of data about it, that the cost of reducing carbon emissions
for most households is relatively slim because they can simply
choose to take a holiday that does not involve flying or they
can actually take advantage of one of the many energy supply schemes
to insulate their home or just improve their habits and reduce
the carbon intensive lifestyle through behaving differently. All
those things are relatively low cost, if not zero cost, and therefore
the cost of getting down that curve to start off with may be very,
very low. In which case the cost of carbon in that particular
system would be low as well. What we do not know at the moment
is where you start to hit the steep part of the marginal abatement
cost curve? Where does it suddenly get steep and how does that
distribute across different types of households, different types
of people? Some people have very immediate, very high costs to
reduce emissions and other people have an awful lot of spare capacity
to cut emissions through choices they are making which are actually
just about habit and behaviour, and I think you need much more
of that kind of information to start to map out who would be suffering
and where the squeeze would be depending on what curve you introduced.
My suspicion would be that taking history as a lesson it will
be introduced gently. But then I think we are seeing that in terms
of the way in which the efforts are being made to constrain carbon
in the economy at the moment: we are introducing it very, very
gently at the moment, certainly in the sense we are not actually
managing to do it! So on that basis it at least has the potential
for doing rather more than that.
Q7 Mr Challen: Looking at the technology
of such a scheme I think it is correct to say that the Tesco Clubcard
has about 40 billion transactions a year and it is envisaged that
this scheme might have about 15 billion, does that indicate that
the technology side of it is going to be a bit of a doddle or
are we not really comparing like with like?
Mr Roberts: From the work we have
done—and we have not gone into that side in a lot of depth,
but from some time in my background working in the banking sector
where I had a brief foray—we have a very good transaction
system and we have a very good accounting system—we have
a banking system and a system for transacting—so think of
your carbon account as being another type of financial account.
If the banks are happy to do it, which I have no doubt they would
for the right price, you could have a euro account a dollar account
a pound account and you could create a carbon account. And you
could link it up with the transaction systems and you do not need
to build anything new to do that. That holds far more information
than the Tesco Clubcard system does at the moment in terms of
the banking system as a whole. Where I think you have an issue
is with the allocation system: how do you identify and get the
right amount of carbon credits to the right accounts smoothly
with a tolerable level of fraud—you are never going to eradicate
it altogether—and I think that is the bit where you have
more systems. We have at the moment government systems which get
money to people, child benefit, tax allowances, all kinds of other
things like that—your Public Accounts Committee equivalent
has raised some interesting points on that. It is a question of
how accurate you want it to be and how resilient to fraud you
want it to be. I think the systems bit is probably the most straightforward
as long as you are not asking for something completely independent
to be set up, which you would not want for this; you would want
it to be part of the transaction system, which is effectively
what the club card is—it goes through the till, it is not
complicated.
Q8 Martin Horwood: Simon, it is good
to see you again after all these years—a strange place to
meet up. You and I both have some experience of marketing and
the systems a bit like club card and I think you are probably
right that this is a relatively simple system to set up. But surely
the complications of these systems is not actually in setting
them up, it is in operating them and that is when the cards get
nicked, they get lost, people misunderstand them, people run up
huge bills without understanding the consequences, and that is
with a voluntary scheme like a club card or a credit card. This
is going to compel people who cannot even cope with those kinds
of schemes to take part, and is that not going to be where the
real practical problems happen?
Mr Roberts: I think there are
some issues about that but I think we need to be careful, because
people will be given an allowance so there is a kind of gift for
them to use up or possibly sell on the first day. But actually
as people who were in the first phase of the EUETS who sold up
on the first day will know that might be quite a good financial
decision to make, depending on what you think the price of carbon
is going to do over time. In relation to the issues, in the work
we did for Defra we looked at the financial literacy issues and
there is about one-fifth of the population who really are not
very good at dealing with money and living within their means
and all those kinds of things. But quite a lot of these are actually
fairly well off as well, so I would be less concerned about them
because they will effectively have to pay for their profligacy.
I think it would be quite difficult—and you would not want
to encourage it anyway—for people to rack up a huge carbon
purchase without meaning to, other than through using an awful
lot more energy than they want to, or filling up several cars
worth of petrol rather than one. There are certain limits to what
you could actually do in terms of how far you could push it. So
I think there are serious issues about how you make sure how you
support people working with the system and managing it, in the
way that they did, for example, with introducing decimalisation,
with introducing the Euro, people had to get used to a whole different
way of thinking about their money and the systems and the transactions
they were undertaking. I think you need to think about that. Any
system would have a "pay as you go" element to it which
some people would prefer to use from a budgeting point of view,
I am quite sure, and obviously there would be a slight spread
as there is for most of those things between the sale price and
the buy price, but we do not actually know how that would work
because we do not know what the price of carbon is going to be;
so it may actually be better to sell in the first week and take
advantage of the drop of price over time in the first few years.
Q9 Martin Horwood: But there are
people, as we know as MPs, who have difficulty coping with budgeting
money, let alone carbon as well. Tax credits and things like this
throw people into complete consternation and distress, and these
are the people you are going to give a carbon allowance.
Mr Roberts: But we have not abolished
money in order to deal with that, we try and educate them and
support them and work through schools, as we are hearing about
today, on initiatives to help people deal with money management
and so forth. We are not very good at training people on how to
manage money. There is a proportion of the population who would
find it more difficult than others. The actual financial implication
of PCAs may be quite limited in the first instance, so we should
not overblow it and suddenly they are going to rack up thousands
of pounds worth of carbon debt in some way or whatever because
they would have to be buying as they went or using it up. So I
think there is a danger of overstating it. You would need to find
ways of supporting those people who find it difficult to participate
in the system to their maximum advantage, i.e. people who are
disadvantaged by the fact that they cannot participate or are
unable or do not understand how to participate, you would have
to look at ways to do that. But I do not think it would be any
more complicated than a money based system, and it is far fewer
transactions and it is controlled and they get an allowance to
start off with, so it is a bit like saying, "Here is £100,
you decide how to spend it and once you have spent it you have
to buy things which will cost you more than if you just spend
within it."
Q10 Mr Challen: Here we are talking
about a scheme, which will be national, mandatory, so pretty comprehensive,
but it occurs to me that it may duplicate things that we already
have. The EUETS, for example, already covers great parts of the
energy sector and many other things too. Could this co-exist with
other schemes? I could see how it could co-exist with taxation
and regulation but other trading schemes offsetting, what kinds
of impact would it have on those areas where it might begin to
duplicate?
Mr Thumim: There are potential
complications, if you imagine a carbon trading system running
in parallel with the EUETS, and that arises where you have units
of carbon that are effectively operated in both markets, so the
overlap between what we are talking about now, which would be
the domestic system with the EUETS, will be where you have domestic
electricity use, and the domestic users have a permit and the
power station operators have a permit on another system, which
is in the same geographic area, i.e. Europe. So you have some
at first glance (which is the analysis we have done so far), pretty
odd effects from that system because if you make a reduction in
the domestic system, two trading systems can take it up, one domestically
and one somewhere else in Europe, so you get the reverse of what
you would have thought. So, yes, that means looking at them very
carefully; you could not just say, "Right, we are just going
to do this in parallel with what we have already." So I think
anything where the system you are talking about is also a carbon
trading system you have to look at it very carefully and think
about the best way of bringing it in, and it may not be something
you do overnight, and you could imagine that it might be something
that emerged on a European level anyway later in which we played
a part. If you are comparing it to measures that are not carbon
trading then there is not a problem and most of those, for example
the renewables obligation or other regulatory instruments, are
there to facilitate the opportunities to live within the carbon
budget and you can look at it in that way. In terms of offsets,
unless an offset is actually a carbon credit I am not sure what
is worth anyway, so I would not be worried about that. I think
this would end the need for offsets effectively; I am not sure
what function they would have in a situation where you already
have a carbon budget and it was effectively constraining in a
real way the emissions that individuals could cause.
Mr Roberts: Offsets, as we know
from the recent work Defra did, only create reductions in carbon
if they are actually part of another capped system, so you are
effectively trading between two deficits and in other words you
are just leaving it—"I have reduced but have they done
something else? I do not really know." So what you have here
is an opportunity for me to pay you to offset my carbon by you
actually doing something in terms of it rather than leaving it
to some slightly onerous and difficult to understand process by
which someone on the other side of the world might have done something
to possibly not increase their emissions by quite as much as they
would have done otherwise.
Q11 Mr Challen: Are you aware of
any other European countries at least that are looking at personal
carbon allowances?
Mr Roberts: I am not aware of
it, no. Just to expand on this issue with the EUETS I think there
is a point in time where we may need to move from focusing on
the point of emitting to the point of demand in terms of where
you regulate and I think there is a discussion and issue to be
addressed there, particularly in the electricity system where
while it might get people switching between coal and gas as a
choice and other low carbon technologies at the moment you are
specifically not allowed to count demand side measures as part
of your process for meeting your EUETS targets.
Q12 Mr Challen: It does raise the
very interesting question of, if I put coal in my hearth—I
do not actually have a coal fire, but if I did—and I use
that coal and it was actually exported from China who would be
responsible for that under a personal carbon allowance scheme?
Mr Roberts: You would have to
give up some of your allowances when you bought the coal.
Q13 Mr Challen: Would that then relieve
China of its need to set stiff targets?
Mr Roberts: It would only be an
issue if you are regulating the amount of carbon emissions by
telling China or anyone else how much coal they can mine out of
the ground.
Mr Thumim: You would not apply
that to oil necessarily.
Mr Roberts: So at the moment,
like petrol some of it comes from the North Sea but a lot of it
comes from elsewhere, if the regulation was on how much carbon
you could buy in effect then coal of itself is not a bad thing,
it is only when we burn it we start causing problems. So it is
the point of combustion that is where you would want to apply
the cap and the regulation. Obviously what it would do is reduce
your demand for coal imports from China if you decided that rather
than burn it, you decided to avoid it.
Q14 Mr Challen: It begs the question
about embedded carbon in all products.
Mr Roberts: Yes, and that is a
broader issue and it is why it is important that you cannot just
look at domestic carbon emission rates of itself. Most of the
evidence would suggest that the public would expect the rest of
society, the economy in effect, to be constrained in some way
as well, and some of the proposals for domestic carbon emission
trading include some mechanism for auctioning off the rights of
the rest of the economy and businesses and organisations and recycling
the revenue in various ways, which I think may be an over complication
of how one would go about it at this stage and the knowledge about
how it would work.
Q15 Joan Walley: In your report you
warned that the whole debate could very easily descend into some
kind of confrontational debate and then you had that kind of response
in fact to your own report. Could you give the Committee some
kind of idea of some of the responses that you got which took
you aback slightly?
Mr Roberts: I think, as has been
identified in our evidence, there is quite a lot, particularly
from what one might call left of centre analysis, that this is
somehow going to constrain the poor and they will be trading their
deprivation for cash and this is just a means for the rich to
carry on polluting and pay for it. To which the answer is at the
moment the poor get no cash for their deprivation and the rich
do not pay anyone to pollute. So, yes, it is a point. But what
this system actually does if you are constraining carbon emissions
is to make sure that those people who are currently constraining
get some benefit from those people who are not. So there is a
"think it through" answer to that one. Also, more recently
there was a situation where a representative of an energy supplier
in response to a presentation on the issue from someone from Defra
said, "Would I have to cut off my customer if they do not
have enough carbon credits?" to which the knee-jerk response
is, "Yes, like you do if they do not have enough money,"
but a more considered response is there would be a pay as you
go scheme so they would need to find a way, if they have not any
carbon credits, of effectively buying some credits, which no doubt
the supplier would have a system to sell them to the customer
anyway because that is how they are all set up and that is how
it would work, so it would end up having a similar kind of effect—it
would be just a price they would be paying rather than some credits
they would be giving up. It felt like people very quickly get
into a position in relation to that and other people saying, "Absolutely
no point, we have a tax system, just use that," and some
people say in relation to the regressive nature of it that tax
is far more regressive than a personal carbon allowance because
you do not give anyone anything before you even start taxing their
carbon content, whereas with a carbon allowance you give them
the right to emit equally, and effectively you are redistributing
rights principally from the rich to the poor on average—not
entirely though.
Mr Thumim: It is interesting that
a lot of the objections, certainly from the left of centre, would
be not to the rationing aspect of it—because effectively
this is a combination of a rationing system where the trading
happens not on the black market but above board—and you
find that people do not object to the concept of rationing, the
right to emit, but they sometimes object to the concept that you
should be able to buy and sell that right, the trouble being that
the efficiency that is expected of the carbon trading system is
a product of that trading, so there is an issue there.
Q16 Joan Walley: So do you feel that
that response is really representative of the general public at
large?
Mr Roberts: No, I do not think
we know enough about the general public; if you ask the general
public they go, "What, why would we want to do that?"
but you ask them the very direct question actually about a system
that you cannot explain very easily, as I demonstrated at the
start of this evidence session. But the public response to it
will be conditioned by the fact that they have no frame of reference
for what we are talking about, so in that sense how could you
expect to get a response which would actually be "genuine"?
I think the more interesting thing about the responses of people
is what it is that they are actually about is a response to genuinely
trying to constrain carbon emissions in the UK economy and really
having a strong focus on the lifestyles we lead that are too carbon
intensive at the moment. So they come up with the various arguments
against it but actually they are arguments about constraining
carbon in the economy, generally speaking, rather than against
this particular tool for doing it. Because as a tool for doing
it, on most criteria of users, it is fairer, generally, and it
creates a consciousness about the carbon content of decisions
in ways that other mechanisms like tax do not. And it sits neatly
with all other things around regulation to create the services
which people would need in order to respond. So I think a lot
of it is, as we said in our evidence, ill considered and not thought
through, but people feeling that they desperately need to have
a position in relation to it because the Secretary of State made
an announcement about it and the latest Secretary of State suggested
it should be a manifesto commitment in the next election in his
speech at SERA back in March. So there are all kinds of places
where it is coming up and people feel the need to have some response
and I think in most cases they have not actually thought it through.
That is what we would hope would happen, that there would be a
more considered exploration of the issue so that we were actually
having it based on fact rather than a knee-jerk nice sound bite
type reaction to it.
Q17 Joan Walley: But is not the conundrum
how you actually go about having an informed public debate without
this sort of detail so that people could actually see how it will
work? So what would need to be in place rather than perhaps a
pilot project in one part of the country, the Isle of Wight or
wherever, to get that informed public debate so that you could
have a more seasoned, well judged response to it?
Mr Roberts: Two things. One is
that you would need to deal with the operational feasibility issue,
you would need to know roughly how much it is going to cost to
get the banks to run it and how you would allocate it and deal
with that side of it, which I think is fairly straightforward
but needs nailing, not to actually get it done but to know what
the issues would be you would have to resolve and what time it
would take and how much it would cost. The other side is to get
a lot more data about the domestic sector, what the cost of our
emissions are and how they distribute across the domestic sector,
what opportunity to distribute across the sector as well. So you
can actually get a picture of who are the winners and losers because
at the moment we do not have a very good picture of that. There
is a bit of work which has been done but it is on quite old data.
I think you need a better picture of that so that you can go out
to the public to have a discussion that is actually based on real
fact. But I would actually say that there is a subset of the public
which is more important at this stage, which is actually the political
subset of the public, politicians. I think the key question at
this stage is what will the politicians need to know about how
the public will react in order to make a decision about it, and
there is a lot of this that "we need to have an informed
debate". Well, the politicians maybe should have that informed
debate first in terms of actually understanding the issues and
thinking it through, but I think the public at this stage are
not really ready to have a discussion about whether it should
be carbon rationing or carbon taxes or whatever, because they
are only just getting to the point where there is a recognition
we need to constrain carbon in the economy. It is only if you
are having it in that context because it is not a question of
doing this or nothing but it is a question of doing this or these
other things instead—would you rather have a carbon allowance
or a heavy tax on petrol and domestic fuel? That is, in a way,
the kind of choice you need to be putting in front of people rather
than, "What do you think about this?" If you were going
out to the public now what I would say is go out and ask them,
"On what basis do you think this would be acceptable? What
are the criteria you would apply to it?" And from the limited
out of work that has been to date people would say, "We do
not want to see any free riders, we want it to be fair, we want
it to be part of a system which covers the whole economy and we
want some element of understanding that it is going to be fairly
resistant to fraud and people are not going to be able to spot
exactly how much energy I have bought here, there or everywhere,"
so that there is not going to be some Big Brother element to it,
all of which I think you can address.
Q18 Joan Walley: As a part of that
things that would be needed would you say there should be some
kind of an indication of what a year's carbon allowance might
consist of and where would you set that?
Mr Roberts: I think you would
set it at the current level minus 2/3%. That is the other thing,
people suddenly think—
Q19 Joan Walley: When you say "current
level" whose current level?
Mr Roberts: The current level
of carbon emissions from the domestic sector. We know it is 42%
of the total UK emissions.
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