House of COMMONS









Tuesday 4 December 2007



Evidence heard in Public Questions 1 - 85





This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.



Any public use of, or reference to, the contents should make clear that neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.



Members who receive this for the purpose of correcting questions addressed by them to witnesses are asked to send corrections to the Committee Assistant.



Prospective witnesses may receive this in preparation for any written or oral evidence they may in due course give to the Committee.


Oral Evidence

Taken before the Environmental Audit Committee

on Tuesday 4 December 2007

Members present

Mr Tim Yeo, in the Chair

Mr Martin Caton

Mr David Chaytor

Mr Nick Hurd

Mark Lazarowicz

Mr Graham Stuart

Jo Swinson

Dr Desmond Turner


Witnesses: Rt Hon Hilary Benn MP, Secretary of State, Ms Anne Sharp, Director, Domestic Climate Change and Energy, Ms Marie Pender, Head of Climate Change Agreements and Carbon Reduction Commitment, Mr Martin Nesbit, Deputy Director, Emissions Trading, Department for Environment, Food and Rural Affairs, gave evidence.

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 in the end, 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 per cent without taking account of any purchases of credits. Now you are saying you will get a 16 per cent 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 per cent compared to the 12.5 per cent - 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 emission 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 per cent 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 three per cent. 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 per cent 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 per cent 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 seven per cent. 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 two 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 part of 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 per cent of our effort or no more than ten per cent 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.

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 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 all 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, one. 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 will stop 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 five per cent of its kids not in primary education currently 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 has 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.

Q20 Mr Hurd: You talked about the defined market mechanisms that work to change incentive strategies. The voluntary offset market is a small but quite a vibrant market. The Department, before your leadership, lodged a consultation exercise and made it pretty clear that the Department's view was that the voluntary market should be regulated in the same way as the compliance market - i.e., that would effectively shut down the market for this work. Are you going to review that?

Hilary Benn: We, as you know, are still currently reflecting on the consultation that we undertook, even the commitment to cover the code of practice. I will be making an announcement on that shortly, if you will bear with me for a little while longer. In general, I think we should be looking at ways of encouraging as many contributions to this task as we can find. If you hang on, you will see what we are going to say.

Q21 Dr Turner: Land use is a very important factor in climate change. What is the government doing to address the need to avoid emissions from land use change?

Hilary Benn: In the UK or globally?

Q22 Dr Turner: Both, but particularly globally.

Hilary Benn: There is a responsibility on all governments to be aware of the issue that you have identified. To the extent that governments are concerned about the impact of rising emissions from land use change, they ought to have policies in place to try to deal with that. I think I am right in saying that about 18 per cent of global emissions come from agriculture. In the UK it is about seven per cent, interestingly enough about the same as aviation currently, although aviation was forecast to rise quite considerably. One of the conversations we have with the farming community here in the UK is about what part they can play in trying to reduce greenhouse gas emissions. There is the whole question of biofuels. My view is that biofuels have a contribution to make but the key question is what kind of biofuels. We know from the evidence that we have currently we have some types - ethanol from corn which is even worse than the petrol it is meant to be replacing - and we have other types which do deliver real savings in carbon and greenhouse gas emissions. That is why we have pressed so hard for the EU as part of its target to have proper criteria to enable us to assess the sustainability because we would not want to end up with a perverse effect of the drive for biofuels resulting in greater greenhouse gas emissions and the consequent impact on land use. Palm oil and deforestation is a really good, or bad, example of that.

Q23 Dr Turner: That is right. One of the biggest contributors to CO2 emissions at the moment is the process of deforestation. Given the fact that biofuels are very much a factor in this, what a discussions do you have as Defra Minister with the Department for Transport that is promoting the use of biofuels and you are involved in helping them to set sustainability criteria to avoid and deforestation?

Hilary Benn: I talk to my colleague, Ruth Kelly, about a number of things. I am not sure we have yet had a conversation in particular about the renewable transport fuel obligation. As you know, we are starting at 2.5 per cent in 2008 rising to five per cent by 2010/11. The key to dealing with that issue, both in relation to the UK and the rest of the EU, is indeed the sustainability criteria that we want the EU to draw up. It is in the current draft of the proposals. Has that responded to the point? We are aware of the issue. I think we are pretty clear about what it is that we want to do to make sure that biofuels contribute and help us to reduce dangerous climate change rather than add to it. Sustainability criteria in my view, until you get on to the second generation biofuels that everybody talks about which will certainly make an additional contribution, are the best way we can manage what is a contribution that could be beneficial, ensuring that it does not lead to those adverse consequences that Mr Hurd raised in his original question.

Q24 Dr Turner: Defra has a lot to do with energy, but mostly in an indirect role. You have very little direct energy responsibility. In terms of sustainability you have an enormous responsibility which is more difficult to carry out. Do you think there might be a case to be made for putting the responsibility for ensuring the sustainability of biofuels with Defra rather than the Department for Transport?

Hilary Benn: You can cut the organisation of government in lots of different ways. The question is: does the government collectively have the right policy to deal with the problem? I think on biofuels we do, as shown by our determination to get these criteria agreed at EU level. It would be all fine and dandy, the UK having its own, but if you are going to have an impact you need it to be agreed on a European-wide basis and that is what we are pressing for. All other government departments are committed to that objective.

Q25 Dr Turner: We do have a situation whereby we are embarking on the transport fuels obligation but we do not have an agreed, excellent system of sustainability criteria to make sure that it does in fact have the right environmental benefit.

Hilary Benn: Sure. I would say it is chicken and egg because you have to start somewhere. If you look at what would be the time lag between us getting going on our RTFO and what we hope Europe is going to agree, there is a case for saying that setting out with the RTFO will help to increase the pressure to come up with the sustainability criteria that you use, the first point. The second point is that biofuels to have a contribution to make. They have to be the right type and therefore we should be getting on with that, at the same time ensuring that we have the right criteria to make sure that they are better than what they are replacing and, if they are not, and then they are making a contribution towards our targets and that is a good thing.

Q26 Mr Stuart: The evidence we have received in our biofuels investigation was that there would be very limited reductions in emissions as a result and at an extremely high cost. If all departments were working well together or, as Dr Turner suggested in a sense, Defra had the lead, do you really believe that 500 million would be spent solely on biofuels?

Hilary Benn: I think you have conceded in asking the question that it is going to have a beneficial impact. Maybe I am missing the point of the question. I do not mean to characterise your question incorrectly. We need all the help we are going to get.

Chairman: Is it the best value for money?

Q27 Mr Stuart: Transport wants to do something so it is doing something that looks illogically expensive for the benefits, if there are benefits. We have had evidence to suggest they might be precious little or even counterproductive. Looking across departments and looking at the environment I do not see that it is a rational allocation of a Treasury resource to be looking at giving up 500 million for the limited benefits that biofuels may or may not offer.

Hilary Benn: To me, the answer to that question is that it depends what kind of biofuels come forward and what savings they offer over what they are replacing. You either take the view that biofuels have nothing to contribute and we should not go down this route at all. I think they have a contribution to make but we should not overstate what that contribution is because clearly we cannot head for a world where we grow all our transport fuel but starve to death because the land is all being used for growing the fuel and it is not being used for growing food. That is why, as in a lot of these things, you had to achieve some balance. The truth is we are only just starting out here.

Q28 Mr Stuart: We have other things which we know will deliver, that have proven delivery, and there are question marks over this. Yet, the resource for this is massive and the resource for other areas which we know will deliver and which the Department is keen on is not getting anything like that commitment. It does not seem a rational allocation. It is not to say that biofuels could never have a future but to develop work and research until it is ready for that future and do not spend vast sums on a system which is not likely to deliver very much in the meantime.

Hilary Benn: My view is that we need to start on a number of fronts including this one and it is not a competition between all of the approaches that we need to take. I think we need all of them if we are going to have a chance of meeting the targets that we have set so we should not be afraid of trying them out but in the end policy must be determined by the evidence. I think we can all agree on that. Clearly, there is not much point in doing something that results in an even worse impact than what it was replacing. Hence, the importance of getting those decent sustainability criteria so that people have the information - all of us, government, individuals business and others - on which to take the right decisions. We should be guided by that.

Q29 Jo Swinson: I think it is intriguing that you say it is not a competition between different ways of cutting carbon. In essence, there is a competition because they are competing for government resources in terms of ministerial energy and time of officials but also in terms of the funding that is given towards different ways of reducing our carbon emissions. While that does not mean that if you do one thing you cannot necessarily do another - we can look at lots of different ways of reducing our carbon emissions - there is still a competition for resources in terms of what we prioritise.

Hilary Benn: I am tempted to say there is a relatively inexhaustible supply of ministerial energy so that I can promise to give and so do my colleagues. It is not that progress on all of this is wholly dependent on the total amount of money that the government spends out of the public purse. We are not going to spend our way out of dangerous climate change as a government. What it is about is trying to create the right mechanisms. The climate change levy is one; EEC and CERT are others; the carbon reduction commitment is another; the EU ETS is another; the light bulb agreement is another and there are other examples. It is about trying to create the right mechanism: incentive, regulation, taxed carbon price, because I am absolutely persuaded that having a carbon price that will redirect investment that will come from the private sector - take energy generation; there is a vast amount of money that is going to be invested over the next 20 or 30 years in energy generation around the world. What you want is a system that will help to redirect that towards low carbon forms of energy generation as opposed to the types which have got us into the mess that we are currently in. Obviously what government does is important and government expenditure is important but it is not the sole determinant as to whether we are going to make progress or not.

Q30 Jo Swinson: I do accept that point. You mentioned the issue of the target and the fact that the Climate Change Committee will be reviewing the 2050 target. When are you expecting to receive their recommendation?

Hilary Benn: We have not yet finally determined when we are going to ask them to do that. There is what is in the Bill currently but now we have given them this additional task the question is will they need a little bit more time to do that alongside advising us on the first three five year carbon budgets. We will take a decision in the near future as to when that is going to be but it is not going to be terribly long because obviously they have a requirement to get on with the task of the first three five year budgets and we have to fit the two things together. It brings it forward in terms of reviewing the target compared to where we were previously precisely because the government recognises - the Prime Minister made the point - that science is changing all the things that we understand and I think it is the right mechanism for determining should it be stronger still than 60 per cent and should it be up to 80 per cent.

Q31 Jo Swinson: It is certainly the case that science is changing and I suspect most people in the field will expect a review of the target to suggest 80 per cent. Can you envisage circumstances where the Committee would recommend a target, say, of 80 per cent and the government would not adopt that?

Hilary Benn: We have constructed the Bill in the way that we have because we felt in the end the decision for what the target should be is one that should not be outsourced, albeit to a very important, influential body, but in the end it should be a democratic decision for which the government can be held to account. In the same way as Mr Stuart invited me a little earlier to prejudge what we would do in those circumstances, I am going to resist the temptation in relation to your question except to say that the government of course would take very careful account of what the Climate Change Committee has to say on this issue. The law will say and the government's position ultimately is that this should be a decision for the elected government and not the Climate Change Committee.

Q32 Dr Turner: If I understood you correctly, you said that you were going to ask the Climate Change Committee to determine the budgets first and then review the evidence on the target.

Hilary Benn: No, I hope I did not say that.

Q33 Dr Turner: This is very crucial.

Hilary Benn: It is very crucial. We will find the form of words that the Prime Minister used. What he said was, "So we will put this evidence about changing science up to 80 per cent to the Climate Change Committee and ask it to advise us as it begins to consider the first three five year budgets on whether our emissions targets should be timed up to 80 per cent." In other words, we have them in sync.

Q34 Dr Turner: So it is the target first and then the budgets to achieve that target?

Hilary Benn: That is what the words say: to advise us as it begins to consider.

Q35 Mark Lazarowicz: Can we come a bit nearer to the present day and look at the 2020 target to reduce CO2 emissions? That is of course by 26 and 32 per cent in the Draft Climate Change Bill. When this Committee looked at that we said that that was wrong, to impose that upper limit on the target for 2020, and we recommended that it should be amended to read at least 32 per cent. The government response in turn was that that was unnecessary and it would not deter cuts greater than that being made because excess progress could be banked in a future period. How realistic is that if people are not being made to do it? Which sectors of the economy would be motivated to take so much action that the country as a whole over-achieved its target?

Hilary Benn: The argument for a range including the upper limit was principally to give some certainty to business. I know that the Committee takes a different view but we did think long and hard about this, including reflecting on what the Committee had to say when we reflected on the consultations, first point. Secondly, I do not quite see why in relation to individual organisations and businesses having that as an overall framework is going to lead people to say, "We are certainly going to make sure that we do not do more than this", because it goes right back to your original question at the start of the session, Mr Chairman, which was about it being better to get going quicker than to leave it too late. I do not think having it framed in that way prevents people, organisations, companies or business from getting on with it faster, but it sets the framework overall within which the country as a whole has to deliver.

Q36 Mark Lazarowicz: Is that not what people do when you offer them a target range? They aim for the lower end of that range because that requires the least effort.

Hilary Benn: Not necessarily because, not regardless of what the government says and whatever they Bill says, companies themselves can see the future coming and you can see organisations that have set pretty ambitious targets of their own which they are determined to achieve. I do not think that across the whole of business they are going to be sitting there saying, "We are certainly not doing more than 32 per cent because that is all that we have been required to do." I just do not believe that that is going to be the case. That is the first thing. The second thing is, to the extent that companies are going to make progress by more efficient use of energy, generating more energy from low carbon and otherwise sustainable means, that is going to save them money and that is a pretty powerful incentive too. I do not see it as an obstacle. It is the window through which we have to pass by the time we get to 2020, framed in the way that it is.

Q37 Mark Lazarowicz: Can you think of any other previous government targets where range has been offered and what has happened is something other than people aiming at the bottom end of it?

Hilary Benn: Marie has an example and I will come up with another one.

Ms Pender: The climate change agreements that I manage are a classic example of over-achievement of targets. The accusation has been levelled that that was because the targets were too easy. Having negotiated the targets, I can say that we tried very hard to push industry to beyond its comfort zone in what it thinks it can achieve on energy efficiency but nevertheless they still over-achieve consistently. Our view of why that is is because they do see energy efficiency saving them rather a lot of money. Once they get on to that path, they tend to take the action early. They do not plan that they have a target to meet in 2010 and just aim to meet it. They think it is quite a good idea and they will do it.

Hilary Benn: Kyoto would be another one. As far as the government is concerned, we did not say that we were only going to do the 12.5 per cent. We look at the moment as if we are going to do almost double that. I do not think it follows that having a target means that people are only going to come under all at it and not exceed it.

Q38 Mr Caton: The reason we are doing so well on Kyoto is the dash for gaps which was really a financial incentive rather than an environmental incentive. With the climate change agreements I do take your point but there you have the climate change levy, an actual tax, that is the main incentive for people wanting to enter into the agreement. I am not sure having this 26/32 range is equivalent to either of those two examples and I remain - I suspect the rest of the Committee remains - concerned.

Hilary Benn: The target range does not do it. You have to have the mechanisms both for the 2020 and the 2050 targets that will give you a chance of achieving that. That includes a range of incentives, cap and trade schemes and so on, precisely because we recognise the point.

Q39 Chairman: When do you think we will include international aviation and shipping emissions within our budgets and targets?

Hilary Benn: What we have said, as you will have seen in the Command Paper that we published, is that the first thing is to get aviation into the Emissions Trading Scheme, because we think that is the right and proper approach. When that happens, we will ask the Climate Change Committee to advise the government on two issues. One is what would be the impact on our UK targets of including aviation. Secondly, what will be the methodology doing so? Clearly, one of the things that the EU is going to have to agree as part of aviation being included in the EU ETS is what is the method for divvying up. You could adopt one system for divvying up now and then you find it is not really compatible with what the EU comes up with as part of a decision on the ETS; and then the government will reflect on what the Climate Change Committee has to say on those two issues. With shipping, we are some way further off in truth but we have framed the Bill in a way that would permit them both to be included when we have a suitable international agreement.

Q40 Chairman: You have referred more than once to aviation and emissions trading. There does not need to be a divvying up if there is 100 per cent auction of the alliances.

Hilary Benn: You still need a mechanism for deciding how you are going to allocate ----

Q41 Chairman: No, you do not, because you do not allocate yourself. You would have an EU-wide cap on aviation and you would follow the alliance's 100 per cent auctions.

Mr Nesbit: You would still need to determine what was the UK's share of overall emissions. You would need some mechanism for that.

Q42 Chairman: No, you would not. You can just auction it. You have an EU total and any country can buy. They could buy the whole lot.

Hilary Benn: What do you then include in the UK target?

Q43 Chairman: It is a separate issue. You were saying you could not have a UK target until we have got aviation into the EU ETS. I do not agree with that but that is your view and I am just taking that as a premise. You then said there was a difficulty about divvying up but there is not if you have 100 per cent auctions. On this point, you said the Commission target was a three per cent auction. I think at least one of the parliamentary committees is now going for 25 per cent maybe. Would you agree that it would be absolutely catastrophic if airlines achieved the same windfall benefit from increasing their emissions in the way that the power generating companies have in phase one? That would be a catastrophic outcome.

Hilary Benn: That would not be a good outcome and that is why the UK government is in favour of a reasonable level of auctioning and does not support the current Commission proposal.

Q44 Chairman: Reasonable is?

Hilary Benn: Did one committee go to 50 per cent?

Mr Nesbit: Yes, the Environment Committee proposed 50 per cent.

Hilary Benn: I think the Transport Committee was at 25 per cent. The Commission started at three. The Presidency could be moving towards ten. I think we are likely to end up somewhere in the middle but the UK government certainly favours a higher level of auctioning than the Commission's original proposal or indeed where the Presidency currently seems to be.

Q45 Chairman: We are caving in to the US airline industry lobby?

Hilary Benn: I do not see that that follows from the answer I have just given.

Q46 Chairman: Coming back to the UK share of all this, is there any reason why we should not immediately start publishing projections of where we think aviation and shipping emissions should be, the ones that Britain is responsible for, relating that to our overall targets for air emissions and budgets?

Hilary Benn: When you say "where they should be" I am not quite clear.

Q47 Chairman: If you do not have any idea where they should be, you are saying that okay, we have a target for some of our emissions but here is this very important and rapidly growing sector which everyone knows is a major polluter and we have no idea what the figure should be. If that is the position of the British government, it does not seem a very strong one.

Hilary Benn: No, that is not our position. What we want is for it to be in the EU Emissions Trading Scheme because then you have a cap. You have a baseline which is that we are pressing for 2004/6 and, if aviation goes above that, it has to compensate somewhere else which seems to me a logical and sensible place to be.

Chairman: I would certainly support that principle.

Q48 Mark Lazarowicz: The government's present policies on aviation do envisage an increase in flights and in CO2 emissions. Clearly, if every country in the European Union was to see an increase in aviation emissions, there is no way the ETS scheme could lead to a reduction in emissions for the EU. Is it realistic to think that we can proceed with our policies that would bring about an acceptable level of increase in emissions when there is no indication that other countries are likely to offer compensatory reductions to make up for our increases?

Hilary Benn: Can you just repeat the last bit when you say, "Is it sensible for us to proceed?"?

Q49 Mark Lazarowicz: On the basis of policies which would result in an increase in aviation emissions, there is no indication that I can see that other countries in the EU will be prepared to offer larger than proportionate reductions in their own aviation emissions to allow us to increase our emissions.

Hilary Benn: I think the issue here is this: within a reduced total that the country has to achieve and the EU has to achieve, we will still in the world to come have a choice about where we choose to emit the carbon and greenhouse gases that we can accommodate. Aviation is a particular focus partly because we know in the foreseeable future there does not appear to be an alternative fuel sources other than kerosene, one. Two, because it is growing in size, not driven because governments around Europe are knocking on people's doors and saying, "We have a target for aviation to meet. Please get on a plane or we are going to miss our target." This is a social process that is taking place, including because of it being more affordable for people to fly. However, we still come down to a choice about where we emit. I think one of the issues that we have to address is are we saying that there are certain types of greenhouse gas and carbon emissions that we think, because of their character in some shape or form, are particularly bad as opposed to other types? I made the point that agriculture and aviation are currently seven per cent each roughly of UK emissions. Are we able to accommodate a system in which in the end people or the system will choose where emissions take place? As long as you meet the overall target, does it matter whether the emissions came from this sector or that sector as long as you achieve a reduction? That, it seems to me, is the issue that we are debating here.

Q50 Mark Lazarowicz: That is perfectly correct in theory but from what I can see of aviation trends elsewhere in Europe there is no sign of any other European Union country particularly wanting to have a substantial reduction in aviation emissions. That must then raise the question as to how realistic it is to get an EU Emissions Trading Scheme that is going to lead to overall reductions if countries like the UK, a major contributor, is projecting increased emissions.

Hilary Benn: The success of the ETS in making sure that aviation makes its contribution if it cannot mitigate its own emissions is where you set the baseline. Anything above that is going to then have to be compensated for by emissions reductions elsewhere. That is, from the UK's point of view, why we have been pressing very hard for the 2004/6 baseline.

Mr Nesbit: It is worth remembering that aviation is not being brought into the ETS as a closed, sectoral scheme. It will be part of an open emissions trading regime and aviation businesses, if they are unable to meet their own cap, will be required by further reductions from other sectors than implied by other sectors' caps. The total of emissions in aviation and the other sectors covered by the ETS will be effectively capped.

Q51 Mr Hurd: I have some questions on the emissions trading which this Committee has looked at on quite a few occasions. The first one brings me back to the question of purchasing carbon credits from overseas which Mr Stuart touched on and which has exercised both the joint committee and this one. I know you are deferring it to the committee but can you see an argument for setting some sort of quota for purchase of overseas credits to meet the emissions targets?

Hilary Benn: I can see the argument for asking the CCC. I am not trying to dodge the question. I am saying that the government has taken the view that the right way to deal with this issue - and it is an issue - is the one that we have set out in the Bill which is to ask the CCC to look at this and they can take a whole range of things into account and all of the points that lie behind the questions that you and Mr Stuart have rightly and understandably asked. Then they will advise us as to what they think the right thing to do is.

Q52 Mr Hurd: Is there anything to stop the government hoovering up cheap overseas credits in an early budgetary period in order to roll them over into later budgetary periods? Is there any mechanism that prevents that?

Hilary Benn: That is a good question. I would have to check in relation to between the carbon budget periods. I will have to come back to you. I am sorry.

Q53 Mr Hurd: Do you recognise why people are concerned about the whole transparency of this issue? We need to be much more out in the open on this business about to what degree we are meeting our international obligations by action on the domestic front versus buying credits overseas. Do you accept that up until now the government has not been sufficiently transparent on what has been going on in terms of meeting our targets by purchasing overseas carbon credits?

Hilary Benn: Are you saying that the government has not been transparent?

Q54 Mr Hurd: Do you accept that the government has not been transparent?

Hilary Benn: No, I do not think I do. I am absolutely in favour of transparency. The advice that we will get from the Climate Change Committee will provide that because they will take a view and the government will then have to consider how it responds to whatever they say about the use of those credits. I come back to the original question which was about the transparency of the process for assuring ourselves that there have been real carbon savings as a result of the offsets purchased, and we all have an interest in ensuring that in exactly the same way as we all have an interest in ensuring that when it comes to the sustainability of biofuels you have a good answer as to what the impact has been or not.

Q55 Mr Hurd: Were you surprised when you entered the Department to find out that, as we did, 70 per cent of the anticipated emissions savings from our participation in phase two of the Emissions Trading Scheme are expected to come from purchases of credits through the Clean Development Mechanism? As a member of the Cabinet in a government exercising complete transparency, were you surprised to find that?

Hilary Benn: I do not know if I was surprised.

Mr Nesbit: I think that calculation assumes that all installations make the maximum use of their potential to use clean development mechanisms. We think that is unlikely. We have not projected exactly what use they will be from the Clean Development Mechanism but it seems unlikely to be at the limit we have set of 80 per cent in the UK's national allocation plan.

Q56 Mr Hurd: Can I move you on to the global carbon market and the global carbon price which you talked about earlier and the opportunity to link together this mosaic of trading schemes which are springing up around the world. What is the government actively doing to promote this integration because there are complications about integrating schemes that have different caps, for example. What is actually going on in practice that the UK government is trying to facilitate in terms of linking these schemes?

Hilary Benn: The first thing that we are trying to do is to ensure that we have a bigger, longer, deeper, more effective carbon market overall. That is why getting the right post-2012 deal is absolutely fundamental to making progress. I would not say that linking all the bits together is a second order issue but we need a bigger market overall and that is why we need the largest economy in the world to be part of this market. It is not currently. That may change. I do not know. That is entirely a matter for the democratic process and decision-making in the United States of America.

Mr Nesbit: In addition, we have been working very closely with those states in the United States that are developing trade schemes, providing them with some of the lessons from the first phase of the EU ETS, both positive and negative, and discussing with them and with other economies developing cap and trade regimes how to move forward in a reasonably comparable way, both in terms of the way the schemes are designed and in terms of the level of ambition in setting the schemes so that we can facilitate linking as soon as possible.

Q57 Mr Hurd: Is it true that a new institutional framework of regulations is required to create this global carbon market?

Mr Nesbit: In a sense, there is already an institutional framework which is the UN framework convention on climate change and its work on emissions trading among those partners which are signatories to the Kyoto protocol. In addition, we have been setting up or engaging the setting up of an informal grouping of countries and jurisdictions within countries which are moving ahead with cap and trade schemes. I do not think I would regard that as a formal peace of governments. It is simply an informal mechanism for ensuring is that the schemes develop, as far as possible, in a way that is compatible and allows linking at a later stage. Clearly, before the European Emissions Trading Scheme is linked to schemes elsewhere, there would need to be a level of assurance that the cap was relatively robust, and that the emissions reductions were real and that the way in which the scheme was designed to did not lead to confusion on the carbon market.

Q58 Mr Stuart: In 2006, UK installations purchased a net total of 33 million ETS allowances from the rest of Europe and on that basis Defra's new climate change annual report published in July subtracted 33 million tonnes from the UK's actual emissions in 2006. This allowed it to state that once the EU ETS was taken into account UK carbon emissions were 11 per cent down on 1990 levels - this was being trumpeted by members of the government - not 5.3% down, as they were if you looked at the UK's actual emissions in that year. What proof have you that those 33 million allowances actually reduced emissions anywhere by 33 million tonnes?

Mr Nesbit: Provided the overall level of emissions across the EU ETS stayed within the cap set at European level, then you can be confident that ----

Q59 Mr Stuart: The cap that we recognise and is widely recognised even within government was set at a level too high.

Mr Nesbit: It would have been possible for installations across Europe to have higher levels of emissions were the UK's cap not set at the level that it was set at and were UK installations not purchasing those credits. It is very difficult to construct a counterfactual but that is the basis on which ----

Q60 Mr Stuart: It was announced by the government as an 11 per cent reduction and in fact you can give us no evidence that it led to any reduction. You must admit that that does knock confidence in the very transparency and effectiveness issues which we have been trying to focus on. I wonder how well these issues are understood across government and is there a risk of confusion or complacency among policy makers by presenting the purchase of credits in this uncritical fashion?

Hilary Benn: I really do hope there is no complacency or confusion. There is an issue of principle which your questions have got to the heart of as to whether it is right and proper for countries in part to make their reductions by purchasing reductions elsewhere.

Q61 Mr Stuart: Especially if you know that they are probably not representing anything.

Hilary Benn: That is not, as I understood it, what Mr Nesbit was saying. Have another go.

Mr Nesbit: Phase one of the European Emissions Trading Scheme was recognised as an introductory phase. It has given us the evidence that the European Commission is now relying on to set more demanding caps for phase two. Provided you have the assurance that you are actually getting real effort from the setting of caps, then the use of those emissions trading schemes within carbon budgets is reliable.

Q62 Mr Stuart: I will not labour this. We know and government knows that there is not a real effort corresponding with that. We have a new Secretary of State with a reputation for being unusually frank and honest and I hope he will take these points on board. We look forward to greater transparency and effectiveness in the way these things are dealt with in the future.

Hilary Benn: I appear before this Committee both to learn and to try and answer questions.

Q63 Mr Chaytor: I want to ask about the question of behavioural change, both within business and amongst householders. The Department has quoted the climate change levy as a successful example of a policy that has exceeded its targets because there has been a conviction by businesses that this is actually the way to cut their bottom line. With ordinary citizens looking at their household bills, we do not have that kind of behavioural change yet because most people seem to think that the best way to keep warm is to have lower gas prices and to turn up the thermometer. Most people view green taxes as a form of stealth tax. How can we do more to secure the kind of internal dynamic that there now appears to be in business with the domestic sector? What mechanisms are in place to attempt to achieve that?

Hilary Benn: This is a really important part of what needs to happen because we know that 40 per cent of our CO2 emissions are the direct result of decisions that each of us take as individuals. The first thing is people being more aware of the problem and the fact that each of us has to play our part. I think things are changing. If we reflect on how climate change has come to the centre of our politics as a House of Commons - never mind as a nation or as a world - you can see that change happening. That is the first thing. The second thing is people will often say - we ask a lot of questions and two surveys - "Yes, I get that this is going on but I am a bit confused about what it is that I am meant to be doing." We have been running, as you know, the Act on CO2 campaign. I do not know how many Members of the Committee saw the adverts that appeared over the summer with sticky black footprints. I thought they were really striking. The words "carbon footprint" are gradually entering our language and people are beginning to understand what they mean. The truth is we are entering a world in which the phrase "living within our means" which we understand currently to mean something financial - i.e., you are spending more than you are earning - this is the century in which this phrase is going to have to acquire a second parallel meaning. Are we overdrawn at the carbon bank? Are we living within the world's carbon means and the world's capacity to accommodate human activity? That is the task. The Act on CO2 campaign raises awareness. We have the carbon calculator which we launched. I think about 600,000 people have clicked on it. I do not know if Members of the Committee have done so. I did shortly after I arrived in the Department because I thought it would be a good idea and it makes you think. It gives some advice about what you can do and you discover that you have done some of the things, like most people, and there are other things that you could do. We have two tasks. One is to ensure that individuals as consumers have information. This goes back to your points about transparency. We need information to understand what the carbon impact is of choices that we make. There is labelling and we have made some progress on energy efficiency of appliances, although I was talking to the supermarkets the other day about the missing bit of that equation. You look at two washing machines and you see that this is an A rated and it will cost you 300 and this is a B rated and it will cost you 280, so consumers see that comparison but what we do not yet have is the information which tells you, if you do a wash a day for ten years at current electricity prices, what this would cost you as opposed to what that would cost you. There is an example of how we need businesses and others to get information out there so that consumers who want to take the right decision and people who are increasingly aware can do so. Then there are things that we need to do to make it easier for that to happen. I think the domestic energy sector and the housing market are really good examples because the government has said from 2016 all new homes must be carbon zero and we will ratchet up the building standards to get there. Great. The house building industry can prepare. The problem is 26 or 27 million existing households where not all of them are as energy efficient as they could be, despite the efforts of EEC, CERT and so on. The green homes circulars which are going to get launched next year through the Energy Savings Trust are about trying to make available one stop advice on energy use, travel and other things. My view is that we have to get to the point where a market develops, where someone will come and knock on your door and say, "You have had this advice. These are the things which will bring your bills down. We will come and do it. We will pay for that and in return you will pay back of that cost, whether it is through a mortgage where people are moving home or through your energy bills", because only the most hardy going to go out to do this for themselves and source their photovoltaic cells and find a builder who can connect them up. What most people want is to come back home and there is a button that says, "Hot water now. Heating now". We have to make it easy for people. I make that point because sometimes folk come to the government and say we should be giving yet more in the form of grants to get people to lag their lofts. Hang on a minute. Lagging your loft - and not everyone has done it - will pay back in a year and a half. Going back to your point, Ms Swinson, about government spending, here is an example. Is it really sensible out of a finite pot of money to spend money on getting people to do something that will pay back in a year and a half? No, I do not think it is very sensible. We should find other mechanisms for doing it. The last point I would make is that the campaigning that there is on climate change is really important because it pushes all of us as politicians to move and that is a good thing. I myself have said that, in the same way as we had the campaign to make poverty history, we need something similar and we need to encourage something similar that is about making climate change history, not just in the UK but also in other countries of the world. I am sorry about the length of that answer but it seems to me there are a number of things that we need to make progress on.

Q64 Mr Chaytor: I suppose my question is relevant to that because there are a number of highly diverse mechanisms in place. What we do not have in the domestic sector is a single, clear incentive as we have in the large business sector. The Carbon Trust provides the information.. The Carbon Trust provides the support. The Carbon Trust provides the consultancy and there are reductions on national insurance to compensate the investment. Why is the government so resistant to the use of council tax reductions as an incentive for improvement to domestic energy efficiency? Is this not a single mechanism that touches the heart of most people's family budgeting and their concern about tax rises and incentives? Is this not the nearest thing to a silver bullet there is to change behaviour?

Hilary Benn: I am not sure that it is the nearest thing to a silver bullet because, to take the example I just gave, if it is the government handing over money to people to do things that, are, some of them, clearly quite sensible, the weakness with that proposal is the same one in relation to grants for installation and there are other ways in which we can achieve the same objective. I doubt very much whether most of the people who have had the energy companies knocking on the door and saying, "Here are the light bulbs; we will come and do the loft or your cavity wall" have any idea that this is the result of a policy that the government has put in place in the form of EEC and what will be CERT. One issue for the government is to better explain how all these bits fit together. In relation to domestic energy efficiency, I believe that trying to generate both a sense that this is going to be a national movement and we are going to do the existing housing stock, in the same way as we managed to convert to North Sea gas. It is not comparable but I remember when they came and changed the burners on cookers and everyone talked to each other and said, "Have you been done yet?" We need to do something equivalent but we need to find the mechanism. The Green Homes Service launch thereof in the new year is, I would say, step one but we need further steps in order to achieve the objective that you have rightly set out.

Q65 Dr Turner: We recently had a UN report which has been somewhat critical of the UK's performance. They describe the Climate Change Bill for instance as bold and innovative but they expressed serious concerns about our ambition to reduce emissions in terms of the targets set and in terms of our current performance on our climate change programme. They say that if the developing world followed our lead temperatures could rise by as much as five degrees centigrade, clearly well in excess of the hoped for two degrees safe limit. How do you respond to the UN report's criticism? Have they got it wrong or have we got to look at our policy is much more radically?

Hilary Benn: The first point I would make is that I suspect it was written - I have not checked myself - before at the Prime Minister made his recent speech. I would be surprised if it referred to what he said about up to 80 per cent. That is the first point. Secondly, if developing countries followed the UK's lead of at least a 60 per cent reduction as set out in the Bill by 2050, boy, would we be making progress. I am slightly puzzled as to the criticism and I suspect, thirdly, that the human development report, as is its wont, because I have read it on a number of occasions dealing with other issues, probably had quite a lot to say about other countries but that does not tend to get reported in the newspapers here in the UK for reasons that we all understand. If you are looking around the world at who is giving leadership, I think with all due modesty it is fair to say that the UK has given leadership on the fight against dangerous climate change. It is not exclusive because other countries are also providing leadership but it is quite striking when you travel to other parts of the world how that is recognised. It is not always recognised and appreciated here in the UK but that is the way it goes. Coming back to Bali, the problem is not frankly where the UK is. I met the NGOs yesterday and representatives of the business community to talk about what is coming up in Bali. They recognise that the problem is not the UK's policy. The problem is what is everybody else going to do. We should occasionally just pause for a millisecond to acknowledge that fact.

Q66 Dr Turner: The report also pointed out UK transport emissions which need to be tackled. It obviously applies to other countries as well, but we do have a particular problem with government policy in that we have average fare increases of 4.8 per cent next year on public transport and projected reductions in government support for railways to the tune of 1.5 billion by 2014. These do not help us to reduce transport emissions, do they, given that private transport is not subject to these increases in costs?

Hilary Benn: If you look at the price of petrol, I am not sure that people filling up their cars would quite see it that way, the first point. The second point is, if you take the railways, a huge amount of investment has gone in and I think I am right in saying there are now more people travelling on our railways, not just since any time compared with the 1960s before the not so good Dr Beeching got to work on the railways, but even before then. There has been a very, very significant increase in passenger usage of the railways, but yes, we need to make further progress on the transport sector. I suppose it goes back to Mr Chaytor's point about people having alternatives. We have here in London obviously the congestion charges scheme that the Mayor has pioneered and, as I think of the city I have the privilege in part to represent, Leeds, yes, Leeds would be keen for more investment in public transport. Frankly, we could not build any more roads in the centre of Leeds because the centre is covered enough with motorways and roads as it is.

Q67 Dr Turner: The basic point is that whatever has been done so far to promote public transport and deter increasing reliance on private transport clearly has not delivered, because the use of private transport continues to increase and public transport does not. The railways are suffering from a saturation in demand, so do you think it reasonable that fares should be further increased just to control demand on the railways?

Hilary Benn: I must be careful not to stray into the territory of my Cabinet colleagues on that subject. Notwithstanding what has happened to fares, people are travelling on the railways, in part because if you have to deal with congestion as the alternative then it is a good way of getting about. That is the first point. The second point which I did not raise in answer to your previous question is we must not ignore the capacity for technological change in the individual transport sector - i.e., cars - what Europe is doing looking at regulating for CO2 emissions for vehicles, the development of hybrid fuels, other forms of technology and electric vehicles. If you can make progress on electric vehicles and you get your electricity from a wholly renewable source, you do not have a carbon and greenhouse gas problem; you still have other problems that you might want to deal with. Julia King is doing her study, as you know currently, which is due to report by the Budget next year and I and others I am sure look forward to what she is going to have to say about the contribution that technological and other change can make to deal with the problem that you have raised.

Q68 Mr Hurd: Perhaps I can link in to Dr Turner's questions about engaging the public. One way of engaging the public is by sending a very clear signal on the leadership from government and I would like to ask you a question about the expansion of Heathrow in that context. I have a constituency issue but do you understand why many people are confused as to a government on the one hand that talks about the over arching challenge of climate change and the need to change behaviour and, on the other hand, it appears to be giving the green light to an expansion of the fastest growing source of emissions? Did you just lose the argument? How are my constituents supposed to reconcile these two messages?

Hilary Benn: Because governments must continue to have regard to how we are balancing sustainable economic development with fighting climate change and that issue remains. It goes back to the answer I gave earlier, first point. If we were wholly exempting aviation from any contribution, then you would have a fair point about there being a contradiction but we are not. For the reasons we have discussed earlier, we are absolutely at the forefront of Europe, pressing for aviation to be included in the EU Emissions Trading Scheme. If we were wanting to put it in a separate box and say that aviation does not have to get stuck in and does not have to play its part, then you could have a go at us but we are not doing that. The third point is, within the overall reduced total of emissions that we are committed to achieving, society still has the choice about where it chooses to emit. I think it is important that one acknowledges that because otherwise people could argue: what about other forms of emissions? I grant you that aviation has grown because that is where the public demand is. Otherwise, why are people not saying, "Why are you not doing anything about emissions in those other sectors?"? The debate is: do you want to be sector specific about saying that those are good emissions and those are bad emissions or do you want to construct a system overall that meets the target we have set for reducing emissions, recognising that we have a choice about where we choose to do it? If aviation grows once it is in the ETS, it is going to have to make a contributory saving elsewhere. It seems to me that that is consistent with what we are trying to achieve.

Q69 Mr Hurd: Do you understand why there is profound scepticism about what the ETS will deliver in terms of reduction in aviation emissions, not least because of the track record that we have had but also just the simple fact that the aviation industry seems to be falling over itself to go into it which ought to ring considerable alarm bells?

Hilary Benn: Whether it is falling over itself, given the terms on which it might be included, I do not know. Yes, you are right about the ETS. You have to have decent caps but it is part of the best and only hope we have of dealing with this and therefore that is not an argument against the ETS. It is an argument for having a strong and effective ETS with the right caps and one that includes aviation.

Q70 Mr Hurd: Did your Department agree with the decision on it?

Hilary Benn: The government has taken the view that we are going to issue the consultation document which we have done and there will be a consultation. The government will listen to what people say as a result of the consultation.

Q71 Chairman: Do you think, if we achieve an 80 per cent target in UK emissions by 2050, the third runway at Heathrow will be in full use?

Hilary Benn: That sounds like a question inviting me to anticipate the outcome of the consultation which we have just launched upon so without being disrespectful in any way I think I will probably pass on that one, if you do not mind.

Q72 Mark Lazarowicz: Turning to a slightly different area, you will be aware there has been disappointment at the fact that we do not yet have a Marine Bill well on its way to completion and a Marine Act on the statute book. If there is to be a Marine Bill considered even in the 2008/9 session, that will mean that the Commons draft Bill must appear pretty quickly. Can you give us an indication of when you expect the draft Bill to appear for consultation?

Hilary Benn: On this disappointment, one way of looking at it is we waited 1000, 2000, five million years, for the Marine Bill to come along. I happen to be in the fortunate position as Secretary of State responsible in a government that is committed to legislate to provide one in the current parliamentary session. I really appreciate the level of interest and support across all parties that there is for a Marine Bill. The answer to the specific question is it will appear in the new year. I am acutely conscious of the need to get that done so as to allow for a period of consultation on the draft text because I know most directly from the recent experience with the Climate Change Bill how we have all collectively benefited from scrutiny of a draft Bill in relation to the Climate Change Bill. I do believe it made a good thing better and I want to do the same with the Marine Bill. We want to get on with this as quickly as possible. Keep up the support but I would urge people not to think that somehow the government is not committed because we are resolutely committed to doing what we promised in our manifesto in relation to a Marine Bill.

Q73 Mark Lazarowicz: You will be aware that the consultation paper on the Bill was written in March 2006. In some quarters there is a difference of opinion between the UK government and some of the devolved administrations which is leading to the delay in the publication of a draft Bill. Is that true or not?

Hilary Benn: No. We are working on the production of a draft Bill. Different parts of the UK and the Scottish Executive in particular have views about what they would like the Bill to provide for. We want a UK-wide Bill. I want a UK-wide Bill, first point. The second point is that if there are issues about the devolution settlement then there are ways in which the devolved administrations can pursue them. I just hope that they are not going to be played out in relation to the Marine Bill because I would not want a discussion about any change to the settlement to get in the way of us getting a Marine Bill that is effective in providing protection for our seas and what lies beneath them in the way that the government wants to set out. I hope very much that we can reach agreement on this. It is absolutely legitimate for devolved administrations to have a view about what they might want to change but there is a place for dealing with that and, with the Marine Bill, we want to work on the basis of the devolved settlement as it is having regard to any changes that the UK government is happy to make. Above all, I want the Bill. I think we all want the Bill.

Q74 Mark Lazarowicz: I am sure we would all agree with you on that. Your Fisheries Minister has recently, I understand, called for an increase in cod quotas to deal with the problem of fish dumping. Everyone is concerned, rightly, about fish dumping but does not the position of the government that cod quotas should be increased first of all run at variance with the scientific recommendations about the level of cod quotas for next year and, in any event, would not an increase in cod quotas do nothing really to deal with the problem of fish dumping? Is not the real answer to change the whole quota system? Is that not where the government's attention should be directed?

Hilary Benn: As I understand it, my colleague Jonathan Shaw has been leading on this and if it would be for the assistance of the Committee I would be very happy to provide you with a note on this. My recollection is that cod stocks have recovered a bit and that is why we are taking the stance that we are in relation to the negotiations that will take place in the Agriculture Council just before Christmas. Can I send you a note on that if that is okay?

Q75 Jo Swinson: I wanted to turn to the issue of excess packaging which is something that many of our constituents are concerned about. There is obviously a variety of government mechanisms in place to try to deal with this including the voluntary Courtauld Commitment agreements. The thing in particular I wanted to ask about is the legislative tool that we have at our disposal to tackle this issue, the Packaging (Essential Requirements) Regulations. These are being implemented by a number of trading standards offices but I have done a survey of them and they are having great difficulty in finding this to be of any use because the criteria which can be used to justify packaging do not just include getting the product home safely and properly protected but also things like consumer acceptance, product presentation and marketing. Obviously there is carte blanche for marketing departments of multinationals just to create whatever excess packaging they like and they can justify it on the basis that they will sell more products, which is probably true if it takes up more space on a supermarket shelf. Even that, do you think there is an argument to tighten up those regulations and change them so that they can be more useful than they currently are?

Hilary Benn: This is an important issue and it is one - I agree with you - that some consumers are increasingly concerned about. What I think we have to recognise is that the regulations have enabled us to make some progress in increasing the recycling rate. They have succeeded in raising the rate in the UK for packaging waste that has been recycled from about 27 per cent ten years ago to nearly 50 per cent.

Q76 Jo Swinson: I think we are talking about different regulations. I think that is the producer responsibility.

Hilary Benn: Are you talking about the essential requirements?

Q77 Jo Swinson: Yes, the essential requirements.

Hilary Benn: As I understand it, a number of companies have already been prosecuted. You mentioned trading standards.

Q78 Jo Swinson: There have only been four prosecutions.

Hilary Benn: I hope others will look at that and if they have not abided by the requirements of the regulations that will encourage them to do more.

Q79 Jo Swinson: I think the problem that trading standards are finding is that it is very difficult to bring forward a prosecution just because the regulations are so wide and something can be justified on the basis of marketing so there might be more products left as a result of packaging. That is seen to be all right. Do you not think we need to change it so that essential packaging requirements about what is essential?

Hilary Benn: What I can tell you is that DG Environment is aware of the issue and is proposing to undertake a study which is going to reflect on the experience not just in the UK but across all of the Member States, which will leave them to decide whether there needs to be a revision either to the essential requirements or to have more effective enforcement measures. The point is understood and there is a process of trying to look at that. I hope that is helpful.

Q80 Chairman: Given that climate change tends to increase the risk of flooding, is it sensible to go on building homes on land that is at risk of being flooded?

Hilary Benn: As you know, we have strengthened the planning guidance twice in relation to this, most recently with PPS 25. That is the first thing we have done. The second thing we have done is to give the Environment Agency who are the experts in assessing the risk not just the right to be consulted; they have to be consulted in relation to planning applications. Thirdly, it is open to ministers to call in applications if they are unhappy about what is being proposed. All of that puts an obligation on planning authorities to ask themselves the question: is this a sensible place on which to build? If we are going to build, what are the measures that can be put in place to protect people from flooding? We are sitting on a flood plain this afternoon in this evidence session. We happen to be on the first floor but it is a flood plain which is protected by the Thames Barrier. From memory, there are about two million homes in the country built on flood plains. I think we have the mechanisms in place. The responsibility is clear. The question is can you adequately defend? Ultimately, that responsibility falls within the framework of the guidance and is subject both to the Environment Agency's views and the power of call-in with the local authorities who are responsible for granting or not granting planning permission.

Q81 Chairman: Would you say that you are making progress in ensuring that adaptability to climate change is becoming an integral part of the flood and coastal erosion management decisions?

Hilary Benn: In relation to the Bill, you will have seen what was in the original Bill, what we said in response to the consultation and you will have seen what the Prime Minister said in his speech about an amendment we intend to bring forward to give us the power to require public authorities to produce a report on adaptability. We have recognised that there is a lot of interest in adaptation. That is the first point. The second point, in relation to flooding, is that I am very struck, given the number of houses that I have visited in June and July that had suffered terribly, by the steps that could be taken as those houses are refurbished and repaired, simple things like trying to put the electrics up here as opposed to down here. I know it is difficult but kitchens get really badly affected. Do you have them on the ground floor or on the top floor? There are some steps that could relatively simply be taken, if you are talking about a small amount of water threatening to come in through the front door, covering up air bricks and defences at the door to stop it coming in and ruining the carpet. I think it is an issue both about building in those areas, to make sure that those kinds of things in from the start and, secondly, I think it is an issue for the insurance industry because after all they are paying for the repairs, stripping out kitchens, replacing the electrics and so on, so we should try to build that in. I remember visiting Waterside Close and it is called Waterside Close for a reason; it is just that the river has not flooded to that extent in the past. Thirdly, on flood defence more broadly, as you will be only too well aware, we are considering increasing the expenditure on flood defence. During the summer floods there were some places that were protected because of the success of the schemes that have been put in place. With the recent storm surge in East Anglia was, in truth, a combination of a bit of luck that the height of the surge did not quite coincide with the height of the high tide and Great Yarmouth missed by about this amount, plus all of the investment there has been since the 1953 terrible flood which claimed over 300 lives in the UK and 2,000 in Holland that meant that those communities were able to be protected. There is a growing awareness. I think the Climate Change Bill and the mechanisms it is going to put in place - the government's obligation to report, to have a plan and the new power that the Prime Minister has just announced - will help us to make progress on this.

Q82 Mr Stuart: Just following up on that, I am grateful for your openness to those of us whose areas were affected by flooding earlier this year. Of course, this is not new. There has been much interest in flooding in recent years, several reports from Parliament, government and others, and yet there are many ways in which it went wrong. I wonder if you can tell us why you think so many things that were preventable went wrong and why we should believe the array of reports, views and lessons learned will make more of a difference this time to deliver some of the things which you have already touched on, practical things perhaps that could be changed.

Hilary Benn: I would not accept that lots of things went wrong. What went wrong was that vast quantities of water came out of the sky. Neither you nor I, nor anybody else, has yet found a way of preventing that. It was pretty exceptional rainfall. The scientists tell us that we might be likely to experience extreme weather events of this sort more frequently in future.

Q83 Mr Stuart: I must come back on that. You do not accept that lots of things went wrong. We had critical infrastructure which was basically unprotected and which, in some cases, either failed completely or, I think in the case of Hull's pumping station, it was two feet under water and just survived. We have villages like Leven near Beverley where the sewage pumping station is at the lowest point below the passing ditch. You could go through a whole array of things which are fairly basic things which were not done as well as the houses being built in completely the wrong place. There were a lot of things that went wrong that were entirely preventable, that were addressed in previous reports. There were promises in 2000 of major change happening and too few of those promised changes were implemented. Is that not true?

Hilary Benn: The referee in this is going to be Michael Pitt and he is going to produce his interim report pretty soon. We will have to see what he has to say. The reason I bridle a bit at what went wrong, I think is that the starting point has to be an acknowledgement of the scale of the deluge. Two types of flooding, as you know, took place. One was river flooding. There are very few instances in which the defences failed to protect at the level that they were meant to protect at, but a number of them were overwhelmed because of the quantity of water. That is not withstanding a doubling of the expenditure on flood defence in the last decade, 300 million to 600 million, the first point. Secondly, the government already recognised that we needed to do more. That is why it was on 2 July, I seem to recollect, that I got up in the House and said that over the next three years it is going to rise from 600 to 800 million and we have now announced the phasing of that. The ABI asked in June for 750 million by 2010/11. What I announced to the House on 2 July was 800 million. The ABI asked, over the three years, for 2.25 billion, I think I am right in saying. The phasing I have announced will give us 2.15 billion, so not bad going in relation to what the ABI itself has asked for, the first point. The second point is the surface water flooding - Hull in particular. The truth is that the system simply could not accommodate the quantity of water that came out of the sky. In terms of who is responsible, let us tell the truth. If in urban areas you concrete over, you asphalt over, you pave over all your bits of earth, do not be entirely surprised if large quantities of water fall out of the sky and they have to go somewhere. If the drainage system cannot cope there is an issue about responsibility for surface water drainage. As you know, we have already been consulting on giving most likely the Environment Agency an overall responsibility for that. I am going to listen obviously to what Michael Pitt has to say on that front because we are dealing with a legacy of drainage that was not built to accommodate that amount of water. One thing you can do is build anew at a better standard so you can shift more of the water away. Secondly, things like permeable paving. There is a consequence to what we as a society have done and I do not think it is fair to say that is all the fault of government because people pave over their drives and put paving in their back gardens. That is the second point. The third point on essential infrastructure - you are absolutely right - this revealed a weakness. The saving of Walham in Gloucestershire was, if you like, the high point of that second incident because the prospect of power going out for the whole of Gloucestershire really did not bear thinking about and it was pretty darn close. All credit to the Environment Agency for getting the temporary barriers there and to the Gurkhas, the military and others for erecting the barriers and saving that. That is a lesson that we have learned. Water pumping stations tend to be next to rivers, water treatment, and that was the case in Mythe, but it was overwhelmed and 340,000 people lost their water supply. I am determined that we learn lessons. You are not a finger-pointing because you and I have discussed on previous occasions how your constituents were affected. I am determined that we do learn the lessons. There are lots of us who need to learn the lessons so that we are better protected from this in the future but I am not going to sit before this Committee and say, "I have worked it out so I can stop anybody being flooded in any circumstances", because I cannot and that is the truth.

Q84 Chairman: Secretary of State, thank you very much indeed for a good tour round the issues. We are very grateful to you for giving up your afternoon and we look forward to seeing you again in due course on the same matters.

Hilary Benn: Me too. Thanks a lot.