Joan
Ruddock: This has been a particularly interesting debate,
not least the closing remarks by the hon. Member for Worthing, West. I
am sure that, with some assistance, I shall be able to provide him with
the answers that he seeks, but if not, I will write to him after the
Committee.
It is
important to reiterate that the statutory instruments provide the first
key steps to implementing the requirements of the Climate Change Act
2008 and, like that Act, demonstrate the commitment and leadership to
set in legislation the parameters necessary to take action to tackle
climate
change. The
proposed level of carbon budgets will require that emissions are
reduced by at least 34 per cent. below 1990 levels by 2020, a zero
limit for the first budget on the amount of permits we can purchase to
offset our emissions outside the existing EU ETS, and will help to
ensure that the action we take to meet that target will take place in
the UK. That is particularly important in the current economic
circumstances, because we are determined to develop a truly low-carbon
and, we hope, resource-efficient
economy. Let
me try to answer the numerous questions I have been asked during the
debate. The hon. Member for Bexhill and Battle asked about zero
credits. He welcomed the fact that we said they would be excluded from
the first of our budgets, but asked why they had not been excluded for
all three budgets. We have said very clearly that it is our intention
and our aim to meet those budgets if it is at all possible—we
assume that it will be. If they were to remain at that interim level,
we believe that we would be able to meet those budgets without the
credits. However, we have also made it very clear—I say this to
all hon. Members who have raised the issue—that our great goal
is that global deal at Copenhagen.
In pursuing
that goal, we need, of course, to keep that negotiating opportunity.
Those of us within the EU negotiating envelope are saying that, if
there is a global deal, the EU as a whole will move from 20 per cent.
reductions by 2020, to 30 per cent. by 2020. Obviously, it is different
if we have 34 per cent. reductions to achieve by 2020 rather than the
42 per cent. suggested by the CCC. At this point, we are obliged by the
Act to simply set the limit for the first budget and we have said quite
clearly that that limit is zero. However, we have also indicated our
intention to proceed beyond that. The important signal for industry
mentioned by the hon. Gentleman is already there. It is clear that we
will meet a 2020 budget of 34 per cent. and that it is our intention,
in pursuing a global deal with great vigour, to move to a much tighter
regime.
The hon. Member
for Bexhill and Battle criticised the Government’s strategies
and gave us a long list of all the things that the Conservative party
would wish to put in place. I do not think I heard a single thing in
that list that is not already part of Government policy. There may be
variations on a theme but, decarbonising the energy supply,
decarbonising transport, greatly increasing the amount of renewables,
household efficiency, and carbon capture and storage—we have led
the world in thinking and development on that—are already part
of Government policy. There will be a new renewable energy strategy and
a low-carbon transport strategy published in the summer, so many of the
policies that are necessary to meet those emission reductions are
already in development, or are already happening.
The hon.
Gentleman also asked about smart meters. The fact is, of course, that
the roll-out of smart meters requires significant effort. We are
talking about 49 million meters and that is a major national
project. Every household would have to have their meters replaced. We
do not believe that that can be done overnight. We are in the process
of two years’ preparation and planning, which will mean an
indicative table to complete the roll-out in the decade from 2010 to
2020. I wonder whether his party could commit itself to a faster
timetable and what that would
cost. The
hon. Gentleman also said that we should not reserve the right to
purchase international offsets, and that we should have done something
much bolder. I have made it clear, however, that we intend to meet the
34 per cent. target without using credits. The zero limit is already
set in the orders for the first of the three budgets, but if the 34 per
cent. target changes to 42 per cent., the CCC has itself acknowledged
the need to use credits and has suggested that it could be possible to
meet the whole of that difference through credits. We do not seek to go
down that road, however, for the obvious reason that we are completely
committed to establishing, in our own national interest, low-carbon
policies. That will be an appropriate effort, because it will
incentivise industry and create more jobs. We cannot and do not seek to
return to a high-carbon, low-price energy economy. The provision exists
in case it might be necessary, and we must acknowledge that none of us
can be certain about the
future. On
plan B, the hon. Gentleman asked what would happen if we did not have a
global deal, but I am not prepared to countenance that idea at this
point. We are making enormous efforts to try to get such a deal, and we
should not begin to imagine a world in which we have not actually got
it.
The hon.
Gentleman spoke about future decisions on carbon budgets being ceded to
the EU. I am sure he recalls and supports the fact that, within the EU
ETS and other legislative frameworks, we are obliged to follow European
law. We will clearly be part of the European element of a global
agreement, so some measures will have to be determined in consultation
with other member states and we will be bound by European agreements.
However, we currently set our own carbon budgets, which are ahead of
those of other countries, and we will continue to do so. We are the
only country in the world that has a legally binding framework of that
kind, so the issue that he raises is not a risk,
although he might feel the need to make such a point owing to the point
of view of some of his Euro-sceptic
friends. My
hon. Friend the Member for Edinburgh, South is to be congratulated on
his role in all our climate change deliberations. He has always driven
the Government and others forwards in terms of progress and ambition,
and we appreciated his co-operation on our deliberations on the 2008
Act, while he simultaneously pushed us on it. It is, however, grossly
unfair of him to criticise the Government for a lack of ambition. When
he speaks about other nations, such as Germany and Ireland, he is right
to say that we have led the way and that we continue to be seen as
leaders, particularly within the EU. When there was real doubt about
whether the 2020 climate and energy package would hold because of the
onset of the recession, the UK led the cause to remain strong and
ambitious together, and we continue to do that. Wherever I travel in
the world and engage in climate change talks, I see the way in which
the UK is valued as being at the forefront of the
debate. My
hon. Friend said that because the CCC advised on intended targets of 42
per cent., that is the minimum needed for us to play our part, but that
is not what the CCC told us. It said that it was now appropriate to go
for the interim targets and that we should move to intended targets if
we got a global deal. We believe that to be correct, and we do not wish
to give away the negotiating ploy of being able to say to other
developed nations, “There is more to come from the EU if the
rest of you get into this deal.” We have to remember where the
US, Japan and Russia stand. It would be foolish to give away that
bargaining ploy, and if the UK acted unilaterally our contribution
could simply be banked within the EU and no further ambition would be
entertained. We are clear about why we are staying with 34 per cent.,
but we obviously wish for more and are more than prepared to go further
in the context of the global
deal. My
hon. Friend referred to the carbon loopholes. While I understand that
people want us to make a huge effort at home—as a Government, we
believe that we should—in any international agreement there will
nevertheless be more and more need for financial flows to developing
countries, and one way to do that is to be willing to use a trading
mechanism that provides offsets within those countries. In principle,
it would be entirely wrong to want to deny developing countries the
benefit of trading schemes, and it is of course our hope that
eventually we can get into a global trading scheme that will benefit
all countries in different ways, according to their
needs. The
hon. Member for North Southwark and Bermondsey went over similar ground
on whether it would be better to move to higher targets and what those
targets should be. He spoke about our previous target of a 20 per cent.
reduction of CO 2 by 2010, and he knows that he and I have
rehearsed this before. There is a real difference between what we are
discussing here and our aspirations of some years ago—from about
1995-96. We have been in the process for some time, and today we really
know what the path is like. We understand carbon accounting and we have
done well, nearly doubling our Kyoto commitment, but the difference is
that what we speak about today is legally binding. That makes a huge
difference to how and when we have to put measures
in place and secure achievement. He said that we should accept 42 per
cent. now. I hope that I have answered his questions, even if not to
his
satisfaction. The
hon. Gentleman also asked about carbon liabilities for companies. I
think we have been clear that under the 2008 Act the Government will
publish guidance on the reporting of carbon by companies. We will
produce that guidance by 1 October this year. We will review the
benefits of carbon reporting by 1 December 2010—clearly there
will be consultations between now and then—and if we then see
that something useful will be produced, we will be able to put that in
place. We must also require companies to report their emissions,
through regulations, by 6 April 2012. If we do not think that that is
the way forward and do not put that in place, we will have to explain
why. I think that we have provided for that, although perhaps not at
the speed that the hon. Gentleman requires. The provision is there; it
came out of the debates during the progress of the Climate Change
Bill. The
hon. Gentleman spoke about the ease of dealing with the trading of
credits—allowances—in a recession. He said that it would
be much easier and therefore there was a risk that there would not be
an achievement and there would not be reductions. The price of the
units is affected by the recession, so it is cheaper to do the tasks
required. However, it is the cap that determines the outcome. That is
already set, and we all agree that we have to have tighter caps in the
future. I
think that I have dealt with the hon. Gentleman’s question about
the interim and intended budgets and with most of his other points,
unless he jumps up to tell me otherwise, because they were raised by
others. He repeated that he thought that there should be less
opportunity provided by having the options of international credits,
but I think that I have dealt with that in relation to the EU ETS cap
and the points that I made about the need for finance flows to
developing
countries.
Simon
Hughes: Will the Minister allow me one further
question?
Joan
Ruddock: I will, because I may well have forgotten
something.
Simon
Hughes: There is one thing that I do not think the
Minister has answered; I apologise if she has. I think that I am right
in saying that the accounting regulations will require counting of
allocated emissions, rather than actual emissions. I asked whether it
would not be better, for obvious transparency, to know the actual
emissions, rather than the allocated emissions, under the ETS
system.
Joan
Ruddock: I think that again, in a sense, I have dealt with
the point. What happens with allocated emissions and actual emissions
is recognised under the protocols. In terms of gaining credits, there
is an understanding that each unit amounts to 1 tonne of carbon. That
is agreed internationally. I am talking about what the credits are
equated with when it comes to budgeting, and that is the international
agreement. It is not a case of there being an actual and there being a
presumed; they are presumed to be the same. One unit is equal to what I
have said. [Interruption.] I am being told that, notwithstanding
that, we will be publishing
actual emissions, for transparency purposes. I understand that they will
be the same, but perhaps they will not. [Interruption.] I am
being told that the accounting is different for the purposes of
budgets. That is why there will be a publication of actual emissions as
well. I am delighted to be able to satisfy the hon. Gentleman on that
point in a way that I had not expected to be able
to. Let
me see whether there are other questions. The aviation question
was
about—
Simon
Hughes: Interim flights and touching
down.
Joan
Ruddock: Yes, I know the answer to that. An international
flight that happens to have a couple of stops in the UK is an
international
flight.
Peter
Bottomley: I once looked at the schedule of a plane that I
took from Southampton to somewhere, and I think that during the day it
made four international flights and two or four domestic flights, each
of which had a separate code number. At some stage, I would be
interested to know which of those would be caught by the
measures.
Joan
Ruddock: I suspect that the answer is that because we have
not yet negotiated any international means of making those records,
that matter will undoubtedly exercise those who endeavour to make such
an international accounting system
work. The
hon. Member for Worthing, West asked who would scrutinise the
accounting system. The answer is indeed that the Environment Agency is
operating the UK carbon account at the moment and it will provide many
of the data for the system into the future. He may know, as he has
obviously read the explanatory notes carefully, that there was a
suggestion that it might be necessary to set up a new agency, but we
are confident that it can do it, because we already have a great deal
of expertise and experience in the
field.
Peter
Bottomley: I know that we are running short of time, but
the Minister might then ask the Environment Agency if at some stage it
will make plain to Parliament who provides the validation of the system
that it will use. I am not challenging the agency; it is just that it
is always useful to know who will do
that.
Joan
Ruddock: One thing that might be relevant and of interest
to the hon. Gentleman is that it will come within the national
statistics regime. I think that will probably satisfy him, as that is
independent, of
course. Regarding
the impact assessment for the carbon accounting regulations, one was
published with the carbon budget levels and the EU 2020 package at the
time the orders were laid. However, no IA is required specifically for
the accounting regulations as they do
not impose any additional burden. Costs, which are expected to be very
low as the system uses existing systems, will be borne by
Government. Finally, with
regard to the equation, apparently it is all pluses and minuses so
there are no brackets. The items are arranged in a logical order to
help the reader. I am sure that the hon. Gentleman would
like, with that piece of advice, to re-read those notes and see whether
he can make more sense of them. I read them and thought I understood
them at the time but I do not wish to debate it any further with him
today.
Peter
Bottomley: They did make sense and they were sensible. I
was just checking that they said what was
intended.
Joan
Ruddock: I am sure that they did.
Miss Begg,
this has been a lengthy SI debate and quite comprehensive in its range.
I would like to say to all hon. Members that we have been engaged in an
historic exercise. These are the first carbon budgets in the world and
this is the first Government to have restricted their economy in terms
of carbon emissions—an economy that we believe will improve
immensely because of that constraint. We will move to a low-carbon
economy, which will be in everybody’s interests. I thank
everybody who has contributed to the debate. I am delighted that,
despite some small questions and criticisms, there is all-party support
for the measures, as I hope we will see as we end the debate. That is
extremely important because, when I go abroad to international
meetings, people are amazed that in this country we have a population
that by and large is tremendously supportive and enthusiastic of such
measures. It is the duty of every Member of Parliament to ensure that
we keep up that impetus and that when we get to Copenhagen, this
country leads the way and is a catalyst to getting that global
deal. Question
put and agreed to.
Resolved, That
the Committee has considered the draft Carbon Accounting Regulations
2009. draft
Carbon Budgets Order
2009Resolved, That
the Committee has considered the draft Carbon Budgets Order
2009.—(Joan
Ruddock.) draft
Climate Change Act 2008 (2020 Target, Credit Limit and Definitions)
Order
2009Resolved, That
the Committee has considered the draft Climate Change Act 2008 (2020
Target, Credit Limit and Definitions) Order 2009.—(Joan
Ruddock.) 5.58
pm Committee
rose.
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