Examination of Witnesses (Questions 1-19)
LORD TURNER
OF ECCHINSWELL
AND MR
DAVID KENNEDY
4 FEBRUARY 2009
Q1 Chairman: Good morning. Lord Turner,
we are very grateful to you and to David Kennedy for coming in.
We do not have quite a full turn-out here but you have quality
rather than quantity in terms of the Committee members attending.
The work of the Committee, I think, is universally regarded, but
certainly regarded by us, as incredibly important and we were
extremely enthusiastic about the report that you published before
Christmas. I wonder if I could ask this, though. Even in the last
two months the economic background has deteriorated further and
the pressure on governments around the world is clearly to slow
down the rise in unemployment, to turn round the recession and
so on. How much more difficult do you think that will make it
for governments to give the necessary priority to achieving what
are clearly extremely challenging targets? Even the ones that
you have set for this country, even the interim target, are extremely
challenging. Do you think that we are now facing a bit of a crisis
in addressing climate change, because of the coincidence of timing
with the worst recession for at least 25 years and possibly longer?
Lord Turner of Ecchinswell:
That is an issue which we intend to look at in detail over the
next six months and heading up to the report that we are doing
in September: the impact of the recession on the climate change
targets. We see the need to disentangle this debate into about
three or four different strands. First, there is a completely
mechanical exercise that we will be doing, which is to understand
the mathematics of how the recession feeds through to emissions
in the short term; and, of course, in the short term it is probably
likely to produce a fall in emissions. One of the things we will
be doing, therefore, is making sure that we are well equipped
with a tool that will enable us, when we look at the figures for
2009 and 2010, to disentangle the recessionary effects from the
underlying trends and not end up, as it were, believing that we
are on a good trajectory, but only because of the recession. That
is one thing. The second thing is, I think, there are some opportunities
to use the fact that we are in recession to do things which are
sensible, as anti-recessionary devices and also sensible for the
climate change. We will be putting some thinking into this, and
I think it is also something that would be useful for government
and your Committee to think about. For instance, all sectors of
the economy are likely to be impacted by the recession which we
are heading into but some of the ones that are worst hit are those
in the construction industry. At the same time, we have identified
on the climate change agenda the refurbishment and improvement
of existing buildings as one of the areas of significant improvement,
which does not depend on long-term investment in new technology
but on double-glazing, insulating, et cetera. Therefore, some
creative thinking about the way that one ought to be able to accelerate
the policies that relate to the improvement of the energy efficiency
of the existing stock may well be helpful in counter-recessionary
terms. The third element of this debate about the impact of the
recession, I think, is the supply of capital, the credit crunch
and, in particular, the supply of long-term capital, where obviously
there can be a danger that some of the capital-intensive things
we need to do in order to meet the targets—things like the
wind energy investments—may be set back simply because of
the shortages of credit available. Again, we are intending to
look in detail at what the situation is there, and there may be
a need as part of climate change policy to work out how to address
that, if it does turn out to be a major problem. Finally, I think
it is worth saying that one of the important things is to stop
the recession being used by industry lobby groups, or whatever,
to suggest the need to slow down targets in a way which is irrelevant
and is simply tagging on what they want to achieve in any case
to another. Let me give you an example. You could imagine that,
in a situation where the car industry is clearly under huge short-term
pressure, you might have an argument that says, "Let us delay
the progress towards a stretching 2020 target in terms of grammes
per kilometre at the European level"; but actually there
is nothing about the degree of the stretch in the 2020 target
on grammes per kilometre that will make any difference to how
many cars people buy in this year or next. One of the things I
think we have to do therefore is, as it were, to stop the recession
being used as an excuse to put off progress in ways which would
be completely irrelevant to the short-term economic downturn.
Those are therefore some of the parameters of this issue which
we intend this year to look at in more detail.
Q2 Chairman: That is very helpful
and we would welcome that. We are going to have a look ourselves
at some of the green economic recovery opportunities as well.
On the science for a moment, progress towards a replacement for
Kyoto is agonisingly slow and tortuous, and obviously very difficult.
I think that the new President's ambition is for US emissions
to be down to 1990 levels by 2020. That is the sort of summit
of what he hopes to achieve, which is obviously a great improvement
on the previous administration, but not really immensely far forward.
I think I am right in saying that your committee is using an assumption
that global emissions will peak by 2016, as its working assumption.
Do you think that is still a realistic assumption?
Lord Turner of Ecchinswell: Perhaps
David Kennedy could talk about the precise way that we modelled
it.
Mr Kennedy: Within the stylised
model; it was the Hadley Centre model that we used; we did assume
at 2016 it peaking, but actually the results are not that sensitive.
If you were to change that to 2017 or even 2020, you would get
pretty much the same target for 2050, which is a 50 per cent global
emissions reduction. The high-level message is the important one.
We have to peak reasonably soon, so there is a big challenge;
but whether it is 2016 or 2020, 50 per cent probably corresponds
to both of those.
Lord Turner of Ecchinswell: I
think that the point still stands, however. The figures you suggested
earlier might suggest a world in which we do not peak until 2025
or 2030, and I think that is a problem. It is vital that we are
trying at Copenhagen to achieve a deal which, as it were, peaks
in the late 20-teens, rather than in the late 2020s.
Mr Kennedy: The stylised scenario
is that we had a 2016 peak and a 2030 peak. It was clear that
we cannot meet the goals that we set ourselves within the report
with a 2030 peak; so it has to be 2020—no later.
Chairman: We have had evidence in the
past from the Tyndall Centre, who talked about the importance
of not just focusing on the 2050 emissions target, but the build-up
in the meantime.
Q3 Joan Walley: In the report you
appear to say that it is unlikely that we can avoid avoiding a
2°C increase. Looking at your language, before, we seemed
to be talking about a rise of temperature that was close to 2°C;
now we seem to have changed the definition of it. I wonder if
you could explain what the basis was for your conclusion about
the 2°. Is that based on science? Is that in line with what
the EU and the UN are committed to? Is this definition of the
2°C?
Lord Turner of Ecchinswell: What
we did was to look at a whole load of models, drawing primarily
on the Hadley Centre. As you know, what those models give one
is probability distributions of, if this is the emissions target
then their best shot is that there is a 50 per cent chance of
going over 2°, an `x' per cent chance of going over 3°
or above 4°. Then it becomes very judgmental how tight you
think the target has to be. If you said, "We must definitely
not go above 2°C", I think that is close to impossible
to achieve these days. Almost any model would suggest that, even
with the sort of emissions that we put up there already, there
is a chance—it might be only a small chance—that
we will go above 2°. You have to think in this probability
distribution sense. We then tried to work out what are sensible
decision rules in this situation. We looked carefully at the evidence
on the way that harmful impacts on human welfare tend to accelerate
with increase in temperature, and believed that they accelerate
significantly as you go above 2° and then become really very
dangerous and very uncertain once you go above, say, 4°—but
that there was a strong acceleration range of the harmful impact
between 2° and 4°. Whereas at 1° or 2° you
could argue that there is a significant ability to adapt rather
than mitigate. Indeed, at 1° or 2° there are probably
winners and losers in different parts of the world; though there
are undoubtedly losers in some parts of the world. We were then
trying to work out what was doable; what was accepted in the sort
of agreements that had been made at the G8 at Gleneagles, et cetera;
and how they fitted into this space. We ended up believing that
there was a sensible way forward, which would keep to a very low
level; and we have said that it had to be less than 1°—the
chances of what we would count as a catastrophic climate change,
which we define as maybe 4°, and that was aiming to keep
the mean expectation close to 2°. On the Hadley Centre figures
that we have had, with the trajectories we are now talking about,
there is probably a slightly over 50:50 chance of going above
2°. The mean expectation might be 2.3, something like that,
rather than below it.
Q4 Joan Walley: Would it be fair
to say that what you have effectively done is move the goalposts,
so that instead of avoiding a 2° temperature rise it is now
avoiding a one per cent chance of a 4° rise? Have you done
what you have done based more on what is more politically likely
rather than on the actual Hadley and scientific evidence?
Lord Turner of Ecchinswell: In
a sense, the 2° had entered the debate but it was always
a slightly arbitrary figure that people had taken from the past,
and we did not treat it as a completely binding one. As I say,
you have to remember that you cannot say, "The aim is not
to go above 2°". That is just not a doable aim. You
have to define the aim as, "I don't want a more than `x'
per cent chance of going above 2°". Once you have accepted
that there is already a certain chance of going above 2°,
you are trying to work out how big a chance you are willing to
accept. We ended up believing that the most vital thing is to
keep the chances very, very low that we go to really high levels
like 4°. We would also be very worried obviously if we went
above 3°. That was the approach we used, therefore. We did
not consider ourselves bound by the 2°. I think that it is
now in a situation where it is very difficult for the world to
get the chances of going above 2° to very low levels. If
you said, "We want to have a strategy which gets the chances
of going above 2° below 10 per cent", I think that we
would need far tighter targets than anybody is suggesting.
Q5 Joan Walley: If the scientific
evidence came in that that was actually necessary, would you revise
your position accordingly?
Lord Turner of Ecchinswell: Yes.
There are two categories of scientific evidence. Scientific evidence,
which I think will always be less likely to move rapidly, as to
what is harmful—which is the sort of stuff that is in the
IPCC Working Group III report on the way; that the harmful impacts
on human welfare increase with a temperature rise; that could
change. We could end up believing that 2° was more worrying
than we thought and we would have to adjust on that. The thing
that is more likely to change is the scientific models of how
emission trajectories relate to the probability distributions
of temperature rise. I.e. it is more likely that the science will
come back in five years' time or ten years' time and say, "Because
we better understand the feedback loops, we now believe that this
trajectory, which we previously thought had only a one per cent
chance of taking us above 4°, now has a 10 per cent chance
of taking us above 4°". We are quite overt in the document
that we must track over time and that, if that scientific evidence
came through, we should then be tightening our targets. Basically,
we believe that policy at any time should be guided by the idea
that, on the basis of the best scientific evidence existing, the
chances of, at some future date, going above a catastrophic level
is kept at a very low level, where we somewhat arbitrarily define
"catastrophic" as 4° and somewhat arbitrarily define
"very low" as one per cent. I think that is the scientific
evidence which is more likely, over a five or ten-year period,
for new discoveries to shift significantly. The judgment on how
bad for human welfare 2° or 3° is will probably, by
definition, be a slightly slow-moving judgment, because it is
not dependent on models.
Mr Kennedy: It was important to
us what the science says. It was also important to be credible,
to be able to demonstrate how we think we would meet any target
that we propose. The 50 per cent global emissions reduction with
2016 peaking requires a four per cent annual emissions reduction
globally. If you bear in mind that the Stern review said the maximum
achievable globally is three per cent, we are already pushing
beyond that to get to our recommendations. It is therefore a very
stretching target.
Q6 Dr Turner: The relationship between
global atmospheric CO2 concentrations and temperature rises is
an approximate one, as we know already. There are already signs
that climate change is advancing, if anything rather more rapidly
than the worst IPCC scenario. You have probably read the same
reports and you probably know. Are you restraining your recommendations
in terms of what you think is politically and practically achievable,
rather than what would really be needed to achieve the kind of
reductions that would give us a fighting chance.
Lord Turner of Ecchinswell: I
do not think that is what we have done. Here is the difficulty.
When you take the models of what the emissions increases will
produce in terms of climate change effect, you have an uncertain
probability distribution provided by the scientists. Even their
best shot is simply a probability distribution, but different
scientists and different models will give you different probability
distributions. You therefore have a probability distribution which
itself is uncertain. You then have an uncertain set of descriptions
of how bad the impact for human welfare is of going above 1°,
above 2°, above 3°, and you look at that. You have costs
of mitigating climate change. We, like Nick Stern in his report,
believe that those are often overstated and that it is manageable,
but there are economic costs there. You are trying to work out
an optimal path through this, and also a path that is credible
in technical terms. There is simply a maximum rate of pace at
which we can change the capital stock and introduce new technology.
Therefore, if you say that you should have taken a pure point
of view and anything else is a compromise, the process is inherently
a position of judgment. One of the things that people have of
course tried to do is put all these judgments into a massive great
integrated assessment models, with hundreds of parameters in them
and a discount rate, and to say, "This is the optimal path
which balances the costs versus the benefits". We believe
that those models are so complicated and have so many embedded
assumptions that you can get anything that you want out of them,
and you do not really have the confidence that they are telling
you other than giving a little bit of false assurance. We therefore
used a judgmental combination of ways of saying, "We have
described a path which we think is technically doable, at a cost
to the world economy and to the UK economy which is relatively
slight, which will mean that the temperature increase is almost
certainly limited to a level that is not catastrophic; which is
still likely to be significant—say 2° to 2.5°—but
which is manageable in terms of the adaptation cost required to
do that; and which is in alignment with some of the commitments
to which people have already made commitments—which is a
useful thing". To that extent there is an element of the
politics of the doable at the end, but the core of what we were
doing was trying to balance the economic doability of getting
there versus what we thought was a reasonable result. It would
always be possible as a committee to say, "We're absolutely
committed to keeping the chances of going above 2° to less
than 20 per cent". That would have been much tighter targets
and I think that there would be two problems with them. First
of all, you would have lots of people who said, "But that
may not be optimal. It may be more sensible for the world to accept
a slightly greater degree of warming and adapt to it. There has
to be some balance between adaptation and mitigation". Secondly,
we would have described a path which simply will not occur, where
there will not be support. I think that you therefore have to
proceed in that way. There is an awareness of a political context
but the core of it is the economics and the assessment of how
the harm for human welfare appears to accelerate significantly
once you go to 2 to 2.5 to 3 to 3.5°.
Q7 Dr Turner: So it is a pragmatic
rather than a scientific decision?
Lord Turner of Ecchinswell: I
think that the distinction between pragmatic and scientific is
not a clear one here. If we believe that the science gives us
the answer: the science does not give us the answer. Science gives
us a best shot but it is in itself uncertain of a probability
distribution relationship between emissions and temperature increase.
To arrive at an optimal decision, you then have to add two things:
a description of how bad the impact on human welfare is as the
temperature increases—which is in itself highly uncertain
and, if you read IPCC Working Group III, there is no crisp, precise
science in that; there is a set of spectrums of increasing impact
over time—then you have to do the economics of mitigation,
which is probably about the most certain of these three things.
If you look at the science, the human welfare impacts of increasing
temperature and the economics of mitigation, the third one is
probably a bit more crunchy and specific than the other two. I
therefore think that the distinction between pragmatic and science
is a false one. The only way through here is to make a pragmatic
judgment, based upon all of these inputs.
Q8 Martin Horwood: In common with
other members of the Committee, I am getting a little nervous
about this balance between 2° and 4° in your assumptions.
Surely the whole nature of feedback mechanisms and the irreversibility
of some of the things like the collapse of the rainforest or the
ice sheets over 2° is that the thing that will increase the
risk of going to 4° is actually going to 2°? Therefore,
you cannot actually separate the two in the way that you seem
to be doing. It is almost like saying that you are going to aim
to get off the toboggan halfway down the hill.
Lord Turner of Ecchinswell: No,
I do not think that is right. You are absolutely right to identify
that one of the things you have to be very aware of—that
the process of going to 2° or 3° in itself produces
feedback loops which increase the chance of going to a higher
level—is that those feedback loops should be in the scientific
models to start with. That is precisely what the scientists are
attempting to get to grips with. When they say, "This emissions
trajectory we believe has a 99 per cent chance of keeping us below
4°", they have embedded their best judgment of the feedback
loops within it. They have not produced a model without the feedback
loops and then you have to add feedback loops as a separate thing;
those feedback loops are in there already. What gets very complicated
is whether there is anywhere what people call tipping points or
thresholds. Does it become totally irreversible or do we simply
have feedback loops without absolute irreversibility? I think
that the scientists vary on that. However, we did highlight that
it was possible that some of the feedback loops became very strongly
reinforcing above a certain temperature and that there were some
physical things which might be irreversible—melting the
Greenland ice sheets, et cetera. I therefore think that we have
fairly rigorously taken those into account in the way that we
did it; and it was a sense of those feedback loops and irreversibility
that made us believe that the crucial thing is to limit the increase
to about 2 or slightly above 2; and to make very likely that we
do not go above 3, and almost certain that we do not go above
4.
Q9 Martin Horwood: And you think
that there are scientific models which can take global temperatures
safely above 2°, at which the risk of going on to 4°
is less than one per cent?
Lord Turner of Ecchinswell: Yes,
I think there are. That is what the Hadley Centre models say.
The Hadley Centre models say that there are certain trajectories
which will produce a, let us say, mean expectation of 2.2°,
a chance of going above 2° of 55 per cent, but still say
that the chances of going above 4° are less than one per
cent. That is what the models from the scientists actually say.
Q10 Joan Walley: How closely does
your method for working out the 2050 target resemble Contraction
and Convergence?
Lord Turner of Ecchinswell: The
answer is that, when we proceed from the global target to the
UK target, we are suggesting something that is reasonably pragmatically
close to Contraction and Convergence. I think it is important
to realise that actually, although people get very worked up about
precise methodologies—Contraction and Convergence or other
variants, or Triptych, et cetera—it is very difficult to
imagine a long-term path for the world which is not somewhat related
to a Contract and Converge-type approach. I think that Nick Stern
has put this very well indeed and, again, it is a way of cutting
through the complexity of some of these models. If the world in
2050 has to be down to something like two tonnes per capita, or
somewhere between two and two and a half tonnes per capita, unless
you can tell me large numbers of people who will be significantly
below two to two and a half tonnes per capita, there cannot be
large numbers of people who are above two to two and a half tonnes
per capita. China is above there already; India is on a path which
will go above that; it might be the case that a large slice of
Africa could still be below it; but unless you can credibly turn
up at an international negotiation and try to persuade other people
that where they will be in 2050 is still significantly below two
to two and a half tonnes, the only credible negotiating stance
for you is a willingness to come down to two to two and a half
tonnes. There are then all sorts of variants of that. There are
some variants, argued sometimes by emerging countries, which believe
that in 2050 the developed world ought to be below the present
developing world, as it were to make up for historic responsibility
and because we have greater economic resources. There are other
people who argue, no, the whole thing should work on a long-term
Contraction and Convergence and we will not be fully Contract
and Converge by 2050; America will still be well above India because
its starting point is higher. However, I think that those are
variations on the basic theme. We could not see how, in the long
term at some date, you can imagine a global deal which is not
roughly heading towards Contraction and Convergence. There may
be variants. There are parts of the world which are sufficiently
cold that there is a requirement for household heating and there
are others where there is not. There are some where air-conditioning
needs to be used in summer and some where it does not. That may
mean that permanently—and this may be achieved by global
trading—it makes more sense to cut the emissions in one
place than the other; but I think that the core of it is sort
of Contraction and Convergence.
Q11 Joan Walley: What I do not understand
is, if that is the case and if what you are doing is more or less
Contraction and Convergence, given the scale of the need for education
and for the whole planet to understand the scale of the challenge,
would it not make sense for you to come out publicly and endorse
it properly, or have you just done so in your report?
Lord Turner of Ecchinswell: I
think that we have really. We did not call it Contract and Converge.
Apart from anything else, for some reason which I do not quite
understand, this has ended up in a slightly emotive sense and
it also gets interpreted in particular ways. However, we have
made a very clear statement that we cannot imagine a global deal
which is both doable and fair that does not end up by mid-century
with roughly equal rights per capital to emit; and that is clearly
said in the report.
Q12 Joan Walley: If Aubrey Meyer
were producing a sequel to the book that he has already written,
would he have something written by you on the back page, endorsing
Contraction and Convergence?
Lord Turner of Ecchinswell: I
would have to think about that. Broadly speaking, the principle
we are at is in favour of that. The other thing to say is that
we have set out that principle. We are not the UK agency which
is involved directly in the Copenhagen negotiations, and I think
that it is probably unhelpful for us to be extremely precise about
negotiating stance; because there is what you want to do in principle
and what the UK is committed to. There is a slightly separate
thing about the whole processes of international diplomacy that
try to corral people to a decision. A different bit of the British
government machinery is responsible for that. I think that if
Aubrey Meyer read the words that I have said he would be willing
to put those on the back of his book, because they are pretty
strong support in principle for what he is saying.
Mr Kennedy: There is a caveat
there. There are two aspects to burden-sharing. There is where
you end up in 2050—and we have said that equal per capita
seems very reasonable. It is hard to imagine how you would get
away from that. There is how you get to 2050 as well. Contract
and Converge has a specific path to 2050. I am not sure that we
have looked in detail at what the path to 2050 is; indeed, that
is something we have to do in the context of our advice on the
fourth budget. Whether we are endorsing Contract and Converge
from now to 2050, therefore, you would have to question in 2050.
I think we are saying that it is reasonable.
Chairman: That is very clear and helpful.
Q13 Mark Lazarowicz: Can I take you
back to the issue that was raised earlier on about taking into
account the developing scientific evidence. Obviously there is
the concern about the feedback mechanisms of various sorts, suggesting
that the 450 ppm figure was itself too high even to get to the
2° target. This is clearly a moving picture, but can you
give us your thinking on how regularly targets should be revised
or, shall I say, how quickly the current thinking should be revised,
in the light of that evidence? Because obviously three, four or
five years down the line things may be moving radically, and it
will be too late to make changes if the scientific evidence requires
us to do so.
Lord Turner of Ecchinswell: I
think that is a good point. I think that it was difficult for
us to do anything other than to root our proposals on the best
summary of the scientific consensus on the evidence. We did not
have the resources to, as it were, redo this amazing science which
has been done by thousands of scientists across the world. We
basically took the IPCC Fourth Assessment Report, therefore, as
being the clearest statement of the situation. Of course, that
will be revised by a fifth assessment and a sixth assessment,
because it is a rolling programme. I cannot remember when the
next one is due, but they seem to be on a cycle which is five
or six years, and it takes time to do that analysis. Obviously
there are some scientists who argue that, even since the IPCC
Fourth Assessment Report, there is new information that makes
them more concerned. This includes things like the pace at which
the Arctic summer ice is melting; some of the understandings of
the feedback loops that we have referred to, where some people
argue that they were not allowed for within the IPCC fourth assessment
report because they had not yet been massaged and considered by
peer review at that stage. How often should we look at it? As
a committee, I think we would imagine, maybe every four years
or so, doing a sort of re-look at the scientific evidence. I do
not think that there is a value in us looking at it every year,
having looked at that and made a statement as to what we think
the targets and the budget should be to 2050; but, something like
every four or five years, I would imagine the committee doing
another exercise and saying, "Now what is the latest on the
scientific evidence? Does it appear to be suggesting that the
problems are bigger than we thought when we did our initial work?"—that
sort of periodicity.
Mr Kennedy: We have an ongoing
science research programme, so we understand what is coming out
of the research community and, to the extent that changes, the
committee will be aware of them.
Q14 Mark Lazarowicz: Given that,
I do not think there is any scientific work being done which suggests
that we are being too rigorous in trying to go for a 450 ppm or
below level, is it right to take the approach that in your range
of policy options we should be erring on the side of the more
dramatic cuts in emissions rather than the other end of the spectrum?
Is that the approach that you are taking?
Lord Turner of Ecchinswell: I
think you would be right to say that there have been more new
bits of science over the last two years which suggest that the
IPCC fourth assessment might have understated the size of change.
I am not aware of large bits of new evidence available that said
that they were too worried. That clearly says that what we are
doing is definitely what we need to do. If anything, it is easier
to imagine that we might come back at some future stage and say,
"We believe we need to do even more than to go back the other
way". It is not impossible that in ten years' time the latest
evidence will suggest that the pace of climate change is slower
than the present models suggest. I think at the moment one would
probably guess that there is more of a bias of probability the
other way.
Mr Kennedy: We have done some
detailed modelling as well that says really there is not a lot
of excess cost in doing more now, and if science tells us we have
done too much we can take our foot of the pedal. The opposite
is not true. If we do not do enough now and then try to accelerate
later on, it is likely that we cannot do it or it is very expensive
to do it; so it is very prudent to be ambitious now.
Q15 Mark Lazarowicz: On a related
theme, you will of course be aware of the work of the Tyndall
Centre. Their approach has taken the line that we should be focusing
more on cumulative emissions rather than year-on emission reductions.
What is your response to that?
Lord Turner of Ecchinswell: That
was very much in the work that we did and that is why the trajectory
of emissions—the cumulative emissions are the integral of
the curve of emissions, and all of the models are based on that.
That is why, in order to produce a probability distribution of
temperature in 2050, you cannot just put in what are the emissions
in 2050: you have to define an entire path from here to there.
The approach on cumulative emissions is absolutely what we have
set out, and that is why it is important for us to have a trajectory
for the UK and for the world which begins cuts as soon as possible.
Q16 Mark Lazarowicz: Do you or your
officials have good links with the Tyndall Centre in terms of
picking up from their work and so on?
Mr Kennedy: Yes.
Lord Turner of Ecchinswell: We
are aware of the Tyndall Centre's work. The primary scientific
input which we built on was done by the Hadley Centre, in terms
of the actual models; but it is absolutely fully compatible with
the basic principle that what matters is cumulative emissions.
Indeed, the scientists who are on the committee were very keen
to make sure that that was continually stressed. It is so clear
that it is the only way to do it that all the scientific models
are based on that approach.
Mr Kennedy: We have had a whole
range of stakeholder workshops. The Tyndall Centre has been included
and attended those, and has fed into our thinking.
Q17 Chairman: You touched, at the
start, on the risks that the recession may knock us slightly off-course.
To achieve the cuts that your committee has recommended does need
some strengthening of policy right now. Are you confident that
that is actually going to happen?
Lord Turner of Ecchinswell: Our
role is to set out what is required in terms of a budget and we
will now see that the Government will come back in response to
the budget. Again, this relates to what we are going to do in
the first progress report this September. We are required by the
Act to produce annual reports on progress against the budget.
It is fairly clear that this year this will be a somewhat uninteresting
report, in the sense that the budget will be set; we will have
one year of data, 2008 data in the first year of the budget; there
will not be much to say about whether we are on target for these
budgets or not. What we will do in this year's report, therefore,
is to set out a toolkit for how we will do monitoring in future
and how we will be able to monitor not just the end result but
a set of intermediate targets that you have to hit in order to
get to the end target. Let me give you an idea of that. In the
area of electricity generation, in order to make sure that the
total tonnes of carbon are coming down in line with what we think
is required for their overall budget, you can break that into
what has to happen to the average grammes per kilowatt hour of
electricity produced and then multiply it by the total number
of kilowatts being produced. You can then decide trajectories
of those which are compatible with the end result; but then you
can take the grammes per kilowatt hour average across the system
and say, "For that to be true, by this state we will have
to have had this amount of a renewable system". However,
to have that amount of renewables in the system by 2015, by 2012
we will have to have this many windmills in planning consent,
this many consented, this many being able to be
built, et cetera; or, the equivalent in the area of residential
houses, by this time there will have to be so many houses
which have been retro-fitted with cavity wall insulation, et cetera.
We are intending to try and set out a fairly detailed set of intermediate
targets so that, say when we are reporting in 2012, we will be
able to say, "We're worried". We will be commenting
upon the 2011 figures but we will be saying, "Here is where
we are on all these intermediate targets and, given where we are
on this, we are worried about whether we will get there in 2015
or 2016". Within that, that will obviously also have a set
of things which identifies the policies that are required in order
to hit those targets; so we will have a set of policy indicators
in there, to say, "These policies will have to be in place".
That is a sort of toolkit that we will be setting out in September,
which will then be used in subsequent years as we progress on
the data. Where are there some areas of policy which we suspect
need intensification? We will look, this year in particular, at
the whole area of supplier obligation. It goes back to my earlier
point. One of the things which is not new technology-dependent,
as we know, is the energy efficiency improvement of the existing
housing stock. We are placing a lot of reliance on the supplier
obligation to deliver that, working through the suppliers and
their targets, et cetera. I think that there are issues which
can be looked at there, about whether that is an intense enough
process; whether we need to think about some of the variants of
policy which could be pursued there. We are using at the moment
a through-the-suppliers-to-individual-households approach, but
some people have argued that the way you really change is to have
a whole-street approach, where people are offered a package in
a particular town or street and you have to have a more comprehensive
approach. The analogy is often made with when we switched over,
introducing gas central heating and gas grids, back in the 1960s
and 1970s. We did not try to do it on a house-by-house approach.
I therefore think that there are particular areas of policy which
we will be looking at this year, to see whether they need intensification
or change.
Q18 Chairman: It is certainly a mouth-watering
prospect, the reports of future years as they analyse what needs
to be done. I hope it means that your successor will be robustly
independent of any political interference. In the immediate future,
however, which I think that everything we have talked about stresses
is important, are there existing policy areas that pick up one
or two things which we really need to see done during 2009 to
strengthen policy—even to get to the interim target? Is
there anything you would highlight in that context?
Mr Kennedy: I think that Adair
has picked a key one: supplier obligations, and the incentives
there for people to change the way they use energy in their houses.
We need to do something this year on renewable heat; so if you
are looking at our scenarios to meet the interim budget, we need
a financing mechanism; we need attitudes towards renewable heat
to change. We need to move now, we think, on electric cars in
order that they are in the mix in significant proportions in 2020.
In the power sector, renewable electricity is a big part of our
story. On that, we need to improve the planning, the transmission
arrangements. We have said that CCS is a big part of the story
for the 2020s. We need to move on this year with a demonstration
to have that in the mix for 2014. We have talked about agriculture
as well, which had not been on the radar in the context of climate
change discussions, but we think that there is a big potential
there. There is not a policy framework and we need to move on
and develop that. Again, it is a near-term challenge. Across the
piece there are challenges therefore, and we have to meet them
sooner rather than later.
Q19 Joan Walley: Could I come in
on this point? You have this vision and you have this report and
you have these annual references to progress along the trajectory
but, meanwhile, the Government is bringing forward public expenditure
over the next three years to try to bring it forward to deal with
the recession and the economic challenges that we face. In evidence
that we have had in previous sessions, it seems to me that there
is a disconnect between, on the one hand, the Treasury rules which
guide where investment goes and, on the other, a disconnect between
the individual work of the different departments. I am talking
specifically about DECC, which is tasked with bringing forward
energy efficiency in homes and dealing with the CERT programme;
and also in respect of BERR and the environmental technologies
industries. It seems to me that if you are going to be able to
make sure that the Government has kept to its progress, there
needs to be a new approach towards engaging in a cross-departmental
way, with the departments that will have responsibility for carrying
out government policy. Given the imperative of climate change
as the guidance currently exists, and perhaps how the officials
within the departments currently are not putting this at the top
of their agenda, I have difficulty seeing how this is actually
going to happen on the ground.
Lord Turner of Ecchinswell: I
think that those are very important points about the machinery
of government. They are really issues to ask the Government rather
than the committee. However, you are absolutely right. Now that
we have produced our report, proposed the budgets, and that the
Government will now respond—it will see the parliamentary
process of defining precisely what the budgets are and agreeing
them—I think that there does need to be a process in Government
for them to say, "How do we make sure that the totality of
the machinery of government in all of the departments will make
sure that it meets this?". I think the Government is well
aware that that is a challenge. As we know, it has been very bold
for Government, with support from Opposition, to go down the line
of something which puts a very clear discipline on this Government
and any future Government; but, in order to make sure that the
targets are met, there is quite a lot of work to be done. What
we will be trying to contribute to that by our report, which sets
out what I said are all these intermediate targets—this
idea of "If you are going to be there by `x' you have to
be here by `y'"—I think will be a major input to that
debate; but it really is for Government in the actual departmental
sense, rather than us as the Climate Committee, to work out what
is the machinery of Cabinet Committee or review, or the role of
Treasury, and the relative role of DECC versus BERR, et cetera,
to make sure that it all fits together. However, I would agree
with you, and I think it is recognised, that it is something which
now needs to be put together in order to provide this Government
and any future Government with the machinery which makes sure
that they actually deliver the targets that we have now set.
Mr Kennedy: We will be designing
the indicators that Adair has talked about in a way that can be
reflected both in PSAs at the high level and then in departmental
delivery plans as well.
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