CORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 616-iii

House of COMMONS

MINUTES OF EVIDENCE

TAKEN BEFORE

ENVIRONMENTAL AUDIT COMMITTEE

 

 

carbon budgets

 

 

Tuesday 14 July 2009

PROFESSOR SIR DAVID KING, DR CAMERON HEPBURN and DR MYLES ALLEN

 

PROFESSOR PAUL EKINS

PROFESSOR DAVID MACKAY

Evidence heard in Public Questions 154 - 222

 

USE OF THE TRANSCRIPT

1.	This is a corrected 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.
2.	The transcript is an approved formal record of these proceedings. It will be printed in due course.

Oral Evidence

Taken before the Environmental Audit Committee

on Tuesday 14 July 2009

Members present

Mr Tim Yeo, in the Chair

Mr Martin Caton

Colin Challen

Mr David Chaytor

Dr Desmond Turner

Joan Walley

________________

Witnesses: Professor Sir David King, Director, Dr Cameron Hepburn, Smith School of Enterprise and the Environment, and Dr Myles Allen, Department of Physics, Atmospheric Oceanic and Planetary Physics, University of Oxford, gave evidence.

Q154 Chairman: Good morning and a very warm welcome to this session of the Committee's inquiry on Carbon Budgets. Could I ask, by way of kicking things off, about the Committee on Climate Change and their view that it is right to use a 50 per cent chance of exceeding a 2°C rise in average global temperatures as the basis for their recommendations? Do you think that is a sensible approach?

Professor Sir David King: I think it is a very difficult question that you have started us off with. If you lay it out in scientific terms you would want to talk always in terms of a probability distribution function. A function that peaks at 2° with as much of the curve above as below would only be satisfactory if it were a rather narrow distribution. The problem is that the best science available would indicate that with a 50-50 chance of not exceeding 2°C you still have a relative high chance - I would say perhaps 20 per cent - of exceeding 3.5°C. Exceeding 3.5°C would probably not be a wise thing to chance. However, at this point in time, it is probably as good as we can do. My colleague on my left, Myles Allen, is one of those scientists who are producing these sorts of figures so perhaps I could see if he would like to add to that.

Dr Allen: The crucial point is that if you are going to start off aiming for 2° then you are accepting the fact that you are going to have to modify what you do as you go along if you are going to have any chance of hitting it. Whatever policy we design now in the light of the knowledge we have today, one thing I can tell you with certainty is that it will not be correct because knowledge will evolve; we do not know the right answers now. You are going to have to design an adaptable policy and invest in technologies that will allow you to adapt in the future if we discover that we are overshooting. The other crucial point about this is that often people complain if you say "learn as you go" because it is sometimes interpreted as "let's do some more research, it is just an academic looking for more money". That is not what I am saying here. The only way of resolving some of the really fundamental uncertainties in how the climate system responds to increasing emissions is to reduce emissions. We have done one experiment so far; the next big experiment we have to do in order to find out how the climate system responds to changing levels of carbon dioxide is to change in the other direction. It is only when we have done that, some ten or 20 years later, after we have made substantial cuts in emissions, will we know where we are going. We just have to accept that. We cannot put off reducing emissions because of the uncertainty because we will only resolve the uncertainty by reducing emissions.

Q155 Chairman: Some people have suggested that the Committee on Climate Change and indeed the government have based their targets for reducing emissions and the carbon budgets themselves with too much regard to what is feasible in political terms rather than just focusing on the science.

Professor Sir David King: To a certain extent I think that is what Dr Allen has just been saying. If it were practical I am sure that the scientific advice would be to stop emissions today. The best advice I could give while I was in government was that we should reduce emissions as much as is feasible.

Dr Allen: Stopping emissions today would undoubtedly be painful and so inevitably the Committee on Climate Change has an eye to two considerations here. I do not think we should necessarily criticise them. They themselves acknowledged that they were making compromises on the environmental objectives, acknowledging the economic imperatives.

Professor Sir David King: Could I just add that of course your remit is to look at the UK situation but if the UK were to reduce its emissions overnight to zero and the rest of the world did not, this would not do very much for the problem. Part of this is what is also internationally negotiable.

Q156 Chairman: Those of us who have taken an interest in this for some time, looking back over the past 15 years the science has got consistently more robust throughout that period and there is inevitably a tendency for the government to be playing catch-up. They will be perhaps too optimistic in what they are hoping for and therefore underestimated the scale and the urgency of the challenge. Maybe sometimes the scientists themselves have been quite conservative in their presentation of what their conclusions are. Do you think we are in danger of falling into that trap again with the present set of government targets and budgets?

Professor Sir David King: My immediate response to that is to refer to inertia. There is inertia in our geological system which is roughly 20 to 30 years, in other words the carbon dioxide or the greenhouse gases we have already put in the atmosphere will lead to a further temperature rise over the next 30 years whatever we do. The second inertia is the political system. I think that possibly more serious than the inertia in the UK is the inertia in the international global governance system. Kyoto was a long time ago now and progress has not been tremendous.

Q157 Joan Walley: When you had your position inside government, what advice did you give about overcoming this inertia? Surely that degree of inertia is not acceptable.

Professor Sir David King: I do not think that degree of inertia is acceptable and if we are going to get this problem under control we all know that it would be better to get it done quickly, rather than to leave it to future generations when it is going to be a little bit too late. What did I do? I think that I probably did more than anyone in any other country did in that time scale. I certainly raised the issue not only with the cabinet at the time but went on radio and television and made my position very clear. I do think that having a public voice on this made my actions speak louder within the cabinet. It was also, I would have to say, very important when the opposition took a strong position on this. Once both sides were almost competing with each other to take a stronger line, I felt that action became more certain.

Q158 Chairman: I am sure all that is true and certainly your own substantial contribution is recognised and respected. Even after all that, are we not in a position where today it could not be said that we are adopting a precautionary approach; there is still a considerable level of risk in the position that the government has now taken.

Professor Sir David King: Yes. My view is that on both sides of the House it may be easier to make speeches about climate change than to take action because action actually costs money. Whether the Treasury has taken this fully on board is the question I would ask. Very often policies would end up being massively softened. Take the stimulus funds for example. I do believe that the use of the stimulus funds to stimulate a move into a low carbon economy was the intention when it was set up. What is the current estimate on how much of it would be used for stimulating the low carbon economy as we emerge? Eight per cent of the total. I think that is quite a low figure. In South Korea, on the other hand, the figure is about 80 per cent of the stimulus fund and in China it is about 50 per cent. I think something goes wrong and I suppose I tend to point the finger at the Treasury.

Dr Hepburn: Obviously it is easier to make pronouncements and far harder to commit to them. I think a critical aspect of our climate change policy and the world's climate change policy is the credibility of the long run commitments that we make. You ask about allowing risk to remain in the system. I certainly do not disagree; there is considerable risk in the system. Equally the economics and the politics have to be considered when we think about the credibility of the targets we are setting ourselves and I do not think there is a great deal of point in setting targets that we know almost for certain we are simply going to be unable to achieve because of political realities and economic costs. This is not a call for a weak approach to climate change; it is not a call to say that it is all too hard and too costly. However, it is a call to honestly face up to the costs, face up to the political difficulties, design policy that is credible in those contexts and which we can commit to and put the institutions in place to enhance that credibility. I might add that the Committee on Climate Change is welcome in this respect. Indeed, I called for something similar in 2003 in a paper with colleagues at Oxford. The institutional structure provides us with a greater credibility about the budgets and the targets.

Q159 Chairman: Do you think that the Committee's intended target, the more challenging one, is realistic? Could that be achieved?

Dr Hepburn: With a global deal on climate change, which is of course the condition that sits behind the intended target, reductions of 42 per cent by 2020 are still incredibly challenging and they would be costly. However, I think they are achievable and I do not think it is economically irrational to seek to aim for that type of target.

Q160 Colin Challen: Sir David, you made quite a high profile visit to the States a few years ago to talk about climate change in a rather hostile environment.

Professor Sir David King: I do remember that.

Q161 Colin Challen: One might say that a ripple from that is the Waxman-Markey bill. Bearing in mind the last question and answer about our higher intended targets in a global deal, do you think that the Waxman-Markey bill provides us with enough incentive to go to a higher target? To me it seems lacking in ambition.

Professor Sir David King: What I see in the Waxman-Markey bill was, at the outset, the intention to produce something with real teeth, but as it progressed it got softened down. My own feeling is that the inertia that we were referring to earlier on within the political system is playing through in the United States. Despite the very clear intention of President Obama on this situation I do not think that that clarity has got through to the political system as a whole and I fear it will take four or five years before they have something that really does deliver what is necessary. The Waxman-Markey bill is, I believe, watered down, not to the point where it is not worth having - it is certainly worth having - and it is taking the United States quite a big step forward.

Dr Allen: On this point about inertia, one key development in the science over the past few years has been the recognition that essentially carbon dioxide is forever. If you emit carbon dioxide into the atmosphere its effects persist essentially indefinitely. To some extent we need to start thinking about the cumulative impact of how carbon dioxide emissions add up over all time, not just emissions in any given year. That is what the science is pointing to; that is what the climate system responds to. On the whole recognising this point might actually help overcome a lot of the inertia in this, in that once people recognise that if you release carbon today it will not be available for you to emit in 20 years' time unless you somehow manage to develop the technology to take it back out of the atmosphere again, which nobody has at the moment. That does profoundly change the way you see the nature of the problem. One of the things I appreciated seeing in the UK Committee on Climate Change report was an acknowledgement that we are working within a cumulative budget for carbon dioxide and there is a limit to the total amount of carbon dioxide over all time that we can afford to dump into the atmosphere. The number they proposed essentially is equivalent to around a trillion tons of carbon; we have emitted about half a trillion so far so you could say we are about half way there. I should say that it took us 250 years to burn that first half trillion, with the present trajectory it will take us less than 40 years to burn the second. You should not use this as a reason for complacency but it is a very powerful way of framing the problem, certainly when you are thinking about the long-lived greenhouse gases.

Q162 Mr Caton: Climate modelling means projecting what emissions are likely to be in the future. These projections are based on economic models. Are the models and the projections up to the job of predicting something in 2050?

Dr Allen: Which ones, the climate models or the economic models?

Q163 Mr Caton: The approach but particularly the climate models.

Dr Allen: I will speak to the climate models. I think the crucial point here is that we are no longer making a theoretical prediction based on physics alone. We are in effect simply extrapolating an observed trend. I hate to make my science sound so trivial. Of course we extrapolate it very cleverly but we are not working from theory alone; we are seeing the changes which were predicted and we are seeing more or less exactly the changes that were predicted back in 1990 by the IPCC. If you look at the IPCC's predictions from 1990 and what has happened since then they more or less hit it on the nail. As far as the global temperature projections in response to a given increase in carbon dioxide concentrations or greenhouse gas concentrations are concerned, there is an uncertainty in those but they are pretty robust. As far as how the carbon cycle responds to emissions, that is one step back. We are pretty confident about how the climate system responds on a 50 year timescale to a given concentration path. How emissions translate into a concentration path - in other words, how much extra carbon might come out of the biosphere as a result of warming temperatures, for example - that is much less certain. There are models which predict a massive die back of the Amazon in the mid-21^st century which would release a huge amount of carbon into the atmosphere, irrespective of what human emissions are doing at that time, but other models do not do this. That is a much less certain part of the science. That is going back from concentrations to emissions. How policies will actually translate into emissions is the point where I hand over to Cameron.

Dr Hepburn: The way to understand economic models is as tools to provide - hopefully - insight and understanding about the mechanics of the problem. You used the word prediction; I think that is a dangerous word. Clearly predictions are going to be wrong. Where they are helpful is in providing us with scenarios that help us to think through plausible futures. Sir David may wish to say something about the work at the Smith School or the work in government. What I would say about the economy models is that if you go back ten years, there were very few people predicting a recession. That is something you might put in a scenario. The original IPCC scenarios - the so-called SRES models - turned out to be wrong. The actual pathways followed involved much greater rates of growth of emissions than even the top level predicted because of the growth in global trade and China's role in that and the fact that China expanded its production on the back of coal fired power. These things you might think were predictable ex ante but in fact effectively were not. I think it is dangerous to describe the economic models as predictions. Where they are helpful is when they provide us with an understanding of the bits and pieces that make up plausible scenarios.

Dr Allen: In terms of setting a carbon budget, again bearing on what is predictable and what is not, we can predict the climate system's response to a cumulative injection of carbon dioxide with a fair amount of confidence. We can project the climate system's response to a specific emission path with much less confidence. That is one of the things which has come out of the science, that there are some things we know and other things we just cannot know given the current information. We will learn as the emissions trajectory changes but it is much harder.

Professor Sir David King: Your question is both broad and important. The science does not only rely on the modelling as indicated, but paleoclimatology is giving us a very clear indicator of the sort of behaviour of the planet's climate system in the past as a predictor of the kind of scenarios we can expect in the future. A very important part of climate science is studying the planet's previous climate behaviour. All of this is pointing in the same direction unfortunately.

Dr Allen: To add to that, one of the key messages that comes out paleoclimate research is that staying below 2° is a good idea. As soon as you go beyond 2° we start to get into territory where even predicting how the system will respond, how other sources of greenhouses gases may get released from the natural climate system and therefore exacerbate the anthropogenic injection becomes much harder. We can see in the distant past events of this nature and that is of course the kind of thing we need to worry about.

Q164 Chairman: When you say "go beyond" do you mean 3°?

Dr Allen: I would be much more cautious about claiming to be able to predict how the climate system would behave at 3° warmer than pre-industrial than 2°. It is the unknown unknowns if you like that worry me here.

Professor Sir David King: If I could just add one more thing about the economics, of course the geological availability of fossil fuels is a major factor in the economics and so having a very large remaining store of coal in countries like China, Australia and in the state of Virginia in America is a major factor in our ability to look at the high carbon scenario with a high probability.

Dr Allen: There is plenty of carbon down there to do a lot of damage.

Q165 Dr Turner: I seem to recall that the paleo record gives us more than pause for thought; it does not even bear thinking about. Some of the apocalyptic scenarios could well be true which makes it even more important that we try to succeed with our immediate moderate plans. We have not been too successful so far even in keeping on track with our climate change programme for 2010 let alone anything else. What lessons do you draw from that? What does the government have to do to up its game?

Professor Sir David King: I do not think there has yet been an understanding of what defossilising the economy actually means. I think if we looked at a defossilised economy in 2050 we would have to find an astonishing range of changes. Our entire mode of behaviour depends on the use of fossil fuels so whether we are looking at our mobile systems (I do not mean mobile phones), our systems of transporting people and goods around the planet, if you look at our built environment, those two together are about 80 per cent of carbon dioxide and about 80 per cent of our activity. If you look at every item of our behaviour - how does food end up on the table - we have to re-examine every aspect of what we do. In government what I saw was that this was originally seen as a problem for the energy section of the old DTI as if it had nothing to do with transport, as if it had nothing to do with all of the other bits of government. I do not think that we begin to tackle this problem until we understand that. Yes, I think pricing carbon dioxide is absolutely crucial but even in Europe today we are toying with pricing carbon dioxide - maybe "practising" would be a better phrase - but at 12 euros per ton, or whatever the price is today, we are not even close to the value I think we need to see. A hundred euros a ton would roughly cover the cost of carbon capture and storage of the top end of a coal fired power station and I would hope that the caps across European countries would be squeezed down until we got the price up to that sort of level. However, even with the price at that level we will need to see all the levers of government - regulatory levers, obligatory levers - pulled out in order to de-fossilise our economy. I have previously argued that the Committee on Climate Change should have been put in with the Bank of England because I do think that as we move forward we want to control both inflation and deflation of our finances, but we also want to control our movement to defossilise the economy. I am not joking; I think these two should be put together so that as we figure out how to manage our finances we are also figuring out how to lower carbon emissions. We are still a long way from understanding the depth of the change required. The science and technology are there (although we need more science) and the technology will come to the fore provided we get the right economic drivers playing through.

Q166 Dr Turner: One of the economic drivers - or rather economic brakes - is cost. Governments, not unnaturally, look to the cost of their policies and will look to policies that have the smallest price tag. If you look at it in terms of cost effectiveness, what do you think are the most cost effective policies that government could put in place as of now?

Professor Sir David King: I am going to have a shot at this and then turn to my young economic mentor in a moment. For me the most important thing, as we move into a decarbonised economy, is to avoid making investments in infrastructure and in long term projects which are high in carbon of necessity. For example, whether or not British Airports Authority were to invest in a new runway or a new airport would come into that category because I would have imagined a future scenario in which fast rail overtakes the short haul flights across Europe. That scenario is likely to mean that your investment in an expensive new airport system may not yield the return that you were hoping for. I am talking, as we move forward, about lowering the cost to our economy by avoiding stranded assets, by avoiding major infrastructure investments which are likely to have to be shut down because they are so heavily based on carbon. I would not myself have gone for four coal fired power stations with carbon capture and storage at this point in time because frankly carbon capture and storage is an unproven technology. It would seem that caution in investing in coal fired power stations ought to override that need. What I am talking about is for Britain to avoid companies like GM going bust, in other words if our major companies go bankrupt because they have been investing in the wrong sort of infrastructure - I am referring to the infrastructure required to build Humvees doing seven or eight miles per gallon - then we are going to find that it is an expensive transition. I think it would behove government to see that all the right regulatory behaviour is put in place to avoid investing in the wrong infrastructure. Now I will pass to Cameron if you do not mind.

Dr Hepburn: The point made about stranded assets has to be right. In response to the question about which technologies are more cost effective or least cost effective, there are three answers. The first is that we need to be very careful in assuming that we know. I am not saying that we do not need some planning but humility about how technologies will develop and about which rates of learning will proceed more rapidly and which different technologies are important. What that humility leads you to conclude is that in a way, like the Monetary Policy Committee of the Bank of England which does not interfere in every aspect of the economy, it sets one price and lets the rest of the economy sort it out. Similarly in climate policy, I am not saying there is no role for planning but getting the prices right is really a critical aspect of working out which technologies are cost effective. If you have your carbon prices sorted then you do not need vast teams of analysts trying to work out what your most cost effective response is. To that end the way our UK input into the European Emissions Trading Scheme prices and the prices we set here are very important. Let me just make one critical point about pricing and the political economy of pricing. First, we should be selling the allowances that we have available to the private sector and if we sell a large number of them up front with longer commitment periods, then what you create is an interest group owning carbon assets who want tighter targets in the future. At the moment in response to the question about political inertia we know that there is a vast amount of lobbying conducted by vested interests against change. Creating a balancing group that is pro-change - or at least pro-tighter targets - seems to me to be a rather important feature of speeding up the process of political change. A very powerful way of doing that is by allocating emissions allowances now so that the holders of those assets worth billions of pounds or euros want the trading scheme to continue and want prices to rise and hence want tighter caps. I think that political point about pricing is very helpful when we think about our humility in not trying to pick all of the technologies that are the least cost. The second point that is key here is recognising that we want to expose ourselves to upside and positive surprises and we do that when we invest in research and development in the low carbon arena. I think our levels of research and development in energy have been lamentable. It should be a relatively high priority to rectify those levels of research and development, given the scale of the challenge that Sir David has just outlined. Perhaps the Committee on Climate Change could have spent a little bit more time thinking about the role of low carbon research and development and the role of the government, which is a very clear one, in supporting that. The third point is on the point that David made about stranded assets. Some degree of thinking ahead is helpful and planning is helpful. The reason is that market prices alone will not get your infrastructure sorted because they are effectively a marginal price and unless you have a very long term, very credible price that the financial sector can come in on the back of that and get the infrastructure in place (as I was mentioning earlier, political realities have to be addressed and I think it is unlikely to the case for some time) a level of clear planning about our low carbon infrastructure ahead of time is required.

Professor Sir David King: Perhaps I could come back with one more point and then Dr Allen would also like to come in. Again your question was very broad. In setting up the Smith School of Enterprise and Environment we are bringing together top economists, top scientists, top lawyers - an interdisciplinary group - to help to advise governments and the private sector on this transition. When we are advising the private sector what we are talking about is persuading them that there is a massive opportunity for innovation within the private sector represented by this need to decarbonise our economy. When we look at the cost to the economy I would say, "Bring it on" because we have this enormously strong science base in the UK, second only to the United States in our total output, and we have this high density of small high tech companies in that magic triangle between Oxford, Cambridge and London, the highest density of small high tech companies in the world. In many ways we are poised to benefit from the innovation coming through to the private sector that lies ahead.

Dr Allen: On this issue of where should we be investing and what the most cost effective areas are, I want to take issue with something Sir David said. Can I use a visual aid?

Q167 Chairman: By all means, but we are not being televised.

Dr Allen: Sir David mentioned thinking about the amount of fossil carbon underground. This is a one in ten thousand trillion scale model of the problem; each of these is half a trillion tons of fossil carbon.[1] We have used one and the second one will take us to around 2°; that is what the UK Committee on Climate Change says. The fundamental determinate of whether we are going to hit dangerous climate change is what we do with the rest of it.

Q168 Chairman: That is what we could use, is it?

Dr Allen: This is basically what we could use.

Q169 Chairman: So we know for the record, how many pieces are there?

Dr Allen: There are ten.[2] Obviously, this is an estimate of the amount of fossil carbon that is economically recoverable. Therefore what you invest in (in terms of to what extent it determines the risk of dangerous climate change) ultimately depends on how it impacts on what happens to the rest of this carbon, which is why I would take issue with what Sir David said about carbon capture and storage. When we are looking at what is sitting down there there are essentially three things that might happen to the rest of that carbon. We could burn and dump it in the atmosphere with all the consequences we have been talking about; we can leave it down there as fossil carbon; or it could be used, if the technology evolves such that it allows it to do so, and the carbon dioxide sequestered back underground to keep it out of the atmosphere. To my mind that is the determinant of success, whether or not we actually manage to come up with the technologies in time to avoid releasing the rest of that carbon into the atmosphere. That is why I would take issue with what was said about the investment about carbon capture and storage. From my perspective as a physicist looking at what matters for the problem, our investment in carbon capture and storage is orders of magnitude smaller than it ought to be given what is actually going to be required to avoid dangerous climate change.

Q170 Chairman: There are various ways of trying to drive all of this forward, one of which is the carbon price, but is there a role for an interventionist approach which might say that over a certain period we have to generate electricity only producing so many kilograms per kilowatt hour, so there is an actual arithmetical limit on the amount of emissions from each unit of electricity produced? Similarly, could you have something which related to people's movements as transport is such a big factor, so many grams of carbon emitted for so many passenger miles travelled? You could actually have a regulatory target as well to drive both research and drive investment. Would that be feasible?

Professor Sir David King: The example that I would give there that has been enormously successful is the car exhaust regulation target. Introduced in the 1970s, today it has reached a remarkable level. We have cleaned up all our cities around the world through progressive car exhaust regulation, stating in a given year that in three year's time what the requirement would be. I do think that is a very smart way forward. We know how to do it and if we could be tough with the car manufacturers then we should proceed. I say that because I have been very close to car exhaust regulation over the last 40 years and I do know that at every single step the manufacturers have complained and said that it was impossible. What we have to learn is to ignore what they say because their scientists and technologists will find the answer because they fear that if they do not then their competitors will and they will be wiped out. It is a very good way forward in my view.

Q171 Dr Turner: You have already spoken about the inertia of government but, with your experience within the system, have we got the ability within British government structures - either political or Civil Service - to make the smart decisions that are necessary?

Professor Sir David King: I would have to say that the level of expertise demanded within the advisorial system in government that you are referring to is not there at the moment. We have a system based on the generalist rather than the specialist and I think that that needs a radical change if we are really going to manage this problem.

Q172 Mr Chaytor: Sir David, in recent months you have expressed some growing scepticism about the costs both in the Stern Report and produced by the Committee on Climate Change, the cost of meeting our targets and the cost of the damage that the Stern Report originally produced. Could you just say where you think we now are on costs? Is one per cent of GDP no longer accurate in your view?

Professor Sir David King: You may have asked a question which will now divide opinion between Dr Hepburn and myself because he has worked closely with Nick Stern. Basically my view is that the strength of the economic models used is limited. In other words, these economic models are really based on almost perfect decision making within the system. In other words, companies do not do what GM did; they behave as models companies and they know what legislation is likely to arise so they are going to invest in the right directions in the future. My belief is that we can only minimise the cost to our economy as we go forward if we act to see that information goes out to the private sector and that we have the right regulatory behaviour. No economist predicted the recent fiscal crisis. That fiscal crisis arises from strong negative feed-back terms in the economy related to confidence and other things. This is not included in these models. As physical scientists we tend to shudder when we see the models being used to predict the state of the economy. I then hesitate in criticising because I know that Dr Hepburn and his colleagues are fully aware of these limitations. Nick Stern is now saying two per cent of GPD. I am still a bit sceptical about whether it is minus one, two three; I do not know. Here is my scepticism in a nutshell. If we were to look at the cost of no action (in other words, to let the carbon dioxide run) what would the cost to our economy be? Stern has made an effort at calculating that. How do you include within that calculation the geopolitical destabilisation that might arise - and is likely in my view to arise - from an environmental global migration that is unprecedented? The Indian Government is now putting up a fence between India and Bangladesh supposedly to keep thieves out; one suspects it might have something to do with the fact that rising sea levels could well cause the people of Bangladesh to seek higher land and higher land is in India. I am just referring to the fact that by mid-century, if we have not grasped this problem, we will have massive negative feedback terms in the global geo-political economy that would be very difficult to calculate. Equally, I am saying that if we get it right and use our innovative capacity, we could move forward and actually grow our economy on the process of defossilising. Having said all of that, I pass over to Cameron.

Dr Hepburn: I think Sir David and I disagree less than he expects. There clearly is a large amount of debate about both sides of the equation on costs, both the mitigation side and the climate impact side. For the reasons I was setting out earlier, these things are incredibly difficult to measure and they are incredibly uncertain. Anyone who suggests otherwise is doing all of us a disservice because that uncertainty and indeed the unknown unknowns are relevant factors for us to consider when we think about how we ought to be responding to the problem. Let me focus on what is agreed amongst the economic profession because I think that is probably what is helpful. A lot of debate is of one or two per cent, it could be a bit more. Bear in mind that one or two per cent of global GDP are very large numbers; these are not necessarily small costs. Are the damages ten per cent or 20 per cent under different scenarios? So there is debate. However, the point is that almost all sensible economists would agree that the damages from climate change - the climate impacts - exceed or far exceed the costs of doing something about it. That is one of the points that the debate between the American economists within American and between America and other countries following the Stern Review really brought out, that actually we do all agree that the economics of this problem suggest that we need to take action, we need to take action now and we need to start doing it in a very cost effective way. The next thing economists agree on is that we ideally would focus on two problems. The first is the carbon price and the absence of one; the second is the failure to capture research and development spillovers. In the context of a world where we do not get the carbon price right then you are looking at other policies like the ones that you suggested, emissions limits on power plants, limits on cars. These are second best policies but we do not live in a first best world.

Q173 Mr Chaytor: Has the recent economic crisis changed fundamentally any of the assumptions on which the original economic projections were made? If economic growth is not going to continue year on year at a steady two per cent, what are the implications of that?

Dr Hepburn: The financial crisis has really underscored the fact that humility is really the only response in the face of the economic uncertainty. In terms of what it does to emissions - the emission pathway - it does a little; reduce emissions and the reductions will be persistent for some time. It is not quite rounding error but it is almost rounding error. We will have booms and busts and I do not think that necessarily surprised anyone. I do not think it has led to a radical re-thinking of the future projections of growth in business as usual and hence the future of projection of emissions in business as usual and hence the scale of the problem.

Dr Allen: I think it is very dangerous that people often get the impression that economic crises are good for the planet because they reduce the emission rate but again, thinking back to this budget idea, it is not going to make any difference being poorer. Burning the carbon a little bit slower is not going to make any difference at all to what you do with the rest of it. Again it is a different way of framing the problem which avoids this misperception that somehow low growth is good for the planet.

Q174 Mr Chaytor: Is being poorer less likely to lead to scientific innovation?

Dr Allen: Precisely. The way you are going to solve this problem is by becoming rich enough to solve it in effect. Simply being poor will mean that you will emit the carbon slower over a long period but you end up doing the same amount of damage to the planet. I think that is quite an important message to get across because there are advocates who say we should actually curtail growth in order to solve the problem of climate change and I would disagree with that.

Professor Sir David King: What I would say in the response to the fiscal crisis which is one that I supported very strongly last October was a stimulus budget. The stimulus budget put decision making in the hands of governments around the world on how that money should be spent. For example, the Department of Energy in the United States now has a very large R&D budget and that has come entirely through that stimulus funding. Governments can choose to invest this wisely into new low carbon technologies which is precisely why Stephen Chu now has this enormous budget to spend on energy research. So I come back to what I said earlier about the stimulus fund as an opportunity to kick start a low carbon economy.

Q175 Mr Chaytor: In terms of our government's response through the stimulus fund you drew the comparison with South Korea where 80 per cent of their funds go into green growth. The UK Government's defence would be that we are probably further ahead than South Korea and therefore we do not need to allocate such a large share of our stimulus onto green growth.

Professor Sir David King: I put our government's figure at around eight per cent, as against South Korea's 80 per cent.

Q176 Mr Chaytor: At Question Time last week the Minister said it was 20 per cent.

Professor Sir David King: Did he? That is marvellous.

Dr Hepburn: I might just jump in and say that there are different ways of determining how you measure green. It is also rather important how you measure policies that had already been announced prior to the stimulus, whether you net them off or whether you count them as well. There is a certain art to the measurement of the greenness of a stimulus.

Q177 Mr Chaytor: Are there very specific areas of investment that you think should have been in the UK's stimulus package which were not? Had you been the chancellor where would you have allocated the money?

Professor Sir David King: I would certainly have looked at RDD&D all the way through to demonstration in low carbon technologies. I am in favour of investment in carbon capture and storage; it is just the extent of that investment coupled with the number of power stations where we might disagree. Harking back to the time when a little white van visited every home in Britain to convert us from town gas to methane gas with North Sea gas coming through, I would have seen a little white van going to every home to improve energy efficiency within the home, loft insulation and so on. We have modern technology by which we can actually pick out exactly which houses in any village or town are poorly insulated so we could have targeted the construction industry where there are large numbers of unemployed people, by sending people around to do homes on a very widespread basis. There is an investment that would pay back in kind year on year because of lowering energy costs in running the houses, and would pay back in terms of emerging with a housing stock which is currently one of the least energy efficient in Europe into one of the most efficient in Europe. I would also have looked at fast rail. I would have looked at a whole range of projects where the investment would be an investment on behalf of those future generations from whom we are borrowing the money to dig us out of this fiscal crisis.

Q178 Colin Challen: The HSBC report in February is the one that is most popularly quoted analysing green stimulus packages across the world and that has the European Union overall green stimulus - the average across the EU - at 14 per cent. So the elephant in the room is the 86 per cent that is stimulating GDP growth, or trying to. How far do we need to shift from the current economic paradigm or do we need to shift at all? What is your take on this classic economic paradigm that we are trying to return to?

Professor Sir David King: I will have a shot to start with and then Cameron will come in. I do believe that this one number that we judge every country's health on - GPD growth - is a very misleading number and I do think we need to look at it again. My favourite number happens to be from Dasgupta where he looks at the wealth of a nation as its capital building infrastructure wealth, the human skills wealth, the environmental wealth and the cultural wealth of a nation. If you can put a figure to that - I do not see why you could not - then the growth in that wealth would be a much better measure than this simple number GPD that we are all so set upon as the only figure that matters for our economy.

Dr Hepburn: As I am sure we know here, GDP just measures busyness that is captured by a market; it does not measure output properly and it certainly does not measure welfare. We do not have a commonly accepted measure of welfare that we judge ourselves by and compare ourselves against one another with. I would echo David's comments there. As you probably know the Stiglitz Commission is working on a green measure. There are and have been several measures proposed in economics over the last few decades and I think it is high time we concorded on one and adopted it. It does not have to be perfect. GDP is far from perfect as a measure of output but we use it all the same, so I would echo the points there. As far as the question of whether we need to stop growing or slow growing, I do not disagree with what Myles said earlier. We have in any event population growth due to come and even if GDP per capita remains constant the earth's marketed output is going to grow so it is somewhat of hypothetical question to ask, whether we should stop or slow growth. I am not sure that answers the question. The question is how do we grow in a low carbon and sustainable fashion. On the stimulus, I do think it was, at least in part, a missed opportunity here. We should definitely learn the lessons so the next time we have a crisis - and there will be one - we can get it right next time. I hear from my colleagues in China that the last bubble that burst, the Chinese officials said to the rail industry, "It is not your turn now, but next time there is a crisis be ready because the money is coming your way" and it did, billions of it, and they were ready; out they go with their rolling out of rail infrastructure. I do not think it is too much to ask that we can plan ahead ourselves for the next crisis - I hope it is not too much to ask - so that we do deploy in a more sensible and more low carbon and effective way. In the interim the issue actually is the opposite. We have serious pressure on public balance sheets that is going to emerge. I do not think there are too many who would doubt that. In that context it is less about throwing money at the problem and more about thinking how the public balance sheet can be shored up by raising funds. The question here is: can we use that requirement of supporting a public balance sheet to shift to a greener tax base and to raise environmental taxes.

Q179 Colin Challen: Does the fact that the Treasury, being the only department in government that does not employ a chief scientist, have anything to do with its inability to assimilate these new ideas?

Professor Sir David King: I know exactly why you are asking me that question. I certainly did try to get a chief scientific advisor into every major government department and the Treasury was not very sympathetic to the idea. However, I think there is another issue with the Treasury that I could never get through on and this is the issue of not backing winners. There is a very deep belief in the Treasury that the market place is the only place where winners are determined. Using South Korea again as a good example, when a technologist invented broadband in South Korea the South Korean Government invested heavily in creating the infrastructure for broadband to spread in that country. If you look at the development of broadband it was quite extensive in South Korea before it ever went international. That was government investment in backing a winner. It was a risk investment but it turned out to be an enormous winner so companies like Samsung have massively benefited from that. I would say exactly the same with Silicon Valley. I do not think that Silicon Valley would have come into being without the DARPA funding that pulled the gismos through to the market place and created Silicon Valley. This is all anathema to the Treasury so the belief that we can pick winners which are low carbon winners again does not match with the Treasury belief in the market system. Treasury will always look at market instruments as a means of tackling a problem and not investing risk money. For example, we have £150 billion a year fund for government procurement and I did try to see that a ring fence should be placed around one per cent of that for risk procurement on gadgets being produced by our small high tech companies. I think that would have transformed our economy. Likewise here I would have liked to have seen government procurement funds being used to pull through low carbon technology.

Q180 Colin Challen: In the context of this inquiry into carbon budgets do you think the Treasury has, as indicated by this absence of a chief scientist, a fear of science? In setting the remit for the Committee on Climate Change and our general political approach, the science is really something that interferes too much with their perceived wisdom which is why they do not want a chief scientist.

Professor Sir David King: No, I do not think that is right; it is much worse than that. One thing I will never accuse Cameron Hepburn of, is being one of those that I call suffering from economism, where you think that economics provides all of the answers. I do think you will find people who go rather close to my definition of economism within the Treasury. They feel they do not need the science base.

Q181 Joan Walley: Could I just come in and ask about the Green Book in the Treasury and how the Treasury should be revising the Green Book which determines the whole decision making basis and where money is actually spent. It seems to me that that failure to revise the Green Book in keeping with the pressure to decarbonise the economy is just something that has not been taken on board either by the Treasury or by Treasury ministers.

Dr Hepburn: I am obviously going to have a somewhat different emphasis than Sir David on these issues, particularly with regards to picking winners and the role of the Treasury. I had a role in the revisions that occurred earlier in the decade - 2002 or 2003 - and I think it is important that we look for consistency across different aspects of government spending. I am obviously personally very concerned with the environment and climate change but I do not think that environment and climate change issues should dominate health or education or other priorities. The role of the Treasury is to balance up those competing considerations, face up to trade offs and to do it in a way that promotes consistency. I did a survey for the OECD on policy appraisal a few years ago and the UK actually bears up rather well in comparison with other OECD countries. I say "rather" well but that actually means "exceptionally" well. This is not to say there is not a role for revisions of the Green Book to make it green in the environmental sense, but equally it is not intended to be and I do not think it should be a document that prioritises one specific area of public interest over others.

Dr Allen: I would just add one point to that. I think it would be helpful to simplify matters as far as possible. I do not know anything about our own Treasury but other countries' treasuries are understandably concerned about the level of complexity of carbon regulation and the opportunities it appears to introduce to distract people from the business of making money, which is what the treasury wants them to do. For example, you could focus on the point, as Sir David made earlier, that if you are going to carry on using fossil energy in the second half of this century and avoid dangerous climate change then that fossil energy will carry a cost premium of 100 euros a ton minimum, that being the cost of disposing of the carbon dioxide within it. As far as the Treasury is concerned the case for changing our energy mix becomes a purely economic one; they do not need to worry about the environment any more because they simply need to add to their projections the fact that the cost of fossil energy is going to increase in this way in order to neutralise its environmental impact. Maybe one solution is to explain things to the Treasury in a very simple way.

Q182 Chairman: Leaving the Treasury at one side, are there other parts of the government which do understand the urgency of decarbonising the energy supply?

Professor Sir David King: Surely Ed Miliband gets it, does he not?

Q183 Chairman: Yes, I think he does. In the present Whitehall is that sufficient?

Professor Sir David King: As a matter of fact I would have to say that our foreign secretary also gets it. When he was in Defra as secretary of state I saw a secretary of state who really grasped the problem and I was very impressed on a recent trip to China to find that we have 28 people in the embassy staff who are working with the Chinese Government on metrics of carbon dioxide emissions. I think we are doing some things right but it has to be described as patchy.

Q184 Chairman: Do you think that the government is doing enough to overcome the planning difficulties which appear to be one of the obstacles to faster investment in low carbon energy?

Professor Sir David King: No, not enough. More needs to be done. I think we are moving in the right direction. We all know about planning blockages - the vast number of wind farms that have never come into being because of planning blockages - and at the same time the inertia in moving that on seems to be causing a lot of drag.

Chairman: I am sorry we cannot continue because we are having an extremely interesting session, but time unfortunately has overtaken us. Thank you very much indeed for coming in and we will draw heavily on what you have said when we come to write our report.

Memorandum submitted by Professor Paul Ekins (CB11)

Witness: Professor Paul Ekins, Kings College London, gave evidence.

Q185 Chairman: Welcome back to the Committee; we are very glad to see you again. We have about half an hour so we are going to pace our questions in a way which gives us a chance of finishing before 12 o'clock on this session. Can I ask first of all why you think we have not made as much progress as we would like to towards our 2010 target for a 20 per cent cut in CO₂ emissions? We are not going to hit it, and given the rhetoric that has been around why do you think it is?

Professor Ekins: The policies that have been implemented have not been implemented strongly enough. There has been huge policy innovation over the last ten years. We have devised and put in place an extraordinary range of policies across all relevant sectors but they simply have not been strong enough. I would start by singling out the price mechanism. The Stern Review was absolutely clear; every economist is absolutely clear; every session such as this that I come to says that the carbon price is absolutely critical and unless we have a decent carbon price that is visible we will not be able to do it. However, we do not have a decent carbon price that is visible and until we do we will not manage to crack the problem.

Q186 Chairman: The recession obviously is going to help a bit. If emissions do fall in a recession is there something we can learn from that in terms of strengthening the other policies?

Professor Ekins: I think the main lessons to be learned from the fact that emissions will fall in the recession is that when the recession ends emissions will go up again. There is an absolutely ineluctable link in all economies between incomes and energy use. This makes even more important the issue of carbon prices because unless carbon prices go up at the same time as incomes then inevitably economic growth will lead to greater carbon emissions. That is a lesson which we have yet to learn; it is a lesson that comes straight out of every single piece of energy economic analysis I know. If we are going to get richer we will use more energy unless that energy is also more expensive.

Q187 Dr Turner: Your evidence to us suggests that UK's 2020 targets need to be considerably toughened. What key policies do you think the government needs to implement to make this difference?

Professor Ekins: There is no magic bullet. We will need a range of policies across the sectors. However, they will need to be underpinned by a robust carbon price. That, to me, is a necessary but not sufficient condition for progress. The only way of introducing that in the absence of OPEC increasing prices (which is bad for everyone except OPEC; it is very bad for our economy certainly) is through a policy that I have spent an enormous amount of time researching called environmental tax reform whereby the government systematically increases carbon prices across the board - through the kind of escalator that we have seen now with the landfill tax, which we saw in the 1990s with the fuel duty escalator - and reduces other taxes to compensate so that the overall budget is not affected. People have more money in their pocket; businesses have more money because social security contributions and national insurance contributions go down; consumers have more money because income taxes go down or employees' national insurance contributions go down. If they then want to spend that money on high carbon goods and services then they pay significantly more than they are at the moment. Over time a five or six per cent escalator on the major carbon bearing energy uses supplemented by sensible regulation, supplemented by voluntary agreements of various kinds, supplemented by consumer information so that people became more aware when they were consuming carbon containing goods and services that would transform the economy by 2020 and I see no other way of reaching the 2020 targets which are right at the bottom of the Committee on Climate Change's recommendations; they are right at the bottom of where they need to be if we are to make the scientifically appropriate contribution.

Q188 Dr Turner: How much confidence do you place in the government's predictions of CO₂ emission reductions by 2020? The government are saying 19 per cent; do you believe that?

Professor Ekins: I do not because I do not see the basic change in the policy approach and the policy profile which we need. What I see is a continuation of the policies that have, over time, been put in place since 1997 - supplier obligations et cetera - which have certainly delivered something and it is certainly the case that emissions would be higher now than if those policies had not been implemented. However, they have not met the 2010 target and they will not meet the 2020 target unless we have a much higher underlying carbon price. In the previous evidence we heard that to motivate carbon capture and storage and make it economically viable we might need a carbon price of a hundred euros per ton of carbon dioxide; for me that is the absolute minimum towards which we should be aiming through a process of environmental tax reform by 2020. Not all at once, but a little bit every year. That would then start to make real inroads and the other measures that are being implemented would of course be motivated and stimulated to a greater extent. Innovators would have a greater incentive to invent low carbon technologies; everyone would have a greater incentive to implement more efficient appliances and more efficient houses in energy terms. It would give an enormous extra stimulus to all the other things that have been implemented so far to rather weak effect.

Q189 Dr Turner: The Committee on Climate Change has recommended that the interim targets for 2020 ought to be achieved without the purchase of any offset credits. Do you think the government could however use offsets to make an additional effort to exceed those targets? What do you feel about the admissibility of credits in the system?

Professor Ekins: I think that using credits to achieve domestic targets confuses and undermines the purpose towards which we are directed. One of those purposes is to achieve a low carbon economy in a developed country like the UK. Unless industrial countries like the UK achieve a low carbon economy developing countries are not going to begin to try to do anything on their own account because they will interpret moves towards low carbon economies as moves to stifle their development which they have made abundantly clear they are not prepared to consider. In a sense, by allowing people to purchase offset credits you are accepting that moves to a low carbon economy might be unacceptably expensive. If they are going to be unacceptably expensive then people will not want to go there. What we have to prove is that we can do it and we have to use targets to stimulate the policy measures that will enable us to do it at home in our own economies. The second thing we need is the provision from developed countries to developing countries of finance to help them decarbonise their economies as they develop, which is a quite different purpose and should not be confused with the decarbonisation of our own economy. Unfortunately this business of offsets has been introduced in order to make it cheaper for us and therefore stop us moving as quickly as we might to a low carbon economy, and in order to provide this finance. We would do much better to separate those two objectives, to provide the finance (which everybody agrees is going to be necessary for a global deal to be achievable) independently of our own targets to be met at home.

Q190 Dr Turner: So you would abolish offsets?

Professor Ekins: It seems to me that it is a very flawed mechanism. While we do not have another mechanism for providing the finance, there may be some political pragmatists who would say that in the absence of a kind of offsetting mechanism actually that finance would not materialise, then probably it is better to have offsetting credits than no finance. Then I think it would be very important for the targets that we set in our own country to be much tougher so that those targets themselves really did bring forward the kind of domestic effort that we need to show that decarbonising an economy like the UK is possible at acceptable costs.

Q191 Dr Turner: How would you envisage a financial support mechanism for developing countries actually working? How do you think we can get the developing world to cough up, instead of buying cheap credits?

Professor Ekins: There have been a lot of proposals of various kinds, some of them are more or less automatic like a global carbon tax. If you were to have a global carbon tax and rich countries were to contribute some proportion of the revenues from a global carbon tax into an international fund and the rest of the revenues from the global carbon tax could be used for an environmental tax reform of the type I was talking about earlier, that would be one possibility. Some people have suggested taxing international currency movements; some people have suggested using the Global Environment Facility of the World Bank and putting some proportion of GDP from each developed country into that to be used explicitly for low carbon purposes. I do not think the problem is the lack of suggested financial mechanisms. I think the problem has so far been the unwillingness of the developed countries to follow through on any of those suggested mechanisms in order to implement them.

Q192 Dr Turner: There seems to be no actual move so far towards getting the international agreement that would be needed in order to establish such a mechanism.

Professor Ekins: We have the Road to Copenhagen document published by the government just recently where the prime minister does suggest a sum which developed countries should put on the table. This is clearly a crucial part of the bargaining that is going on in the run up to Copenhagen and no doubt it will continue right to the wire, probably until 11.59 on the final day when the final announcement is to be made as to exactly how much money is going to be there. My own feeling is that that is really not desirable and likely to be counter-productive. The only way we are going to counter this problem is through enormous innovation and low carbon technologies, and if we achieve that innovation in our own country with our own technologies and with our own companies, then a lot of the money that goes in these kinds of funds will be used to deploy those technologies around the world and our own economies can benefit from that. We are used to that with trade and aid budgets in the past and this seems to me to be an extension of that. To have a low carbon innovation fund at the global level funded by many hundreds of billions over a period of time is the minimum we will need, but it will ultimately benefit all countries, especially those countries that have taken the lead in developing the low carbon technologies. At the moment it looks as if those countries are going to be largely constituted in Asia, places like South Korea which featured prominently in the previous evidence, and China and Japan because they are investing heavily in low carbon technologies. Unfortunately, we have yet to show that we take that form of investment seriously.

Q193 Mr Chaytor: Given your sweeping criticisms of the policies that this government and perhaps some other European countries have adopted as being inadequate, are you absolutely confident that the EU Trading Scheme as the central plank of the European Union's efforts to reduce its total emissions is the right policy for Europe? Or what changes to the EU Trading Scheme would you like to see in place to make it more effective and give it more teeth and more bite?

Professor Ekins: I think the EU Emissions Trading Scheme is an immensely important policy and I am amazed, to be honest, that the EU managed to put it in place in the relatively short time that it was negotiated. It does provide some kind of model for a global mechanism which we desperately need. I would have far preferred to have had a global carbon tax and most economists would agree with me that that would have been a far better way to have proceeded at this stage. We might then have moved towards a trading scheme in order to arrive at a more surety on the cap, but we failed to get a European carbon energy tax in the early 1990s - which I remember very well - and it was clear that a global carbon tax was not going to be introduced. I think the European Emissions Trading Scheme was an essential second best, but very much a second best. In order to make it more effective there is only one thing you can do, which is to reduce the number of emissions that are allocated or sold through it. That is the way caps work; they work entirely according to the quantity of carbon that is allocated through them. If we have a very low carbon price at the moment it is because there are too many allowances. These allowances are extraordinarily difficult to calculate; they are extraordinarily difficult to calculate even in the absence of lobbying because you never know what technologies will be brought forward as soon as you get a decent carbon price. Every single estimate of abatement technologies in practically any field has overestimated the cost that will be necessary to bring them forward when they become mandated. We have seen it with emissions regulations of all kinds and undoubtedly we are seeing it with carbon. There are many very low cost ways of abating carbon as the marginal abatement cost curves of McKenzie and others show in the Committee on Climate Change report. So as those are mobilised by a carbon price of any size, the carbon price goes down. You have to be really tough on the cap in order to maintain the carbon price. Unfortunately, the political pressures brought to bear both at national level and at European level by those who want cheap carbon were very largely effective, in my view, even in the second phase. They were extremely effective in the first phase and very largely effective even in the second phase, meaning that we have too many emissions allowances in the system. I am afraid that in the third phase we are going to find very much the same thing happening. As soon as people believe there will be a carbon price above 20 euros per ton of carbon they will make the investments, that will bring forward limited innovation which will make the carbon price fall again. Unless we have a really tight cap so that people know that one is serious, perhaps a cap that suggests at the moment a carbon price of 200 euros per ton of carbon, then people would make the investments and that might come down then to 50 when we actually see the emissions trading. Politically that has not been proven possible to deliver.

Q194 Mr Chaytor: In terms of the use of offsets, you are utterly opposed to their use.

Professor Ekins: I am opposed to the use of offsets for meeting domestic targets. I think that the use of offsets may be a useful way for deciding which projects to invest in in developing countries but while developing countries do not have robust carbon caps - which they do not at the moment - then the absolute carbon emissions that are delivered by these offsets are extremely doubtful because you never know the robustness of the baseline against which they are being calculated. Undoubtedly many of these projects do save carbon but we do not know precisely how much and they simply serve to undermine the robustness of the developed country targets which are supposed to be delivering against firm caps.

Q195 Mr Chaytor: Trading within the EU itself to meet our targets will be required to buy up to 25 million tons of EU allowances which presumably will be invested elsewhere in the European Union.

Professor Ekins: Indeed. That is the whole purpose of the EU Emissions Trading Scheme.

Q196 Mr Chaytor: If the investment is elsewhere, particularly in countries that are heavily dependent on coal - Poland being the obvious one - is simply used to transfer from coal to gas, is that an effective outcome of the system because it is not dramatically reducing the amount of carbon consumed, is it? It is locking in Poland and other Eastern European countries to many more years of fossil fuel consumption.

Professor Ekins: The issue of carbon lock-in is very important and undoubtedly the best outcome would be to enable Poland and other countries to leapfrog from coal straight to renewables. It does not sound very good coming from someone in the UK because of course we have not leapfrogged from coal to renewables, we have gone very heavily from coal to gas so it might seem just a trifle rich for us to suggest that Poland did not do the same because our government has not been prepared to do that by paying what it would to exploit some of the best renewable resources in Europe. Obviously EU emissions trading schemes do tend to go for the next least expensive alternative once the cost of carbon goes up. To me the obvious answer to that is that if strategically we do not want people to go from coal to gas then the carbon price has to be sufficient for even gas fired power stations to be too expensive because of the carbon that they emit, so that renewables investments then do become economic throughout Europe. Again the UK would stand to benefit very greatly from that because our renewable resources are among the best in Europe and among the least exploited so far.

Q197 Mr Chaytor: If the cap is set too low because of political preferences and the lobbying of vested interests, does it mean that the trading system alone will be inadequate to deliver the kind of emissions cuts needed? I suppose my question is, is a carbon tax an inevitable supplement to the trading system because the trading system cannot deliver the depths of cuts in emissions that we will need?

Professor Ekins: Until the market becomes better established I think a carbon tax would be very helpful indeed. I have done quite a lot of work on how a carbon tax might be combined with the Emissions Trading Scheme at the European level and suffice to say it is perfectly feasible to do that. Until the carbon market settles down, until the costs of carbon abatement are reasonably well established, until one can see what sort of quantity of permits will deliver what sort of carbon price, then I think it would be very helpful to have a carbon tax which could be used to set a floor on the price of carbon, which is what investors of low carbon technologies tell us that they need above all. Indeed, when you look at those countries that have been successful in investing in low carbon technologies, without exception it is because the investors have been able to calculate over a long period what the returns from their investment would be. That is not the case in the UK where we not only have the Emissions Trading Scheme which is very volatile but we have the Renewable Obligation Certificate Scheme which also produces very volatile prices for these ROCs so that it is not possible to make those bankable, take loans in the certainty of being able to pay off the loans and make a normal return for your shareholders. Until that kind of certainty is forthcoming through the system I am afraid that our investors will not make the investments in low carbon technologies that are necessary.

Q198 Mr Chaytor: Your figure was 100 euros a ton as the absolute minimum, but with the current arrangements how many years will it be before the carbon price rises to, say, 60 euros a ton, which is where many people are saying is the cut-off point?

Professor Ekins: It is very interesting because that depends entirely on innovation. It depends entirely on how the next generation of low carbon technology develops and the extent to which, once we start rolling out these new designs of nuclear power stations and new designs of wind turbines, they become cheaper. The cost of photovoltaics is already coming down very fast, and if we were to make sizeable investments in sunny parts of Europe and North Africa which would provide large amounts of energy those costs might come down even faster. It may be that actually the backstop technology which appears in a lot of economic models - that technology at which very large quantities of low carbon energy become available - would emerge at 60 euros per ton of carbon dioxide. It is impossible really to predict what that is. What we know is that that would stimulate that development very quickly. If we were able to get to a price of 100 relatively quickly then the innovators would know that that gave a significant margin for the development of these technologies, and they could go forward in the confidence that they would make a return. It may then be that we would have a cost reduction and the price of carbon could come down, but that would be once we have gone over the hill of innovation and we have made those investments, we have deployed the technologies and we have started to reap the benefits of the economies of scale to the kind of sunlit uplands towards which low carbon enthusiasts like myself look. However, it takes a long time to get to those sunlit uplands, as anyone who has been in mountains knows. That climb will not be easy and it will require high carbon prices and high carbon prices are politically difficult.

Q199 Colin Challen: The Climate Change Act sets the remit for the Committee on Climate Change and in that remit it has responsibility to take into account not only the climate science but fiscal circumstances, economic competitiveness and social circumstances amongst others. How well do you think it is balancing these things? How are the trade-offs working?

Professor Ekins: I think it is extremely difficult. The Committee on Climate Change is obviously a policy relevant body in the sense that it has to consider the policy implications of the targets that it suggests but it is not comprised of politicians and ultimately these decisions about balance between competing economic social and environmental considerations need to be taken by politicians. The scientific case for very strong carbon abatement is absolutely unassailable and the factor concerning which I am least optimistic, if you like, is that public awareness of what climate change means for this country and the world at the moment is nowhere near the scientific reality. People just do not seem to understand, appreciate or even be particularly interested in a change to human circumstances of absolutely extraordinary proportions that will dwarf anything that we experienced in the first 50 years of the last century when we had two world wars and Stalin purges. It is that kind of change that people need to realise is coming up the track in the second half of this century, which may seem a long time but of course it is well within the lifetime of probably most people who are currently living in this country at the moment. It is not far away and until we get that perception then I am rather afraid that the kinds of political changes and policies I have been talking about, as being necessary, will not be politically deliverable. I think politicians have a real responsibility to explain these things in ways that carry commitment, as do scientists and policy analysts like myself. At the moment the message has not got across with anything like the urgency that it needs to.

Q200 Colin Challen: Given that and given the remit of the Committee to consider all these other things which are not in themselves climate science related, do you think that the Committee has chosen the correct emissions reductions trajectory or should it have offered one or two other alternatives so that we can contrast what it has chosen with something which might have been more weighted to the science or perhaps a more generous trajectory which was more weighted to social implications?

Professor Ekins: I think the targets that we have are sufficiently challenging to serve their purpose. I think there is quite a strong chance that they will not achieve their objective even if they are part of a global effort of delivering us from dangerous and anthropogenic climate change. We know there is only a 50-50 chance of staying below the 2° with those targets. That 2° itself is not quite an arbitrary number but it was certainly chosen on the basis of certain political considerations. It is quite possible that 2° will turn out to be too much for a comfortable human existence of nine billion people on the planet, but it seems to me that the development we now need to see is to move from having set the target which, after all, is intended to be very much a first step in the process rather than the last one, to getting on a trajectory which will meet the targets with a certain amount of comfort. In other words, we don't just put in place policies that we think, if everything goes absolutely according to plan, might just squeeze in under the 29 per cent carbon dioxide reduction, which has been the strategy for the 2010 targets. I have been monitoring the 2010 targets very closely ever since 1997 and every time the government has produced a new policy effort to meet the 2010 targets and has produced its calculations, it is just squeezing in below and of course the policies have not delivered to the extent that was anticipated and other things have blown the policies off course, so we have ended up missing them by rather a large margin. We simply cannot afford to do that in 2020 with these targets which are relatively robust and challenging and can be justified - kind of - with reference to scientific evidence. The overriding task now is to put in place the policies that can be seen will meet them with some assurance so that when things go wrong - as they undoubtedly will - and technologies do not quite deliver according to plan - as they inevitably will - and we have to spend more on carbon capture and storage than we thought we would and therefore we are able to implement less of it, or the first nuclear power stations do not go in quite as planned - as is happening in Finland - we do not then find ourselves many percentage points short of these targets which are already absolutely at the minimum of what is scientifically justifiable. We have to start upping the level of ambition of the policies that we put in place so that they will achieve these targets with some headroom for comfort, which is how government operates in many, many other areas. We need to introduce that into our climate change policy as well.

Q201 Dr Turner: You lead the energy systems and modelling research for the UK Energy Research Centre and your principal conclusion is that decarbonising electricity production should be our number one priority. Just how fast do you think this can be achieved and what should the government be doing to accelerate the process?

Professor Ekins: That conclusion arose out of modelling which indeed we did do. The decarbonisation of electricity is not something that can be done terribly quickly. There are three large possibilities for the decarbonising of electricity. They are: large scale offshore wind farms, new nuclear power stations and carbon capture and storage. All of those require very, very large investments which will take at least ten years to put in place. Between now and 2020 the contribution that is planned is that a lot of offshore wind will be in by 2020 (and it remains to be seen in the White Paper which will be published tomorrow the extent to which the government perceives that to be feasible) but I do not know anyone who suggests that there will be large numbers of carbon capture and storage plants or large numbers of new nuclear power stations up and running by 2020. Prior to 2020 we have to do what needs to be done largely through renewables - offshore wind and biomass - and improvements in energy efficiency, in particular in relation to the existing housing stock. Those are the two really important efforts - increasing the energy efficiency of cars is another very important one - so that by the time we get to 2020 the overall size of the energy demand has been brought under control and we are clear about what sort of levels of the new decarbonised sources of electricity will be needed in order, eventually, to contribute to the decarbonisation not just of electricity itself but of household energy use which will increasingly rely on electricity and indeed vehicles and road transport which can increasingly use hybrid or electric vehicles. That time scale is between 2020 and 2040 really so that those big new investments in low carbon energy sources can roll out between 2020 and 2040, plus perhaps marine and wave power if that has been sufficiently developed by then.

Q202 Dr Turner: I was just going to ask you for a rough guesstimate of the possible contribution by 2020 of wave and tidal stream.

Professor Ekins: By 2020, very small; the first prototypes are barely in the sea and they are not delivering anything resembling large quantities of power. Wind technology is infinitely further advanced than marine renewables and we know what the challenges of rolling out large quantities of wind are going to be over the next ten years. The challenges in implementation terms will be just as great for marine; there will be large structures sitting in the sea having to deliver quantities of energy but at the moment we have no real idea what the design of the ultimate structures that will be the commercial models will be. That is very much a post-2020 technology so far as I am concerned.

Q203 Chairman: Thank you very much indeed. You have covered quite a bit of ground in a fairly short space of time so we are very grateful to you.

Professor Ekins: Thank you.

Memorandum submitted by Professor David MacKay (CB10)

Witness: Professor David MacKay, University of Cambridge, gave evidence.

Q204 Chairman: Good morning and welcome to the Committee. Can I thank you for giving us all a copy of your book which we have been given this morning?[3] I will start by asking you if you think that the way in which we talk about emissions targets and carbon budgets is meaningful to the people who need to understand the importance of them.

Professor MacKay: You are thinking of the British public I assume? Is that who you are referring to?

Q205 Chairman: I was not just thinking of the British public really, I was thinking of the decision makers as well.

Professor MacKay: I do think it is important to understand the scale of our energy consumption and the scale of what we are talking about when we name these targets. We have been hearing from the previous witnesses about the prices of carbon and the technologies and innovations that are expected, but at the end of the day, if we carry on living the way we currently live or with a similar lifestyle we will have to build a lot of new stuff. We will still be living energy intensive lifestyles at home and on the roads and the devices we will be using need to be built. We need better insulated houses; we need new heat sources that do not need natural gas; we need vehicles that do not run on petrol. We need this power to be coming from somewhere. Maybe clean coal can play some part in that but mainly we need to be looking at renewables and nuclear in our country or possibly in other people's countries if we do not want to use our own countryside as a place to get the power from. I think it is important that the public discussion of the carbon targets includes an understanding of the scale of what is required. I think the government is going in the right direction with many of its policies that we are hearing about (renewables, nuclear and home insulation) but the rate of progress in those directions is not sufficient at the moment and maybe people are not yet visualising the end point of what 2050 needs to look like if we are going to meet these climate targets.

Q206 Chairman: How can we express these things in ways that might be more meaningful so that people do understand what the scale of the progress needed actually is?

Professor MacKay: I suppose there are two ways of visualising the scale of these things. One is to talk per person what needs to be put up: how many square metres of solar hot water panels we should be thinking of (square metre per person might make sense); how many square metres of photovoltaic panels, if they become affordable and if you really want a big contribution from photovoltaic panels we need to be talking about not just covering all south facing roofs but substantial chunks of countryside as well. How large would the wind farms be per person? We need to be talking about many hundreds of square metres per person of wind farms. The personal scale is one way of visualising. Talking about taking a home and insulating it and putting 20 centimetres of polystyrene or some sort of good insulation on the outside of every home and every office building, at least all the old ones that are not up to Swedish building standards. So there is the personal visualisation and then there is the nation-scale visualisation of what that means in terms of land areas that need to be occupied by some of these new facilities. If we want to reach the 2050 targets the sorts of things we need to be visualising, in addition to all the efficiency measures (where we make transport more efficient by electrifying most of it and we make heating more efficient by switching over to heat pumps perhaps), the power sources we need to be imagining involve something like a seven-fold increase in nuclear power so that would require building nuclear power stations not just on existing sites but probably on some new sites as well, and a 30-fold increase in wind farms in the country. That would be one example of a mix that would supply enough electricity to cover not only today's electricity but also electrified transport and electrified heating systems. A 30-fold increase in wind farms really would start intruding into the countryside; we do need to imagine perhaps coving five per cent of the country with wind farms. If that is viewed as politically unacceptable people need to understand the exchange rates. We need a plan that adds up. We cannot say no to everything. If we do not want 2000 more wind turbines we could replace those 2000 new wind turbines by an extra Sizewell B nuclear power station. That is the exchange rate and so we need to be talking about 70 Sizewell Bs or, if we do not like 70 Sizewell Bs then 70 times 2000 wind turbines would provide the same amount of power and would cover most of the countryside.

Q207 Chairman: We have been quite proud of our progress, relatively speaking, since 1990. We have some progress towards emissions targets, but that has been achieved at least in part by the fact that we have exported a lot of our heavier industries. Do you think it is important that we should measure emissions on a consumption basis as well as a production basis?

Professor MacKay: You are certainly right that we have exported a lot of our energy intensive activities overseas which are now out of control with the growth in emissions. We certainly need to understand that. I think we could reach our 2050 targets without explicitly accounting for what is going on in other countries as long as we trust them to be doing a similar accounting exercise and decarbonising their economies as well.

Q208 Chairman: Would that not allow them to argue that in effect we are riding on their back? We are pointing to a reduction in emissions in the UK simply because we are now buying steel or whatever from some other part of the world.

Professor MacKay: Maybe the point you are making is that attributing allowances to people on a per capita basis is perhaps not the most rational way to do things. If we do end up with some countries that are the energy intensive countries that manufacture all the stuff for everyone else, they could make a strong case that they ought to have a larger allowance and that perhaps would favour a system based more on carbon taxes, that wherever the fossil fuels are getting burned we will make sure we tax them appropriately heavily. This is really getting out of my territory; it is not my specialism.

Q209 Colin Challen: The Committee on Climate Change has suggested that we should almost entirely decarbonise our electricity generation by 2030. Do you think that is attainable?

Professor MacKay: Is it possible to decarbonise by 2030? Yes, it is. The rate of building of clean electricity systems needs to be much bigger than what it is today. At the moment we have about three gigawatts of wind capacity that produces on average about one gigawatt of output. I think the right sort of build rate to aim for would be that every year from now until 2020 we need to put up that much again, three gigawatts of capacity every year. Similarly the nuclear build rate that people are talking about at the moment, I get the impression that people are imagining that there might be ten gigawatts built not by 2020 but maybe another decade after that or possibly as much as 30 gigawatts. Again that is not the right sort of build rate for meeting the target of complete decarbonisation of electricity, especially if we are moving to electrifying transport and electrifying building heating using heat pumps which would be a sensible policy. Then the actual amount of electricity required will have to actually increase and eventually maybe even double or triple.

Q210 Colin Challen: What is the simplest thing to do to head towards that 2030 ambition? What would be your view on the technology required?

Professor MacKay: I think we need to build pretty much everything that makes sense at pretty much the maximum rate imaginable. France built nuclear power stations at a rate of roughly three gigawatts per year and I think a possible plan that would add up for Britain would be to aspire to that sort of rate of building of nuclear power stations, roughly two gigawatts a year and similarly, as I said earlier, a build rate of wind farms of about 3 gigawatts per year. We need to pull out the stops on those two technologies which are the biggest options for electricity in Britain. In addition there are some other important options. I support a big investment in tidal stream research and development and maybe eventually tidal stream could be on a similar sort of scale as wind is today. I would also emphasise waste to energy plant. I think we should imagine building, for every town, a waste energy facility that would be taking waste that currently goes to landfill and causes all sorts of problems, using it as a resource, as a source of electricity and a source of feed stock for chemical processes which currently use fossil fuels as their feed stock.

Q211 Colin Challen: I have not yet had the chance to read your book but is it really looking at Britain as a sort of energy island or to what extent do you think that things like the super grid can make a contribution by 2030?

Professor MacKay: I think the super grid concept is essential for the future of humanity. In the long term, where is humanity going to get its energy from once the fossil fuels are not being used any more? Solar power in deserts has to be one of the major sources for humanity. I think it would make sense for Britain to join in building a super grid with a strong emphasis on solar power in deserts in Libya, in Algeria. Supporting the development of that infrastructure and technology I think would make a lot of sense. By 2030 could that be making a strong contribution? I think it is not impossible to imagine that by 2030 we could build solar power stations in deserts that have an area similar to the area of London and that we could have power lines crossing Europe carrying a power similar to Britain's electricity consumption today. I think this is possible. In the news in the last week we have heard that German countries are proposing to invest 600 billion euros or dollars in exactly that project. I think it would make sense for Britain to become part of that too. Britain could be self-sufficient in terms of its own renewable and its own nuclear power, but I think it would make sense for us to be supporting the development of solar in deserts which would lead to us then being energy importers. We are already energy importers obviously in terms of gas and coal so it would not be a radical change to have a dependence on Algeria and Libya for electricity.

Q212 Colin Challen: Even 2030 is quite a long way off given that the IPCC say we should start reducing our emissions by 2015. Putting to one side the fact that tomorrow we will have a renewable energy strategy published, if you had to look at the very short term - what needs to happen in the next two or three years, the first budget period of the Climate Change Act - what would you say we had to do immediately to head towards these longer term targets?

Professor MacKay: I do not think the climate scientists care very much when the carbon gets emitted so I think emphasising urgent actions that have to be done in two or three years is probably not consistent with the science that says that the carbon goes upstairs and hangs around there for hundreds of years. I think what is urgent is to think about the long view and figure out a road map to 2050 and work out what the priorities are for investment to ensure that we do reach the 2030 and 2050 targets. The government has been emphasising electric vehicles; I think that is definitely a good part of the solution. Transport is roughly one third of our emissions at the moment, almost all using fossil fuels, and if we were to electrify transport it would not only defossilise the transport it would make it much more efficient because electric vehicles are more efficient.

Q213 Colin Challen: You started that statement by saying that we should urgently look at the long term but does climate change science not say that if we are going to go for 80 per cent a fall at the end of that period we should aim for a sharp fall in emissions at the beginning of the period because there is that big block of emissions that is the problem and if you have got to 80 per cent cuts in the last five years before 2050 there is hardly any point in doing it.

Professor MacKay: I am sorry, I was not meaning to say that we could delay our reduction of emissions; it is the total that matters. I do not think it is essential to meet a particular budget in two years as long as the total remains the required total. My reason for saying that is that I am worried about locking. We could say that may be a good way to reach our short term targets is to have more use of gas which happens to be a fossil fuel and we could build a whole load of new technology that uses gas and reduce our coal power stations. I think this is what the market is about to do, we will have more gas power stations. People also talk about micro-combined heat and power, perhaps a power station in every home. Again this would be using gas and it might be seven per cent more efficient than the way we currently use gas for home heating, but it is only seven per cent more efficient. It might help us achieve a short term target but then it might be locking us into a technology that would prevent us from easily reaching the long term targets.

Q214 Colin Challen: Should efficiency savings in fossil fuel based generation be excluded from any accounting we do moving towards the green economy? Some people have argued under various cap and trade schemes that a more efficient gas plant, or even coal with carbon capture and storage, should almost be counted as equivalent to savings from renewable energy.

Professor MacKay: I am not sure what the best way to do the accounting and setting up targets is. I would say that we need to make sure that the policies we come up with are consistent not only with the short term but with the long term targets on the totals.

Q215 Dr Turner: We have obviously got to get off fossil fuels as fast as possible. How would you prioritise the actions that the government needs to take to expedite this process?

Professor MacKay: As I said earlier, I think we need to do almost everything as fast as possible so I would not want to set one priority against another priority really. You have heard from earlier witnesses that having a strong carbon price would really help, a strong price that is predictable for the future also. I would encourage a policy of having a floor on the carbon price so that if the Emissions Trading Scheme is not taking the price up to 60 euros a ton or 100 euros a ton then we could round it up. We could say there is an additional tax such that the price will be 100 euros per ton whatever happens in the market. That would then support the development of many renewable technologies and other clean forms of energy and give people confidence that their investment is going to pay off in those technologies.

Q216 Dr Turner: Would you do this by way of regulation, for instance by putting stringent emission limits - grams of CO₂ per kilowatt - on electricity production?

Professor MacKay: That is a possibility, to have additional legislation that stipulates the required efficiency for particular technologies. This could be done for vehicles, for example, and there have been moves in Europe for emissions limits on vehicles in terms of grams per kilometre. You could have the same for electricity also and there could be explicit targets for buildings. We have building codes and we could have new targets that say, "Okay, all old building stock by 2020 has to be insulated to this standard". There are already grants that help reduce the leakiness of your house by 25 per cent or so, but we need grants to support much more radical retrofitting of good insulation technology into existing buildings.

Q217 Mr Chaytor: The model of electricity generation that you propose would involve a huge expansion of infrastructure but is still a very centralised model. You are saying nuclear and vast wind farms will feed energy into the grid and simply replacing coal and gas. Do you give any credibility at all to the concept of de-centralised energy systems and micro-generation?

Professor MacKay: What I care about are the numbers and some forms of de-centralisation definitely work. Solar hot water panels on roofs are a de-centralised energy technology that works and might even pay for itself. I would strongly encourage support for hot water panels on every home. Another de-centralised technology that works and delivers energy locally is a heat pump. A heat pump is a back to front refrigerator that moves heat from your garden into your building. It is de-centralised; it is using a small amount of electricity that comes from the grid to move a lot of heat from your garden into your building. That is de-centralised and it works. I am not against de-centralisation; it is a question of whether the numbers actually stack up. The wind does not have to be organised into mega wind farms; it could be that it could be done on a community basis. A community of 2000 people could say, "We want to power our electricity with a one two-megawatt turbine" and they could get together. There is one successful example of this in Britain, a community that got themselves a small wind farm. That is roughly the scale, 2000 people buying a two megawatt turbine. That would then fit in with the picture I was sketching earlier of the scale of wind that is required. You could view that as de-centralised. I think it is better for them to buy together one big, tall, two megawatt turbine rather than for them all to buy small roof-mounted wind turbines which are useless and never pay for themselves, unless they are in exceptional locations.

Q218 Mr Chaytor: What assumptions do you make about the rate of growth in energy efficiency both in terms of generation and consumption through appliances?

Professor MacKay: Heating systems today take high grade energy and turn it directly into heat, so a condensing boiler is about 90 per cent efficient at turning high grade chemicals into heat by setting fire to them; electrical heaters of the standard sort are 100 per cent efficient at turning high grade electricity into heat. That is very inefficient according to thermal-dynamics; you can do much better and that is what a heat pump allows. A heat pump can be perhaps 300 per cent or 400 per cent efficient. If you take one unit of electricity you end up with four units of heat in your house because what it is doing is pumping heat, moving heat from your garden into your house.

Q219 Mr Chaytor: Is the heat pump the most effective form of electricity generation for heating purposes?

Professor MacKay: A heat pump is not generating electricity, it is actually generating heat in your house and it is using a bit of electricity from the grid. That is four times more efficient than a standard resistance heater and in my view it is also four times better than setting fire to fossil fuels.

Q220 Mr Chaytor: Why are you not arguing then for a heat pump in every home?

Professor MacKay: I certainly am.

Q221 Mr Chaytor: Is infrastructure and use of space the ultimate solution?

Professor MacKay: I think that is part of a sensible road map. People also talk about wood burning stoves but there is not enough land area in Britain for everyone to have a wood burning stove. I think heat pumps and solar hot water panels would play a crucial role in a decarbonised heating system. You were asking about efficiency options and the efficiency assumptions I am making. I am assuming a vast roll out of heat pumps and the Committee on Climate Change also assumed this in their model. That gives you a big efficiency savings. I am also assuming that we do have a big insulation programme, insulating old buildings as well as possible which is another of the most important things to do in terms of efficiency. On the transport side of things, electrifying transport can make it perhaps four times as efficient as it is at the moment. Making vehicles smaller, lighter and more fish-shaped can also make them more efficient. I am assuming, in the sketches in my book and in the evidence that I gave to the Committee, transport does become more efficient but then there is the miracle of growth which undoes some of those options. In my sketch I assumed that overall there was a 50 per cent net saving in energy consumption for transport when we moved to these electrified vehicles and a greater use of public transport and car sharing as well.

Q222 Chairman: I think we are now unfortunately losing our quorum so thank you very much indeed for coming in. We will study your book with great interest. It is a very good time to give MPs a book, just at the start of the summer recess, so there is a reasonable chance of it being read.

Professor MacKay: Thank you very much.

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[1] ADD INFO HERE, AS REQUESTED BY GORDON

[2] Note by Witness: There are ten pieces, representing what was there in 1750. We have already placed one in the atmosphere, and can only afford to place one more.

[3] Sustainable Energy - without the hot air, David J C MacKay, 2009