Examination of Witnesses (Questions 1-58)
PROFESSOR SIR
BRIAN HOSKINS
AND MR
DAVID KENNEDY
9 JUNE 2009
Q1 Chairman: Good morning, and thank
you very much for coming in. We are very grateful for your time.
Just so that we can try and pace this, we have quite a lot we
would like to talk to you about and we have about an hour and
a quarter as we have another witness, so we will proceed as briskly
as we can, dealing with the issues in a thorough way. Could I
start by asking if you feel that the budgets and targets which
the Government now has, whether they are actually consistent with
the aim of avoiding dangerous climate change.
Mr Kennedy: Perhaps
we can answer that in two stages. First of all, we recommended
targets which, we thought, were consistent with avoiding dangerous
climate change, and that is the 80% in 2050 of all greenhouse
gases, including aviation and shipping, and we recommended, what
we called, an "interim target" of 34% emissions reductions
in 2020 rising to 42% if there is a global deal, as being consistent
with that 80% longer-term goal, so that is what, we thought, would
make us avoid the risk of dangerous climate change. The Government
has accepted all of those recommendations, so, as you know, the
80% is already in the Climate Change Act and the 34% which, we
said, should go into the legislation prior to a global deal has
been accepted in DECC, and Ed Miliband announced that and it is
going through the House at the moment under the affirmative resolution
procedure. The other thing that we recommended as well was that
the 34% should be achieved through domestic emissions reductions,
not the purchase of credits, and again the advice has been accepted
there. The last thing is that, if you look at the narrative to
the secondary legislation, we have recommended a set of options
for reducing emissions to meet the budgets, whether that is energy
efficiency improvements, electric cars or renewables in the power
sector, and the narrative in there very much reflects what, we
suggested, are the appropriate set of measures to reduce emissions.
Sir Brian Hoskins: If I could
come in on the first part of that, there is a lot of discussion
of what "dangerous climate change" is and, if you are
in an island in the Indian Ocean, I suspect it is pretty dangerous
already, so we looked at this. There is this EU target of two
degrees and some people take that as very robust as if 1.9 is
all right and 2.1 is just over the top, and there may be thresholds
in the system somewhere near there, but we certainly do not know
they are at exactly 2.0, so we took the attitude that we wanted,
in probability terms, to keep the 50-50 point as close to two
degrees as we could. We also then looked at something else, the
chance of reaching four degrees above pre-industrial levels, and
I think sometimes, when we speak about four degrees, we think,
"Oh well, everywhere could manage four degrees", but
it really becomes an index of how far we have gone along the road.
If you think about the regional changes and perhaps even global
changes that would correspond to that four degrees, there is no
doubt that that would be a world where life, as we know it, could
not be pursued. We wanted the chances of going there to be of
the order of 1% or less, so we wanted the 50-50 point to be two
degrees and, if it could have been less, we would have said "Fine",
but we did not think pragmatically that that was possible at this
stage, so those are the two criteria, the 50-50 point close to
two degrees and then a very, very low chance of getting to that
four-degree world. This led us to the sort of idea then that the
global emissions should peak before 2020 preferably, but certainly
by 2020 and drop around 4% per annum after that, that is for global
emissions, and down to about a 50% global cut by 2050 and, then
going from that global cut of 50% by 2050, we had to say, "What
does that mean for the UK?" and we said that the only way
you can envisage that is that this is a per capita emission allowance
at that stage of something over two tonnes of CO2 per person and
that means an 80% cut for the UK. The way we decided is that that
was the 2050 point, but then, on the way to that, we took account
of the EU targets of approaching 2050 consistent with this global
emission curve and what was actually technically possible, and
we came up with the earlier targets, so we believe what we have
is consistent with keeping climate change within bounds that are
pragmatically possible and as least dangerous as we think can
be done at this time.
Q2 Chairman: That is interesting.
If we are saying that already there is a 50-50 chance of an increase
of more than two degrees, we are saying it is quite possible that
the world could become a dangerous place even if the current targets
are achieved, which at the present time some of us might think
is also quite an optimistic assumption, but let us leave that
at the moment. Even if we do what we are planning to do and what
you have set out as a Committee, there is still a significant
risk that we are going to be in very dangerous territory.
Sir Brian Hoskins: I do not think
we can be complacent about a world where the globally average
temperature rises above two degrees. There is no doubt there will
be huge adaptation that is required to face that and the question
is whether that is possible and whether that is possible in most
countries, particularly in the poorer countries of the world.
I do not think we would say it is necessarily going to be easy
and, if one had gone back to 1850 and made choices, perhaps one
would not decide to be here, but it will require major adaptation
around the world to face that sort of climate change. The chances
of crossing major thresholds, perhaps at this time we do not know
we will cross those, and sea-level rise for 1,000 years is possible
to levels which maybe we can cope with in time, but we certainly
could not if they happened rather quickly.
Q3 Chairman: Is there a risk that,
if we start to think about adaptation measures on the basis of
a rise in temperature of significantly more than two degrees,
(a) that kind of admits we are not going to achieve the two degrees,
and (b) it may even weaken the pressure to do so and if we are
in a world which has a three- or four-degree rise?
Mr Kennedy: This is something
we are thinking about at the moment because, as you know, we have
just established an Adaptation Sub-Committee which Lord Krebs
is the Chair of. We are aware of Bob Watson, who is the Chief
Scientist at Defra, saying, "Let's aim for two, but plan
for four", and we want to explore that idea. Do we really
want to aim for two and plan for four? I am not sure that those
two things fit together and we want to articulate what you actually
aim for and adapt to, we have only just started, so we are not
sure how we are going to bring those two together at the moment,
but that is clearly an issue that we need to tackle.
Sir Brian Hoskins: If I can add
to that, you drive a car in the manner of not having an accident,
but you still take insurance, and I would view the adapting to
a higher level as an insurance against the possibilities of that
sort of thing happening.
Q4 Dr Turner: The Report published
a week or so ago suggested that 300,000 people globally have already
died each year because of climate change, and I do not know if
you accept that or not, but, if we are talking about being a global
leader tackling climate change and that amounts to a 50-50 chance,
is that an acceptable level of risk? If somebody gave you a gun
not with one bullet in it, but three, with every other chamber
free, you would not accept that kind of Russian roulette, so why
should we claim that we are doing the right thing?
Sir Brian Hoskins: This is a very
interesting position for me. I have never been attacked from this
side before in a parliamentary committee and it has always been
the other way.
Colin Challen: It is friendly fire!
Q5 Dr Turner: That is the worst kind!
Sir Brian Hoskins: I agree, and
in the summer of 2003, for instance, in Europe there were many
deaths associated with that and there clearly will be major events
which almost definitely can be related to climate change. It is
always difficult with individual events to relate them, and in
terms of health then relating the actual increase in the number
of deaths to climate change is always a problem, but I am sure
there will be events. If we manage to limit climate change to
two degrees, there still will be events that will be extremely
serious ones, it will happen, and I think that, if we could see
a realistic scenario where we went below that, we would be recommending
that. I think where we are at this time, if I thought the world
could keep to the sort of emissions scenario we were proposing
in our Report, I would be fantastically pleased. We would hope
for more perhaps, but that is going to be incredibly difficult
to keep to what we are saying, and I think what we have is a compromise
between what is possible, just possible if we really work at it,
and what we would like in a perfect world.
Mr Kennedy: Let us say, we are
very confident in saying that the 50% global cut should be a minimum
and the 80% cut for the UK should also be the minimum. As Brian
says, in order to recommend more than a 50% global cut, you have
got to have a sense of what it is you are going to do to bring
your emissions down below 50% of current levels and how much it
is going to cost and what the impact of that is going to be of
taking you away from this two to three degrees band of temperature
change, so you get into a grey area where it is not clear how
much it will cost and it is not clear what it will achieve, so
we did not feel confident in saying that more than a 50% cut is
what we should aim for. We are certainly open to people coming
to us and saying, "We have got a plausible scenario for a
bigger than 50% cut. This is what it involves and this is what
it will achieve", and then a more ambitious target may be
appropriate.
Q6 Colin Challen: We are basically
saying to ourselves and to developing countries that we will only
go so far as we feel we can afford and we may afford a bit more
if other people can reach an agreement. Is that really sending
out the right signals about the level of risk we are expecting
other people to accept?
Sir Brian Hoskins: I have just
been to India and given a public climate change talk and I put
in the targets that the UK is specifying in its legal framework
and they were incredibly impressed that the UK, after all this
talk in the developed world, someone is actually putting this
in as legal targets to meet, and I think the crucial thing at
the moment is that the world emissions peak, and start to go down
before 2020 and that we head on in that direction. There is a
lot of work that suggests that it is the cumulative carbon dioxide
that we emit that is the real problem, so what we have got to
do is to start limiting that as soon as possible, but there is
no doubt that we will continue to monitor the science and, if
there are real indications that things are even worse than we
took into account in our Report, then we can do that adjustment
to reduce that cumulative carbon emission later on. I think that
to agonise too much at this time whether the 2050 target should
be just a little bit lower or not, the crucial thing is that we
start on that trajectory going down at that sort of rate and we
can do some adjustments afterwards, and I suspect the science
has always, over the last 20 years, tended to suggest that things
are worse than we thought they were before, so it would not be
at all surprising if we are turning the screw further later on,
but at this time, if we can really head in the direction we are
proposing, then that is a marker to the world actually of what
we are intending to do.
Q7 Colin Challen: If you say that
we can turn the screw a bit tighter later on, that is a licence
to politicians, as it were, to print credits for themselves until
the cows come home. It is giving them a green signal to say, "Okay,
the big effort comes a bit later".
Sir Brian Hoskins: No, I think
we have given them a very hard signal now and it could be made
ever harder.
Mr Kennedy: We have given them
a hard signal and there is a gap in our work, so the gap is that
we have got the path to 2023 and we have got the target in 2050,
but we have not got the path yet defined from 2023 to 2050, so
it is something we come back to in the Climate Change Act and
we fill in the gaps over the next years on that path, and we will
be recommending the fourth budget which applies to the end of
the 2020s next year.
Q8 Chairman: But the crucial thing,
even if you have a pathway beyond the 2020s, is to make sure that
enough happens before 2020 to get that peak.
Sir Brian Hoskins: Absolutely.
Mr Kennedy: Very much so, and
that is our focus in the Report we will give to Parliament either
in September or October this year when we will set out our vision
in detail of what has to happen to meet the carbon budgets.
Q9 Mark Lazarowicz: Just to be clear,
Mr Kennedy, I thought you said that could not come up with a plausible
scenario to go beyond 50%.
Mr Kennedy: I said that, in principle,
somebody could come up with a scenario. We have not come up with
one, the IEA has not come up with one or Nicholas Stern or anybody
else out there. If there were to be one, we would consider it,
and I come back to the point that our recommendations are a minimum.
Q10 Mark Lazarowicz: So you have
the expertise to be able to give us a range of scenarios if you
were asked to do that?
Mr Kennedy: We have given a range
of scenarios for meeting the very ambitious targets that we have
proposed. We have not found any scenarios to go beyond, to get
more than a 50% global cut.
Q11 Mark Lazarowicz: On the point
of the importance of cumulative emissions, does that not underline
your argument that we should really be working towards the intended
budget rather than the interim budget in the planning? That is
obviously again a matter for the Government and Parliament, but
does that not underline your argument that the more ambition at
the early stage that we can put in, the better?
Sir Brian Hoskins: The very term
we used was "intended" and that is certainly what we
thought would happen, given the global agreement, and, if it is
possible to go towards that target, then that would be more consistent
with the cumulative carbon emissions globally, and the more every
country can do, that will help.
Mr Kennedy: We are hoping to have
the intended budget in place in the next two years. If we did
not have it in place for 10 years because there was a problem
with the global deal, and we hope that does not happen, but, if
there were not a global deal and we are stuck with the interim
budget, obviously then there will be more to do in the 2020s,
but we hope we do not get into that situation.
Q12 Mark Lazarowicz: Again, I appreciate
that the decisions of what percentage to have to go for is a combination
of the scientific projections combined with the pragmatic realities
of politics, but, from what you are saying, I get the impression
that certainly the European 20% cut is very much a pragmatic political
one rather than a scientific one and that is basically what is
behind it, is it not?
Sir Brian Hoskins: The target
we have set is consistent with the European 20% and 30% for the
2020 period and the UK has to do more as its share of that.
Q13 Mark Lazarowicz: But that is
not only the scientific basis for the 20%, is it, it is the basis
of the horse-trading at the European level, is it not?
Sir Brian Hoskins: I think they
were actually designed with something in mind, though I am not
sure how definite that was, of actually contributing to this notional
trajectory towards 2050 and what the European contribution could
be, but I am sure the hope again was that it would be the 30%
one they would be going for, but that will be part of the negotiations
in Copenhagen.
Q14 Mark Lazarowicz: But the intended
budget was for a low-carbon pathway and should we just not domestically
be going on that pathway because it makes sense to do so for all
sorts of reasons?
Mr Kennedy: Well, what influenced
our thinking was that to be on the intended path in the first
budget period would involve us, for example, purchasing credits
in addition to the domestic emissions cuts through energy efficiency
and whatever else we are doing. We asked ourselves, "Is it
worth the UK purchasing credits when nobody else is stimulating
the global market at the moment?" and we did not think there
was a strong rationale for that. We think there is a strong rationale
for the UK being a participant in the global market when everybody
else is and building this market up and achieving a bigger global
emissions cut.
Q15 Dr Turner: How content is your
Committee with the way in which the Government has implemented
your recommendations so far and, if you have got any areas of
concern, can you tell us about them?
Mr Kennedy: I think we have said
that the Government has accepted our recommendations, I think
that is a first step, and we have talked about the importance
of actually meeting the budgets, achieving the emissions cuts;
I think that is where the hard work starts.
Q16 Dr Turner: There is a lot of
difference between accepting a recommendation and implementing
it. That is the area I am asking you to comment on.
Mr Kennedy: I do not think it
has been implemented at the moment, so we have got the targets
and they will be in the legislation. We have a whole set of policies
from the Climate Change Programme to the Energy White Paper, but
do those separate policies together add up to a coherent, strategic
approach to meeting carbon budgets? I think our sense is no and,
as we said in our Report in December last year, we do need a strengthening
of the policy framework in certain areas. For example, we talked
about the supplier obligation going forward and we are not sure
that that will deliver, unless it is radically reformed. We talked
about the need for a set of policies to support renewables, to
support nuclear, policies that need to be in place for coal-fired
power generation, a strategic approach to developing electric
cars in the UK. We are looking to the summer strategy which DECC
will produce in the next month or so to give us that vision, the
set of policies which will deliver the emissions reductions, and
we will provide a view on that summer strategy in the narrative
in our Report to Parliament in September/October, which will be
our vision and our strategic approach to meeting the carbon budgets.
Q17 Dr Turner: That is about as much
as an answer to that question as I can reasonably expect to hear,
I guess.
Sir Brian Hoskins: Perhaps I can
add to that that the Committee is an independent one and, there
is no doubt, we will be monitoring and monitoring very hard what
those policies are and whether they are likely to do it, and we
are eagerly waiting to do that.
Q18 Dr Turner: And you must tell
us what you think, with no reservations.
Sir Brian Hoskins: We certainly
will.
Mr Kennedy: There is a specific
response actually, so we raised the point about whether we could
allow investment in conventional coal-fired power generation over
the next 10 years with a view to retrofitting that, and we set
our position out very clearly. It could be allowed if it was on
the full expectation of a retrofit and, if CCS is not retrofitted
to conventional coal plant, then conventional coal will not generate
in the 2020s and there should be a regulation to say that. Now,
the Government has responded with its three-pillar policy which
is any new plant has to have some CCS, CCS would have to be retrofitted,
and they are talking about whether, if it were not to be retrofitted,
you would then say that a coal plant cannot generate. That is
something where we will be working with them, we will be following
their proposals as they develop and they are going to have a consultation
in the next couple of weeks on that.
Q19 Dr Turner: Do you think there
is a risk with budgets that they could end up deferring action
if it looks as if enough has been done to meet a particular budget,
so a country could just say, "We don't need to do anything
for another couple of years, chaps, desirable though it might
be because we've met the budget"? Do you think there is a
risk of that?
Mr Kennedy: Yes, I think there
is a very specific risk over the next five years. We have got
a recession at the moment and the recession will reduce emissions,
and it will reduce emissions to the point that, in principle,
you could meet the budget which is in the legislation without
doing much. That, for us, is a very dangerous situation because
we need to start improving energy efficiency and we need to start
investing in renewable electricity and the whole range of measures.
If we do not start those things now, we are not on the track to
our 2020 goal or our 2050 goal, so the way round that for us is
not just to look at emissions reductions and whether the policies
are on track for the budget, but to look a level lower and to
say that it is not just the level of emissions, it is a whole
set of things which have to happen underneath that, whether it
is investment in renewables or lofts being insulated or electric
cars on the roads, so we will have a very comprehensive framework
that looks at all of these things.
Q20 Dr Turner: Can you give us comfort
and assurance that there is no question of your recommendations
being tailored to what you know the Government might accept?
Sir Brian Hoskins: Can I, as an
independent member of the Committee, say absolutely no chance.
Dr Turner: That is very important.
Q21 Colin Challen: The Tyndall Centre
was discussed at your meeting on 20 March and clear differences
emerged, and I think the main one was their recommendation that
we should aim for the stabilisation of 450 parts per million as
soon as possible, whereas your Committee seems to suggest that
we should keep the 500 and then try and retrieve the situation
to get back down to 450 parts per million. What do you think is
wrong with the Tyndall Centre's approach?
Sir Brian Hoskins: The Tyndall
Centre has an alternative approach, but let me say what we have
done and contrast it with what they have done. We have said that
the target is a temperature target, that is what we are interested
in, and we then have looked at the problem as a transient one,
as one that develops in time, and we have gone for emissions trajectories
which may actually slightly overshoot in the level of carbon dioxide
in the atmosphere and then fall afterwards, whereas the Tyndall
Centre did not do any calculations. We did lots of calculations
and the Tyndall was based on some calculations in a paper two
years previously by someone else and what that was was actually
looking at an equilibrium level of carbon dioxide of 450 and,
when you start to think of that equilibrium, the scientific uncertainty
is far higher and it is including all sorts of slow processes
which might occur in 1,000 years' time which we cannot have confidence
in, so what we have gone for is actually the transient one where
we are actually going for a trajectory and we looked at various
trajectories which, in the carbon dioxide level, would slightly
overshoot to maybe near 500, but then decrease afterwards, so
we are not thinking about an equilibrium. In a sense, if we think
about an equilibrium, we want to return to the pre-industrial
eventually, so we do not want an equilibrium at 500/450, but we
want to actually go back to a lower level than now so that this
is a transient pulse of climate change that we are giving the
world. We have gone for doing calculations using the latest models
and we have done lots of those, and they used previous calculations
and only a few of those. They went for this equilibrium level
out there, whereas we looked at the dynamic problem and also we
included all the greenhouse gases considered separately in the
calculation. In the calculation they took account of, it was only
carbon dioxide and they tried to fold the others in, so it was
not nearly such a sophisticated calculation that they were using.
Mr Kennedy: If we come back to
your point, you have talked about the 50-50 above two degrees
or below two degrees, and actually, if you look at the temperature
distribution in the Tyndall Centre analysis, they have the same
probabilities of being above and below two degrees as we do pretty
much, so they end up in the same place, but they get there a different
way.
Q22 Colin Challen: The models that
you are using, do they fully incorporate possible feedback effects
such as ocean acidification, deforestation and so on, and how
actually do you assess those things when they are very indeterminate?
Sir Brian Hoskins: Do they include
them fully? I cannot answer honestly yes. We do not know what
we do not know. However, the climate change models at the moment,
the fully-fledged climate change models, try to include all the
processes you have mentioned, the Arctic sea ice melting, for
instance, which changes the reflection of solar radiation, the
change of the Amazon forest which would have impacts on the climate,
the fact that the soils, as the climate gets warmer, may not absorb
as much carbon dioxide. We took all those sorts of things into
account according to the current knowledge, so we took a range
of the parameters associated with all those feedbacks and that
gives the sort of probability distribution that we came up with,
so we are taking those into account at the best that current knowledge
is. One of the advantages for the Climate Change Committee is
that it was all done essentially almost in six months before the
Report was produced, so we were able to use all the science that
was around up to this time last year and nothing has really come
since which says that we did something wrong, so the feedbacks
are in those calculations as best we know them at this time.
Q23 Mr Caton: In written evidence
to this inquiry, the Institute of Mechanical Engineers has criticised
your Committee for not carrying out a rigorous and detailed analysis
of the feasibility of achieving the targets. What analysis did
the Committee make of the feasibility in terms of policy, engineering
capability, industrial capacity or the skills base available or
likely to be available in the engineering community?
Mr Kennedy: Certainly we differentiated
between what we call "technical" emissions reductions
and feasible emissions reductions in the first three budget periods.
We showed that, in our view, what is feasibly achievable is enough
to meet the carbon budgets. To give the example of energy efficiency
improvements, we know that there is a lot of opportunity and that
we have not taken that opportunity in the past. We considered
the state of the industry for energy efficiency improvement, we
considered the social research evidence base, why it is that people
are not acting in the way that we might think they should act,
and we brought those things together and gave an assessment of
what we realistically think that we can achieve. In terms of the
specifics of the engineering side of things, it is very important
to consider have we got an engineering capability to deliver,
for example, offshore wind, and investments are going to be very
important in the next 15 years, have we got the capability to
deliver nuclear investments again and CCS; there is a whole range
of things where we will need some engineering expertise. I think
we did not go into detail on that in the December Report, but
it is something we are thinking about as part of our roadmap and
vision for what has to happen to meet the carbon budgets and it
will form part of our Report to Parliament in October.
Sir Brian Hoskins: Clearly, we
had a limited period in which we could put our Report together,
but I think what we produced has then stimulated activity, for
instance, at Imperial College, where I am. There are 600 energy
engineers and there is now a programme looking at how we get to
that, essentially, zero-carbon electricity supply by 2050, and
that involves the technology, the grid, the policies and the people
to do it, and it is a huge task to see what is there, but I think
we have stimulated that and we will certainly take on board what
these sorts of groups come out with, but it is a major challenge.
We could not look at the whole feasibility, but we did an overview
of it and there are people working in greater detail on that and
that will affect the policies which we will be recommending or
looking at and seeing whether what the Government is doing is
sufficient.
Mr Kennedy: We should add that
we have got an engineer on our Committee, Julia King, who is very
aware of these kinds of issues and brings them up regularly at
committee meetings, and that is why we are focusing on them going
forward.
Q24 Mr Caton: The current annual
percentage reduction in emissions is around 2%. What is the annual
percentage reduction in emissions implicit in the budgets recommended
by your Committee and accepted by the Government?
Sir Brian Hoskins: Well, we are
looking at 80% over the 70-year period, so essentially, if we
are around that over the whole period, then we must be going at
something like the 1 or 2% per annum level, something in that
range. Clearly, at times it is much more difficult to squeeze
out than at other times and, where one can make the greater reduction,
then clearly we will.
Mr Kennedy: The average annual
emissions reduction under the intended budget is about 2.8% and,
if you draw a curve that goes from now to 2050, you can see that
that 2.8% is on the path to an equal annual percentage emissions
reduction up to 2050 which we think is probably an appropriate
path towards 2050.
Sir Brian Hoskins: I did the wrong
analysis, sorry, it is double what I said.
Q25 Mr Caton: Is that 2.8% achievable?
Mr Kennedy: Well, we think it
is and we have set out how we think it can be achieved through
a range of measures in buildings, in the power sector, in transport
and also in agriculture, which we should not forget because that
is an important area which we brought into focus in this debate.
Will we achieve it? If we think we will not achieve it, we have
to do something differently, and we have not achieved those kinds
of emissions reductions in the past. What is it that we have to
do to achieve it? We have hinted in the December Report and we
will put our views in full in the September Report and we hope
they will be consistent with the Government's summer strategy
which needs to, as I have said, give this vision, this strategic
direction and a detailed set of policy prescriptions on how we
are going to achieve our policies to achieve the cuts.
Q26 Mr Caton: What reductions do
you think we are going to see comparatively in the immediate future,
in the next couple of years or the next few years anyway?
Mr Kennedy: In the next couple
of years, well, we will see emissions reductions through energy
efficiency improvements, and we have CERTs which is the energy
company-led policy of insulating lofts and cavity walls and sending
you compact fluorescent lightbulbs through the post. That has
to change going forward, we think, and the supplier obligation
has to be much more whole house and neighbourhood based, but,
as I say, we will talk in detail about our views there. Energy
efficiency improvement is one and emissions reductions from transport,
we will see some efficiency improvement over the next years with
conventional combustion engines, we will see some investment in
renewable electricity and over the next five or 10 years we need
to make massive cuts through all of these measures, we need to
make some progress on electric cars and probably we need to feel
confident that nuclear is coming into the mix, and CCS by 2050,
we want to know whether that is going to be a big part of our
story or not.
Q27 Chairman: David, when you came
to us in February, we asked about contraction and convergence
and you said that equal per capita emissions by 2050 seemed "reasonable".
Nick Stern has suggested that close to equal per capita emissions
in 2050 would not really be fair because that does not take enough
account of the responsibility of the developed countries for the
problems that exist. Do you think that there is an argument for
saying that the scale of the contribution which developed countries
should make should actually be even greater and, therefore, the
targets and budgets that we are looking at will need to be made
even more demanding?
Mr Kennedy: I think this is really
beyond our scope as an organisation to take a view on. What we
have said was that it is very hard to imagine a situation where
the UK is above the global average, and the UK could be below,
but whether it is below is a matter of judgment and negotiation
that we have not wanted to get into, so we are aware that there
are different ways of attributing responsibilities, whether it
is historic or differentiated paths to contract and converge or
whatever. As I say, that is really beyond our scope and it needs
the kinds of judgments that we do not feel we can make as a committee.
Q28 Chairman: I cannot tempt you?
Sir Brian Hoskins: There are clearly
various arguments there and I could be persuaded by one or the
other. I think I view this again as the danger of arguing on the
head of a pin the 2050 target. The immediate thing is that we
have got to turn over these global emissions and head down that
direction and it could well be that the UK, if we really do manage
to get a zero-carbon electricity supply by 2050, a fantastic target
and, I think, an amazing opportunity if we can develop the technologies
to do that sort of thing, maybe we will say, "Yes, we can
do that", and a lot of the residual that we were saying is
going to be associated with things like agriculture at that stage,
the greenhouse gases associated with agriculture, and really we
are in only the early stages of seeing what could be got out of
agriculture, so it could well be that the UK could decide to go
below that level at that time. However, I think that, if we spend
too much time at this stage arguing about whether it is there
or there, if it is compared with where we are now, it is down
there and I suspect that, if we really are in that direction,
we might be able to do more and in helping others, but by that
stage, if we are really able to help others in the zero-carbon
electricity supply, maybe they will not need more either.
Q29 Colin Challen: I recognise it
is not really your job to enter into the political domain, but
you are, by the very nature of this task, in the political domain
and that does mean talking about burden-sharing and it does mean
talking about global agreements and our contribution now with
either intended budgets or other kinds of budgets. With that guided
philosophy of contract and converge, as Lord Turner calls it,
or contraction and convergence, how would it affect your budget-setting
process if the Waxman-Markey Bill with its fairly low interim
budgets, how would that affect our share of the burden? Would
you be happy to continue with the prognosis that you have delivered
about the next three budgets and so on if the Waxman-Markey Bill
were the basis of a global agreement?
Mr Kennedy: I do not think we
are in a position to say that at the moment in the sense that
we will have the negotiations at the end of the year and we will
see where we are in the States. Will the 30% target be triggered?
That is the first question for us and, if it were to be triggered
at the EU level, then that would trigger our intended budget.
If it were not to be triggered and there were to be an in-between
outcome which could result because of Waxman-Markey not being
ambitious enough in the eyes of Europe, would we then suggest
that our intended budget is too ambitious as a contribution to
a lower overall European effort? We have not considered that and
I do not think we can give an answer without having a full consideration
of it.
Q30 Colin Challen: Is burden-sharing
something which the Committee needs to spend some more time having
a look at? It spends a lot of time on the science and at the economics
and not the burden-sharing, yet the burden-sharing aspect is an
essential part of this stool and it will not stand up without
that third leg.
Mr Kennedy: Very much so, and
I think we were careful to say that the 2050 target is not contract
and converge, it is equal per capita emissions in 2050, and contract
and converge is about the path to the data in which you get convergence
as well, so we do need to think about the burden-sharing methodologies
and we have the opportunity to think about them. That is when
we look at the fourth budget period which we will start to look
at immediately after we give our Report to Parliament in September
or October. I do not think we can define the appropriate UK contribution
and path through the 2020s without thinking about the different
burden-sharing methodologies, so we will give it our full consideration
at that time.
Q31 Dr Turner: Given the enormous
reliance which the Government and your Committee place on the
EU ETS as a policy instrument for delivering CO2 reductions, there
seem to be some very big questions around it, notably, for instance,
the proposed cap in Phase III is supposed to deliver a cut of
21% emissions in the European power and manufacturing sector,
but if, on the other hand, the full quota of project credits is
used, the reduction of emissions within the EU could shrink to
just 7%. Does this not weaken the advice which you are giving
to the Government on budgets and is it consistent with the whole
carbon budgeting process?
Mr Kennedy: I think we should
differentiate ourselves there. You have characterised it, firstly,
that the Government has set a lot of store by the EU ETS and I
think the Government, although I cannot speak for them, I think
they do set a lot of store by the EU ETS, and we have questioned
the role of the EU ETS. We have said it is a useful tool to have
there alongside a range of other tools and what has happened since
we reported in December is that the carbon price obviously has
gone very low as a result of the recession. We are carrying out
our analysis at the moment of whether we think the carbon price
is going to bounce back and, if it does not bounce back, that
is a real problem for us because we are relying on the carbon
price to drive a lot of low-carbon investment, particularly in
the power sector. There is a real question: will the carbon price
play its role? Adair Turner has hinted at this before the Energy
and Climate Change Select Committee where he said that he thinks
that it makes a lot of sense to seriously consider underpinning
the carbon price, and what we are looking at is possibly underpinning
the carbon price, but a whole range of electricity market interventions
that are mainly required to support power sector decarbonisation,
so it is an open question for us, is the carbon market going to
play its role or not, and we are moving, I think, in the direction,
without saying what we are going to say in September/October,
where a range of interventions needs to be seriously considered
if we are not confident in the carbon price.
Q32 Dr Turner: But the carbon price
is a very significant element and underpinning it in some ways
is an issue which is increasingly discussed, but it is kind of
separate from the implication of, for instance, banking allowances
and using credits in Phase III. Just how do you take that into
account with national carbon budgets? There seems to be such a
level of unpredictability there that it potentially makes a nonsense
of the whole structure.
Mr Kennedy: I think there are
two things. One, I think you are hinting that possibly at the
European level maybe we do not need to reduce emissions because
there will be so many credits in the system. We do not think that
will be the case and we think there will be emissions reductions
needed in Europe and within the UK energy-intensive sectors. Another
way of coming at that, and maybe this is what you mean, from an
accounting perspective is how do we factor in the emissions reductions
that are from purchased credits rather than domestic emissions
reductions and, in that sense, we have the traded sector budget,
which we set out in our recommendations last December, and what
we look at there are the net emissions from the traded sector
and those net emissions are the emissions minus any EUAs that
are purchased by the UK and any CDMs that are purchased.
Q33 Dr Turner: Has the Committee
considered taking a position on the use of credits? I notice that
the Government has limited the use of offset credits for the non-traded
sector to zero, but only for the first budget period. Do you think
we ought to introduce more certainty in the whole process by yourselves
making some serious recommendations to control or to limit the
use of offset credits?
Mr Kennedy: Are you saying that
we should then change the primary legislation? I think it is the
primary legislation that requires the limit on credits to be set
only one budget ahead, so, within the parameters of the primary
legislation, they have done as much as they can. We have said
that we do not think we should use the purchase of credits to
meet the second or third budgets, except in a world where we have
got the intended target in 2020, so, if you could design the legislation
in a way to accommodate that, then our recommendation could be
fully implemented. At the moment, it cannot be.
Q34 Dr Turner: But, looking at it
from a slightly broader perspective, ultimately most of the 80%
cut by 2050 will have to come from domestic efforts, otherwise
it is just not going to be meaningful, so would it not make sense
to drastically limit the reliance on offset credits and allowances
now so that we stimulate more domestic action more urgently and
achieve a better result faster?
Mr Kennedy: I agree in the sense
that we recommended that the 34% cut in 2020, which is the basis
of the interim budget, should be achieved through domestic emissions
reductions and not the purchase of credits.
Q35 Dr Turner: So you are on the
side of the angels then.
Mr Kennedy: But, as I say, within
the current legislation, there is not a lever to actually write
that down as a formal commitment of the Government.
Q36 Dr Turner: I think we can agree
that you have identified a grey area with all sorts of serious
implications that need to be addressed.
Mr Kennedy: Whether they need
to be addressed, it is certainly something we will be very focused
on. We have to monitor the Government's progress in reducing emissions
next year and, as part of that monitoring, we will be saying,
"Is the bulk of the emissions reduction being achieved through
domestic emissions cuts?" and we will be looking at the complementary
purchase of credits and saying, "Is that appropriate or is
it too much, and is the Government shying away from the difficult
political choices to get domestic emissions cuts?" That will
be central to our narrative over the next years.
Q37 Mark Lazarowicz: Have you any
view on the way that the Government has indicated that it intends
to approach the issue of purchased credits or maybe the Government
is not putting it yet? What is your initial feeling about the
way the Government has said that it intends to approach these
credits?
Mr Kennedy: They have said that
they do not intend to purchase any credits for the first budget
period and they have not really said anything about their intentions
for the second and third budget periods.
Q38 Mark Lazarowicz: Is there a case
for a different approach for EUA credits or CDM credits because
the EUA ones obviously are a scheme which is the cap and with
the CDM ones there are more question marks, so is there a case
for having an approach between the two of them?
Mr Kennedy: In principle, it would
have been an issue, but, in practice, they cannot purchase EUAs
to meet the non-traded sector budget and they cannot do that because
of the way that the European Framework was designed, so I do not
think it is an issue for us in practice.
Q39 Colin Challen: We know that the
IPCC reports, when they are published, are already a few years
out of date because of the necessary peer review process and so
on, and it does rather beg the question of how often the Committee
should review the science and what might constitute a significant
enough development of the science for it to initiate an immediate
review?
Sir Brian Hoskins: I was very
involved in the last IPCC and I was involved in a meeting a couple
of months ago to think about the next one in terms of the science.
We have our finger on the science that is occurring through my
role and through generally the Committee having a contact there,
and we certainly are keeping an eye on any new developments in
the science and we will continue to do so. If those are suggesting
in any way that we should revise our proposed targets or our advice,
then we will certainly take that on board, and we have this continuing
process which allows us to do that and I think that is extremely
important, so I agree with you, the IPCC is assessing and it then
has a tremendous robustness because of the whole process, but
the penalty you pay is that it tends to be a little dated when
it comes out, so we are keeping our eye on the science and we
have very close relationships with the Hadley Centre here and
the other global climate centres around the world, I have personal
contacts with all of them, and we will be taking it on board,
I assure you.
Q40 Colin Challen: And that could
lead to recasting the budgets then?
Sir Brian Hoskins: If we found
that the science was telling us something new and we needed to
recast them, then we should do that.
Q41 Colin Challen: Well, some people
argue that actually there has been a lot that is new since the
IPCC Report was published, particularly on the feedback cycles.
Sir Brian Hoskins: Well, I think
this is where, as I said before, our work was really done this
time last year and the IPCC Report then was 2007 and, as you say,
most of the work that was published was in 2006, so we were really
able to take on board two more years of science which had occurred.
If you look at our Report and see the things we mentioned, I do
not think there is anything that really has come to the top of
the agenda that we did not mention there, so the melting of the
summer Arctic sea ice, yes, there is a problem and it is at the
higher end of any of the modelling, but we took that on board
in our Report, so we were cognisant of the things that have happened
since the IPCC Report and we have recognised them and that is
why we made our targets as stringent as we did, and the modelling
that we did took those on board as well.
Q42 Colin Challen: If there were
changes in the UNFCCC methodology and the way that they calculate
historic datasets at all, would that lead to your having to revise
the carbon budgets, do you think?
Sir Brian Hoskins: The historical
datasets?
Q43 Colin Challen: Yes.
Sir Brian Hoskins: I thought you
were going to be referring to the other greenhouse gases because,
if I can just mention that, one of the problems is how you actually
consider the range of greenhouse gases. We talk as if they are
all carbon dioxide and we talk in terms of the carbon dioxide
equivalent, which is how we have tended to put the final bit of
our budget, but the other greenhouse gases do behave in a different
manner and they affect the climate in a slightly different manner
as well, so the Kyoto "basket" is one way of tackling
those, but we would certainly recognise in the modelling that
we do that we have to consider them in different ways, and it
may be actually that thinking about those in different ways in
the UK might turn out to be a good thing to do. In terms of the
historical, I think we are aware of the CO2 levels in the atmosphere
now and of methane and nitrous oxide, et cetera, so we can measure
those, and I do not think we are in for any shocks in terms of
measuring what we have done to the climate system so far in terms
of the actual gases in the atmosphere. In terms of the impact
on the climate system, of course we may find that there are problems.
Q44 Mark Lazarowicz: How worried
are you, or how worried should we all be, of the fact that every
climate model seems to underestimate the situation when we look
at it again a few months or years later? Clearly, we cannot predict
what is unpredictable, but how far should this always push us
towards a precautionary approach and going for the tougher end
of emissions reductions rather than the weaker end?
Sir Brian Hoskins: Again, I am
on a different line here. Usually, I give a talk and say that
we should be aware of all these possible dangers. If there is
one criticism of climate models I have, if you double carbon dioxide,
you get this and, if you quadruple carbon dioxide, you get this,
and it is all too smooth, whereas most complex, dynamical systems
like the climate system tend to behave more in terms of plateauing
and then more abrupt changes, so yes, I think things have tended
to be moved towards the more constraining end all the time and
I think that, in going for a two-degree target or trying to keep
as close to that as possible, one is recognising that more and
more of these things are liable to kick in beyond there, and there
may indeed be surprises which are going to push us to say that
we are not going far enough. If I can mention the summer of 2003
again, that should not have happened yet. The climate models were
giving it as routine by the middle of the century, but at the
moment it occurred, it occurred partly because of the particular
weather pattern and we do not know at the moment whether that
weather pattern is liable to occur more frequently in the future,
so yes, there is a possibility that, with more understanding of
the science, we are going to be pushed to the more constraining
end and, if and when we see that, then we will take that on board
in our targets. I think that, given the direction we have started
on, it would be easy enough, and it will always be difficult,
but we could adjust to the new information and, given that we
have set out on this new direction for the UK, it would be possible
to take that on board.
Q45 Mark Lazarowicz: How far is your
modelling and your policy work generally taking account, as far
as it can, of the possibility of these types of changes in the
science, requiring greater constraining? How far are you trying
to take it on board in what you are doing?
Sir Brian Hoskins: Well, I am
on the Climate Change Committee, so I suppose that is a recognition.
Weather and climate is my thing, so that is a recognition from
Adair Turner and the organising of the Committee that they needed
someone on board who is up to what is happening on the scene.
I am there at every meeting, or try to be, and, if I find something
new, you can believe that I will be bringing that forward to the
Committee, so we have the information coming to our regular monthly
meeting and, if there is something new, then I will be bringing
that to the table or else the secretariat will have found it and
will be discussing it, so I believe we are on board and we can
very actively discuss it if there is new information which suddenly
says that we have got to do more.
Mr Kennedy: In terms of a concrete
opportunity, I have said that we will be looking at the fourth
budget period next year and, as part of that, we will take a look
again at the science. If the science tells us that we need to
be more ambitious, we will reflect that in our advice for the
fourth budget, but, if we are more ambitious in the fourth budget,
we would have to ask the question: does that mean we have to be
more ambitious in the first, second and third budgets to be consistent
with that? We will be asking ourselves those questions next year.
Q46 Mr Caton: Continuing on the problems
of climate models, has any work been done recently to reduce uncertainties
in projections, to correct against over-optimism and ensure better
peer review of the model?
Sir Brian Hoskins: There is. There
is a lot of work going on the whole time, I assure you, to actually
evaluate how models are performing compared with the real world,
compared with each other, to look at any new observations that
come in, to see whether the models are consistent with those new
observations or whether it means one should refine something or
change something. This is a living process that is going on. The
models have a firmer basis on equations of physics, Newton's laws
of motion, et cetera, so there is a very firm foundation there,
but then, when you start putting in another process like clouds,
of course there are all sorts of different ways that can be done
and all the time you could say that weather techniques are being
tried. For weather forecasting all the time in seasonal behaviour,
there is an experiment going on in the system the whole time and
this is used to confront models and say, "Are you still doing
the right thing or should we adjust the way we are doing it?"
so this is a living process which I, with other hats on, am very
involved with and it is certainly happening. I think that, when
we talk about the uncertainty, the uncertainty is much wider if
you go to this equilibrium situation that Tyndall was talking
about before and, when one talks about this transient behaviour
over this century and sort of thinking about the carbon dioxide
in the atmosphere peaking and then perhaps coming down afterwards,
the uncertainty is rather less than that partly because it involves
less understanding of how heat is diffused through the deep ocean
and things like that, so there is major uncertainty. I think that
uncertainty is much higher when you consider the regional manifestations
of what a two-degree or four-degree rise would mean, so, if you
ask me, the Indian monsoon is amazing for its lack of variation.
Plus 10% and people are flooded out, minus 10% and they cannot
grow their crops. Is that going to stay the same in a four-degree
rising temperature? Probably not, but we cannot tell you at the
moment where that would go, so I think the uncertainty comes much
more in saying, "What would that mean if I lived in India
or I lived wherever?" rather than in the globally averaged
temperature context.
Q47 Mr Caton: Recognising that there
is uncertainty, as you do, is that addressed in the policy framework
at this stage or can it be addressed in the policy framework?
Sir Brian Hoskins: It is extremely
difficult to do so, but I suppose that comes in in our twin targets
of trying to keep the 50-50 level near two degrees and saying
that the four-degree world is one where we believe many of those
things, such as the Indian monsoon or whatever, might make life
untenable in certain regions of this earth, so it is taken on
board when we set the criteria we set, and that is very much guided
by people like me, saying, when I look at the climate system,
that I can see that there are going to be real fault lines in
that system as we get into that sort of world.
Q48 Mr Caton: To what extent is your
Committee dependent on emissions projections from the Department
for Energy and Climate Change model in delivering your advice
on carbon budgets and on the balance to be achieved between the
traded and non-traded sectors?
Mr Kennedy: Certainly we draw
on their model, so in the December Report we had, what we call,
a "referenced" emissions projection and then we had
the budget and the difference between those two was the emissions
reductions we need to achieve. It was not the only thing we used.
We did two things. First of all, it was a bit of a black box,
the DECC energy model, so we brought in some consultants, Oxford
Economics, to review that model and they said that it is largely
fit for purpose, but they recommended a few changes and those
changes were implemented. We also hired some consultants to develop
alternative emissions projections for us which we could use as
a benchmark against which to compare the DECC model, and that
was a Cambridge Econometrics' set of projections that we used.
They are reasonably close. The Cambridge Econometrics' projections
are a bit higher than the DECC emissions projections, so, if you
believe them, there is more emissions reduction required to get
to the budgets that we have proposed. There is a great deal of
uncertainty in emissions projections modelling, as you know.
Q49 Colin Challen: How confident
are you with the integrity of our carbon accounting systems? It
seems that much of this is just based on estimates, for example,
the input of fossil fuels rather than a measured output from a
chimney stack or the problem that aviation presents relating to
pulsing. There is a whole range of things here, so is carbon accounting
sufficiently accurate for us to actually make sensible decisions?
Mr Kennedy: I think we are reasonably
confident for things like power generation and the way that we
measure those emissions for our inventory. I think where we raised
the question in the December Report was in the non-CO2 emissions
where we are lot less certain, for example, about methane emissions
in agriculture and it may turn out to be the case that some of
the non-CO2 emissions are lower or higher than we currently think
and, if that were the case, then either we would have to reduce
emissions more than we currently think or less, depending on whether
they were higher or lower. If you look at the range of uncertainty
there, we do have estimates of the range of uncertainty and our
view was that it is manageable, so, if there were to be a revision
of the way we count these non-CO2 gases, then we could accommodate
that within the budget framework.
Sir Brian Hoskins: Can I just
pick up on aviation, which you mentioned. It is very difficult
to count, at the moment, in a single number, what is the impact
of aviation. You have the carbon dioxide that is going to perturb
the carbon in the atmosphere for the next few hundred years and
you have a contrail that may live for an hour, and actually putting
those two together is really stretching the science in terms of
actually finding metrics to really understand what that behaviour
is. Indeed, there is still no understanding—or the understanding
is at a very low level—of what the impact of aviation is
on the cloud in the upper atmosphere—so not the contrails
themselves but the cirrus cloud impact of aviation. So this is
a very live issue. The actual metric for something like aviation—you
know how much aviation fuel is used but then getting a metric
for the other impacts is the subject of current research.
Mr Kennedy: That is something
we are going to come back to in the report that we do on aviation
in December. So we will ask the question: if you think the radiating
force factor is one for aviation, would it be sensible to add
the incremented capacity at Heathrow; if you believe it is two,
would you still want to add that? So we will set the range of
scenarios across the estimates of what people think the forcing
factor might be.
Q50 Colin Challen: The net carbon
account. What would you think would be the width of the error
band deviated from the central case? Is it 5%, 10% in either direction—15,
20? Could you put a figure on it? This is a very serious question.
Mr Kennedy: It is a serious question.
The Clerk of the Committee said, actually, we are allowed to come
back after the event with answers to very difficult technical
questions, and I think I would place that one in that category,
and one we can come back to you with a band of uncertainty.
Sir Brian Hoskins: Could I say,
globally, I think, the gleam in the eye is that within a few years,
perhaps, from satellite measurements, from in-situ measurements
and from modelling, one may be able to invert and actually find
out remotely what are the emissions from each country. In the
end, that sort of policing might be required for a global view.
Q51 Colin Challen: This line of questioning,
obviously, would lead to the validity and the equivalence of offsets
and carbon credits, if they are sought from countries which do
not have the level of technical expertise that we do. Do you discount
at all any of those credits for that reason in the calculations
that you make?
Mr Kennedy: Our position on credits
was—let us turn it round; because in 2050 we have to reduce
emissions domestically then our budgets are dominated by domestic
emissions reductions. We did not see an issue in complementing
those emissions reductions with the purchase of EUAs. We did not
see a problem with, at the margins, the purchase of CDM. We know
there are debates about the certainty of credits where you do
not have a cap against which you can issue those. It is not something
we have really got into and I think our view is that, probably,
there may be a need to strengthen the framework for issuing CDM,
and as far as we understand the UN is working on developing that
kind of framework and it is something for the Copenhagen discussions,
I think, to develop project-based type mechanisms.
Q52 Joan Walley: Can I pick up on
what Colin Challen raised in respect of carbon accounting. In
view of what you said, Sir Brian, about aviation and about looking
at new ways of being able to assess from satellites and so on,
can I just ask you how the policy of the Climate Change Committee
then gets translated into policy on the ground in respect of infrastructure
projects? If there is so much uncertainty or still so much knowledge
that we do not yet have to translate into the accounting of the
budgets, how do you then, from the Climate Change Committee, advise
governments about the factors which need to be taken into account
when government is appraising, using Treasury rules etc, the long-term
climate impact of, for example, expansion at Heathrow? How do
you translate that into policy on the ground?
Sir Brian Hoskins: Let me start
then with the Heathrow link. We are looking at aviation and we
will be reporting in December in terms of keeping the UK aviation
emissions or impact on climate at, certainly, not higher levels
than currently. I think we can act as a conduit for the best current
scientific knowledge to say how one should assess something like
aviation, and then we can look at the implications of that assessment
on the budgets. I do not know if you would like to take it from
there.
Mr Kennedy: In referring to the
kind of rules for appraisal of projects you are talking about
the social cost of carbon that they use—
Q53 Joan Walley: And, also, about
the basis on which planning decisions are being made right now,
not having that clear, long-term information. Could what you do
lead to changes in assumptions that would lead to a policy change
on the ground?
Sir Brian Hoskins: We would hope
so, yes. When we have come to a clear view of aviation, for instance,
that should have an impact on policy and what happens on the ground.
Q54 Joan Walley: With due respect,
is that not going to be too late for decisions about Heathrow
at the moment?
Mr Kennedy: There is that specific
point. Our view of what has to happen (and this will be investments
across all of the sectors) we will publish in—I keep saying
"September or October" but the law says we have to do
it in September, but we cannot give a report to Parliament when
you are not here, so it may be when you come back on 12 October)—and
that will have a detailed set of investments, and it is not too
late to lay those out in October with a view to those being taken
forward over the next five and 10 years. On the specifics of Heathrow,
first of all, we do not know what we are going to say about Heathrow;
we are now in the middle of doing analysis. Is it too late for
what we say to feed into the discussion in December? I would not
have thought so, but there is a lot of politics involved, which
is, again, not for us.
Q55 Mr Caton: To calculate progress
on meeting UK carbon budgets, the Government intends simply to
count the trading sectors' allocation of allowances rather than
its actual emissions. This has been criticised by environmental
groups because it provides no incentives for driving emissions
below the cap given within the ETS. Do you have a view on that?
Mr Kennedy: We do, and I think
we were very clear in December in saying that we cannot just say:
"This is a black box we have got to cap and so we do not
care what happens in the energy-intensive sectors and, in particular,
in the power sector." What we said is a certain set of things
have to happen to make us confident we are on track to decarbonising
the economy on the path to 2050. Going forward, we will not just
look at the ETS path and say: "Well, actually we cannot ever
miss the budget for the traded sector", because by definition
it is a cap set so we will be looking a lot deeper than that;
we will be saying: "Is there enough renewables stuff being
proposed into the planning process? Is it coming out on time?
Is construction starting? Are the renewables coming on the system?
Are the investments going into transmission? What is happening
with nuclear? What is happening with CCS?" So our focus will
be all of the things that drive the emissions reductions, which
I think the critics of this way of accounting are very interested
in seeing happen.
Q56 Mr Caton: Would you like to see
the Government shifting away from just using the allocation of
allowances?
Mr Kennedy: It is not a key issue
for us to have a discussion about the way of accounting; the key
issue for us is that these things have to happen and that the
monitoring framework has to include a very sharp focus on what
is it that is happening on the ground in terms of investments.
We will make sure that is part of the monitoring framework.
Q57 Chairman: Progress in Britain
towards a 20% cut by 2010 has been disappointing. Are you pretty
optimistic that we are going to do better by 2020?
Sir Brian Hoskins: We have to
remain optimistic. I would never have guessed a couple of years
ago that the UK would have these targets—so fantastic. I
remain optimistic that once we start thinking about those we will
see the amazing opportunities that this new technology is going
to get us and put the UK in the right position. So if we are always
treating this as a: "God, we're being held down to this;
this is too much", I think it really will be a struggle.
If we could just turn the corner and see the opportunity, I think
we might actually quite enjoy it.
Mr Kennedy: If you look at the
social research, there are grounds for optimism in the sense that
people understand that there is an issue with climate change and
they would like to do something about it, but they do not really
know what they can do. If you put that together with the fact
that there is a range of things that we can do over the next five,
10 and 15 years that are not bad, in terms of quality of life—so
energy efficiency improvement saves you money and reduces emissions;
a lot of people would not go and buy an electric car now but in
five or 10 years' time it will be as good to drive an electric
car as a conventional car. The power generation story. Again,
if we are serious about this and if we get the policies in place
this summer we can really make some progress on increasing renewable
electricity. So I think there are grounds for optimism. It is
going to take leadership from government, and it is a social transformation
we need. We have been successful in social transformations in
the past, whether it is attitudes to drink/driving or smoking
in pubs; there are positive examples from the past and I think
it is all to play for. The summer strategy is, for us, key and
we will be looking at what are the range of measures in there?
Sir Brian Hoskins: I can look
at two previous situations: the Clean Air Act, which was remarkable
and a great turnaround, and it was not easy—we do not know
what a fog is these days—and the Montreal Protocol; again,
a superb example of where the problem emerged, the science said:
"This is what the problem is", and because industry
saw an opportunity—the substitutes for CFCs, there was a
new market here and something new to do—it all fell into
place. In fact, the Montreal Protocol has actually done more for
helping the mitigation of climate change than Kyoto. So the Montreal
Protocol was fantastic; we have done it before, it was easier
but I think there are examples and this one we can do as well.
Q58 Chairman: Those are all very
fair points, I think we would accept. We just felt that in the
past the Government has not been very accurate in predicting the
impact of its climate change policy and we have identified what
we call "optimism bias" in some of their future projections.
There we are. We have covered a lot of ground this morning and
we are very grateful to you. We are running out of time, as we
have another witness, but I am sure we will be wanting to talk
to you again. I should have said at the beginning, incidentally,
and I am sure it is the view of the whole Committee, that we are
delighted that the Committee on Climate Change exists and are
very encouraged by work you have done so far. I think the reports
have been extremely helpful and to the point, and you have our
complete support in all that, and we look forward to a continuing
dialogue.
Sir Brian Hoskins: Thank you very
much indeed.
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