Session 2009-10
Publications on the internet

To be published as HC 446

House of COMMONS





Wednesday 10 March 2010


Evidence heard in Public Questions 1 - 70



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Oral Evidence

Taken before the Environmental Audit Committee

on Wednesday 10 March 2010

Members present

Mr Tim Yeo, in the Chair

Colin Challen

Martin Horwood

Mark Lazarowicz

Dr Desmond Turner

Joan Walley


Witnesses: Rt Hon Edward Miliband MP, Secretary of State for Energy and Climate Change, Mr Peter Betts, Director of International Climate Change, and Ms Jan Thompson, Head of Negotiations, Department of Energy and Climate Change, Department for Energy and Climate Change, gave evidence.

Q1 Chair: Secretary of State, a very warm welcome to this Committee. As you know, we regard you as an ally in Government and have warmly welcomed a great deal of what you have done over the last 18 months. For that reason, apparently we are breaking the rules by letting you have your coffee in here. Previously only the Prime Minister has been allowed to have a cup of coffee in the course of a select committee hearing by special dispensation. Thank you very much for making time to see us. It is obviously a sort of valedictory on our side as well as perhaps on yours. I was assuming you were going on to a bigger job after the election. It is very useful for us to have a bit of a stock take after Copenhagen, after this outbreak of renewed scepticism in the light of one or two perhaps exaggerated scientific claims about the pace of change, and so on. Could I start by asking specifically about Copenhagen and whether you regarded the outcome in the end as a setback or a success? What was your evaluation of it?

Edward Miliband: Thank you very much, Chair. At the outset let me reciprocate the compliments because you personally and, indeed, your Committee plays a very important role. The House of Commons and, indeed, legislators, including people on this Committee, played a very important role in pushing people in the right direction before Copenhagen, so I want to thank you for that. I have with me Peter Betts, Director of International Climate Change, and Jan Thompson, who is the head of our negotiations. I call them in shorthand the Two Degrees as a way of making it easy for us. Let me say a couple of things in response to your opening question. In the end, I think the verdict on Copenhagen is that it was a mixed bag and that is the best way of putting it. It was definitely disappointing in two particular respects. First of all in the respect that we did not get the track to the legal treaty that we set out to get, and that was a disappointment. We will perhaps come on to some of the reasons for that and what needs to be done. Second, it was disappointing in that at the time of Copenhagen, at the time the talks finished, we did not have the commitments that had been made by countries registered in the Copenhagen Accord so it was very hard to tell what kind of commitments had been made. It is worth saying that since the Copenhagen talks concluded we now have 107 countries that have associated with the Accord, 72 countries have actually put targets or actions into the Accord, and that covers about 80 per cent of global emissions, which is much more than any previous agreement did. Yesterday, coincidentally, China and India formally associated with the Accord. They had not done so before even though they had put their targets into the Accord. There are gains to build on. It is also worth saying that the Accord itself has really important steps forward on finance, on the commitment to 2˚C, on monitoring, reporting and verification. It is a mixed bag. The other thing I would say to finish this opening is that all of these kinds of endeavours find it hard to succeed at the first time of asking and in a way realistically we made a significant amount of progress which we should be pleased about. We have a long way to go to get the kind of binding legal agreement that I think we need, but I do not think we should be discouraged, frankly, because if a year or two ago you had said that we would have China, India, South Korea and Mexico as well as Europe and the United States in an agreement with targets we would have thought that was a reasonable outcome.

Q2 Chair: Yes. We will come back to the Accord a little later on. Notwithstanding what you have said about China and India, and, of course, there is a lot happening in those countries both in terms of on the ground and shifting policy attitudes, was it their resistance that really blocked the opportunity to get a commitment to a global emissions cut of 50 per cent?

Edward Miliband: They were two of the countries that were very sceptical about this and about the 50 per cent by 2050 target. The reason for their scepticism goes to the heart of the challenge for these negotiations both before Copenhagen and after, frankly, which is the amount of carbon space that is available. The argument shall be familiar to you about the fact that developed countries have, in a sense, caused this problem, and this is true, but as you look forward the growth in emissions comes mainly from developing countries. It is that paradox that the negotiations are trying to resolve. Their worry about a 50 per cent commitment is that unless it is clear what developed countries are signing up to, and developed countries have offered 80 per cent as their commitment, but I think for China, India and others that is probably not seen as enough and will restrict their growth and development too much, and unless they are clear about the carbon space available to them they do not want to sign up to that long-term target. That was one of the barriers that we faced, yes.

Q3 Chair: Just on the developed country target of 80 per cent, which you have just referred to, there are two alternatives here. Is there resistance to that because they think the existing developed countries should be committed to a bigger target or is it more they are nervous that quite soon they will be in the developed country bloc and, therefore, they will then be subject to rather a tough target?

Edward Miliband: I think it may be a bit of the latter and a bit of the former in truth. In the particular moment of the negotiations, and I think this has been relatively widely reported, just to back up a bit, part of the problem these negotiations faced was that previous negotiations at Kyoto and Bali only succeeded really because we ended up with a small group having negotiations over a new text that had been tabled. That only happened at Copenhagen on Friday at three o’clock in the morning, which was rather late in the day to put it mildly. The presence of the leaders at Copenhagen meant that we had a very hard deadline of essentially the end of Friday. Anyway, on the Friday there were discussions about whether we could say developed countries would do 80 per cent in the text of the Copenhagen Accord and there was resistance from some countries. Probably the truth is it is a combination of the two things that you asked about, one that they might become developed countries at some point but, secondly, what did it mean for the overall carbon space.

Q4 Chair: You have just described some of the problems in the negotiations themselves, and certainly those of us who even were in Copenhagen on the periphery, as a number of Members of the Committee were, were conscious of the sort of broadly chaotic atmosphere. I thought there was a certain amount of diverting attention away from the main issue on to various aid related lobbies, important in their own right but slightly muddying the clarity of what was going on. Do you think that we need to have different or better machinery if we are going to get really meaningful binding agreements?

Edward Miliband: We must avoid a repeat of Copenhagen. This is no reflection on the Danes as the hosts. I was very frustrated because I felt it was bogged down in procedural argument. On the discussions in particular about how much were developed countries willing to put into the agreement, how much were developing countries willing to put into the agreement in terms of their actions and could we find a pathway to a legal treaty, there were deeply entrenched issues around that, as we have touched on, but also we were frankly timed out. I do have to say this. The leaders met between midnight and 3am under the chairmanship of Prime Minister Rasmussen. They all went to bed. As sherpas, we then met for four or five hours between 3am and 8am and, frankly, we did not get beyond the introduction because of the argument that was going on. The only reason we got the Copenhagen Accord was I spoke to the Prime Minister, I think it must have been at about six or 6.30, and said, "This is going nowhere", and he was he who said, "Look, the only way we are going to get the Accord is if we go in and negotiate line-by-line", which was something that had not happened in the past. That was why we got to what we got to. That was inevitably a very imperfect process because you had very little time to negotiate and, therefore, it was very hard to try to bridge difficult issues like can we find a path to a legal treaty or can we try to accommodate different countries’ worries about carbon space, and so on. We must avoid that happening again and I think that partly must involve reforms of the UNFCCC and various other things.

Q5 Chair: Do you think that a body like the Major Economies Forum, notwithstanding its provenance but as a practical matter, since it speaks for such a big proportion of emissions, might have a larger role in the future? If those countries agree, not only are they the main emitters, they are also probably the main suppliers of capital to developing countries as well. Would that be a helpful way to try to proceed in future?

Edward Miliband: I am not sure it would. The one reflection I have on the year is that the distance between the Major Economies Forum and the UNFCCC negotiations was too wide. The major emitters met every month or so during the course of 2009, but the UNFCCC negotiations were a bit of a parallel universe. I actually think what would be more fruitful, and I think the Mexicans, the hosts this year, are thinking about this, is can we convene a more representative group, a sort of friends of the chair, as it has been called it in the past, to take forward the discussions. You cannot do it with 192 but maybe you can do it with a smaller group. Do you want to add anything about that because you have obviously had experience of this for some years back?

Mr Betts: I guess the very big players will not see it as in their interests to reach an agreement in a body like the MEF, they would much rather be part of a broader UN context. I do not think you will get them to reach an agreement in that forum.

Edward Miliband: You do need a smaller group, Chair, you are completely right about that. You cannot leave it just to the 192 because it is not going to work like that.

Q6 Martin Horwood: There have been some more concrete suggestions as to what form that might take. Crispin Tickell has suggested something that might be equivalent to the WTO. I rather like the suggestion that you could have a Climate Security Council which is almost in parallel to the Security Council and which could have, for instance, one representative from the island nations, one from those most threatened by climate change and so on. Is the British Government edging towards supporting any of those models or, if not, are there any other models for a practical mechanism because surely we need to get on with this quite fast?

Edward Miliband: This is really very interesting. What people do not realise is that the group that negotiated the Copenhagen Accord was about 30 countries and they were basically modelled on the basis that you have just set out. The Danes went to each of the regional groups and said, "Nominate a couple of countries to serve on this group". Partly because the period of time was so truncated it was very difficult to move from that group of 30 into the wider UNFCCC. Landing the Copenhagen Accord in that wider group, as we tried to do on the Saturday, turned out to be very tricky indeed. Yes, you need a smaller group and it needs to be representative but I think it needs to meet earlier on in the year to start the process going while always referring back to the UNFCCC.

Q7 Martin Horwood: I think the key thing about the suggestion for a WTO-style model or a Climate Security Council is they would be permanently in session, they would not be brought into play just before a summit, they would be something that existed, as the Security Council does, on an ongoing basis.

Edward Miliband: I am not sure what the Security Council concept would mean in this context, it might be difficult. Basically I agree with you about needing to have a more permanent style of negotiations, although you do need countries to go and check back with their host country obviously. To be fair, I do not think in the end the problem with the negotiations was there was not enough time during the two years, it was just that there were lots of difficult issues which were not overcome. Partly that goes to the Chair’s question. I think it was harder to overcome those in a group of 192 and I also think it was harder to overcome them because there needed probably to be more political ownership of those UN negotiations. It probably needed more of a role for ministers than they had.

Q8 Joan Walley: The Committee was at Copenhagen for some of the time and, as you just said, the talks did break down on a couple of occasions. I wonder what impact you think this had on the mood of the conference, given that the conference was about the actual negotiators and all the people who were represented from all the countries but also the many other people who attended the conference as well.

Edward Miliband: The mood was pretty bad for most of it. I think that goes without saying maybe. It was a very difficult negotiation. Partly it did reflect a history of some mistrust between countries. What I found most frustrating of all was that we were having arguments about the arguments, or rather how to have the arguments. We were having shape of the table arguments rather than, "Let’s have a discussion about the difficult issues and how we can overcome them".

Q9 Joan Walley: Can I just say to you, given that on the whole environmental agenda there is a recognition that prevention is the best way of dealing with any environmental problem, how do you think with what you just said about the lack of trust that there could be a prevention of that lack of trust, if you like, incorporated into the way in which the procedure for negotiations from the UN down is all set up? Do you see what I am saying? If you think that the lack of trust at the conference itself was a real obstacle, should that not be something which is worked at relentlessly with leadership on bilateral, multilateral arrangements, vertically and horizontally, and with the NGOs?

Edward Miliband: Yes, although I think it is easier said than done. I think one of the positive things to come out of Copenhagen was that there were less conventional alliances than you might have expected. For example, I think Prime Minister Meles of Ethiopia and President Nasheed of the Maldives both played a very positive role. They are among the biggest persuaders for a legal framework encompassing all countries. In a way, what I think is more positive and encouraging, and we tried to do some of this in Copenhagen, is that it cannot simply be developed versus developing countries, we have to try and form new alliances and find new ways round some of the issues that we face. Some of that comes in the formal negotiations and some of it comes outside and that is partly what we are seeking to do.

Q10 Joan Walley: I am really interesting in exploring with you what those informal negotiations might look like. I know, for example, the President of the Maldives was very vocal in making alliances here in Parliament before the conference took place in Copenhagen. Do you think that with organisations like the CPA and other organisations that are there for parliamentarians that parliamentarians have a role in all of this as well as government ministers?

Edward Miliband: I think parliamentarians have a big role in this and played a big role in getting the progress that we did see in Copenhagen. This was what was frustrating about the negotiations themselves. Part of this is a process of breaking down some of the misperceptions there might be. For example, why are some developing countries worried about the notion that they might be part of a legal treaty, they might have binding targets? They might be thinking, "We’re trying to have imposed on us binding reductions", but at the moment that is not what we are talking about. They might think that there is going to be some kind of harsh penalty regime if they do not meet the actions that they are setting out. Part of the thing that we tried to do during 2009 - obviously not as successfully as we would have hoped - was to try and break down some of those misperceptions. At root we must not lose sight of the fact or be too dewy-eyed about the fact that there are very difficult issues here about how countries run their economies and what it is going to mean for the amount of carbon that they can use up. If they were easy or trivial issues that countries were facing we would not have had the difficulties we had at Copenhagen. There are deep-seated and very difficult issues to overcome about equity and justice here. Fundamentally, that was why Copenhagen was hard.

Q11 Joan Walley: We may come on to this later but can I just ask you: mediation was one of the key messages that I got at Copenhagen, that there was a real role for fully trained mediators on a scale that we have not got the expertise available internationally at this stage. Would you agree with that?

Edward Miliband: I certainly think all possibilities are worth looking at. One of the things that needs to be thought about, and there is an opportunity now to do that because the UNFCCC Secretary General is thinking about what role it plays in the future, how the role of the Director General is constituted and what status that post has, is how it can help facilitate the negotiations more perhaps than it did. It is very hard for a host country, frankly. The notion of a host country is fine, but it is very hard for a host country, which has not got long experience of these negotiations, to suddenly be in the pivotal role and frankly treading through some very difficult situations to try and overcome differences between countries. I think a stronger UNFCCC, no doubt with the right experts, is part of the answer.

Q12 Joan Walley: How would you characterise the role of the NGOs?

Edward Miliband: I think by and large the role of the NGOs is positive because in my experience they were pushing developed countries forward. Sometimes the links in a developing world that the NGOs have are not as strong as they might be, and having pressure not just on developed countries but developing countries is important.

Q13 Joan Walley: My last question: should the question of what was a safe limit for any rise in temperature have been reopened in Copenhagen?

Edward Miliband: As in two 2˚C versus 1½˚C, you mean?

Q14 Joan Walley: Whatever, yes.

Edward Miliband: I think it is good that we got 2½˚C into the Copenhagen Accord. The Accord does say that this needs to be kept under review and we need to look in the future at what the right level is. Frankly, 2˚C is hard to do, as this Committee knows more than any other, but it is very good that benchmark was set in the Accord.

Q15 Mark Lazarowicz: One of the issues which caused difficulty at Copenhagen was the question of monitoring and verification and particularly between the USA and China that was an issue. Do you think that what was finally agreed at Copenhagen with regard to monitoring, verification and reporting of emissions was adequate and, if not, what more do we need to do now?

Edward Miliband: I think what was agreed on MRV is a very important start. It does get us towards the kind of assurance we need that countries are not just going to make commitments but those commitments are going to be kept to. Peter, do you want to add anything on the MRV side?

Mr Betts: I think that was one of the biggest steps forward that we secured at Copenhagen, for the first time developing countries agreeing some kind of international process, not just on the actions for which they get funding from developed countries but also on the actions they take unsupported at home. Clearly we are going to need to put some flesh on the bones of those provisions over the next year, but it was a big step forward.

Q16 Mark Lazarowicz: I think the actual phrase was "domestic measuring with transparent reporting". How do we get transparency?

Mr Betts: The Accord provides for an international process of analysis and consultation on unsupported actions, so we are going to have to work hard over this year to try to pin down what that means.

Edward Miliband: It is also worth adding that there are these so-called "national communications" that all countries are required to do, but developing countries had much looser requirements. They have now agreed to make these national communications every two years to the UNFCCC and that will help with the process of monitoring what countries are doing.

Q17 Mark Lazarowicz: It only has been a few months but how far have we got with the process which Mr Betts referred to?

Mr Betts: The first international meeting of the UNFCCC will not take place until next month and that is when we will try to agree a work programme for this year. We are trying to promote some offline working on some of these difficult issues with groups of developed and developing countries as well.

Q18 Martin Horwood: Was China the problem with verification?

Edward Miliband: I think China was very worried about what they would see as sovereignty issues in relation to MRV and what it might mean. Again, I think it goes to a wider anxiety they have, and it is really important to understand this, around their growth and development and the extent to which they are going to be told what to do, they are going to be constrained from doing what they need to do to take people out of poverty. It is bridging that gap or that divide between the anxiety of developing countries that they need to grow and develop and the need for the world for them to not grow in a high carbon way that in a way lies at the heart of these negotiations. I think they did have anxieties about MRV and the language that was eventually negotiated was obviously a crafted set of language, but I do think it represented a move forward and was negotiated in the end between President Obama and Prime Minister Wen.

Q19 Martin Horwood: There are other countries that have got similar social and economic issues, like India, which is, of course, a democracy. Is it just more of a problem that China is not and, therefore, are very reluctant to have anyone coming in and verifying?

Edward Miliband: To be fair to the Chinese, it is important not to misunderstand their anxiety on MRV because I think they are going to do what they say they are going to do. They have got a 15 per cent renewable energy target and they are pretty confident that they are going to meet it. The Chinese State does tend to meet the targets that it sets. I think some people in the US Congress would say, "Is it that China is not going to meet what it says and that’s why they are worried about MRV", but I think it is more to do with - this goes back to the Convention and to Kyoto - this bright line that they see between developed countries on the one hand who have obligations to cut their emissions and developing countries on the other who they believe should have voluntary commitments. If I can put it in this way: the MRV issue was part of that wider argument. India and other countries would have that same wider argument. They may have been less concerned about the MRV question, but it goes to that issue in the negotiations.

Q20 Mark Lazarowicz: Turning to another development which was maybe more in the background than the forefront of some of the negotiations leading up to Copenhagen, which was the issue of Climategate and some of the criticisms of the IPCC process as well, how far did you think it had an effect on the negotiations either directly or indirectly in your view?

Edward Miliband: I think it had very little if not any effect. To my knowledge, the only country representative who made any comment about Climategate undermining the science was the Saudi negotiator. He assured me that they had been misquoted by the BBC and, indeed, the minister assured me that they absolutely signed up to the fact that climate change was real and was happening and was an issue that needed to be tackled. I do not think it affected the negotiations.

Q21 Mark Lazarowicz: That is perhaps reassuring in terms of the effect of that debate, but it has certainly been suggested that some way needs to be found to bring at least some of the climate sceptics a bit more closely into the IPCC process and so on. Is there any merit in doing that or is that wishful thinking in terms of trying to persuade the unpersuadable?

Edward Miliband: Let me put it this way: I am obviously concerned by some of the issues that have arisen in relation to parts of the IPCC literature. It is particularly Volume 2 of the Fourth Assessment Report. I think later today the IPCC is going to be announcing how it plans to handle those issues and having an examination of what can be done about its practices to improve the assurance that we can give people. I would not quite put it the way that you put it in your question, but I would say that the people who think that climate change is real and is happening need to be the most zealous about uncovering errors, making data available, being open about that data, listening to all voices because I think we have nothing to fear from being open about the science, to be honest.

Q22 Colin Challen: I was just wondering how concerned you might be that the Copenhagen Accord represents a kind of plateau which, to mix metaphors, will have a chilling effect on further progress? It seems to me that we are going to spend a lot of time now trying to implement the Copenhagen Accord and yet most analysis shows that even on the most optimistic estimate it probably would not contain a temperature increase to 2˚C, it would be more like 4˚C, so it is not really the right plateau to be on, but it is going to have that chilling effect because we are going to have to spend a lot of time working out what it means.

Edward Miliband: I do not want to come across as the defender of everything that happened at Copenhagen, far from it, because there were lots of disappointments, but there is a bit too much gloom and doom around. There are different analyses that I would be happy to supply to the Committee about what the pledges in the Copenhagen Accord might mean. Our analysis, if you could get to the high end of the pledges that countries have made, suggests we would be about 48 gigatons in 2020 and would be peaking global emissions in 2020. That is not quite as much as someone like Nick Stern said, he said we needed to be in the mid-40s or at 44 gigatons, but it is definitely an important start and step forward to be able to peak global emissions by 2020 because it is, after all, the objective we set out in our Copenhagen manifesto last June. There are different estimates from different countries and there are questions about various technical aspects of emissions. I do not think it is as negative as is implied by your question, but I would say that we need to build on the Copenhagen Accord, we need to try to push to higher commitments from countries, that is important, and we need to make sure that countries make good on their commitments. I would make just one other point, which is there is $100 billion that has been as an objective for finance for 2020. Some of the commitments in Copenhagen rely on some finance being made available, but if we can make good on that finance I think there is a prospect of doing more than is contained in the 48 gigaton estimate that I have provided. It is a really important start but we need to build on it.

Q23 Colin Challen: What is it about the Copenhagen Accord which could actually make it successful? What characterises it in that way when previous things like the Kyoto Protocol were not very good at all? I know that was the first step, but most countries only achieved their targets where they did by some other factor which was not related to a policy instrument tackling climate change. The Copenhagen Accord does not seem to have the teeth to get to the level of its ambition.

Edward Miliband: There is a much wider issue about the teeth of any legal agreement. The thing I would say to you is what we need to do now is to put into operation the things that have been agreed in the Copenhagen Accord, like finance for developing countries, fast-start finance, we need to get that money moving, and we need to work towards a legal treaty, or treaties, in the UN negotiations because the two tracks of the UN negotiations, the Kyoto Protocol track and a long-term cooperative track, are still going and need to conclude as soon as they can and have a legal framework. There is a much wider question for the world about what happens when countries do not meet their targets. There is no easy answer in truth to this question. There is a compliance regime in Kyoto that has not had to come into operation yet. I think the best assurance that we have is getting towards a legal treaty, although that is not a full answer on compliance. The one other point I would make is I think this is different from the World Trade talks in the following sense: countries have an interest in getting ahead in this low carbon race and it is different from trade where the incentives to lower your trade barriers are less one-sided, if you like. Countries have an incentive to move on low carbon. Britain should move ahead as fast as it can in relation to this because there are big first mover advantages. The truth is that while the Copenhagen Accord made some steps forward, and that is important, what is also important is that countries are getting on with it as well in terms of the transition to low carbon and that should give us encouragement.

Q24 Colin Challen: Certainly there is a lot of action taking place and we could mention the United States as one example of a country where, despite its absence from Kyoto, if you like, nevertheless on the ground you will find a lot of investment in wind, renewables and so on. In terms of obtaining the legal status for this or any other treaty, is not the United States an insoluble problem because even if they get their Act, which may be somewhat watered down even on the Waxman Markey Bill, it is politically impossible for the United States to sign up to an internationally legally binding treaty because the threshold, in a sense, is too high. They may want to say, "Yes, we will do some of things", but we will not get the legal regime and if we do not get the legal regime you are going to have probably a lot of carbon leakage, all sorts of problems with monitoring, verification and so on.

Edward Miliband: Obviously I do not speak for the United States administration. I am going to be seeing the negotiator, Todd Stern, tomorrow who is going to be in London. I will tell you what they tell me, which is they are happy to be part of a legal treaty and for the administration to pursue a legal treaty but they would want to know that all other countries were in it too. Part of the divide that we have to bridge in these negotiations is finding a way of ensuring that we can both have common but differentiated responsibilities, ie that developed countries cut their emissions and developing countries at the moment simply take action to limit the growth in their emissions, but the commitments they make are similarly binding for all countries. That is a problem for some developing countries that we need to find a way round. It is part of the view of the United States, and I am very sympathetic to this, that if we are going to have a legal framework for the future it does need to involve all countries. They do not say to me that it is impossible to get a legal treaty in the US.

Q25 Colin Challen: Is it not possible that the price that has to be paid to get a legally binding treaty is to actually take seriously the strong calls in the United States for border adjustments? Is that not perhaps the only way we might get the US into a legally binding structure?

Edward Miliband: I think that border adjustment mechanisms or carbon tariffs, carbon taxes as they are more easily understood, are part of a different road frankly, they are part of a road where I think you end up with a sub-group of countries in a treaty and some outside it and this is the sort of price that has to be paid by countries outside it. I do not think that is a great route for the world, to be honest. The general experience of erecting trade barriers or quasi trade barriers is that it has relatively negative effects on economic growth and, talking about the history of mistrust, on the levels of trust between countries and the ability to strike a deal. I think it would be better if we could get an agreement where the United States feels that China is doing its bit. It is worth pointing out that the obstacle in the negotiations in Copenhagen was not the US and China disagreeing about what levels of targets each country had, there were other issues. We need the developed countries to feel the developing countries are doing their bit and the developing countries to feel the developed countries are doing their bit. If we can avoid border adjustment mechanisms and the like I think it would be better.

Q26 Colin Challen: The immediate response of the carbon markets to the Copenhagen Accord was not really very good because the price of carbon shot down, as I understand it. Does the Copenhagen Accord represent a good future for the development of global carbon markets when it is based upon these kinds of discrete commitments from different countries which really perhaps do not match each other, there is no equality of effort?

Edward Miliband: I agree and disagree with the premise of your question. I agree with you in the sense that I do not think the Copenhagen Accord is what should be the endpoint for the negotiations. Actually, one of the things that gives me hope about our ability to get a legal framework for the future is if you think what is a stable place for us to get to, I do not think the Copenhagen Accord is a good resting place. I do not think developing countries think it is a particularly good resting place because they want developed countries to be part of a legal framework for the future, and I do not think developed countries think it is a particularly good resting place either because they want developing countries to also take on legal commitments. I think it is a good staging post. It is less to do with the content of the commitments although, as I implied in my opening, we need to see higher commitments particularly from developed countries and more to do with the character of the agreement in the sense that we need a legal agreement. That is what we have got to push on for initially at Cancun because that is what gives the carbon markets assurance and that is what gives countries greater assurance that people are going to do what they have said they are going to do.

Q27 Colin Challen: I would go along with the premise that the Copenhagen Accord does represent some form of progress - not enough in my book - but, nevertheless, the carbon markets have reacted in the way that they have and perhaps it is going to take a long time before we can get a properly fully functional global emissions market that will generate the finance that we need to go on to a low carbon path. The question then arises where is the money going to come from which has been promised? Some of it might come from the taxpayer, but I guess most of it - we are talking about £100 billion by 2020 - is envisaged will come from the markets. That is what people anticipate really.

Edward Miliband: That is why we need a legal treaty. The fast-start finance, the approaching 30 billion that was promised at Copenhagen, is about public money and the UK’s share is £1.5 billion over the next three years. As far as the £100 billion is concerned, and there is a high level panel being set up under the chairmanship of the Prime Minister and Prime Minister Meles of Ethiopia to look at how we are going to raise the money for that, it has got to come from a mixture of public and private sources. In a way, you make the case very well about the importance of the legal treaty to give assurance about the carbon market. It also depends on the levels of ambition that there are in any legal treaty. That is why I hope the EU will find a way on the basis of other countries putting in similar commitments to move to 30 per cent because that will help the flows there are in the carbon market. You are right, it does need private finance as well and it needs a legal framework. By the way, some people say to me, "Why do you need this legal framework anyway? Is it worth the political capital", and my conclusion, and I have thought a lot about this, is that it is for precisely the reasons that you set out.

Q28 Colin Challen: It has to be fresh money, does it not? We have made this point before. We have made a commitment that the climate change finance that we are talking about, the extra money, should not be more than ten per cent of our existing ODA budget and those are increasing, we have committed ourselves to increasing them. Should we not also commit ourselves to ensure that ten per cent never forms more than ten per cent of what we are committing to climate change finance? In other words, we have to find 90 per cent from somewhere else because you could say that ten per cent from the ODA budget is a clear limit but then all the increase in the ODA budget might end up going to climate change finance. You can see how people would be sceptical if the increase in the ODA budget is swallowed up by climate change finance.

Edward Miliband: That is not the case because, to be clear about our commitments, we have said that no more than ten per cent of the ODA budget will be used for climate finance. We have also said that after 2013 we will ensure there is additional money on top of the ODA budget, so not all of the increase that is concerning you will come from the ODA budget. I think that is a realistic commitment and it is partly realistic because we know that the issues of poverty and climate are interlinked in the sense that climate change is now one of the big causes of poverty. I think it is right that we limit the amount of the ODA budget that is used. It is acceptable that some of it can be used as long as there is a clear limit, and that is why we have put the limit of ten per cent on it but made the commitment about additionality after 2013.

Q29 Chair: Just going back to what you and the Prime Minister have said about the upper end of the commitments from the Accord taking us to the emissions peak by 2020, is that backed by some analysis that the Department has done?

Edward Miliband: Yes, and I am very happy that we can send it to you.

Q30 Chair: That would be interesting for us.

Edward Miliband: I have got a table here with different people’s views on this. I think we say 48 is the low estimate with high pledges, in other words that is on the basis of the highest pledges that have been made. Some people say it is slightly higher, some people say it is slightly lower. I am happy to make that information available to you.

Q31 Chair: Thank you. Certainly in my view business is a significant part of the solution for climate change and it is where a lot of the innovation for low carbon technology comes from. Do you think that the Accord gives business the kind of certainty and predictability which they need if they are going to make those investments?

Edward Miliband: Not enough, in my view. That is why in answer to Mr Challen I said I think we need to push on to get a legal treaty. Just going back to the point I touched on, people might say, "Why does it matter, why do you need this legal treaty? You have got an agreement, you have got countries that will put their numbers into it, why not just get on with it?" I have some sympathy with the notion that we should just get on with it in terms of what has been agreed at Copenhagen, but it is very hard to see that you can give business the certainty it needs or, as I say, different countries the certainty that they need without some legal framework for the future. I have talked to President Nasheed and others about this. Part of the work we have got to do is to persuade the countries that are sceptical about a legal treaty that actually they really do not have anything to fear from it, that if you are a large developing country and have already put a commitment into the Copenhagen Accord, like 15 per cent of your energy will come from renewables by 2020, provided it is in the right framework and the right circumstances putting that into a legal treaty is not going to be a problem. It is important to convince people of that. If there is one task of the negotiations in the coming months, that is the main task because that is going to give us much greater certainty.

Q32 Chair: We have talked about this before, but do you think there is a bigger role for emissions performance standards? In some senses for developing countries they are less threatening than limits on actual emissions but they do help to drive investment in the best available technology, and I take the electricity generating industry as being the single most important one. If there was a more widespread international use of emissions performance standards, which could themselves be legally enforceable, of course, that would at least ensure new investment was going into the lower carbon alternatives.

Edward Miliband: I think that the ends of this are what matter rather than the means. In Britain we have chosen to go down the road of some very strict coal conditions, just as an example, which are stricter than any other country in the world and that gets us a level of certainty around the future framework for coal. During the negotiations we talked about whether we could persuade developing countries to sign up to, if you like, soft limits, but limits nonetheless, on their electricity sectors. So rather than on a specific power plant, on the electricity sector as a whole. I think it is called a sectoral crediting mechanism whereby they have some soft limits and below that they would get some credit and could use the carbon credits to turn that into financial resources. There are different ways of doing it, but certainly starting with the power sector and finding ways in which we can impose limits in developed and developing countries around the power sector is one of the next steps that we need to be making.

Mr Betts: I agree with what the Secretary of State said, it needs to be handled sensitively. A year or two back there was an attempt to drive an agreement on sectoral standards across countries and that proved to be very toxic in negotiations. India and China saw that as undermining the common but differentiated responsibilities. It would need to be done in the kind of way that the Secretary of State has described.

Q33 Martin Horwood: I think some of the questions I was going to ask have been answered in earlier discussions. I was going to ask about the original twin-track approach to negotiations where you had originally Kyoto and then outside Kyoto. Can you just tell us where you think that has gone to, where it should go and where we are now really?

Edward Miliband: This is one of the mysteries and oddities about these negotiations, which is the EU’s position is we want one legal treaty covering every country and we want developed countries to pledge cuts in emissions and developing countries to take actions to mitigate their emissions. This became interpreted at some point in the autumn as us wanting to "kill" Kyoto, which I have to say I think was so far from the truth. In fact, what we were trying to do was build on Kyoto with a legal agreement that covered all countries. I think it has become a sufficiently large sensitivity in these negotiations that as part of trying to build a greater sense of consensus and trying to get developing countries into a legal treaty, I am pretty non-ideological about whether you end up with one treaty or two. In other words, you could have a Kyoto parties’ treaty and, alongside it, if there is an acceptable legal treaty that covers non-Kyoto parties it does not bother me. I would marginally prefer to have one legal treaty covering everyone, but what really matters is a coherent legal framework covering all countries and whether it is one or two treaties is a secondary issue. That is something that Connie Hedegaard, the new Commissioner, said yesterday launching a document around the EU’s position. I found it a very odd thing in these negotiations that there was a fear that somehow the EU was trying to kill legal enforcement or a legal treaty when, in fact, we were the persuaders for a legal treaty covering all countries.

Q34 Martin Horwood: I think I am beginning to get to the bottom of this. The Government has said that you can have one framework and more than one treaty within that, is that the idea? When you were talking earlier you talked about common but differentiated binding responsibilities. Are you saying that could be enforced by two different treaties?

Edward Miliband: There are two tracks to the negotiations. There is a Kyoto track and a long-term cooperative action track which covers everything outside the Kyoto parties. The EU’s position during the last year was we want one treaty covering all countries. I think what I am saying to you is in the spirit of finding ways through some of the difficult questions that we face, if developing countries come and say to us, "We will accept a legal treaty covering us and countries outside Kyoto, in particular the United States", providing that is an acceptable legal framework for us, the Kyoto parties, to be in a treaty alongside them I do not think is a particular problem for us. If it helps with pushing negotiations forward, providing the contents of the legal agreements are good, it does not matter to me whether it is one or two legal agreements.

Q35 Martin Horwood: So when the Prime Minister appeared to say that he favoured the twin-track approach continuing, that does not seem to contradict the idea that we should have a single binding framework?

Edward Miliband: I am not sure which particular aspect of him saying that you are referring to. The twin-track approach continuing was an acceptance by us that the Copenhagen Accord happened but that the negotiations would carry on under the Kyoto Protocol and under the long-term cooperative action track. The question is whether they eventually converge or sit as two separate treaties. I think what I am saying to you is in the interests of the negotiations, whether they converge on one treaty or two treaties, I am not really that fussed about that, I just want an acceptable legal framework covering all countries.

Q36 Martin Horwood: You do not think that contradicts what we were discussing earlier, which is the need for an institutional reform and you talked about a smaller group, a tighter negotiating permanent secretariat?

Edward Miliband: No, it does not.

Q37 Martin Horwood: Does not the twin-track fossilise the existing framework that took us to Copenhagen?

Edward Miliband: The twin-track is reflective of the thing that I talked about earlier on about the common but differentiated responsibilities. The question is, as a way of reassuring developing countries about our understanding of the common but differentiated responsibilities, if you end up with two treaties rather than one, as long as the two treaties are acceptable I am not fussed about it is what I am saying. I am in the ranks of the persuaders here trying to find a way through the very difficult thing that was Copenhagen. If we carry on with Copenhagen saying, "We are going to just carry on with our previous negotiating position and we are not going to change it", we are less likely to get success than if we try and think afresh about some of the challenges and issues that people have. It was slightly odd that there were people walking around with badges saying "Kyoto Yes" and I was thinking, "Hang on, I’m happy to wear one of those badges, I’m not trying to kill Kyoto". There was an odd view developed about Europe, including in some of the British press, that somehow we were engaged in some deep, dark conspiracy to kill Kyoto whereas nothing could be further from the truth, we were trying to come up with a stronger regime than Kyoto.

Mr Betts: Developing countries saw this as an attempt by developed countries to undermine what they see as the firewall between developed countries having economy-wide caps and their having obligations to take actions. Having a further commitment period of Kyoto, some of the developing countries have said to us privately, "If you could keep Kyoto going for another commitment period separate from this parallel legal instrument then perhaps we could see convergence between the two legal instruments in a third commitment period". That is a message we have received from some significant developing countries.

Edward Miliband: The most important point in this, and it feels like Schlewsig-Holstein when you are having these discussions, is the content. The content is what matters. Form matters in the sense that we do need a legal framework but, frankly, how we get that legal framework and whether it has got two limbs to it or one is just a secondary issue for me.

Q38 Colin Challen: All this talk of twin-tracks reminds me of the talk back in the 1980s about a fast track Europe and the people on the periphery of Europe who were not going to go into the eurozone and all that kind of discussion. Of course, you can have these different tracks under one framework, as is the case in Europe, but that is a political agreement whereas this one has to be relevant to the science. I suspect what we are really talking about are fast tracks and slow tracks. In that context, I am just wondering where China now fits in in your estimation because you did come out quite heavily on China following Copenhagen. Is the Chinese problem that it is two countries, a poor one and a rich one, and this transition is what is really causing the problems for countries like the United States who feel that China is trying to play on its still developing status unfairly and it is abusing perhaps the principle of common but differentiated responsibilities?

Edward Miliband: This is very complex to answer. I am not trying to dodge the question. Let me try and answer it as best I can. China’s submission to the UNFCCC as part of the Copenhagen Accord listed its target to lower its carbon intensity by 40-45 per cent by 2020 compared to 2005, increase the share of non-fossil fuels in primary energy consumption to around 15 per cent and increase forest coverage. All are significant commitments and we think the commitments that China is willing to make are important. The first part of my answer is to say China is making significant commitments and I do not think we should underestimate those. What China is acutely worried about is that it will find, not necessarily in this period up to 2020 but beyond 2020, that essentially it gets lumbered with having to do more than what it would see as its fair share because developed countries do not do enough. We should not see that as an illegitimate worry because we know that at best we are at the upper end of where we should be in terms of the Copenhagen commitments. That is a start, but the best way forward on this is for developed countries to try to do more, and that includes Europe, because that is the best reassurance we can give to China that it will not get lumbered. You then come to the most difficult issue of all which I want to raise with the Committee as a thing for us to think about. One of the things that strikes me is if you look at 2020, Britain’s emissions are on course to be about six tonnes per capita, which is probably a similar level to China’s emissions. The question about that is does that mean both countries should have equal reductions? Do you take into account historic responsibility? Do you take into account the levels of growth in particular countries and the levels of poverty and development? I cannot offer you an easy answer to those questions, they are very difficult to answer. If the world is to meet its targets in the next period after 2020 we will have to see Chinese emissions peaking, peaking and then falling, otherwise we are just not going to meet our targets. The long and the short of it is I think what China has put into the Copenhagen Accord is a really important step forward. We should be as understanding as we can about their anxieties about their growth and development, but we should push them on the need to be part of a legal framework because that is the most important thing the world needs, as I said earlier on.

Q39 Colin Challen: The Chinese in the run-up to Copenhagen and at Copenhagen were saying that a lot of their emissions are not their emissions at all because we consume the goods and these are embedded emissions which we should be responsible for. What do you make of that argument? Do they really believe that we should act on that or do you see it as a bit of a side issue?

Edward Miliband: Personally, I do not know what their perspective is. They did not raise that a lot with me in the discussions and the negotiations, they were raising more the issues of sovereignty, growth and development, how many people they had in poverty and other things. I have thought a lot about this embedded emissions issue and it gets raised with us a lot. What I think the problem with it is that, quite apart from the bureaucratic reason that this is the way the UN measures emissions and to try and change it now is problematic, it divorces sovereignty and responsibility because, let us say, we ascribed emissions that are happening in China to the United Kingdom, we do not have power over those emissions, it is China that has power over those emissions, so I actually think, quite apart from the process because I think we have got the right way of doing this, yes, we are buying goods from China, but I am not sure that changes the picture. I think it is important that the countries that are responsible for emissions also have sovereignty over what can be done about them, and I think that is the current position.

Mr Betts: China does not particularly raise it. I think, for the reasons the Secretary of State gave, it would then give us licence to look at what China is doing close-up and make recommendations that they would not welcome on areas that they would regard as matters of national sovereignty.

Q40 Mark Lazarowicz: One of the areas in which there seems to have been some progress at Copenhagen was in tackling deforestation and reforestation. Can you give us your assessment of what progress was actually made?

Edward Miliband: Yes, I think that progress was made, and I know this has been a big issue that the Committee has raised and I will let Pete say something further about it. There was an important commitment around fast-start finance to tackle deforestation of $3½ billion and I think that was an important commitment, and I also think it is worth saying that countries like Brazil made very, very important commitments around their emissions and indeed around deforestation.

Mr Betts: The Accord calls for immediate implementation of a REDD-plus mechanism. In the margins of Copenhagen, the Prime Minister and five other leaders signalled that they would be willing to provide $3½ billion over the period 2010-12 to support reduction in deforestation. The Prime Minister also said, with Prime Minister Sarkozy, that they thought that $25 billion would be needed over the period up to 2015, the bulk of it from developed countries, to support a 25 per cent reduction in deforestation and, following that, work is now going on led by France and Norway, and Joan Ruddock is attending a meeting tomorrow, to try to really make this an immediate reality and to start the action happening on the ground.

Q41 Mark Lazarowicz: How close are we then to actually getting an agreement, do you think? Can we get one in short order?

Mr Betts: Well, one does not want to be too sanguine, these are always complex areas, but I think there is a great appetite amongst many of the forest nations to make progress in this area. I know that there is an appetite on the part of donors, including the US, for whom this is not such a difficult issue as some other funding issues might be.

Edward Miliband: I think it is somewhere where we can be optimistic about getting an agreement.

Ms Thompson: There was a separate decision taken in Copenhagen, not part of the Copenhagen Accord, about some of the methodological issues underlying the forestry measurement issues and that sort of thing, looking at the drivers of deforestation and how IPCC guidelines are used to estimate emissions and how reference levels can be set in forest countries so that you can be sure that there is additionality in terms of emissions saved, and that decision is a good basis for trying to move forward next year. There was also progress made in Copenhagen on some of the texts that are still not fully agreed, but will be carried forward next year, looking at safeguards for indigenous peoples and also looking at biodiversity, so there has been some progress, although not fully reflected in the Accord.

Q42 Mark Lazarowicz: By "next year", do you mean in Mexico this year?

Mr Betts: Yes.

Ms Thompson: Yes, sorry.

Q43 Mark Lazarowicz: Is there a possibility then that we will actually have a mechanism in place by 2013, which I think is still the UN objective, is it not, and that is still a realistic possibility?

Ms Thompson: I hope so.

Edward Miliband: Definitely.

Q44 Mark Lazarowicz: Can I ask something about the question of funding for that mechanism, assuming it is agreed. We discussed funding more generally, I think, earlier on, but specifically on the issue of deforestation, the suggestion is that the funds required are between $11-20 billion each year and, whatever happens with market finance, that is not going to happen to that level in the medium term. What other discussions or what other thinking is there about how deforestation action could be funded?

Edward Miliband: We do think there needs to be funding upfront from public finance because we think that the carbon market will kick in later, and that is why, as an initial start, we, along with some other countries, made this $3½ billion commitment and indeed we even led a working group with Norway, which actually came out of a meeting that His Royal Highness Prince Charles had in April, to look at some of the financing needs that were required. We hope that other countries would join us in providing some of this early forest finance. We are really talking about the period between now and 2015 before the carbon market gets going when we think that this finance is necessary and we have made an initial commitment around this $3½ billion, but we want to build on that basically.

Q45 Mark Lazarowicz: Is the Tobin tax still a possibility for funding this, some form of a tax on speculative transactions?

Edward Miliband: You will know that the Prime Minister has commented on the potential for some of these mechanisms and I think that one of the roles of this high-level panel is to look at what are the longer-term sources of finance for this 100 billion because I think one of the points, which indeed was emphasised, I am sure, by this Committee and others in the run-up to the negotiations, is for these longer-term sums of money. We know in the past that sometimes they have not come to fruition and, therefore, we do need to look at what are the innovative mechanisms which will make possible some greater certainty about the finance being available, and that is one of the mechanisms that is possible.

Q46 Mark Lazarowicz: Turning to some of the specifics of a REDD scheme, this Committee, as you know, did a report on this issue and one of the issues which struck us particularly, I think, in our visit to Cameroon was the concern about the effects of such mechanisms on indigenous native peoples. What reassurance can you give us that those concerns will be taken on board at these negotiations?

Ms Thompson: That was one of the issues on which some progress was made in Copenhagen. It is not, as I say, reflected in the Copenhagen Accord, but in some of the texts that were being worked on under the long-term co-operative action track, some of those texts have now got some good language in around safeguards for indigenous people as well as around biodiversity. Those texts, although they were not then adopted and agreed at the end of Copenhagen, they, so to speak, have been banked and they will move forward and roll forward to this year so that, when we begin the negotiations on some of the forestry issues this year, those should be reflected going forward because some agreement has already been reached on those.

Q47 Mark Lazarowicz: What about the issue of conversion of natural forests to oil palm or commercial tree plantations? Is that also something which has been agreed?

Ms Thompson: No, that is something which will still need to roll forward for negotiations this year.

Q48 Mark Lazarowicz: The negotiations which, you say, are taking place almost at the moment?

Ms Thompson: Yes.

Q49 Martin Horwood: Can I quickly declare an interest here as Chair of the All-Party Group for Tribal Peoples, which is partly funded by Survival International. You said that there was positive wording around indigenous peoples. Can you give us a short summary of what that positive wording might be?

Edward Miliband: We will write to you.

Q50 Martin Horwood: Well, that would be helpful, but particularly whether it relates to the land rights of indigenous peoples which is a crucial factor.

Ms Thompson: I think that is factored in it, but we will give you the section.

Mark Lazarowicz: And very much the mechanisms for ensuring that that positive language is actually then followed up with policies as well.

Q51 Chair : Why was there no mention of shipping emissions in the Accord?

Edward Miliband: Aviation and maritime was an issue which we hoped would be part of the Accord and it did not prove possible to make it so. Again it is one of these issues which is partly difficult because of the question of how do you ensure for developing countries common but differentiated responsibilities around aviation and shipping, so these across-the-world issues, when you look at a sector, and we talked earlier about energy or electricity, when you look at a sector as a whole, I think there is a real issue for developing countries, if you are introducing some kind of mechanism to limit emissions, about how do you do it in a way which reflects that principle. Jan, do you want to add anything about the negotiations on aviation and maritime?

Ms Thompson: They proved very difficult for this reason, that it is very difficult to set up an effective system to address aviation and maritime emissions that is not a global system and does not, therefore, take account of all countries’ involvement in that. For developing countries, it has been very difficult to accept that that is the kind of way the negotiations should go because they will tend to view it as some kind of violation of the principle of common but differentiated responsibilities. Some of the discussions on this have been going forward in the IMO and the ICAO, as you probably know, but it was not possible in the end to have some kind of reference in the Copenhagen Accord, but it would be something we would be looking at to continue.

Edward Miliband: One prospect just to add, Chair, is that there was some discussion around the margins of Copenhagen and indeed in the run-up to it about whether, if you had some mechanism for carbon reduction in these sectors, some of that money could be used to help developing countries and that that might be a way of getting wider agreement, and I think that might be something that can be returned to in the high-level panel.

Q52 Chair: I think the work that we have done in the last four years suggests that, although progress on both aviation and shipping was pretty abysmal, there is now a much significantly greater acceptance in the aviation industry that progress has got to be made and, after all, the EU is bringing it into the ETS. On shipping, the progress is absolutely glacial and in fact the report that we published last year seemed to produce quite a shockwave in the maritime industry, but on this point about the common but differentiated responsibilities, by not having it in the Accord, the function goes back to the IMO of course who do not want common but differentiated responsibilities to be recognised, so actually, if that is the concern and one of the difficulties, the outcome is to make the matter worse rather than better, is it not?

Edward Miliband: Worse in what sense?

Q53 Chair: Worse in the sense that it goes back to the IMO who have shown a singular lack of urgency in dealing with the matter and who seem to have suffered absolutely from producer capture, in my observation. They said that the British taxpayers have spent a huge amount of money refurbishing their already extremely luxurious headquarters just across the river which came in vastly over budget and, if you have been there, and I would recommend it with their excellent lunches and things ---

Edward Miliband: I am relieved that I have not had lunch there!

Q54 Chair: There are beautiful conference rooms which most Whitehall departments would give their right arms for, but the IMO, apart from displaying this extraordinary lack of urgency, as I say, wants to treat everyone precisely the same, which is going to make the situation more difficult to resolve rather than easier.

Edward Miliband: I think you make an important point and I think it will need to be part of the resumed negotiations and, in a way, this is one of the frustrations about Copenhagen, and the way the Accord had to be negotiated in the end was that it made it much more difficult to get into those knotty issues and we will have to return to it, I completely agree with you.

Q55 Joan Walley: Can I just add to that because you talked earlier on about bilaterals and talking with different countries in different ways to try and get them to where they need to be, so would you not be able to make the same case for dealing with the IMO in the same way because they have really indicated that they are not prepared to move unless everybody moves altogether at one and the same time, and there is a lot of work that needs to be done there?

Edward Miliband: I definitely acknowledge the work that needs to be done - and it obviously needs to involve the IMO and the ICAO - but I think that the vehicle of the negotiations is an important opportunity and I think we should not under-estimate the difficulties of getting everyone into this, but I think it does not mean that we should not be pushing on it.

Q56 Colin Challen: I suppose the slogan for COP16 this year will be something like "Yes, we Cancun"! But who will be the people to make it, "Yes, we can"? Is it going to be the G20, the Major Economies Forum, or the European Union, which perhaps did not cover itself in glory in Copenhagen as much as people hoped? Why do we not just say, even now, "We’ll go straight to 30 per cent and we want to be deal-makers", or deal-breakers, whichever way round it is?

Edward Miliband: There are different aspects to that question. First of all, on who are going to be the persuaders for an ambitious agreement, I think I indicated earlier on, and I want to return to it, that we need a broad alliance of countries and there is a meeting in Colombia in the next couple of weeks of different countries who are developed and developing who are interested in an ambitious agreement, self-styled progressive countries, which I think is an important development because I think that the longer this continues to be either Europe versus the rest or Europe, the US and developed countries versus developing countries, frankly, we are not going to get anywhere. We have got to reflect the variety of voices, including from vulnerable developing countries, and that is why, just to go back to an earlier point, I think the MEF is an imperfect vehicle because it does not have those vulnerable voices, or at least it did not during the last year, so everyone needs to be persuaded, but I think it needs to be a broad alliance; the first point. The second point is I do not want to defend everything Europe did because I think it could have been stronger in various ways in Copenhagen, but the fact is that Europe led on some important things, like $100 billion of finance which eventually got agreed in Copenhagen, but Europe does need to be a persuader. I personally think that Europe does need to find a way of going to 30 per cent, but 30 per cent does need to be, if it possibly can, a lever to get other countries to do more. There is a strong feeling among other European countries in particular that Europe went out there and offered 20 per cent unilaterally and nobody else matched our commitment. There are different ways that you can see that commitment about what is comparable and what is not comparable, so I take your point about Europe pushing forward, Europe being a persuader, Europe looking at whether it can do more than 20 per cent and indeed whether it is in our own interests to do more than 20 per cent and to move towards 30 per cent, but also Europe needs to find a way which can lever in other commitments from other countries and indeed the legal framework that we want in the future.

Q57 Colin Challen: I recognise that argument and I think it is a very powerful one, but we tried to use the lever in December and it did not quite work because people knew that the offer was on the table if they came along and yet they did not really bite. Is that because they did not really believe us? In the same way, if you can do it, why do you not do it anyway because it is such an important agenda?

Edward Miliband: No, I think it was more complex than that. I think countries came to Copenhagen, knowing what they wanted to do and maybe did not want to go further, but I do not think there is any disagreement between us. You are saying that Europe in these negotiations needs to move up its offer, and I agree with you, we need to find the best way of doing that once we get into those negotiations, but I also think, and I think this is implicit in your question, that the negotiations are really important, but Europe also needs to examine, and the Commission is now going to do this, the case that there is in Europe to move to higher levels of ambition because of first-mover advantage and what it will do for the carbon market and all that, so there is an independent case and there is a multilateral case for moving.

Q58 Colin Challen: Can I just make a slight digression which I think does have a bearing on all of this and that is to refer to the Corus steelworks on Teesside where, as you will know, the accusation was made that one of the reasons why Corus did not find a buyer for it was because they were able to capitalise on £250 million worth of carbon allowances and it is cheaper then to go elsewhere. That kind of story obviously is very damaging to the public perception of carbon markets and the way that we are approaching this issue makes people very cynical. Has DECC looked into that suggestion? Have there been any discussions with Corus as to their thinking and indeed what they would do with surplus carbon allowances as a consequence of closing down a plant in this country?

Edward Miliband: I have not specifically looked at that issue, but I am happy to look into it and write to you about it.

Colin Challen: I think that would be very interesting.

Q59 Chair: Just pausing one moment on Europe and the EU and the 30 per cent commitment, although going with that unilaterally might involve in the short term a very slight cost for some of Europe’s industries, many of us feel, and I suspect you might sympathise with this view, that the scientific probabilities are now so strong that those countries or those trading blocs that have successfully decarbonised their economies in ten or 15 years’ time may enjoy an enormous economic advantage, quite apart from having done the right thing environmentally, so is there not actually quite a strong argument on economic grounds for Europe to show rather clearer leadership and to say, "We think that we will be more credible in our response to the science if we have set this more challenging target"?

Edward Miliband: I am very sympathetic to that argument, Chair, and I think it is a shame that both the optics and dynamics of Copenhagen and the feeling of the European centre of gravity was not for more movement. I think we need to build that case in Europe for movement during the course of the coming months because I think it is important. I think it is also important to try, if we can, to get greater ambition from others. If you look at the situation in Australia, for example, they are somewhere between minus five and minus 25 in terms of the emissions reductions that they are offering. That is a very wide range and we want to push countries like that to higher levels of ambition, and we also want the legal Treaty, but I think that the case that you make is a very important case.

Q60 Chair: Is there a danger now, while we are going down the Accord route at least for the time being, that, if we are relying on individual countries to make pledges and review the progress and so on, that actually allows short-term arguments about the competitive concerns to be even more influential?

Edward Miliband: Just explain why.

Q61 Chair: If you are a country agonising about what you can commit to and you are doing so outside any legal framework and without much external pressure, you may think, "Well, hang on, here’s this industry lobby here", if we were having a tough time, "and we don’t want to get even into line with some other countries".

Edward Miliband: Well, I agree with that and, in a way, that is why, and let me be completely candid with you about this, governments face a dilemma in this. I did not come back from Copenhagen and declare a great triumph when it clearly was not a great triumph, but, on the other hand, I think there is a slight danger that everyone becomes a bit too downbeat. You know, we do have 107 countries associating with the Accord and we have never had an agreement that covers 80 per cent of the emissions and, in a way, I think part of the balance we have to strike is sending a clear message about the successes of Copenhagen as well as saying that we have got to build on it and get the legal framework that I think we need.

Chair: Well, I am sure we are at one about recognising that we do not want to sound too gloomy and I think part of the solution is to give people a sense of hope as well.

Q62 Martin Horwood: Looking at some of the other parties to future negotiations, clearly it remains the US and China who are the biggest emitters and the biggest of the most significant players in this. What, do you think, are the key steps, the key changes or the key movements that they need to make in order to take negotiations forward successfully?

Edward Miliband: On China, as I think I have already indicated, I think that the work that we need to do, and this is a discussion I had with the outgoing Ambassador to London in January and will have with the incoming Ambassador later this month, is to try and persuade them about the need for a legal framework because underlying the discussion that we have had in the last 90 minutes or so has been the importance of this legal framework. I think we need to persuade China, among others, that this is going to be a positive for them actually, so that is the biggest priority as far as China is concerned. As far as the US is concerned, I am obviously not responsible for their domestic legislative management - lucky me - and obviously I hope they get a Bill, I think it is important that they get a Bill, and it is obviously challenging at the moment, but having a legislative base in the US would be very, very helpful. I think it is good that they have put their target into the Accord and I think it is good that they have also got ways of acting through the Environmental Protection Agency, but I think we would like a Bill and we would like the most ambitious Bill that we can get. Obviously that looks more difficult than it did six or nine months ago, but I think that that is important and I actually think that what was secured on China and MRV and the Chinese targets is quite important in helping that forward. I think the reasons why the Bill is so difficult is actually not to do with the content of Copenhagen, it is to do with a whole set of other issues which will be familiar to us, so I think that is what we need from the US and China.

Q63 Martin Horwood: And is our sort of well-oiled Rolls-Royce of a diplomatic machine gearing up to try to help this to happen, and in fact not only ours, but the new British-influenced diplomatic machine? Is the international community and Britain, in particular, trying to make these things happen?

Edward Miliband: Definitely, and paying tribute to the Foreign Secretary might seem like nepotism, but I actually think that the Foreign Office did an outstanding job last year in helping us both in America and in other countries. Sometimes it felt like there were more people in the Foreign Office working on these issues in some of our embassies and even in the UK and, if you, as I am sure the Committee will have done, go round the world, you will find that actually there is a big, big focus in our embassies, not just in Washington, on climate and on the need to lobby, to inform and to help to do all those things, so the Rolls-Royce is going at full pelt.

Q64 Martin Horwood: I broadened it out slightly to the international community and to Europe as well, but what are the carrots and sticks available to the rest of the international community to influence China and the United States or the US Congress perhaps in the right direction?

Edward Miliband: Let me just talk about the developing countries for a minute because I just want to expand on something I said earlier, and I think you ask a good question. What developing countries want most of all, and the Kyoto badges issue is sort of illustrative of this, is they do want a future set of legal commitments from the Kyoto parties, and that is the sort of bottom line, that is something we know that they want, and they also want commitments from the US. I actually think that the reason why I said the thing I said earlier about being willing to have another period of the Kyoto Protocol, I think that is one of the carrots, if you like, that we can give in these negotiations, to say, "Look, we’re willing to have another commitment period of Kyoto, but we do need you to be part of a legal framework". This is clearly very important to them and it is important because they think, "Well, we’ve got a legal Treaty, Kyoto, and it may not be perfect, but we don’t want it to be completely upended and we’d like it to carry on," and I think that that is something that we should be willing to entertain, provided it is on the right terms. I also think, and this is not necessarily meant as a stick, if we are going to get, going back to what we said earlier, the resources that we need for the poorest and the most vulnerable developing countries, we need public finance, but we also need the carbon market and that requires a legal Treaty, so I think there is a sort of moral imperative too to getting a legal Treaty and I think that is a moral imperative that China and India and others would understand, and again I think that is something that needs to be explained.

Q65 Mark Lazarowicz: You told us something about your views on the lessons that can be learned from the process up to, and including, Copenhagen as far as numbers of parties involved are concerned and all the rest of it. Are there any other kinds of lessons that we should learn from Copenhagen for Cancun and, really more generally, what kind of things should we be looking out for as potential difficulties and what are we doing to try to avoid them becoming such?

Edward Miliband: That is a good and important question. I have talked about the UNFCCC and the UNFCCC is a 500-strong organisation, and this is no critique of previous leadership because I think Yvo de Boer did a very valiant job in difficult circumstances, but I think that they need more fire power at the top of the organisation. I think there is a case for the post being a higher-level post, as I think it is currently third down in the UN, and I think it needs more fire power. I think I would like to see the negotiations, in a way, directed more by that organisation because I think it is not fair on the host country to sort of dump them in it to have to try and manoeuvre their way through these very, very difficult negotiations, so that is the first thing I would say. Secondly, the negotiations, and I referred earlier to this, need to have more political ownership. Jan may want to something about this, but I was very struck that the negotiators would go off for a couple of weeks every couple of months to go and negotiate, and we would obviously have conversations about it, but the ministers themselves were not there at the negotiations. I actually think that, present company excepted, sometimes the negotiators just stick in entrenched positions and do not move, and I think that is important. Thirdly, you need this smaller group and you need formal and informal smaller groups, so I think you need a sort of ‘friends of the Chair’ process that can take forward and inform some of the negotiations and you also need the informal contacts between developed and developing countries, so they are three lessons that I would point to.

Ms Thompson: I think the new COP Presidency for this year, the Mexicans, are taking some steps to try to address those problems and, in particular, the disconnect between the political and the technical levels and the fact that some of these new negotiations processes have not been closely enough connected into the UNFCCC formal negotiations. One way that they are trying to do this is to set up contact groups, as you have said, ‘friends of the Chair’-type arrangements which would be representative of the various regional groups, but, because they would be under Mexican chairmanship, would be very directly linked into the formal UNFCCC negotiations, so the progress made there would have some kind of legitimacy and could be translated back into the formal negotiations under the UNFCCC. The other way that they are trying to do that to make this link between the political and technical levels is that they will be holding, jointly with the German Government, a meeting at ministerial level of a group of 40 or 45 or so countries, again representative of regional groups, in Germany, in Bonn at the beginning of May, to try and bring ministers together from all those countries to see how progress can be made this year, building on the Accord and taking things forward towards the Mexico meeting in Cancun.

Q66 Mark Lazarowicz: I am encouraged by some of what you say, but I am also a little bit concerned because, on the one hand, clearly lessons have been learnt and things have been put in place, but, equally, it is only nine months now to Cancun and we are talking about changes in organisational structure, changes in personnel, and the Mexican Presidency is doing some things, but the impression I get is that not all of it can be done by them because clearly it is a changing situation. Who should have got a grip on the overall scheme to make sure that things do happen, these organisational changes? Yvo de Boer is resigning, so what is driving this in an overall sense?

Edward Miliband: I think you ask a completely right question, Mark, and I think what is good is that the UN Secretary-General has taken ownership of this issue, not just last year, but this year too, and is driving the high-level panel and trying to get the Accord put into practice and now making changes at the UNFCCC. I think as soon as possible we need a new head of the UNFCCC to drive these negotiations and I think that is the role that that organisation should have. Martin asked earlier about whether it should be in permanent session and I think all of those things should be on the table, frankly, because I think there needs to be real drive and the new head of that organisation needs to be a strong figure, in my view, who can really push this thing forward because, rather than the rotating presidency, which is always going to be difficult and I actually think that Connie Hedegaard, in particular, did a fantastic job last year, rather than that being the person who always has to drive things forward, I think you do need a permanent presence that can drive these things forward.

Q67 Mark Lazarowicz: When do we expect that permanent presence to be there?

Edward Miliband: As soon as possible, and the advert is going out quite soon. I hope that over the next few weeks, frankly, we get a new person in place.

Q68 Colin Challen: It has gone out in an advert but it is not like we advertise the vacancy for the Presidency of the EU. Is it going to be a political appointment or is it going to be a bureaucrat and maybe somebody from the IMF or somewhere else who is just looking for a promotion? Should it not be someone like Kofi Annan? I am just thinking of names off the top of my head.

Edward Miliband: It is different from some of the other appointments that you might be referring to. This is an appointment made by the UN Secretary-General and I think it is obviously not for me to tell him who to appoint. As I have indicated, it does need to be, with the greatest respect to bureaucrats, not a bureaucrat and I think it does need to be a more political figure who can get through the thicket of these negotiations but also drive this thing forward politically, with a small ‘p’, so, if that is the import of your question, I agree with it.

Q69 Joan Walley: Can I just go back to what was being said about the negotiations in the run-up to Cancun and the next phase. Is there any way that you can specifically get a role for trained mediators working within the UN regime to actually help and assist to move that process on because that was the one message that I came away from Copenhagen with, the importance of mediation in helping to get through some of this treacle, or whatever it is you refer to or however we describe it?

Edward Miliband: I do not know, but what do you think about trade mediators? Sometimes one did feel like one was in a sort of situation requiring mediation.

Mr Betts: It is certainly true that part of the problem was genuine political difference, but it is also true that there was often simply misunderstanding, and many delegations had very few people and they very easily can have the views of other delegations misrepresented to them, so it is certainly worth our thinking about that. Perhaps I should have said earlier that we did try to ask some big questions after Copenhagen, including on ways we could improve the process, and we are working very closely with the Foreign Office to try to draw lessons from other processes and other institutions to see ways that we could reform the UNFCCC. On the other hand, it does take time. Any reform in the UNFCCC tends to take time because you need to get everybody brought into it, so I think there are the kinds of things that we can do in a slightly slower time, but a new leadership is something we can do quite quickly and a new leadership could begin to drive some of these things this year rather than in two or three years’ time because I think the new post plus the Mexicans, as Jan was saying, is key.

Edward Miliband: I think, Joan, your suggestion is definitely worthy of consideration. I cannot over-estimate the complexity of these negotiations and, in a way, I have not said this, but these are unbelievably complex negotiations and often the negotiations are conducted by reference to what seem like biblical texts which is the Convention, the Kyoto Protocol and different clauses of those documents. As part of what the new person who does this job as the head of the UNFCCC needs to be, I think it would be better if it were someone who is steeped in that and can get through this, so I am sure there is a role for mediators, but you need to have a level of knowledge to be able to get through some of these difficulties.

Joan Walley: I was not suggesting for one moment that it should be outside the political context and framework within which it is taking place. I think it is just the issue because it is so complicated and because people almost did not turn up in Copenhagen and it is about communication. Because of the complexity of it, it is really important that all the participants are working to a specification and that there is clear communication of what the specification should be, and that, I think, is the gap where there was a sort of mismatch between, on the one level, the political aspirations and, on the other level, how you could get to a situation where people could sign up to it.

Q70 Chair: I think we are probably drawing to a close. Thank you very much for your time. It has been a really interesting session from our point of view and I know that whoever is on this Committee after the election will want to return to it, I am sure, well before the autumn, but we are really grateful to you.

Edward Miliband: Thank you very much, Chair, and, just to reiterate what I said at the outset, can I thank your Committee for all the important work it does both on the domestic and the international scene.

Chair: Thank you very much.

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Prepared 10:31 on 16th March 2010