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I have some general points that are very important for the context of the debate—because, obviously, we will return to this matter. First, the Government believe that unchecked growth in aviation and shipping and in emissions from these sectors is unacceptable. We are working to ensure that those sectors meet the full cost of their climate change emissions and that they play their role in achieving climate stabilisation. However, as virtually every speaker has said, the issues are complex. These are by definition international industries governed by international rules, which require global solutions. For example, when a plane flies in from Sydney to London and refuels at Dubai, how do we allocate the emissions?

We are working at international level; it is not as if we are waiting for things to happen. We are working through the United Nations framework, the International Civil Aviation Organisation and the International Maritime Organisation to achieve agreement on the best way forward. However, we recognise that we cannot wait indefinitely for this, so we have tried to lead the debate in Europe on including aviation in the European Union emissions trading scheme. Noble Lords will be aware that EU environmental Ministers reached agreement on that just before Christmas; the deal agreed at the Environment Council is a step forward and will place a fixed cap on total aviation emissions. Those emissions over the cap, set at the average of the 2004-06 levels, will be covered in one of two ways—either through reducing emissions in the sector or through the purchase of reductions that can be produced more cheaply and easily by other sectors. The deal that was agreed will now go to the European Parliament and we are hopeful that there will be a final agreement before the end of this year.

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The inclusion of aviation in the European Union emissions trading scheme was supported by all 27 member states. That will come into effect in 2012 and will apply to all flights between EU countries as well as those taking off from or landing in an EU member state. This is a considerable prize and a move forward, but we need to be careful that whatever we do at UK level through this Bill does not undermine the agreement that we have in Europe, which is certainly one of movement.

The question of international shipping is even more complex, as the Joint Committee recognised in its report on the draft Bill. Shipping companies can and do easily reregister vessels between countries, or buy fuel at alternative locations, including from tankers moored in international waters. Although I do not have the figures—I can provide them later on—I can illustrate the difficulties by the fact that the amount of shipping fuel sold in the United Kingdom has remained broadly the same since 1990, but we know that shipping levels in and out of the UK have increased significantly over that period. Therefore, on what basis should the UK's share of international shipping emissions be calculated and what policy levers could be used to reduce those emissions, which would not simply displace the problem somewhere else?

During the debate, I was asked about recording emissions from planes in UK airspace and ships in UK waters that may or may not land here. In response to the Joint Committee report, we have committed to report on UK emissions from international aviation and shipping. That is precisely why Clause 12 (5) is in the Bill. We did not debate that last night because everyone was thinking that as we were going to have the debate today anyway, it did not make sense, but that is why that clause is in the Bill. We can keep the commitment to the Joint Committee to report on UK emissions from international aviation and shipping.

The figures will be based on fuel sold within the UK, which is in line with international guidance from the IPCC, and we would not report on emissions from UK waters or UK airspace. Even that method has practical difficulties, which I will come on to.

One further point that is worth raising, which I dug deep out of the Q&A, is that there is no agreed international methodology for attributing international shipping emissions to individual countries. I have four examples. Allocation based on fuel registration or fuel sales may not be robust because shipping companies can easily reregister or buy fuel at alternative locations, as I mentioned. Allocation based on fuel consumption requires detailed commercial information on vessel efficiency, which is not available. Allocation incorporating the location of vessel activity certainly adds to the complexity and cost. Allocation based on the destination or origin of the vessel's cargo raises further issues of complexity, for example, for container ships with multiple destinations and the cost of data collection, not to mention the practicalities of how you collect data. You cannot do that on your own: there has to be international agreement.

Forecasting future shipping emissions is hampered by data constraints because, typically, we forecast the future using models from the past. Historic data

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needed, for example, on fuel consumption by UK vessels are not available. In addition, historic trade statistics provide some insight useful for modelling historic shipping emissions, but since 1992, they are no longer collected within the European Union. There is a range of practical problems regarding shipping, so it is hardly surprising that there is no agreed international methodology on this issue.

The Joint Committee itself said that:

You can say that again. Certainly, that will be the case.

We also need to make sure that decisions on whether to include these emissions are based on the best possible analysis of the economic and environmental impacts. The Government's view is that the best way to do this is to get independent advice from the Committee on Climate Change. That will ensure that we are ready to take a decision quickly when the time is right. That is why we will ask the Committee on Climate Change to look at the implications of including international aviation and shipping emissions in the UK's targets as part of its overall review of the UK's 2050 target. We have already said that that will be the committee's first task, alongside its advice on budgets, so we will have that analysis quickly.

I now speak way outside the brief, because I have no negotiating role. We are asking the climate change committee to do several things: to look at the 60/80 target and to look at this matter. I got the message from previous debates, as did the rest of the Government, that noble Lords are not comfortable with the 60 per cent figure in the Bill. However, I plead with noble Lords, even on Report, not to include in the Bill any measure on international aviation and shipping but to leave that matter to the Committee on Climate Change. Noble Lords may want to include other things in the Bill but such a measure would cause us the most damage internationally. As regards changing the figure, clearly there is international consensus on other figures. I am not inviting noble Lords to defeat the Government. I have been told, “Don’t let them include aviation and shipping in the Bill”. But to be able to make a case for that, one has to show willingness elsewhere. We need to be practical and not include such a measure, because of the agreements that we have secured in Europe which are due to go through the European Parliament. We do not want to upset that because all 27 countries have signed up to them, but noble Lords can decide other matters.

Having listened to this debate, I believe that there is consensus on this issue because nobody putting forward the case for the amendment explained how it would work in practice. This is not a case of a noble Lord saying, “I’m changing the Bill. You’re the Government; you go off and make it work”. In this case, we cannot do that. We need global agreement to overcome some of these practical difficulties. However, I hope I have also made the point that we are not standing idly by. The UK Government are actively involved in pursuing this. As I said in my opening remarks, unchecked

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growth in aviation and shipping emissions is unacceptable. When the EU Emissions Trading Scheme’s rules on aviation have been finalised, we will ask the Committee on Climate Change for its advice on a methodology. We need to know whether there is a methodology for including international aviation emissions that is workable, compatible with the EU Emissions Trading Scheme and takes account of progress in the United Nations framework and the wider international context. We shall need to know the impacts of adopting such a methodology. That is the point that we shall need to put to the Committee on Climate Change, which is dealt with in the next part of the Bill. The committee has been behind the rationale of every clause, but we have not yet reached the part of the Bill where it is set up. That is why I cannot accept these amendments. I and my Defra colleagues shall be more than happy to facilitate meetings between noble Lords and Department for Transport Ministers before Report, if there is a desire to nail Transport Ministers.

The Earl of Onslow: Can I draw from that that, deep in the bowels of the ministry of transport, somebody is devilling away at trying to produce a scheme which everybody acknowledges is fiendishly complicated? Please do not think that those of us who instinctively prefer to have the measure in the Bill underestimate the complications, which are obviously vast.

Lord Rooker: This runs across more than one department. As I say, the Government are already involved in international negotiations on this matter in Europe. That is absolutely crucial. The climate change committee’s secretariat is already in being. We need the climate change committee to be established as soon as possible. Its members will have expertise. We want to put this matter before them. However, it is not as though we start with a blank sheet of paper. We have already started discussions with the International Civil Aviation Authority and the International Maritime Organisation on how we can tackle this. We have an objective to tackle international aviation and shipping emissions, but it must be a practical measure that is adopted globally. We are not waiting for a solution to turn up. As I say, we are already involved in discussions on this. I cannot say how many people are working on this, but work is already under way.

What we are trying to do, once we have the Committee on Climate Change set up, is have a body that is trusted by Parliament and by the public to look at the methodology and take account of what was agreed in the European context, so that we do not disturb what has been agreed by the 27 countries of the EU Emissions Trading Scheme. That is the basis on which we cannot accept the amendments, but I hope that I have made that case in a wholly positive spirit.

6 pm

Baroness Byford: I thank the Minister for the fullness of his response. I have two questions. At the end of his speech, he mentioned that the committee would have as its priority the seeking of advice on methodology. What happens if it comes up with no methodology; in other words, if it cannot find a

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solution? Where would that leave us on the Bill? He also said that data were not available on the way that international emissions work. Presumably, those data would need to be found before the committee could attempt to give advice on methodology. I am slightly perplexed. I think all of us wish to have international aviation included, accepting that it will, we hope, be agreed at European level. I am worried that we are nearly not tackling the issue at this stage because it is insoluble. Can the Minister come back on that?

Lord Rooker: Not really, because on the first point we ought to leave it to the committee anyway. Let us not assume that it will not be able to do anything. We are putting a lot of trust in the committee, and we ought to leave it to give the Government and Parliament advice on methodology. We should start off on the basis of leaving it to come up with a methodology.

What I said about data was in the context of giving examples of there being no agreed international methodology on attributing international shipping emissions. I gave four examples of why it might be difficult. I also went on to talk about the forecasting of future emissions being hampered by data constraints, because there are missing historic data on shipping emissions. Since 1992, those data are no longer collected in the European Union. Trade statistics do not necessarily collect information on the mode used or the route taken which would help maritime modelling. There are some gaps there in the data. I have just given an example that means that sometimes the data are lacking for what we want now as opposed to what we were collecting in the past.

Lord Greenway: I have not intervened in the Committee before, but I have been listening to the Minister and I reinforce what he said in respect of shipping. Shipping is not unaware of its obligations in respect of emissions and a lot of work is going on in all sorts of different areas to try to reduce emissions at sea. A committee of the International Maritime Organisation is looking at the matter urgently and is expected to report some time later this year.

The problem is that shipping is a very complex operation and there is no one size that fits all in terms of reducing emissions. There are a lot of proposals on the table, such as reducing the sulphur content in fuel or burning distillate fuel, which puts more pressure on the oil refineries. Another alternative that has been taken up on the west coast of America in California is cold ironing, which is using shore power when a ship is in port. That still requires power to be generated somewhere else. It is a very complex situation, and I take comfort from what the Minister has said.

Lord Rooker: I am extremely grateful to the noble Lord, Lord Greenway, for bringing in a practical voice, so it is not just me as a hack politician reading out some of the difficulties. We are hearing the practical realities of the industry.

Lord Taylor of Holbeach: I thank the Minister for his response. If the amendments have served no other purpose, they have at least provoked the Committee

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into a good and thorough debate on a central and important issue. We have to have a very good reason for not including aviation and shipping in this part of the Bill. Let us hope that the Minister’s advocacy of what the Government are doing is transmitted into action so that it reinforces our decision not to pursue the amendments. The debate has been excellent, and we have heard some really good and invigorating speeches drawing attention to the importance of the issue.

Lord Teverson: This has been an excellent, and long, debate. The best comment was that of the noble Lord, Lord Crickhowell, who charged me with talking about the problem but not coming up with a solution. I thought, “That is the best description of the Climate Change Bill as a whole; it describes the problem but does not come up with the solutions”. We all accept that because that is around policies that flow from the obligation to get to percentage changes.

I say to the noble Lord, Lord Crickhowell, and to the Minister, that we have to be a little careful about getting too tied up with the fact that no one here has come up with a formula. We could all do that, and I expect that many of us here could come up with quite a reasonable formula. Even the Committee on Climate Change, if it pontificates for five years, or the international organisations, will come up with solutions none of which will be perfect and none of which will perfectly describe the equitable distribution of the emissions between nation states; because there is not a perfect solution or formula. What concerns me and many noble Lords is that if we attempt for too long to find a perfect formula we will get nowhere.

There is also confusion, which we had earlier in debates on the Bill, about emissions trading systems and actually doing the accounts and the budgeting on emissions. They are importantly related things, but they are not the same. I welcome entirely that the EU ETS will take account of international aviation emissions in 2012, subject to all sorts of threats of litigation from the United States. That is a trading scheme. I take the Minister’s point that it would always be better if how we measure those allocations for that purpose was the same as how we measured it for the purposes of this Bill and accounting, but the amendment is about accounting and budgeting; it is not about trading. The two are separate. I would love the definitions to be the same, and I think that is a serious question.

Lord Soley: With respect, that is a little too woolly. If you do the counting and find a way of doing it, you try to avoid trading.

Lord Teverson: Perhaps I am misunderstanding the noble Lord, but we already have all sorts of targets in other areas, around which there is no trading. Trading is a separate activity. You do not have to have trading and targets. You have to have measurement to have trading, but you do not have to have trading with measurement.

Coming back to the comments made by the noble Lord, Lord Soley, on the aviation industry, I am certainly not in any way—he did not accuse me of

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this—a headbanger against the aviation industry. I see it as an important industry now and for the future. One of the experiences that I have had was in the south-west at a major regional airport. Its investment plans took into consideration all aspects of legislation. I asked those people whether they had taken the Climate Change Bill into consideration and they said no. That was a multinational organisation. There is still the requirement or need for top management to understand that this will be a pressure in the future. At the moment I do not see that evidence in some practical investment decisions.

I have not often seen the Minister quite so passionate about a plea as he was in this matter. We feel very strongly about this area, which I am sure he understands. From these Benches I would welcome between now and Report an opportunity to talk through with his department those practical areas so we can ensure that we are not involved in political rhetoric here but are trying to solve a common problem. On that basis—I stress that we see this as a core issue—I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 116 not moved.]

Lord Redesdale moved Amendment No. 117:

The noble Lord said: We have just had an hour and a half debate on this very issue. This is a remarkably succinct amendment which proposes a change from the negative to the affirmative resolution procedure. Recently, I was trying to calculate how many times through the years I have had this debate about affirmative and negative resolutions and I have had some interesting arguments—particularly on the Commonwealth Development Corporation Bill many years ago when many Law Lords urged me from one side of the argument to the other. I completely lost the thread at that point.

However, this is a simple issue. The Bill states:

This is a live issue, given that many noble Lords have spoken on this, and it will not become any less controversial, despite its nature. I very much hope that, having listened to this, the Minister will allow the affirmative procedure. I quite understand and was actually very taken by the Minister’s eloquent argument about the difficulties in this area. However, although there might be difficulties in implementing the previous amendments, I very much believe that this issue should be kept alive within Parliament and should be debated because the situation will change year on year. It is important that Parliament and this Chamber should have the right to discuss what is to be listed as international aviation and shipping in the domestic and international context. I beg to move.

Lord Taylor of Holbeach: These Benches also identify with this amendment. I hope that the Minister, in keeping with his response to the previous

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debate, can accept it. Discussions on the introduction of changes that involve aviation or shipping should be subject to debate in a proper and full way. That would be very much in keeping with what the Minister was trying to impress on us—that he felt that government decisions would be in accordance with the spirit of the debate on the previous amendment.

Lord Rooker: I need not take long. I recognise the arguments and, in fact, agree with them. I am in no position to accept the amendment because this is the Committee stage. We need to look back and I am happy to take this away and come back with something positive at Report stage. I could not be clearer than that.

Lord Redesdale: I thank the Minister for a late Christmas present. We on these Benches rarely receive such a response. On that basis, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 118 not moved.]

6.15 pm

Lord Taylor of Holbeach moved Amendment No. 119:

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