Supplementary memorandum by Mr Jim Murphy
MP, the then Minister for Europe, Foreign and Commonwealth Office
EUROPEAN SECURITY
STRATEGY
During my evidence session with sub-Committee
C on 3 July, I said that I would write with some additional information.
This letter covers the questions raised on proliferation, climate
change and food prices.
Proliferation
Baroness Symons asked about the EU efforts in
the face of the "civil nuclear renaissance". As you
know, EU Member States have widely divergent views on nuclear
energy. France gets most of its electricity from nuclear power
stations; the Austrians and Irish, amongst others, are vehemently
opposed. We therefore had to work hard to ensure a coherent and
helpful EU position at the Non-Proliferation Treaty Preparatory
Committee in April/May. That position made three clear points:
that the EU supported the right of NPT Parties to the research,
use and production of nuclear energy for peaceful purposes; that
the decision on whether to develop nuclear power was for sovereign
governments; and that any increased generation of nuclear power
should not be accompanied by heightened safety, security or proliferation
risks. This was in line with our national position and was helpful.
There are around a dozen different proposals
that have been put forward to address potential concerns over
security of nuclear fuel supply and enrichment services. These
are national proposals, three of them developed by EU members
(Austria, Germany and the UK). We have been taking forward work
on our Enrichment Bond concept, which aims to provide an insurance
policy under the auspices of the IAEA in the event of an interruption
of commercial supply of enrichment services. At the same time
we have been working closely with Germany and the Netherlands
to engage potential customers. To achieve our aim of making it
unnecessary and unattractive for countries turning to nuclear
power to invest in their own enrichment and/or re-processing facilities,
it is essential that we take their needs and concerns into account
and address them in our proposals. The conference we co-hosted
in Berlin on 17-18 April made some good progress in this area.
We will have the opportunity to follow up at the conference announced
by the Prime Minister in the House of Commons on 19 March.
As debate begins to mature, I think it is right
that we look for the EU to play a greater corporate role. We have
discussed this a number of times with French colleagues in recent
weeks and I am encouraged that the French authorities have indicated
that this will be one of the non-proliferation priorities of their
EU Presidency. One option will be to earmark EU funds to develop
one of the proposals on offer. We are open-minded on this but
will need to ensure developing countries don't see this as the
developed world telling them what's best.
Climate Change
In response to Lord Chidgey's question about
the impact of climate change on security, I mention a research
study which the Department for International Development is jointly
funding with the Dutch and the World Bank focuses on the economics
of adaptation. The objective is to improve understanding and quantification
of the benefits and costs of effective adaptation. This is important
in supporting decision-makers in developing countries as they
prioritise between adaptation measures and to estimate the cost
of implementing climate-resilient development plans. As the recent
UN Human Development Report noted, "governments cannot build
credible plans in the absence of information on national financing
requirements". This analysis is also useful to inform international
development efforts.
Enabling countries to tackle the threats of
climate change and follow low carbon climate-resilient development
paths will require additional financial support. How much extra
funding is still uncertain, in particular for adaptation. Hence
the importance of this joint study. The estimates that we do have
are in the range of tens of billions of dollars per year. For
instance, the Secretariat of the UN Framework Convention on Climate
Change estimates $28-67 billion by 2030. But these are only ballpark
figures and aggregated across all developing countries and thus
of limited value in helping governments to cost and budget for
adaptation in their country. This research study covers six country
case studies (Mozambique, Ghana, Ethiopia, Bangladesh, Vietnam
and Bolivia). There is potential to undertake an additional case
study in a small island developing state if other donors express
an interest.
Food Prices
In the context of security, Lord Hamilton also
asked about global food prices and the mechanism which might kick-in
to "correct" currently high prices. Projections show
that world commodity prices should fall back from the high levels
experienced in 2007-08 over the next couple of years as supply
increases in response to those high prices and as stocks begin
to rebuild. Some prices have already started to fall back, with
wheat prices now around 25% lower than their March peak. Historically,
we have typically seen agricultural commodity price spikes take
around 18 months to reach their peak before falling away and allowing
food prices to continue a long-term downward trend in real terms.
However, whilst some of the factors driving
the recent increases have been short-term shocks, others are longer-term
trends, particularly increasing demand from emerging economies
and for bio-energy. As the Government's recent paper "Global
commodities: a long term vision for stable, secure and sustainable
global markets" set out, we therefore agree with the Organisation
for Economic Co-operation and Development's and the Food and Agriculture
Organisation's view that in the medium term prices are likely
to remain higher than the levels experienced earlier in the decade.
16 July 2008
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