Examination of Witnesses (Questions 20-39)
Dr Douglas Parr
25 JUNE 2008
Q20 Viscount Brookeborough: So, is this
evidence here agreed evidence that was sent out to all of them
before it came to us?
Dr Parr: It would certainly have been
sent out to all the key players, yes.
Q21 Lord Plumb: How long has that been
in operation? Was it something that started when we first began
to talk about trading emissions?
Dr Parr: I think that CAN Europe has
been in existence in some form for at least 20 years. It has been
there a long time.
Q22 Viscount Brookeborough: You call
it "CAN Europe", is there a CAN anything else?
Dr Parr: There used to be a CAN UK but
that kind of folded because most of the functions were being carried
out by other organisations like Green Alliance or increasingly
now Stop Climate Chaos and so on, so it kind of ceased to have
a clear and good rationale.
Q23 Lord Plumb: Is it made up of scientists
generally?
Dr Parr: I think that the scientists
and technical people within the organisations would contribute
heavily to the policy papers, yes.
Q24 Viscount Brookeborough: On the question
of external dimension, the CAN Europe paper expresses serious
concern over the level of use that can be made of external credits
in order to offset domestic EU emissions, although it also emphasises
that the EU must support developing countries in addressing their
greenhouse gas emissions. What should, in your view, be the external
dimension of the ETS and perhaps you would also like to comment
on the third paragraph of your evidence where you refer to loopholes
and so on.
Dr Parr: Let me begin by saying what
I think the external dimension should be. We certainly think that
there does need to be an external dimension. We would say that
the relationship between the EU and developing countries should
start with strong domestic reductions but that there needs to
be a transfer of money and potentially expertise to help developing
countries deliver emissions reductions as well. We see part of
that finance or even a significant amount depending on how it
works coming from the revenues from the Emissions Trading Scheme.
I think that there would be a three-tier approach. One would be
direct funding by the EU or even the Member States on a bilateral
basis of projects, policies and programmes. The second could be
through a multilateral fund which at the moment does not really
exist, again for policies, programmes and projects. The third
would be through the existing CDM credits. Our worries about having
lots of CDM credits flowing into the Emissions Trading Scheme
is that firstly it removes the incentive for domestic reductions
and domestic reductions within the EU are critical in terms of
changing the infrastructure that we have towards being a low carbon
society. Otherwise, if we keep pulling credits, there is a fairness
issue about effectively taking credit for emissions reductions
going on elsewhere and taking up all the low-cost emissions reductions
which the developing countries will ultimately have to do. It
is not that we are against that but we should not be taking credit
for it and saying that we are producing these large reductions
which are actually being produced elsewhere.
Q25 Viscount Brookeborough: Would it
not be an opinion that, if we are exporting technology and giving
these returns in reductions, it is actually much more easier to
control than money being put into developing countries because
there are too many stories and there is a lot of history of money
in developing countries simply not achieving anything and at least
if we are actually doing something in those countries by developing
the business, we can bring credits back and we know what has happened?
You seem to be rather more for sending money.
Dr Parr: The CDM has controls on it;
there is not en masse transfer of money to other countries in
order to let them spend it how they will. I am not advocating
mass transfer of money without checks and controls.
Q26 Viscount Brookeborough: Yes but it
is quite difficult.
Dr Parr: I agree that it is quite difficult
and it actually becomes even more difficult when we come to deforestation
which is another part of the Bali programme and another part of
where we think some of the money should go. The entire international
climate talks are based on, if you like, a political settlement
about development in exchange for carbon cuts and I think that,
as part of that political settlement, it would be in the end counterproductive
to say, "We are going to decide how these carbon cuts happen
in your country". I think that there has to be some respect
for the developing countries in how they go about delivering those
cuts even if those projects and programmes are scrutinised for
what they actually deliver.
Q27 Viscount Brookeborough: What are
the loopholes to which you refer?
Dr Parr: Could you point that out to
me, please?
Q28 Viscount Brookeborough: It is in
paragraph 3 of your evidence where you say, "On top of the
unambitious and inconsistent reduction targets, these proposals
offer Member States and EU ETS installations the opportunity to
off-set their emissions by using large quantities of external
credits |" and then you go on, "These loopholes are
a major concern for NGOs |" I am quoting.
Dr Parr: Which section is this?
Q29 Lord Cameron of Dillington: The key
question probably is, what is the difference between the existing
CDM and your gold standard CDM?
Dr Parr: Some of the key differences
are about the kinds of project that are allowed. Under a gold
standard type framework or similar, the focus is on energy efficiency
renewable energy type projects because we believe that those are
the kind of projects that will be delivering changes to the energy
system and therefore driving long-term change. I am afraid that
I am not familiar with the detailed criteria of gold standard
but my understanding is that the levels of verification are rather
higher than CDM and I think that there are more provisions for
evaluation of feedback.
Q30 Lord Cameron of Dillington: May we
have a note of that in order that we can understand that?
Dr Parr: Yes. Could you direct me to
where |
Lord Brooke of Alverthorpe: It is on
page 3 of your evidence.
Chairman: It is paragraph 3 on page 1.
Lord Brooke of Alverthorpe: And then
overleaf as well.
Q31 Viscount Brookeborough: It is the
fourth bullet point on key NGOs.
Dr Parr: I am sorry, I am looking at
a different paper.
Q32 Lord Cameron of Dillington: Over
the page, you refer to your CDM gold standard.
Dr Parr: So, it is that one. I will sort
out an elaboration on that.
Chairman: That would be very helpful.
Q33 Lord Cameron of Dillington: May I
deal with another escape route, as it were, for domestic reductions
which is carbon leakage and whether you consider this to be a
real threat and how we might tackle it.
Dr Parr: Is it a real threat? I think
that there is the potential for carbon leakage. Yes, I would agree.
Is it as big as it is made out? We suspect not because at the
moment there are several industries—and I refer to the experience
of my Brussels colleagues here rather than myself—saying
that there is a danger that we will simply offshore and go somewhere
else. When asked where the evidence for this is, they say, "It's
all confidential. We can't possibly tell you". There is a
history of industry, particularly large industry, making claims
about new taxes, new regulations and how damaging that is going
to be when the actuality is not anything like as serious. My own
experience back in the early 1990s was on ozone depleting chemicals
and Dupont were saying, "We are practically going to go bankrupt
if you implement these Montreal protocol controls". By the
late 1990s, a review of the impact of those controls evidenced
that they appeared to suffer no cost and no job losses across
the chemicals industry. I think that one has to take these claims,
particularly when they are not being backed up with evidence,
with a certain pinch of salt.
Q34 Lord Brooke of Alverthorpe: So, you
do not accept the claims that air flights which previously came
out of Heathrow have now gone to Charles de Gaulle and to Holland?
Dr Parr: That is possible. As I say,
I would not reject it.
Q35 Lord Brooke of Alverthorpe: If you
check, there are some very substantial facts that, unless we get
an international agreement on these issues, you do have leakage.
Dr Parr: Aviation is a case in point
but it depends on whether people want to come to London or not.
If they want to come to London, they cannot go to Charles de Gaulle.
I accept that transfer passengers is another issue.
Q36 Lord Brooke of Alverthorpe: This
is people travelling to other parts of the world rather than coming
to London.
Dr Parr: I think conceptually, just like
the carbon leakage point, I can accept that there is a point.
I have to say that anybody not using Heathrow is most unlikely
to be doing so because the Emissions Trading Scheme or any threat
of that, it is rather to do with the competence of operation.
Q37 Lord Brooke of Alverthorpe: There
are a whole variety of reasons but we still come back to the fundamentals
that carbon emission shifts, it is not stopped and these things
do happen.
Dr Parr: As I say, I do not dispute that
theoretically it can happen.
Q38 Lord Brooke of Alverthorpe: No, in
practice it happens.
Dr Parr: What I would say is that it
is confounded by a whole range of other factors about markets,
supplies, where you want to deliver, where the supply chains are
etcetera, etcetera, and whether the Emissions Trading Scheme is
at a price that is within the range that people are actually thinking
about.
Q39 Lord Brooke of Alverthorpe: Basically,
you are saying on this question that it does not happen.
Dr Parr: No.
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