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Since our previous debates, together with the independent team of external consultants who actually deliver the UK’s emissions inventory, we have looked to see whether the timetable can be accelerated. This is not being done by Defra alone. I realise there is a degree of suspicion about the first-class civil servants in my department, but they did not do this on their own. They did it along with the external consultants. They concluded that bringing it forward could not be done without compromising the accuracy and integrity of the United Kingdom’s emissions figures. I remind the House that the most recent UK emissions inventory was accepted without any adjustment by the United Nations, so there is international recognition that the quality and accuracy of our emissions figures are very high; indeed, they are among the best in the world. I would not think that anybody would want to put that at risk. It is therefore for these reasons—the UK’s existing international commitments and the time needed to ensure the quality of the emissions figures—that the final emissions report is not available until March of the second year following that to which it relates.
However, I take this opportunity to reassure the House that the Government are committed to ensuring that as much information as possible on the UK’s emissions is made publicly available as quickly as possible. We will not delay unnecessarily. If the emissions figures are available, we will publish them.
I shall answer some of the specific questions. I may be repeating myself in Committee, but it is worth putting on the record. Compiling the UK emissions inventory requires the collection of data from a wide variety of sources; for instance, fossil fuel combustion is the major source of UK carbon dioxide emissions. These are based on BERR’s digest of UK energy statistics—I think that for BERR, I would read DTI, but you know what I mean—which is published annually seven months after the end of the reporting year in question; that is, at the end of July.
The inventory also covers the other Kyoto greenhouse gases and requires the collection of emissions data from other sources, including industrial installations, the Department for Transport, trade bodies, the Institute
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Just in case anyone raises with me the fact that in January 2008, we have just published the United Kingdom’s 2006 emission figures, only 13 months after the year in question, we recognise the considerable interest in these figures, which is why we seek to publish as soon as possible and as soon as they are available. Headline figures are available a short while before the full UK emissions inventory is published. We therefore recently published the headline figures for the UK's 2006 emissions. However, the full emissions inventory is not available until March. That is a much fuller analysis, which sets out the UK emissions in more detail.
For instance, the data released in March contains a full breakdown of UK emissions by sector and by greenhouse gas and sets out the underlying data on what activity gave rise to the emissions. A full uncertainty analysis is also presented, together with details of the improvements in the inventory made from the previous year, so the information provided in March is much more useful when assessing the overall programme in terms of the different sectors and trade emissions.
The Government provide annual emission figures to Parliament under Section 2 of the Climate Change and Sustainable Energy Act 2006. Those figures are compiled on exactly the same basis as our emissions statement under Clause 12 will be. There have never been any complaints or questions raised about the accuracy of the figures that we already provide to Parliament. The accuracy and reliability of what we provide is very important; we should not put it at risk.
I think that I have covered much of the detail; if I have missed anything, I will gladly come back to it.
Lord Teverson: My Lords, in view of the Minister’s wish to bring the date forward—he was talking about the early headline figures—could he indicate how far they might be brought forward with some reliability? Are we likely to get to December, or whatever?
Lord Rooker: No, my Lords. I have come here to boast about the fact that we did it in January 2008, only 13 months after the year. The point is that those headline figures are available and were published as soon as they were available. Obviously, the headline figures can be made available only on an accurate basis, bearing in mind the enormous amount of detailed work that has been done, but there is enough information to do that before publishing the full emissions inventory in March. We will produce them as early as possible. If that could be done in
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Lord Teverson: My Lords, I thank the Minister for his understanding of the issues here and for trying to bring this information forward. It is to everyone's advantage if that can be done. I thank him for the briefing note that he sent round a couple of weeks ago, which I found most interesting. The difficulty on our side is that I, like many of us, are used to organisations saying that things cannot be done, and it is always difficult to evaluate that. I understand that the international reporting must be done within a certain time, but clearly there is nothing to stop it being done earlier than the date laid down under the international conventions. I fully accept the Minister’s good will and wish to get this right. The sole motivation behind the amendment is to seek to enable the Government to take policy decisions about the future in a suitable period of time. That is a weakness of the timescales, which we might be stuck with, but for the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 13 [Powers to carry amounts from one budgetary period to another]:
Earl Cathcart moved Amendment No. 72:
The noble Earl said: My Lords, you might be surprised that we bring this amendment back on Report, but we do so in the light of some of the changes that have been made to the Bill thus far and because we do not feel that all our questions about banking and borrowing have quite been answered. We understand some of the benefits of having a banking and borrowing system. We recognise that the provisions for overachievement are reflected in the Kyoto Protocol, and we appreciate that the United States’ acid rain programme, cited in the Stern review and by the Minister in Committee, has shown the advantages of such a system. We appreciate that banking can also help with the cost of mitigation. Further still, we appreciate the function of banking and borrowing mechanisms with regard to the price of carbon. We certainly would not want to see price hikes or sharp declines towards the end of the budget periods if there were some way of easing the transition to the next period.
The Minister agreed in his response that the 1 per cent figure reflects the likely situation when an unexpected shock occurs towards the end of the budget period. He mentioned the,
and the weather, population growth and the uncertainty of timing in delivering policies. However, he went on to say that,
- “the current limit of 1 per cent in the Bill is not a number plucked from thin air. It reflects the likely situation when an unexpected shock towards the end of a budget period would otherwise lead to a risk of missing the budget”.
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In other words, he said that it provides,
Surely the whole point of the five-year period was to take into account the fact that unexpected shocks happen throughout the period and that we should be going into the last year with enough leeway to absorb that shock, should it come.
This leads me to my next point, which is linked to Amendment No. 16 in the name of my noble friend Lord Taylor, which was moved on the first day of Report and dealt with annual rolling targets, and the government amendment on indicative annual ranges, which won the day. Does the Minister think that the new addition of indicative annual ranges relates to banking and borrowing? If the Government are happy to bank or borrow 1 per cent of the emissions for a budget period, could this be used as a sort of template for the indicative annual ranges? I expect the Minister to tell me that the two things are not as closely related as I might think, but I would like to press this issue further.
The noble Lord, Lord Puttnam, argued that,
- “the term ‘indicative annual range’ is a little broad. It would help enormously if that range could be narrowed to a point where people could have some confidence”.—[Official Report, 25/2/08; col. 495.]
However, the Minister did not want to put a definitive figure on how wide that range would need to be. But if 1 per cent is the right figure for the end of the five-year budgetary period—as the noble Lord said, it is not a number plucked from thin air—surely, 1 per cent might be appropriate for his indicative annual range.
In a sense, the indicative annual range is operated in a manner similar to banking and borrowing; that is, if I understood it correctly, an appropriate amount by which we can fall short or go beyond a certain target would be specified. I understand that there is no precise target per se in the indicative annual ranges, but the maximum and minimum bounds operate in a manner similar to the 1 per cent above or below that can be carried over from one budget period to the next. Should the indicative annual targets have some relation to the banking and borrowing range? I beg to move.
Lord Redesdale: My Lords, I support these amendments; we have, basically, only a question mark. Obviously, this is more of a probing amendment. We were pushing for three-year targets. Therefore, the 1 per cent would be more easily worked out. The Minister was very helpful with some of the points that he brought forward at an earlier stage. At what point will the civil servants declare that they need to use the 1 per cent? Over a five-year target, obviously, year on year, it could be difficult to make sure that the 1 per cent is achieved. I agree that it is just in case there is a major variation from the figure year on year, but that takes account of a very stable environment. If there is a bad harvest one year, followed by bad harvests in the second and third years, will that lead to a major problem or is there a process to deal with that variation in relation to the 1 per cent? If a number of disasters affect the aim of the 1 per cent, it gives the impression
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Lord Rooker: My Lords, I thought that the Liberal Democrat question was about taking the clause out altogether. This is Report stage; it is not Committee stage. I probably cannot answer the noble Lord’s question because unexpected events are unexpected events. The Committee on Climate Change will be a can-do committee and we are a can-do, open, transparent Government. As soon as there is a need to make a move, it will be announced. Scrutiny, clarity and transparency are crucial to this Bill, but I cannot begin to think on the unexpected. As the noble Earl said, this amendment was tabled in Committee. I am happy to repeat part of my explanation on why 1 per cent was suitable to be borrowed from a future budget.
It is true that the banking provisions reward good behaviour by providing an incentive to overachieve against the carbon budget and the borrowing provisions allow the Government, in strictly limited circumstances, to borrow a small amount from the next budget. As I explained in Committee, the 1 per cent figure is not a number plucked from thin air. It simply reflects the likely situation when there is an unexpected shock or an event towards the end of a budget period. It may be that, with the ebbs and flows of a budget period over five years, there is nothing in the bank. But if it is towards the end of the budget period and would lead to the risk that the budget was being missed, obviously that would be a good opportunity.
The 1 per cent was chosen because analysis suggested that allowing up to 1 per cent of a future budget would be consistent with the rise in emissions that may result from an unexpectedly cold winter or uncertainty surrounding emission data. It is based on evidence which shows that since 1990 there have been large emission rises due to three unexpectedly cold winters over the period, the coldest of which led to emissions being in the order of 3 to 4 per cent higher than the preceding year. This effectively means that if 0.8 per cent of the subsequent budget was borrowed—that is, 4 per cent divided by the five years of the budget period—the shock could be absorbed with a 1 per cent limit on borrowing, and the budget would still be met. This would not be the case if the limit was set at 0.5 per cent.
The 1 per cent borrowing limit is based on looking at what has happened since 1990, which is a fair time to go back. In the period, three winters were much colder than in the preceding years, and that gave us emission rises of between 3 and 4 per cent. The overall figure was not higher, but the range showed that a 1 per cent borrowing would mean that consistently we would be able to cope with it.
The noble Earl, Lord Cathcart, asked me some questions going back to Amendment No. 16 which I did not really understand. I shall take advice and, if need be, I shall write to him because I do not have anything I can use to answer him now.
Earl Cathcart: My Lords, I was trying to tie the 1 per cent allowance with the indicative annual ranges to see whether banking/borrowing at 1 per cent ties in
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Lord Rooker: My Lords, I am speaking purely from memory so I may get it in the neck. I think I answered by saying that the range would be in single figures, but I cannot say whether the single figure would be 1 per cent. However, it would not be 10 per cent.
Earl Cathcart: My Lords, I think I was trying to tie the Minister down more than that because it could be 1 per cent to 9 per cent, which is quite a big range. That was my aim. If, having thought about it, the Minister is able to suggest a more suitable range, I would be very grateful. At this stage, however, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 73 and 74 not moved.]
[Amendment No. 75 had been withdrawn from the Marshalled List.]
Clause 14 [Final statement for budgetary period]:
[Amendments Nos. 76 to 78 not moved.]
9.15 pm
The Duke of Montrose moved Amendment No. 79:
(a) state the final amount of carbon units that have been credited to or debited from the net carbon account for each of the national authorities for the period; and(b) give details of the number and type of those carbon units.”The noble Duke said: My Lords, I shall speak to Amendment No. 79 before dealing with the others in the group. This amendment would require that the final statement for the budgetary period that reports on the UK net carbon account must also outline the final number of carbon units that have been credited or debited from the net carbon accounts of the national authorities. The Minister stated in Committee that there are no net carbon accounts as such for the national authorities; that is, there are no formal accounts. However, there would be de facto carbon accounts as each of the national authorities drive through their policies to reduce climate change.
Of course, many of the programmes and policies will come from Whitehall, but the very nature of the battle to reduce carbon emissions is that it affects all levels of society and every type of organisation. As a consequence, it also affects all levels of government, and thus we on this side of the House think that it would be particularly useful to understand what each of the national authorities is contributing to the net UK carbon account, so how much of the reduction takes place in the regions is important information to have reported. Having as much information on these matters reported to Parliament as we can would improve transparency and ensure that everyone is on the same page. It would also offer further advantages
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This also brings in questions about the UK carbon account more generally and the actual logistics of the calculation. Can the Minister take us through the process of verification of compliance with the carbon budgets? Surely this will involve knowing the status of the accounts, with some degree of accuracy, of the devolved Administrations. Of course there will be circumstances in which the contribution to meeting the UK carbon budget will be difficult to assign to a particular region, but there will certainly be others that will be easy to assign.
Would this information in itself be valuable? Would it be useful to know to what degree emission reductions are occurring by virtue of companies that span across the borders and what are being accomplished on a much more local level? Can the Minister explain how the carbon accounts are put together and what logistical difficulties, if any, would there be in having a delineation based upon region?
Amendment No. 115, which is grouped with Amendment No. 79, concerns the national authorities but in a different way. It shares some overlapping concerns—namely, on transparency—but it would place a duty to publish the consultations with the national authorities when laying regulations regarding the carbon account. First, as a matter of principle, we cannot see why these consultations should not be published. It is important to know where the national authorities stand in relation to UK policy and which of their concerns have been incorporated into UK policymaking.
There are also particular instances with regard to carbon accounting and their relation to national authorities that it might be important to publicise. One example is the burgeoning industry of hydroelectric power in Scotland which might eventually qualify as a way of generating carbon credits. That possibility is still to be debated in the Bill and I am sure that we will debate it in other forms at great length. Regulation affecting the definition of a carbon unit and how they are counted could be crucial to the industry and thus any consultation should be published. It is important to investigate the degree to which the Government are taking on board the concerns of the national authorities and whether or not some of these concerns might warrant parliamentary attention.
I found with some shock that Amendment No. 233 was also in this group. I had not realised that, having had the amendments separated, they had been happily coupled together again by the Government Whips’ Office. However, in the mean time, for the sake of convenience, I shall deal with all three as that is what everyone expects should happen.
The amendment ensures that the national authorities should set out the procedure to be used in reaching agreement in those circumstances where they are required to act jointly in terms of the Act. Clause 76(1) defines
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However, the Bill makes no provision for the mechanism which is to be employed for the national authorities to act jointly. There is no provision for what happens if they do not act jointly. In Committee, the noble Baroness, Lady Morgan of Drefelin, said about the clause:
“It will be important to ensure that its application to the devolved Administrations is set out very clearly and to ensure a joined-up approach between Administrations as far as possible, as the noble Duke and the noble Lord have already highlighted. We will be agreeing a concordat with the devolved Administrations about how we will work together on implementing the detailed elements of the Bill”.—[Official Report, 4/2/08; col. 910.]
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