Climate Change Bill [HL]

I thank the Minister for the master class in this difficult area, one that I certainly do not understand. One of the key things to remember is that EU ETS carbon units are part of a cap and trade system in that they are limited and can be brought down, while there is potentially an infinite supply of the other units under joint implementation and the clean development mechanism. Once projects have been audited by the United Nations procedure, you can have an infinite allowance for them. The issue is that the units cannot be completely intertradable. If one could be substituted for another, all the caps on the EU ETS, which is why they have value, would effectively suffer from inflation and lose that value. I want to bring up the issue of the different currencies we are talking about here, even though they all revolve around a tonne of carbon equivalent. Later in the Bill the Government introduce the carbon reduction commitment, which will itself have more units of its own. At that point, and given that it too will be a cap and trade system, I would like to ask whether it would not be much better if we kept to that commitment and did not invent another currency at that point. But I am assuming that for this part of the Bill, the CRC units will not be internationally tradable in any way. Presumably you cannot stop investment banks using them as a sort of derivative or whatever, and I am not sure how the CRC units would be treated in the UK carbon account. However, that is probably a matter for later in the Bill.