Climate Change Bill [HL]

We have had an excellent debate in just over an hour on what is a crucial issue. Some of the speeches made the point about the practicalities, which were not mentioned by those who tabled the amendments. I almost apologise for coming forward with some of those practicalities; however, this is not an intellectual argument but one in which we decide how we measure and get agreement. I shall do my best to respond to many of the points. It was made clear early in the debate that everybody understands that emissions from domestic aviation and shipping are already included in the Bill and that it is only international aviation and shipping that we are talking about. At the moment, there is no international agreement on how to allocate these emissions to individual countries, which is why they are excluded from the UK’s targets under the Kyoto protocol and the Bill. 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. 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 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 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: "““We recognise that both the methodology required to allocate international shipping emissions to individual countries, and the policy mechanisms which individual governments could use to constrain emissions from this sector, may need further thought””." 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 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.