Climate Change Bill [HL]

I apologise for not being here right at the beginning. We wanted more discussion of Clause 36 because there is concern about the issue of emission trading systems generally. We on these Benches welcome emission trading systems because they are an efficient means of reducing carbon emissions. The financial community is concerned about schemes such as the CRC, which is excellent in its own way, and the amount of trading that can take place. The number of units under the CRC, for instance, which will be the first emission trading system to be introduced under the Bill in 2010, will not be enough commercially to sustain a market. As the majority of these units will be used by those organisations that ask for an allocation in terms of an auction, is the Minister convinced that a trading system will work and that there will be sufficient liquidity in the market to make these instruments something of value that can be traded? I understand that most of the organisations involved in the EU ETS do not see the market being of a sufficient size for it to be credible and for there to be the type of market for other instruments that we have talked about under the clean development mechanism and joint implementation in the EU ETS. I have read a great many of the papers, including the excellent consultation on the recommendations of the climate change simplification project, Climate Change Instruments: Areas of Overlap and Options for Simplification, produced by Defra in 2007. I started to print it out on my computer before realising that it was some 67 pages long. It gives an excellent description of many of these instruments. However, I do not see the question that I believe has been asked by the financial services sector about the liquidity of these types of units. If that is true of the CRC, which will probably be the largest of these schemes, does that give credibility to other schemes that might be introduced under this part of the Bill?