Climate Change Bill [HL]

I do not know whether we are being thick—I probably am—but the Minister is describing something akin to the VAT system, so that the inputs to a business have a carbon footprint which has a carbon cost in it and that is paid. That is fine, but the trouble when you are operating such a system is that it is not like VAT, where you have a flat rate and everybody knows what the input VAT is. In this instance, we will be dealing with a trading system, and the effect on the outputs will depend on the cost of the certificates that the manufacturer has to purchase to cover that liability. We have not got a straightforward calculation because it depends on a market price, which may vary from day to day. You also have this further difficulty, as my noble friend is saying, of how you handle imports, particularly if they come from a country where there is no trading system and, in effect for the manufacturer of the product, no measured carbon footprint. If we do not find some way of picking this up, this gives a completely unreasonable advantage to the manufacturers of imported raw materials from third countries where there is no trading system. We are in some real difficulties over this. I do not know whether the Minister is going to be able to explain his way out of it this afternoon. Can he set his scribes in motion to write to us all, explaining to us in simple language that we can understand precisely how this might work?