Treaty of Lisbon (No. 8)

I agree, but let us get back to the UK. The Government have admitted that they are allowing for—and indeed expecting—two thirds of the headline carbon emissions that they have announced as resulting from phase 2 in 2008-12 to occur outside the UK, and outside the EU as well. Worse, other member states have set even higher import quotas than we have, which means that they will be able to import more than enough to meet their requirements and then to sell the rest on to the UK, no doubt at a nice profit. The effect is that phase 2 of the ETS may well not lead to any reductions in emissions in the UK at all. I think I am right in saying that the Government agree with that forecast. The ETS is the linchpin of the EU's anti-climate change policy. For all its good intentions, I fear that it has been distorted into something of a massive scam. In phase 1, it is believed that the power generators made more than £2 billion in windfall profits in the UK alone. They achieved that by passing on the notional cost of carbon to consumers, even though they had been given permits for free. In phase 2, it is quite likely that the Kyoto mechanisms will be swamped by a huge oversupply of permits that will lead again to very low carbon prices. The real secret is to ensure that the carbon price is set at a level that seriously affects industrial and individual action, but there is a real chance that that still will not happen in phase 2. There is a great deal of talk in this country about whether our target for 2050 should be a reduction in carbon emissions not of 60 per cent. but of 80 per cent. I entirely agree with that proposition, although I believe that it partly misses the point. The real question is not whether we cut emissions by 60 or 80 per cent. way down the track in 2050, but whether we are going in the right direction now, and on a significant scale. Sadly, I believe that we are still going in the wrong direction.