Climate Change Bill [HL]

My Lords, I do not intend to be shot down by the noble Lord, but I do intend to continue my speech. Should the Government bring something to this effect forward at Third Reading, we would be willing to reconsider our position on the amendment. That is the important point that I wanted to get across to the Minister. Simply put, we want something in the Bill. Current thinking is that, following Kyoto, overseas credits can be supplemental to a country’s reduction effort. However, the strength of the supplementarity doctrine depends on how the reduction is calculated. I hope that the Minister will be able to clarify the concept. What is supplemental to what? Is it supplemental to the reduction effort in terms of how far we have to go to meet the reduction in relation to the baseline year or is it supplemental to the reduction of the projected increase if we continued with business as usual? Those create very different figures. For example, let us say that we are currently emitting 100 million tonnes, which must be reduced by 10 per cent in the coming five-year budget. Is the reduction effort 10 million tonnes, of which a supplemental portion would be about 5 million tonnes, or is the reduction calculated based on what we might be emitting in five years if we carried on with business as usual—say 125 million tonnes—which would make the reduction effort 35 million tonnes? This would mean that a supplemental percentage would be, say, 17.5 million tonnes, which would allow us to buy more than the entirety of our 10 per cent reduction. The way in which this is calculated has a substantial bearing on what caps mean. Can the Minister explain the calculation method that he envisages being used? We understand that carbon markets need a certain amount of freedom. Indeed, we understand that many of the credits purchased in the European Union could come from overseas or be the result of joint implementation initiatives and the like. The amendment would restrict not how many credits can be purchased but simply how many of the credits purchased could be counted towards the Government’s emissions targets. In essence, we support the amendment, which would fill what we believe is a serious hole in the Bill. The issues of offsetting need to be addressed and, as adequate provision has been not made, placing a cap might go some way towards addressing the problem.