Oireachtas Joint and Select Committees
Wednesday, 19 December 2018
Joint Oireachtas Committee on Climate Action
Examination of the Third Report of the Citizens' Assembly (Resumed)
I welcome committee members and those who may be watching our proceedings on Oireachtas TV. This is the 17th public session of the Oireachtas Joint Committee on Climate Action. At the request of the broadcasting unit, I ask all those present to turn off their mobile phones or switch them to flight mode as they interfere with the broadcasting of proceedings.
On behalf of the committee, I extend a very warm welcome to Dr. Paul McGowan, chairperson of the Commission for Regulation of Utilities, CRU; Ms Aoife MacEvilly and Mr. Garrett Blaney, commissioners, and John Melvin, director of energy markets.
By virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by it to cease giving evidence on a particular matter and continue to so do, they are entitled thereafter only to qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person or entity by name or in such a way as to make him, her or it identifiable.
Members are reminded of the long-standing ruling of the Chair to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official, either by name or in such a way as to make him or her identifiable.
I invite Dr. McGowan to make his opening presentation.
Dr. Paul McGowan:
I am very pleased to appear before the joint committee. I will briefly introduce our strategic plan and talk about specific initiatives we believe are relevant to the committee's agenda on climate change. Ms McEvilly will speak about smart metering which I understand is of particular interest to the committee.
We have recently completed drafting our new strategic plan for the period 2019 to 2021 and initiated the formal process to lay the plan before the Houses of the Oireachtas and publish it. While keeping our mission pretty much unchanged, we have put climate change at the heart of our strategic plan and vision for the future. Specifically, we have identified our vision of a sustainable, reliable and efficient supply of energy and water and a secure low carbon future. That is a big step and change for us. It shows, following on from some of the recommendations of the Organisation for Economic Co-operation and Development, OECD, that we do intend to step forward and demonstrate leadership in this area.
We have identified four strategic priorities for the next three years: to deliver sustainable, low carbon solutions, with well regulated markets and networks; to emphasise compliance and accountability; communications, particularly to support customers as they make the transition; and to foster and maintain a high performance culture within our own organisation to deliver on our mandate.
We are in the process of delivering an enduring connection policy, following a significant period when we were operating what was called gate 3, or the previous batch processing of connections. That meant no connections were being processed for a long time. We are looking to change this and introduce regular batch processing of connections. Our first batch, enduring connection policy, ECP-1, has been initiated directly to facilitate the 2020 targets. We are also considering our second batch, ECP-2, and will work with the Department to ensure that batch facilitates the new renewable energy support scheme. In addition, we are taking an active interest in renewable gas, how it might be connected to the system, its future role and how it can be done safely.
We undertake five-year price controls for gas and electricity networks. There is nothing new in this, but it is the key enabler in the delivery of infrastructure. A low carbon future will rely very heavily on infrastructure to deliver the outcomes sought. We are also working on interconnectors, another area which is key to the integration of renewables into the system. The three interconnectors of particular note are the North-South interconnector which links Northern Ireland and the Republic; the Celtic interconnector which links Ireland with France and the Greenlink interconnector which links Ireland with Great Britain. We are also actively engaged in considering how gas and electricity might be integrated into the transport and heating sectors. The electrification of transport relies on networks to deliver that power. To the extent that gas is being used to help to decarbonise transport such as the use of compressed natural gas, CNG, in place of diesel, it requires working with the network developers and also the CNG station developers.
Through our network price controls, we will seek to support Irish Water in making the necessary investments to ensure the water and wastewater infrastructure in Ireland is resilient, that it promotes conservation and that it is capable of adapting to climate change, the extremes of rain and drought.
There are three significant revenue streams in the electricity wholesale market - energy, capacity and ancillary services. The recent completion of the integrated single electricity market, SEM, project and the launch on 1 October of the new single electricity market support flexible units and the roll-out of renewable technology. They also support the introduction of flexible demand and storage to the electricity system. It has been demonstrated that we are now getting highly efficient use of the existing interconnectors between the island of Ireland and Great Britain - the Moyle and the east-west interconnectors. The Delivering a Secure, Sustainable Electricity System, DS3, programme which is well advanced and has groundbreaking ambitions has been designed to accommodate higher levels of renewables in the system. We can accommodate up to 65% of renewables in the system at any point in time and maintain security. The target is to get to a figure of 75% by 2020. As recently as last Friday night, 73% of the demand on the island was being met by electricity from renewable resources. That was facilitated because we were able to export the amount of electricity above 65% through the interconnectors to Great Britain. That demonstrates the benefits being derived from DS3 and the role of interconnectors in delivering these benefits. We also welcome the significant progress being made and the political agreement that seems to have been reached on the clean energy package for all European citizens and very much look forward to working to implement the changes that will come about as a result.
Ms McEvilly will talk about retail markets and smart metering.
It is an ambition of national and EU energy policy to put customers and citizens at the heart of the transition to a low-carbon future. The Citizens' Assembly also placed an emphasis on finding ways to encourage businesses to reach out to customers to bring them with us on this journey. We believe the CRU will have a role in regulating retail markets, particularly in the context of the smart metering project. We will put customers at the heart of everything we do. Our strategy focuses on protecting and empowering customers, ensuring that they have the correct tools and information and are able to make the correct choices in order to benefit from the transition. That means enabling customers to benefit from competition and also focusing on the types of new technologies we believe will become available in the context of smart metering and smart homes. It also means supporting customers to actively engage in energy markets to ensure that they can become what we have called "prosumers" or can become involved in microgeneration. They can also switch some of their energy consumption in order to avail of cheaper tariffs at certain times or of different technologies which will help them to lower their own bills and assist in the decarbonisation agenda.
Our smart metering project is really a facilitative project which will enable much of this to happen. We believe it will have benefits for customers, the economy and the decarbonisation agenda. If we get it right it will be a rare win-win-win project. We have been working with the Department, ESB Networks - which is going to roll out the electricity meters - and with the entire supply industry in Ireland to try to ensure that we can achieve the conditions necessary to make this work to the benefit of customers. We hope to empower customers by giving them better information and choices and encouraging, enabling and incentivising them to avail of energy efficiency options, providing better price information and better information about their consumption and facilitating the use of renewable energy. We spoke about the possibility of having more sources of renewable energy on the network and about making the best use of those renewables. It is really important to us, and it would be great if customers could get the benefit of that. One of the really interesting features of the wholesale market redesign is that we can see that when there is a large amount of wind energy on the system the wholesale price goes down. It would be wonderful if we could enable domestic customers to avail of those lower prices at certain times. That will involve the provision of better information through smart meters, and smart home technology in some cases, which will help them to do this without having to constantly decide when to turn on the emersion, and enabling smart products to come through from suppliers. We see this is as the way forward. It enables ESB Networks to do things in a smarter way. We have to consider where to invest in the grid, where we can be more efficient, how we can support the electrification of transport and heating on a mass scale at least cost and how we make better investment decisions. It is an enabler of all of those options.
This is a massive project. It will cost €1.1 billion. We had to weigh up the benefits as we see them and we conducted a major smart metering trial to that end. In some ways the data is now outdated. We were looking at very simple applications for customers, but found that they could save up to 10% on their bills through simply having better information about how electricity is used in their homes. A better understanding would mean that their consumption could be reduced. A time of use tariff, which would enable a family to move some of their high energy consumption usage, for example, turning the washing machine or dishwasher on, would involve adding a low-cost time during the evening, discouraging people from using electricity at peak times. If that is taken up on a large scale we might be able to avoid having to build additional generators to meet peak demand. We looked at peak demand events over the last few weeks. It is wintertime now, and we are seeing quite high prices because we were bringing on old and often very carbon-inefficient peaking units to meet the very high peak in the wintertime. It would be great if we could avoid that and have customers pay less money by using their electricity off-peak. Those are the kinds of benefits we see.
It would offer a better service to customers. There would be no more estimated bills. The members may know that CRU has a customer care team which deals with customers who are having problems with their suppliers. Estimated bills are one of the most intractable problems we face. A customer believes he or she has been paying his or her bills and discovers that they have been estimated over a period of years, leaving him or her owing a large amount. That is a very difficult problem to resolve. However, smart meters will help us resolve it by providing more up to date information for customers. It will also help us avoid the manual costs of meter reads and network investment. We can gain from many areas of this project.
Phase 1 of the project will commence this year. ESB Networks is in the process of finalising procurement at the moment. This is a major project. We have to buy and install the meters, and then we will face a huge IT project around the availability of the data from those meters. ESB Networks has to update its central IT systems, as does every supplier active in the market. We will go from a situation where each customer is getting four meter reads a year or four items of data for all customers regarding consumption and how they will be billed, to potentially having much richer data. IT upgrades are required across the board. In our phased approach, over 2019 and 202 we will roll out the first 250,000 ESBN meters in a replacement programme, effectively upgrading the meters from what we have at present. The IT project is ongoing and we will be able to go live with the smart services by January of 2021. Meters in homes that have are capable of transmitting that richer data set will be live and suppliers can start offering different services to customers based on that. In the following two phases we will roll out more meters so that this will ultimately become a national replacement project. By 2024, we should have significant penetration by these meters. In effect, all homes and small and medium enterprises, SMEs, in Ireland should be covered at that stage, and the meters and the data will be working at full functionality. That is the plan, and it is well under way.
I want to talk about community-owned energy projects and community initiatives. Why is it taking so long for community energy projects and community energy initiatives to get connections to the grid? I am hearing stories of projects which have been waiting for seven to ten years. Why has this not been sorted out?
Dr. Paul McGowan:
Mr. Melvin will provide particular details, but this matter really boils down to the connection policy. There was a period when the focus was on connecting a large volume of wind energy in order to meet the 2020 targets for renewable energy, which led to a situation where a queue of various projects began to accumulate, including solar - small and large scale - offshore wind and others. Our approach to connections has changed and we have introduced a regular batch system, the purpose of which is to bring forward many of the projects that fit with the renewable energy support scheme the Government is initiating. If the Government, in the renewable energy support scheme, RESS, places an emphasis on community projects, our connection policy will also place an emphasis on them in order to try and match the support scheme with the connections. We acknowledge that there have been delays in connecting projects heretofore, but we have now adopted a different approach to connections.
Mr. John Melvin:
The previous system involved one large batch, perhaps 3,000 or 4,000 MW of connections, which took many years to build.
The current approach is that every two years or so there will be a smaller batch that could be developed, with offers made, and built. The timing of those would line up with the various Government policies and initiatives, including the RESS. The timing of the offers would coincide with the schemes there to support them. If those RESS auctions take place every two years, the batches will be designed to match that so that all the different arms of policy are lined up. Essentially, the batches for the connections will be timed to align with that every couple of years.
Mr. Melvin could provide a real-time analysis of what is happening but it is arguable that what he describes is theoretical. Is the RESS live now and what is the expectation for a community energy project in rural Cork, for example, if it started tomorrow?
Dr. Paul McGowan:
The RESS is due to go live in 2019. It is a Government target but it is not within our bailiwick so I cannot be definitive about it. It is our understanding. It is important to say that if the RESS prioritises community projects, our connection policy will prioritise community projects.
Okay. There is much talk of the front end of what consumers will see and the choices they might have relating to energy supply into their homes. That is fine and wonderful. I have had some briefing from the ESB about smart metering. I want to get to the back end. If we are going to encourage a move towards renewables, we need to hear from the CRU about how it will unlock the regulatory burdens for community energy projects to get on the smart grid, as it has been called, and incentivise people to start producing electricity.
The logic of my intervention is based on the Scottish model. There are 500 MW now being generated and it is approximately 5% of renewable capacity in Scotland. It has hit that specific target. If we can translate a Scottish model into an Irish context, we would be doing a good day's work.
Dr. Paul McGowan:
Taking the ECP-1 as an example, we decided to prioritise DS3 and get projects on the wires, including batteries. We now have a series of approximately 2,000 MW of connection offers out there supporting the likes of batteries, wind and solar in order to meet that policy priority. The next batch will look at the next policy priority. As I have said, if this includes community schemes under the RESS, the connection policy will meet that aim.
I thank our guests for attending and for their presentations. I will try to avoid duplication so I will leave aside points I was to make around community ownership and smart meters, which have been covered extensively in the presentation.
In the area of microgeneration, the Citizens' Assembly recommended the selling back into the grid of electricity from microgeneration by private citizens at a price at least equivalent to the wholesale price. Incoming European Union legislation in the form of the recast EU renewable energy directive will usher in some of these elements to generate, store and sell renewable electricity for consumers in Ireland. What are the challenges to microgeneration, storage, self-consumption and exporting to the grid? How can we overcome these challenges and will we do so? How far are we from getting a tariff for selling electricity back to the grid? Many farmers are seeking to produce and sell renewable energy as part of their business models by using, for example, rooftop spaces for solar power or other methods. When will they be able to produce and export to the grid?
Ms Aoife MacEvilly:
This is the kind of option that smart meters will facilitate. They will be able to record how much electricity is being exported, which just is not possible through the current metering system, and suppliers will be able to receive the data. The smart meters will also match the supplier and the customer's home with the wholesale market, it will be possible to link with the half-hourly price on the wholesale market. People will be able to see the pattern from when electricity was exported and what the price was, effectively, in that period. It can be fed through. The smart meters are the enablers but there may be other actions that need to be completed in market methods to enable suppliers to offer that process. We are happy to work on that because we know there is a real appetite to do it and we know it is part of the Citizens' Assembly agenda. There will be a real benefit. It is worth stating that for most customers in a domestic setting who invest in solar photovoltaic systems, a majority of the benefit will arise from them avoiding the purchase of electricity. I am not sure what will be the value of exported electricity. From the idea of equity, we will work towards people obtaining the wholesale price.
It is a very important principle. We heard from EirGrid about its ambition to reach to a level where 75% of renewable generation is in the system. Ireland is currently at a world-leading 65% in this regard. It is great that we are showing leadership in the area. What is the impact of having large levels of intermittent renewables on the grid? How is EirGrid and the ESB planning for more stable generation that would underpin the process? That is also necessary.
There is enormous potential to generate renewable energy in maritime areas off the coast. What are the obstacles to development of successful offshore renewable energy and how can these be overcome? How exactly are our guests examining the position regarding renewables?
Dr. Paul McGowan:
I will start and then pass over to Mr. Melvin. It is widely acknowledged that the DS3 programme and the delivery figure of 75% is groundbreaking internationally. Many people are looking at what we are achieving. The reality is we are at 65% and security of supply has been shown to be maintained. We have demonstrated that the system can cope with 65% and the increase to 70% and 75% will be subject to trial before it becomes transmission policy. It will require a radical change in some aspects of the generation portfolio. For example, one of the key elements we are considering is the role of batteries or fast-acting storage and discharge devices. Batteries seem to be the predominant technology in this area. DS3 is now delivering competitive auctions to bring that type of technology into the system. Next year we will run the first auctions to deliver between 90 MW and 110 MW with that type of technology. This is the sort of technology we must see on the system in order to deliver the required level of renewables penetration in the system while maintaining security.
Mr. John Melvin:
I am not sure I can add much. The DS3 programme was designed to indicate the services that the grid needed to see in order to be secure while having large amounts of intermittent renewables. The wind may or may not stop blowing, for example, so reserves need to be ready to react quickly. Frequency on the grid can change when there are many renewables on stream. The purpose of this product was to keep the grid frequency stable.
We have seen that evolve over time. We are purchasing the amount of these services required as the level of intermittent renewables goes up. As Dr. McGowan said, many of the existing generators have modified and changed their equipment. At one time the key focus for generation was efficiency, that is, to burn less fossil fuel for more electrons. In the recent past because of these signals, it makes sense for generators to have flexibility to be able to respond quickly as well as efficiently. That is because flexibility allows the greater levels of on-grid generation.
Other ways to support more traditional generation are capacity mechanisms, including making payments to generators for being present on, and available to, the system. As more and more renewables come on stream, the actual energy price declines. As there is no margin at zero pence, why would those generators stay? There are two parts to answering that question. The first is payments for creating the services allowing a greater amount of renewables onto the system. A support or a price also then will be paid for actually having generators on this island that are useful to us. That is how we can allow that to develop and be supported.
Mr. Garrett Blaney:
On offshore technology, there has been a significant reduction in cost across Europe. We have seen a major change, mainly as a result of auctions. As the new RESS process is auction-based, it has been driving down the cost of offshore generation. From our point of view, as my colleagues have explained, we will follow whatever is in the RESS system and try to facilitate that. It is a matter then for the Minister and the Department as to how that is designed. We are happy to input into that and to give further information. If offshore generation is part of that system, we will look at its efficient integration.
On carbon tax, the UK has introduced a price floor for carbon in the electricity sector of £18 per tonne of CO2. Has that been examined in an Irish context for the emissions trading system, ETS, sector and how would the CRU view that? Ireland's Climate Change Advisory Council has also recommended that a long-term price be set for carbon of €80 per tonne by 2030 and that any increase in carbon taxation should be accompanied by measures to address energy poverty and reduce negative impacts on poor households. How could this be implemented in a way that would not negatively affect those who are fuel poor or in rural areas? We have had the process with water charges so it is really important that we bring people with us however we do this. Are there lessons we can learn from the water charges process?
Dr. Paul McGowan:
Deputy Heydon is definitely straying into the area of Government policy, in which we obviously have no role. I will say, however, that a price floor or whatever will have an impact on the wholesale energy price in the market. We have always stated that our role is to ensure the cost of energy is as low as it can be - not cheap - taking account of the need for security, sustainability and so forth. It is a matter for Government policy as to how the impacts of those charges are dealt with at a societal level. I do, however, agree with the Deputy - this is one thing we have noted regarding any major change we are looking at introducing - that people must want to go on this journey with the energy retailer, the generator or whoever it is. People need to accept the gas or electricity infrastructure in their communities, they need to accept the generation technologies and they need to accept smart meters in their homes if this journey is to be a successful one.
The political message to the regulators will be to put increased attention on emissions reduction. While the energy sector has done more than the agriculture and transport sectors, which have done absolutely nothing, the reality is that we are still 90% dependent on fossil fuels for our energy mix. That has to change. Renewables are only 9.3% and that will lead to significant cost to the Exchequer. Last year, emissions only fell marginally and that was because of a mild winter and because Moneypoint was out of action for a while. We have to scale up our ambition. I am fearful that we still do not get that across the State. I have some direct questions. When will the auction be next year?
Moneypoint has been out of action for two or three months now. As was mentioned earlier, with our interconnection capability we are able to run our system. Could we, on a security basis, shut down our power stations fired by oil and peat and manage the country with renewables, gas and interconnection?
Ms Aoife MacEvilly:
I think that is perhaps a long-term vision rather than something we could do overnight. Moneypoint has been down but we have had really good wind, good interconnection, neither of the interconnectors were down, and peat has been part of the fuel mix. If all of those were to go overnight I do not think any of us would be as comfortable about security of supply. We should, however, start planning in that direction. It is worth saying that the PSO ends shortly. By 2019 and early 2020 that PSO will be gone and 100% peat burning should be no more in this country.
Ms Aoife MacEvilly:
We would not, however, be able to take as much wind onto the system so we might win on one side and lose on another. I am not saying it is not possible but we also want to make sure the lights do not go out as we transition. That is part of bringing people with us too. What the Deputy is talking about may be more for the medium term than the long term but it would need to be planned.
That is fine. The ESB has just got money from the Government to put fast chargers on motorways. If the Government came to the Commission for Regulation of Utilities or if the Oireachtas recommended the initiation of a mechanism whereby supermarket car parks, public car parks and offices were mandated to provide a certain percentage of fast-charging EV connection points, would that fit within the new structures being put in place on how EV charging networks should work?
Mr. John Melvin:
I expect that would be part of the vision for the electrification of transport. In the longer term, if nine out of ten people have an electric vehicle, they all arrive home at the same time and they all charge at the same time, local distribution issues might arise. As we have supported ESB Networks in a trial to understand the impacts of electrical vehicle charging and electric vehicle infrastructure, the Irish distribution system operator, DSO, has a head start in understanding those impacts. It is, therefore, something that could be dealt with or handled in the current structures.
I would take out the phrase "long run" from that answer. The point I am making is that we have to turn the long run into the short run. I believe we need to invest ahead of demand in this area and we need to make some bets on infrastructure investment to turn the long run into the short run. Perhaps Mr. Blaney, as the future data communications commissioner, might be best placed to answer my final question. I am very supportive of the smart metering project, as he knows. In our other committee we have been screaming for this for years. Who will own the data?
Mr. Garrett Blaney:
This is a really interesting point regarding the legislation. As it stands, we need to ensure we comply with all of the European legislation, particularly GDPR. My colleagues have been in discussion with the Data Protection Commissioner on this. It is important that consumers have confidence in the smart meter, that they have control of their data and that the data are not being used for any purposes for which they would not wish them to be used. I am not sure it is necessarily a telecoms dimension. Certainly, between the Data Protection Commissioner and the rights that are set in the process with ESB Networks, we are confident there will not be misuse of data and that data protection is built in. Perhaps Ms MacEvilly might like to add to what I have said?
Ms Aoife MacEvilly:
I agree with Mr Blaney. It is, ultimately, the customer who owns the data.
If we take what might be very granular data such as the half-hourly data, the Data Protection Commissioner and ourselves would view that as personal data and, therefore, the GDPR, would apply. On the other hand, data are coming from our meters already and that is necessary for billing. We want to make sure we get the right balance between still being able to extract a level of data from the meters to enable billing and better information to customers but nothing that would be construed as personal data without the customer's opt-in acceptance of that. If they allow it to be given to ESB Networks or their supplier, the supplier does not have the right to simply pass that on. The customer has the right all the time. That is an important point.
I thank the witnesses for their submissions. I welcome the approach of putting customers at the heart of this process and that they will be able to avail of different technology that will enable them to lower their bills. Better price information and education on this is key. How do the witnesses propose to educate customers about smart meters? It was stated that the installing of smart meters will be part of a national replacement programme over the next few years. Will the witnesses confirm that the installation of a smart meter will not incur a cost for the customer? Can I presume that the smart meter will feed into a central database and provide up-to-the-minute data for the CRU and other organisations? That question was partially answered in respect of the GDPR. One of the witnesses might further tease out what will be involved in that respect.
Mr. John Melvin:
The information from the meters will be transmitted through telecommunications infrastructure to ESB Networks, which is the distribution system operator. It will hold that information. The information will be pulled a number of times a day back to ESB Networks. This all assumes that the customer has opted in and has allowed the information to travel on that basis. That will record the consumption every half hour. That information is then passed on to the supplier of that customer. CRU will not be getting these data on a minute by minute basis.
On the question of whether the customer will see a bill for the installation of a smart meter, the answer is, "No, they will not." However, the meters cost money. There is already a meter in place. The paying down of the cost of that and its maintenance is inbuilt into the distribution system tariffs that form part of a customer's retail bill. No one will approach customers and present them with a bill for the new smart meter, rather it will be a case of providing them with their new meter. They either will have opted in, in which case the data will flow, or they will have not, in which case only the standard amount of data will come.
As for getting that price information to the consumer, there are many different methodologies and mechanisms. For example, the half-hourly price is available on our website today. One of the ways in which this might work, and it is only one such way, is for the customer to have an app in their home that is connected to the Internet that knows the price in this half-hour and that, essentially, could turn on the immersion now because the price is very low and there will be hot water when X, Y and Z comes home. These sorts of decisions can be made without human intervention. When we did the customer behaviour trial, essentially, as Ms MacEvilly said, the technology was not that sophisticated and it required customers to decide themselves that they would not turn on the dishwasher or the washing machine until after 7 p.m. or that they would get an item of work finished before 5 p.m., if they were home before 5 p.m. Even that required level of human intervention allowed people to shift nearly 9% of the peak most expensive consumption out of that area. People had the simple information that the period from 5 p.m. to 7 p.m. was expensive and could move consumption from that period. Those who participated were able to move activity away from the more expensive periods into the cheaper periods. Also, by being able to see their information over the past week, they could see, for example, that the immersion must have been on all day and no one was in the house. The provision of such information to the home, possibly by way of the Internet of things in the future in a more sophisticated way, will allow people to cut their overall consumption by around 3%.
Does the CRU propose the roll-out of a national information programme for the consumer? Many people who will be availing of these smart meters will not understand them. Mr. Melvin said that people will have opportunity to opt in if they want to share their data. Is that correct?
Ms Aoife MacEvilly:
We very much recognise, and I should have mentioned this during the presentation, the importance of explaining this to customers and bring them along with us. One of the key areas on which we are currently working with ESB Networks and suppliers is a communications strategy. We are starting to roll out the meters in 2019 but the smart services will not be available until 2021. We realise there is a gap in that regard. We will not be going out with a big singing and dancing national advertising campaign about smart meters when they will not be very smart for two years. It will be more about informing customers, making sure there is information available to address any concerns they have in advance of the meters being installed in their areas and then, as we get to the point where the smart services are turned on, we will step up the information campaign to ensure customers can understand how they can benefit from having a smart meter, how they can avail of it and the offers available from their supplier. There will be much more information coming down the tracks then as we move through the phases of the roll-out. That strategy is core and I thank the Deputy for this opportunity to set it out.
Dr. Paul McGowan:
We have a list of them on the screen. On the gas side, we regulate Gas Networks Ireland; on the electricity side, we regulate ESB Networks and EirGrid, and in terms of water services, we regulate Irish Water. Those are the four utilities, per se, we regulate. Also, any person who sells electricity of gas to final customers holds a licence from us and, therefore, we also regulate them.
I represent Dublin South-West, which is located in the area administered by South Dublin County Council and it has a social housing stock of approximately 10,000 houses. That can be replicated in every local authority area although the numbers would be different. Those 10,000 homes would comprise 10,000 individual customers with different accounts across the utility companies. I have a suggestion which would offer many advantages. Is it open to a local authority to organise a best-deal system for its 10,000 social housing tenants? If it is, there is a quite a substantial housing stock. I know the CRU will be rolling out smart metering. Many of the innovative solutions offered by some of the companies are quite pricey. They may offer savings and they definitely offer savings over the medium term, never mind the long term, but they are aimed at middle-income earners who can afford it. I am mindful of those who cannot afford these types of measures. If a local authority could purchase bundles from utility companies, it would put it in charge, in a much better way without controlling the entire process, of securing deals, reducing energy costs and monitoring all those energy costs. Retrofitting is often the way we deal with some of these matters but that involves a major cost. I do not know if this question has been raised previously or whether the commission has a view on that. Would that proposal be an option if South Dublin County Council decided it would be in the best interests of its tenants to look after the supply of electricity to those 10,000 homes, that it would get the best deal from the ESB or Energia and would renegotiate it from time to time, as well as ensuring its tenants were as well educated as possible in terms of energy use?
Ms Aoife MacEvilly:
Yes, but the new houses will be best in class. As soon as ESB Networks has procured smart meters, all new houses will have them. In terms of mass buying on behalf of customers, it will almost be like the Big Switch campaign because customers might group together to negotiate a deal that is open to the local council. From our point of view, customers will always have a right to switch and we need to ensure it is available that if someone moved into a house and found a supplier he or she did not like, he or she could switch to a different supplier, and that it would comply with the supplier handbook on customer protections. That would be open to local councils to explore if they wanted to bring those customers together.
Is there a gain in that for a bulk buyer, in terms of the objective of all of us, from a carbon footprint point of view? If a local authority decided it was something it could do and get involved in, would there be a gain? It is not just about the best deals. It is about beginning a process of reducing energy use and so on.
Ms Aoife MacEvilly:
To be clear, the local authority would not be the customer. Rather, it would be the individual householders. There are options and there are quite a number of suppliers that are certified as supplying 100% green electricity. People could engage in that regard. Many suppliers offer bundles and, as the Deputy noted, smart home bundles, such as Nest, Climote controllers and other smart home technology, are available if the customer switches supplier. As long as the customer, who is the householder, has the right to choose, those customers could be brought together as a group and shown an attractive deal that is green, renewable and offers alternatives which could be facilitated.
Things have changed. Ms MacEvilly referred to the customer, but she is wrong in this regard. Someone who rents a house, not from a local authority, approached me recently and asked whether rules could be brought in to obligate landlords to introduce the best energy technology in their home. He said he is very much in favour of doing what he can to reduce his carbon footprint but his landlord controls the heating system in the house. The man said he pays the bill but he does not control the energy that creates the heat in his house. This is a matter we can consider. If a local authority controls and essentially owns 10,000 homes, as in the case of south Dublin, while the customer has a right to decide the supplier, the State owns the house. There are 10,000 homes which Ms MacEvilly said could purchase exclusively green energy. Who will argue with that? It may make only a small impact but it will be a significant impact if it becomes a policy issue. The customers may be in charge of the supplier but they are not in charge of the energy. The constituent I spoke with would love to have a heat pump but there is a gas boiler and he has no control over it because he does not own the house, which is owned by the landlord. We might have to investigate this matter.
I thank the witnesses for appearing before the committee. How old is the smart technology they are speaking about? Has it been rolled out in other countries? If so, when was it rolled out, what are the results and why was it not rolled out in Ireland sooner?
On data centres, what will be the impact on the grid of increased numbers of data centres? With significant growth projected in the area, who will pay for future maintenance and upgrades of the grid? What impact will it have on electricity consumer bills? On the electrification of heat and transport, how will the commission ensure the grid will be able to support the increasing energy demands from the large-scale electrification of heat and transport, such as from electric vehicles and heat pumps, that is needed to help meet Ireland's climate targets?
Dr. Paul McGowan:
I will take one or two of those questions at a high level before passing them on to some of my colleagues. On the grid and its ability to cope with future demands, through the price control we look to the utility to bring forward what it considers to be the investment that needs to be put in place to meet future demands. The utilities carry out rigorous exercises to try to forecast demand in both optimistic and pessimistic scenarios. They try to pitch an infrastructure investment plan that will meet the needs of the next five years, as well as looking into the longer term with longer-term projects. We work with them and determine whether their plan is reasonable. Ultimately, our decision on their revenue control will ensure they have the funds available to make the necessary investments.
The Deputy mentioned data centres and their impact on grids. It is clear that data centres are a significant driver of demand on the Irish electricity system and that will continue in the near future. They tend to be fairly flat loads and, therefore, they tend to be a reasonably efficient load to feed. Nevertheless, they raise the peak and they will have an impact on grids. Part of what we are trying to do is ensure that data centres can locate in parts of the country where there is more capacity on the grid than in others because they will take less time to connect. If they insist on connecting in areas where there is a lack of grid access, our role is to see whether they can be part of the solution. As part of their development, can they deliver some of their own energy solutions, while also recognising that in some cases time may be required to roll out the grid and meet their demands? Ultimately, one of our roles is to ensure the cost of all of this infrastructure is met on a fair and equitable basis across the range of customers.
On the roll-out of smart technology, I will hand over to Mr. Melvin or Ms MacEvilly, who are more up to date.
Mr. John Melvin:
The technology that is being purchased is towards the end of the purchasing phase and, therefore, it is up to date. By the end of 2020, it is expected that there will be approximately 700 million smart meters, mostly in Europe and the USA. It is a major infrastructural project that will take a number of years to be rolled out. We underwent a number of phases in the evaluation of the project, which involved statistically relevant customer behaviour trials, a high-level design phase and a detail-level design phase. In 2017, we made the decision to roll them out because the cost-benefit analysis was such that it made sense. The most cost-effective way to roll it out was the phased approach that Ms MacEvilly described earlier, where we will do 250,000 from next year. Once the 250,000 have been completed, it will allow time for the communications infrastructure, that is, the backbone of all of this, to be put in at approximately the same time. We are, therefore, up to date.
Mr. John Melvin:
By the end of 2024, all 2.2 million meters should have been replaced, which would be in every home. As customers take up this option and understand the benefits of using less electricity, they will have the ability to use less electricity, move away from more expensive electricity and use more green electricity.
It is as customers take it up and react. This enables customers to do that, but it does not mandate anybody.
I welcome the representatives of the CRU. I wish to inquire about the efficiency of the CRU in granting the various generation licences, certificates of high efficiency and so forth to organisations and individuals who want to get into electricity generation. I refer in particular to the Mayo Renewable Power project for the 45 MW high efficiency combined heat and power plant, which will be biomass fuelled, at the former Asahi site in Mayo. This project has been ongoing for some time and it took from approximately 2006 to 2015 for the project to get all the consents in place, including a certificate of high efficiency at 100%. In 2016, the project ran into difficulty with the boiler which led some investors to pull out. Thankfully, it is now back on track. Basically, there is a new promoter who is trying to replicate the same project with the same design, proposition and so forth. There is no material change to it. It needs four consents from four different authorities, including the CRU. It has succeeded in getting consents from Mayo County Council, for planning permission, the Environmental Protection Agency, EPA, and ESB Networks.
However, an application was made to the CRU in June for the consent it requires but it appears to be encountering a great deal of difficulty. First, the certificate of high efficiency which was granted at 100% previously was given a 70% rating by consultants retained by the CRU. I am aware that the CRU has gone back to the drawing board on that because there has been no indication of where there is a material change in the proposition. Mayo Renewable Power has no idea when the consent will come through. It is a €255 million project, and €95 million has already been spent on it by the investors. It has strategic national significance in that it will help us achieve our renewable electricity targets and in meeting heating targets. With regard to the region, it is required for the development of a data centre for which there is planning permission. It has been identified by the county council, the IDA and everybody involved as being of strategic importance but the project is in danger of falling flat on its back-----
I will conclude because the case basically speaks for itself. It is in danger of falling flat because of the various components or moving parts which require investors to know what is going to happen. What is happening does not make sense.
Mr. Garrett Blaney:
Obviously, we have different functions in terms of issuing different licences. There are generation licences and supply licences. Mayo Renewable Power is a specific case. There is a European directive on high efficiency CHP and our role is specific under that. We must refer to the European legislation and demonstrate that it is definitely a useful heat. Useful heat is a key part of the high efficiency. Once it gets that useful heat certification, it can get specific support under the renewable support mechanisms. There is a much higher amount of money available if one is high efficiency as opposed to low efficiency or normal efficiency. This is genuinely quite a complicated area. It is complicated legislation in terms of interpretation. There is a great deal of thermodynamics in the process. We must assess whether, in the absence of the project, that is, the high efficiency CHP, this heat use would still have been done. That is the test for us to try to assess it. It took us quite a long time originally. The project itself has questions about the specifics of biomass fuel. The useful heat in this case is drying fuel, so we must ensure that we are confident that it is properly dried and has a proper use. It has taken longer than we would like. It took us a long time the first time, and we are trying to work our way through a number of legal aspects. We have engaged in quite an amount of activity on it. It has been a priority for the organisation. I have talked to the county manager on numerous occasions. It is an issue for the county manager and the county as well. We will continue to examine it but there is nothing more I can say. It is still under consideration at present.
What has changed materially given that the CRU was certifying it as 100% high efficiency previously? It would have proceeded but for the financial glitch that the previous promoter encountered. This was a state-of-the-art innovative project. It did not fit into the wind category because it is combined heat and power. I understand that prior to the last-----
Dr. Paul McGowan:
We must be fair to the process here. There is a process of consideration at present, so I do not wish to give a public explanation of all the details of the project. It is under active consideration. We are giving it priority in the organisation. I am unable to say much more than that.
I thank the witnesses for attending the meeting. I have three questions. With Brexit ongoing, what discussions have taken place with the utility regulator in Northern Ireland and the UK on energy security and the impact Brexit will have, whether it is a soft or hard Brexit? Will they brief us on that? It is important to see what is coming and what is happening in the UK. At EU level, what is the EU interface on moving towards better energy security across the EU in the context of climate change? What discussions are there in that regard? As regards price fluctuations and our dependence on carbon at present, what are the hedging strategies or mandates whereby the CRU interacts with the various energy providers? Does the CRU have a macro hedging strategy for Ireland given that it is carbon dependent? Obviously, price fluctuations occur and consumers complain. Despite the number of companies that provide energy, there is frustration with the ongoing price fluctuation which appears to be linked to the active market position. Many developing countries are trying to hedge some energy efficiently. What are we doing on that as we transition to a more efficient energy scenario?
Dr. Paul McGowan:
We do not get involved in hedging strategies, macro or micro. That is a matter for the players in the market to determine. They have a variety of tools available to them, such as proxy hedges. For example, as the cost of electricity is so closely linked to the price of gas, they can back off some of their price risk in the electricity market with the gas market. There are also hedging tools available within the electricity market such as two-way and one-way contracts for difference, CFDs. In fact, the capacity remuneration mechanism operates on a one-way CFD basis to protect those who are-----
Ms Aoife MacEvilly:
That is probably one of the ways the suppliers compete. Their ability to have an effective hedging strategy, whether that is owing their own generation capacity or engaging in different types of hedging, is the way they compete. That is their competitive advantage. If we start to tell them they must do it in a particular way, it means, first, that we are saying we have a better idea than anybody else about what is happening in the market, which we do not, and second, we would eliminate one of the key competitive areas. It is interesting that while there is a major focus on hedging, because everybody is thinking about protecting against the future price, we may move to a market where there are more dynamic tariffs available.
For instance, large energy users might expose part or all of their energy consumption to the market price because they would get the benefit of the lower wind related price periods. Hedging may become less important and we may move more customers, including domestic customers, into that tariffing arrangement with some protections obviously because hedging is notoriously challenging. In fairness, however, we would not get into that space.
Mr. Garrett Blaney:
Energy security is also a key area in the clean energy package. We have a function on energy security and we make relatively frequent reports on an annual or biannual basis to the commission in terms of our progress. Energy security has become much more complex in many ways. There are new issues, for example, cybersecurity, which is one of the areas we have been examining. We have written to the companies urging them to take extra protection around cybersecurity. It is an area about which we can never be in any way relaxed. We have a constant vigilance on energy security. We are only as good as the next incident.
The Comptroller and Auditor General had concerns about the cybersecurity unit in the Department Communications, Climate Action and Environment. Has the CRU had any interaction with it? Has it flagged concerns within Government regarding the threat of a cyberattack on our energy system based on the technology we use?
Mr. Garrett Blaney:
We have talked to that unit. We have talked also to the Department officials who are dealing with the NIS directive and associated directives. We also talk directly to the companies regarding cybersecurity. We share best information with other regulators across Europe. There is a significant degree of collective experience. I have had some engagement with the Americans regarding their cybersecurity. We are only as good as the next incident and we must be constantly vigilant in this area.
Dr. Paul McGowan:
From a Brexit perspective, we are in a unique position in that the wholesale market we operate runs on an all-island basis. It is jointly regulated by both the Utility Regulator, UR, and the CRU. The focus of the single electricity market, SEM, committee - comprising the UR, the CRU and the independent member - which oversees that is to protect the single electricity market and ensure it continues in its current form, regardless of the outcome of Brexit. We have sensed a level of political commitment from both London and Brussels in that regard, and it is on that we are focused. We do not get involved in any negotiations in respect of Brexit. Those negotiations are carried out by the Government.
I have a few brief questions on costs, which are important in terms of public perception and the public purse. On prices and moving to different forms of energy to protect against rises in electricity prices, Ireland has the fourth highest electricity prices in the European Union. The Commission for Regulation of Utilities appears to judge competition in the market on switching rates alone. These are not fully indicative of competition in the market. Some people cannot be bothered to switch, while others know that if they switch, they will go back to the original contract after perhaps a year. What investigations is the CRU doing in the market? It is seeking further powers but more powers bring greater responsibility? Is the CRU using the powers it already has to investigate individual suppliers? Investigations into pricing in the market are important because pricing is key to people buying into the new technology.
Regarding delays in connections, there have been many complaints from different industries about delays but that was alluded to earlier.
The witnesses spoke about the use of smart meters for energy efficiency. The CRU is also the regulator of water services. The reference to smart meters and water in the same sentence will not cut it with the public. We saw this in the outrage expressed in marches on the streets, which resulted in the idea of universal metering being abandoned. In terms of having smart meters for water, we need data on water use and quality and we need ideas at community level on where it is going. The introduction of meters is anathema to people. Unfortunately, legislation providing that the public water system would remain in public ownership was voted down. Would it help to have such a provision inserted in the Constitution? We will at some stage need to quantify all the data on water usage. There is not much on water in the CRU's submission, which is focused on energy. While I understand that, water services are also crucial to our sustainability.
Ms Aoife MacEvilly:
I will start by addressing what is happening in the market. We conducted a major review of competition in retail electricity and gas markets in 2017 to examine what was happening, what was working well, what was not working so well and what we could do better. We saw there were many changes in wholesale prices and our customers saw the changes in the retail price. In general, we found that the changes in the retail prices were broadly following the underlying market trends. When prices went down in the wholesale market, the retail price came down following a small lag because of hedging. As wholesale prices have gone back up, we are seeing the retail prices following.
We found that there are benefits to competition and that the customers who switch and are active get the best of those benefits. We decided to examine what we can do, using our existing powers, to empower customers and to get more people active. We did a fair bit of research into the reasons some people do not switch. The Senator is correct that some people may not care and switching may not be a big issue in their household. However, there are customers who want to get better value but are sometimes put off in that they find the task confusing. If people are confused or worried they might make the wrong decision, they step back and do not make any decision.
We introduced three new measures to help support customers. One is called the estimated annual bill. We know from some of the behavioural research we have done that it is impossible for customers to compare two offers where one promises a 25% reduction and the other promises a saving of €300. We required all suppliers to indicate the estimated annual bill a customer would face based on an offer. For example, if in the case of one supplier the estimated bill is €1,000 and in the case of another supplier it is €950, the customers can decide to take the option offering an estimated bill of €950. That is now a requirement in respect of all advertising from suppliers of offers to help customers.
We were aware that customers switch but, as the Senator noted, subsequently revert to a higher standard tariff. This often occurs because they have forgotten or do not realise their account will revert to the previous tariff. A few months may elapse before they get the higher bill and ask why that is the case. We now require all suppliers to send out a notification 30 days in advance of the expiry of the offer period and remind customers it is time to look around or renegotiate. The Senator is right that the issue is not only about switching. We place considerable emphasis on customers renegotiating with their current supplier. As customers come to the end of their tariff period, they should phone their supplier and ask what it can offer as they will otherwise consider switching provider. In many cases, the supplier will make another offer to retain the customer.
The third measure provides that suppliers issue a notice to customers who have never switched and those who have not switched for a long time noting that they have been on the same offer for a long time and that better offers are available and asking if they would like to discuss the matter. These measures were rolled out in different phases earlier this year. While it is early days and it may be because prices are going up, switching levels in October of this year were higher than in any one-month period during the past seven years. We believe the message is getting across.
For the first time, the CRU has had a consumer outreach campaign, Switch On, mostly on social media. Customers might not trust SSE Airtricity or Electric Ireland to give them objective information but we hope they will trust us and we provide such information on our website. Those are the types of activities in which we are engaged. Also, if there are complaints against suppliers, we follow up on them. We audit suppliers to make sure they are complying with the supplier handbook, which is the key regulatory protection for customers. We are quite active in that space.
Mr. Garrett Blaney:
I will address the question on metering.
Water meters were based on the introduction of a charge whereas smart meters are being rolled out in a different context. All households already have electricity meters and there is a long history of charging for those commodities. In that context, I would like to separate those two.
The CRU does not have a view on the constitutional amendment per se but we do have a view on the importance of good data. Good data is absolutely key. We, for example, cannot incentivise leakage reduction unless we know the actual level of leakage. We cannot hold Irish Water to account for its ability to deliver conservation or other requirements unless we have good data. We rely on the more than 200,000 industrial and commercial meters and the more than 600,000 domestic meters currently in operation. Meters will be installed in all new houses. As well as that, Irish Water has in place an existing network of district metering in which it is investing to ensure that it is upgraded and fully functional. It is through data gleaned from this multitude of sources that we would expect to have the ability to deliver on the conservation and leakage reduction targets that are required for water. That will not be possible until we have really good data and we are not there yet. Irish Water has a long way to go in terms of delivering the level of data that we require. As I said, good data is absolutely vital if we are to successfully deliver the leakage reduction levels that are required.
Dr. Paul McGowan:
As discussed previously, the real enabler for the so-called prosumer, that is, those who generate electricity from micro-wind or micro-solar, is the smart metering programme which will allow them to identify when they might want to sell power. It will also allow for the measuring of the level of export and enable a settlement to be agreed between the prosumer and the buyer, which could be an energy retailer. The two are intrinsically linked. The delivery of smart metering will deliver the ability of microgenerators to sell to the grid on a national scale.
Mr. John Melvin:
Of the first 250,000 smart metering installations, it is intended that the oldest meters will be replaced first but people can put their hands up and request smart meter installation. The usefulness of that when it comes to selling any microgenerated power in the home will depend upon things like smart services being turned on and whatever other arrangements are available, such as an entity to buy the power. If individuals are actively generating power and want to avail of this opportunity, they can request a smart meter in the first phase of roll-out and take it from there but they will have to wait for the smart services to be turned on before the meter becomes useful. In short, microgenerators can ask for a smart meter now.
The main barrier to the development of offshore wind generation is not the cost but the licensing process through the Department of Communications, Climate Action and Environment. What role does the CRU have vis-à-visoffshore wind? Does it control the connection points for offshore wind farms? Does it give permission to access grid connection points in order to ensure that there are only one or two such points along the coast, rather than ten or more, for example? Does the CRU control that?
Dr. Paul McGowan:
We have no role in respect of the foreshore licensing of such projects but we do have a role in terms of connection policy. Connection policy is part of our remit and we must determine where the transmission system ends for these projects, which tend to be large-scale in nature, and where direct connection to the offshore wind farm begins. That will form part of the work that we will be doing if, for example, the new renewable energy support scheme supports offshore wind. In that instance, that will be one of the key questions that we will be answering.
Dr. Paul McGowan:
Again, it would all depend on the siting of these offshore wind farms. If they are in very disparate locations that would drive a particular approach whereby individual connections would make sense. If, on the other hand, they were all clustered in one area, it might make more sense to take an alternative approach and connect the clusters to one hub. The key issue from our perspective is that whatever we do, there must be absolute clarity on where the developer's obligations end and the transmission system operator's obligations begin because without that, we may end up paying twice and we do not want to do that. We must be absolutely clear because the connection of offshore wind power will be, by definition, expensive.
Ms MacEvilly spoke earlier about the PSO that supports peat-based electricity generation. When will that stop? Can the PSO be used to support a just transition for the workers and what administrative or legislative measures would be required to enable that?
Ms Aoife MacEvilly:
In terms of the peat PSO, the contracts for the two plants were of 15 years' duration. As I understand it, if there is no successor co-firing with biomass contract, the contract for the first plant will end this time next year and the second one will end in early 2020. Given the way that the PSO works, the final settlement may not be until the following year but it will effectively be out of the PSO levy system at that point. We will no longer be supporting peat generation through the PSO.
The PSO is allowed, under Irish and EU law, to support electricity generation that would not normally be delivered by the market which is beneficial either from a renewable, low carbon perspective or from a security of supply perspective. The individual rules have to be agreed through the state aid clearance process. There is a complex set of very specific state aid documents that outline exactly what the money can be used for, no more and no less. There is also legislation which binds the CRU in terms of calculating the payments. It would be difficult to continue collecting the money and to use it for a different purpose but there may be other ways of funding a just transition. That is a broader question relating to issues such as carbon tax or carbon price wars.
My last question is for Dr. McGowan who referred to the CRU's vision, which encompasses security of supply, affordability and a low-carbon future. Does the CRU have the resources to make this happen? The transition involved is huge and we need systemic change.
Dr. Paul McGowan:
That is a very fair question. Those who know the CRU will know that our responsibilities have increased over the years. In fairness, when we have sought additional resources, we have generally had a good reception from various Departments. We will carry out a workforce planning exercise early in the new year and, to be honest, my expectation is that we will identify resource gaps in terms of the delivery of our vision and what we have at present.
We will make that case and put it forward to the relevant Departments and I am hopeful we will have a successful outcome but we will be challenged from a resource perspective as we go into 2019.
I thank the witnesses for their interesting presentation.
All of the questions have probably been asked but I would like clarity on one issue. With the advent of smart meters and smart grids, will it be possible for business-to-business transactions and trading? If one business is a producer of energy and another business is a consumer of energy, could they work together to maximise efficiencies and use best practice to be as efficient as they can?
Ms Aoife MacEvilly:
That type of option will come down the track. The Deputy may be familiar with ESB Networks' Dingle project, which is looking at different types of smart technology that would enable what he is talking about on a community basis. It may use things like block chain and new technologies that we will all have to get to grips with as to how they work best from a consumer perspective. That is the kind of innovation the CRU will try to incentivise to see what works best. The value of community schemes is not just about building wind farms and some of the approaches the Deputy is talking about will help to bring people with us. We are open to that.
On behalf of the joint committee, I extend a very warm welcome to Lord Deben, Chairman of the UK Committee on Climate Change, and Mr. Chris Stark, CEO of the committee. Both have travelled here specially to appear before us. We very much appreciate this and are looking forward to our engagement. I invite Lord Deben to make his opening statement.
I thank the joint committee for inviting us. We were very pleased to come. I will start by outlining my experience.
I have been Chairman of the UK Committee on Climate Change for the past six years and have another four to go. During my time as Chairman, certain issues have become very clear to me as the key ones that have affected our ability to operate. First, the Climate Change Act under which we operate has sought – successfully, I believe – to deal with the dysfunction of time. Democracy demands that a mandate be given again after a regular period. One has to have the mandate refreshed. On the one hand, that is what democracy is, but, on the other, climate change demands a continuous policy over a long period because otherwise we cannot deliver what we have to deliver. What the Act did was ensure these two elements could operate together. What happens is that every five years we produce the carbon budget and present it to Parliament. We have now produced five and Parliament has accepted each one of them. Once it has voted on a budget, meaning that the democratic mandate has been adhered to, it cannot change it, unless the climate change committee agrees. That is crucial because the difficulty is that when decisions are made, everybody immediately thinks not about the long term but about how they will affect his or her constituency and what will happen to Mrs. Miggins or a particular small factory. Our next carbon budget which will be our sixth will cover the period 2032 to 2036. That is far enough ahead for most Members of Parliament to think independently and in an holistic way. Therefore, the discussion is moved to reality and the issues are moved away from the individual questions asked if one was talking about what to do tomorrow. This means that what to do tomorrow is put into the hands of the government and Parliament.
The second point is that the climate change committee's job is not to lay down an annual statement of what the government has to do. What it has to do is keep its feet to the fire to meet the targets. It can do it in any way it likes. I have sometimes said that if the Secretary of State for Business, Energy and Industrial Strategy who is responsible for dealing with climate change wants to meet the targets by standing on his head and it works, that is perfectly all right. We will give a series of explanations for what needs to be done and a choice or menu. As we have to prove that what we propose in meeting the targets is possible, we present a series of scenarios and outline that if one does not do this, one has to do that. We give the government a range of options, but, ultimately, our role is not to make decisions of a kind that should be made by Parliament but to set the parameters within which the decisions have to be made.
That brings us to the third issue, which is that the system be very carefully arranged. It means that before the end of June every year, we have to assess how well the government has done in meeting the targets. That is an independent assessment. Before the end of October, the government has to produce a response. If our assessment is pretty tough, as it was this year, the government has to explain what it will do and it has to do so publicly. The advantage of the law is that one has to do it which for us is sometimes quite difficult. Whatever else we have got on, we have to produce our assessment by the end of June and whatever else the government has got on, it has to produce its response by the end of October. Therefore, the rule is very tough and clear.
The fourth element is that, unlike anywhere else, the climate change committee is a scientific and economic committee, not a representative committee. This is to distinguish it from the representative bit - the elected Parliament. The committee consists of scientists who are regarded by their colleagues as the leaders. The same applies to economists. I am the only non-scientist and non-economist. I have to be appointed, not by the Prime Minister but by the Minister responsible for dealing with climate change, the First Minister of Scotland, the First Minister of Wales and the First Minister of Northern Ireland when Northern Ireland has one. Therefore, the mechanism normally involves four parties making the decision. In my case, I had a Liberal Democrats member of the coalition government, a Scots nationalist in Scotland, a Welsh socialist and a Protestant unionist in Northern Ireland. They have a Catholic and a Conservative as their Chairman. It gives enormous independence because it means that someone has genuinely been chosen by a range of people who have said he or she is an independent and that they accept that independence. Consequently, that person is able to be critical of whatever government is in power and can also be congratulatory, which is important. When the government gets it right, it is very important for people to say, "Thank you." Being independent, someone can say "Thank you" without appearing oleaginous or sucking up to the government. That is important because otherwise people receive no encouragement.
Based on experience, there is one thing about the system that I would have written differently, not because it has not worked but because I can see it might not work. We do not have an independent judgment of how much money we need to run the secretariat we need to meet the requirements of the Act and perform the tasks the government asks us to perform and that we believe we have to perform in order to meet the requirements of the Act. I have to say we have never had an occasion to complain about governments. We have had three sorts of government to work under and never had to come with a complaint. The governments tried to keep us within rules and restrict our expenditure - all governments do - but I really do not have a complaint about it. I believe, however, that the one thing we did not get right was not having a court of appeal, so to speak. We should have been able to appeal to the Comptroller and Auditor General to assess whether we were being given the money. The Act states we have to be given the money to make it possible for us to do the job. There ought to be a bit in the law affording some independence, which the Comptroller and Auditor General has. That is what I would do.
They are the crucial elements which we believe are important. It seems helpful for me to repeat them because, having been Chairman for six years, I am very conscious of how valuable they are.
I thank Lord Deben and Mr. Stark for taking the time to attend today. We are grateful for their insights thus far. My question is simple. I will have an interactive session with the deputation, if I may, in the time I have. I want to get a sense from Lord Deben about Brexit and to what extent Brexit is informing his thinking as chairperson in terms of the challenges faced throughout the United Kingdom in the foreseeable future.
Of course Brexit is a terrible mistake. It is quite wrong. I have done everything I can to stop it and I will go on doing that. I want to make it quite clear where I stand on this matter. It is barmy and it is run by barmy people. It is not easy to operate when we are trying to deal with that.
It happens to be true that our legislation is in fact British or United Kingdom legislation. That climate change legislation is in place and we will continue along those lines. What Brexit makes difficult is that so many of the protections for the environment as a whole are thrown into doubt. All manner of promises have been given by the UK Government about what it will do and so on, but they are not in place now. I believe that the insight of the Pope in Laudato si'is singularly important. He talks about climate change as a symptom of what we have done to the world. I always look at it in those terms. The rest of the environment is important for fighting the battle about climate change. We should not think of it as a box on its own. We are concerned about the other areas of environmental protection that are guaranteed under European law. The UK Government has said all these will be taken into account and will be brought in and so on, but we do not actually have that legislation and such legislation as we have does not have money in it. I am basically a practical man in that I like to know where the money is coming from, and I do not see much of that at the moment.
That dovetails nicely with my next question, which relates to carbon budgeting. This is a feature of the landscape in the United Kingdom. We do not have that system here but we are talking about that system at the moment. It is developing as a concept. There are some signals coming from Government that it might be a way for Government to proceed. I am keen to get a sense or understanding of the dynamic that exists between the UK Prime Minister's office relating to setting targets and how individual UK line Departments measure up to those individual targets. If a Department does not reach a given target or hit a milestone, is there a punitive effect thereafter for individual Departments? It would be useful for those of us on this committee to have a sense or understanding of the dynamics that exist between the UK Prime Minister's office and the actual principle of carbon budgeting in the first instance.
As I go around the world answering questions from New Zealand to Australia and throughout the rest of Europe, I find one thing in common. No government is really joined up. That is the nature of all our systems, whatever they are. People complain about two things: one is the treasury and the other is joined-up government. The treasury is bound to find the things we want to do difficult because it likes to have control. Of course what we are asking for is long-term loss of control, which is what always happens. Governments are not joined up and this is our biggest problem. The UK Prime Minister's office has been highly supportive for us, but that is not where the power sits. It sits now in the UK Department for Business, Energy and Industrial Strategy, which is actually a great success. Those responsible were rather worried when the Department of Energy and Climate Change was amalgamated with the business Department, but actually it works. It works because we are moving from the position where decarbonising our electricity system was the key point. That is what has enabled us to decouple growth from emissions. Now, other things become more important, including transport, houses and especially land use. All those become more important. We are going to have to be far more iterative with other Departments now. It would be foolish to say that there is enough joined-up policy. I am pleased to see, however, that the UK Department for Transport, having been recalcitrant and having incurred my ire, has now come into line and has accepted the budget properly. In the end we win these battles.
I do not believe it is only about climate change. It is about many other things. It is difficult to get policies across the board. Let us consider nutrition and obesity. Ireland has a similar problem to the problem we have in the United Kingdom. It should be a matter for the ministries responsible for education, health and the Prime Minister's office. It is very important to get the policy across government, but Ireland has not managed it and we have not managed it either. This is a battle we will always have.
That leads me to one of the recommendations of our Citizens' Assembly. It spoke about creating an independent body above Government with legislative teeth that could put manners, as it were, on individual Departments. The idea was that it would take the matter out of the silo-based system that we all understand so well. Is there merit in that argument?
I was a Member of Parliament for nearly 40 years, so I am conscious of the democratic concept. I think it is dangerous to take it like that. We need to distinguish between the two elements. I am referring to parliamentary decision-making on what we should do and setting the targets against which we will be judged. In the end, what happens if the UK Government does not meet its targets? They are statutory targets and the UK Government could be taken to court and forced to meet them. I would not take the UK Government to court, but if someone did so, I would be the first witness for the prosecution. I hope the UK Government will do its job. Otherwise I would be rather embarrassed. That is what we have to do. The system works in that sense.
It is difficult for people to say there is no proper democratic control. It is really up to the specialist committee. If we give enough power to the equivalent of the Joint Committee on Climate Change, then we enable ourselves to pressurise the matter. I have used the example with the UK Department for Transport. So that he knows it is happening, I am about to start the same campaign with the Secretary of State for Communities and Local Government because he is the housing Minister and at the moment we are building crap houses. In other words, we are building houses that we will have to re-kit rapidly. Those responsible are doing it in Ireland too. One of the areas where the Parliament could make a major difference – I am trying to get the devolved parliaments to do the same – is to refuse to allow those houses to be built and to insist that a given standard must be met. It is so dishonest. Those responsible are selling houses at a given price and people then have to pay significant sums to keep them warm when that is not counted in the price. We have to build houses where people do not spend that sort of money. At the same time, we are reducing the impact on the environment, pollution and, therefore, on climate change.
I thank both witnesses for coming in. I have a few quick questions around agriculture. What approach was taken in the UK in respect of agriculture and climate change? Where were the quick wins in agriculture? Where are the current challenges?
I am a former minister of agriculture. I come from an agricultural background and I keep cows, so I like to think I am reasonably in line with this. I never think that the phrase "quick wins" works with agriculture. This is a long-term operation. We have recently produced the first of two reports on land use. I am keen on using the expression "land use" rather than agriculture because we have to think about the whole of that.
In the United Kingdom we have a slightly different issue because agriculture there was intensified to a greater degree than in Ireland and as a result we must have far more mixed farming because we have damaged the fertility of our soil. That has led to dealing with the issue of emissions and the fact that the fertility of the soil has been damaged such that it is not capable of sequestering the amount of carbon it should. We are moving towards a de-intensification of livestock. As members can imagine, that received a mixed reaction from the National Farmers Union, but it is surprisingly supportive so long as we do it properly.
Our problem is that because of the barmy policy of leaving the European Union, farmers will be without production supports for the first time since 1939. No living farmer in the United Kingdom has worked in a situation without production support. The British Government has told farmers that production supports will not be available. Farmers happily think that £3 billion will be allocated to farming in a different way. However, they have not met the Treasury. The fact is that it will not be like that. The farmers will be lucky if £500 million is allocated and the £2.5 billion is removed. This will be a huge problem for farmers. Deputy Sherlock asked about Brexit. One of the problems will be that we will have to ask farmers to make real changes at the same time as they are hit by these measures. Ireland will not be in that position.
Ireland needs to recognise that there are no quick wins, but there are ways of improving the situation by using modern technology, getting farmers on side and measuring things better. One of the things we are very bad at is that we do not measure agricultural or pollution output. Farmers may assert that they have done certain things but we do not know whether those things have been done. One must get the measurement right. In the UK, we refused to do that work until the Department for Environment, Food and Rural Affairs gave us some basic measurements to facilitate that. There are no quick wins. Working with farmers to reduce emissions requires slow, regular and continuous policy but one must do it because farming in Ireland, the United Kingdom and everywhere else is a major emitter.
One of the things I hope Ireland could do would be to join with countries such as New Zealand, which has the same intensity of problem because it has a big agricultural sector, to share knowledge about the things that can be done. Ireland could be a real leader on this and shame the rest of the islands into doing better things. There is a role for Ireland in the agricultural world because we must make progress We must face the fact that we cannot allow agriculture to emit at the current levels. We must find ways to enable farmers to continue farming, but to do so in a more environmentally friendly way.
What is Lord Deben's opinion regarding agricultural emissions in light of the fact that Ireland has been recognised as having one of the lower carbon-emitting agricultural sectors relative to other countries and that it has been argued that a reduction in productivity here would lead to the slack being taken up by a less carbon-efficient country? Has that been discussed by the UK committee?
Yes. One of the reasons it is more difficult is that because we have moved to monoculture to a greater degree than has Ireland, we can make changes in that area which Ireland cannot because of its already lower intensity, carbon-based agriculture. No one should argue that we should not attempt to lower emissions for fear that if we do so, someone else will take up the slack. We must all lower emissions, as stipulated by the Paris Agreement. We cannot stop trying to do so because of a fear that somebody else will take advantage of that. All countries, including those that people claim will take advantage of the situation, are going to do it. France, Germany and the UK are trying to do it. I will not accept claims by farmers in the UK that if they reduce emissions, Irish farmers will take up the slack. In the context of decarbonising energy, all industries claim that they cannot make changes because companies in France, China or elsewhere will take up the slack. However, companies in other countries have not taken up the slack because all countries are trying to reduce emissions. It is far better to take the opposite view and to work with those who could potentially take up the slack in order to find how we can all reduce emissions, which is what must be done. I toured New Zealand 18 months ago and attended a very large number of meetings there. The New Zealanders, who face many of the same problems as us, want to work with other agricultural areas to find answers.
The fact is that we will have to eat less meat. There is no doubt about that. I am a passionate believer that vegetarianism is not the answer, but we eat too much meat. No previous generation has eaten as much meat as we do. The production of meat has a significant effect on the climate. We will have to eat less and better meat. That ought to be of benefit to Ireland because it produces a significant amount of good grass-fed meat. We must recognise that much meat is produced in a way that produces a lot of emissions and is not very good meat. We must move away from copying the American meat concept and towards eating less meat. That does not mean that we must become vegetarian. I do not even propose that we should eat meat at the level which departments of health say would be good for us. I am not going that far. We propose a relatively limited reduction in the amount of meat we eat which would not meet the figures proposed by dieticians. I am slightly questioning of those figures. We will not reach that level of reduction. However, we must move down that route. People will be far better off if they only eat good meat and some of the rubbish which is currently on the market is removed. We very much want to get rid of such products.
If less meat is produced, there will be less emissions in general. The production of meat in the manner that occurs in much of Ireland involves the replenishing of soil in a way which is very important for sequestration and provides meat which has the ingredients which people ought to have rather than the sort of meat that comes from feed lots or similar. It will mean that people will eat less meat because it will be more expensive as it is more expensive to produce in that manner. However, that will do us no harm. One must be honest about it.
I must leave shortly to speak on Brexit in the context of a review of last week's European Council meeting. I will propose that we do not let the brothers next door get us down but, rather, maintain our close connection, particularly in terms of energy and climate, because we will not be able to decarbonise if we are not connected. We must balance the variable supply of electricity. It makes sense to do so on a north west European grid basis. We have everything to do in that regard.
We have fantastic connections. Lord Puttnam, who was involved in the drafting of the UK legislation, is a good friend to this House and has been of significant assistance to Irish Governments through the years. Similarly, we brought over Mr. Alex Chisholm, dusted him down, trained him up and sent him back to the UK, where he is now a permanent secretary. Our energy regulator, Mr. Dermot Nolan, heads Ofgem. The former head of EirGrid is a director of National Grid in the UK. We have a significant number of connections and I am sure we will be able to overcome political issues and maintain co-operation.
Britain has been successful in reducing emissions, with a 40% reduction since 1990 and ongoing reductions last year of 2.5%. That has largely come from power generation and a move away from coal. As Lord Deben said, in transport, land use and other sectors, however, Britain is flatlining much like everywhere else. I agree fundamentally with Lord Deben, and the vision France has, that we are doing big picture change and that we need system change. This is a broad question but how is that going to be brought about in the UK? How close is the UK to that type of system change, particularly in transport and agriculture? That seems to be the key to unlocking the next step in decarbonisation.
The Deputy is right that the decarbonisation of electricity has, in some senses, overshadowed the flatlining in other areas. Transport will be significantly changed by decarbonisation of electricity because electric vehicles will become more sensible as non-carbon fuel is used. We are pressing the British Government to move much faster on that front. The Government has a policy which will not meet the requirements. We are not going fast enough and that change will have to happen. I have no doubt that will be made to happen because there is certainly not going to be any move to net zero, which we are now working on, without it. That is one of the areas we have to speed up significantly.
I also agree that we will have to work together because, of all things, energy is a northern European issue. It is not just a matter between Ireland and the UK. It is much wider than that. I hope Ireland continues to stick to its guns about what are the UK's responsibilities towards Ireland. For the UK to walk away as if it has no responsibilities is both historically wrong and morally unacceptable. A bit of continued pressure is going to be important. I certainly think we have to keep the relationships because that is the only way in which both parts of these islands will be able to operate. It would be ridiculous if it were otherwise.
We in the UK depend significantly on the energy we get from France. It is very helpful at different peak moments and it is not just a question of bringing the energy over. France has a different peak system from ours. We are, as the Deputy is aware, hoping to have a link with Norway, which would be very important. There is a great deal to be done in getting the continental European links to be more effective. Ireland could play a major part in that. I do not know how accurate this is, but there is an estimate that there is a saving of 11% to be achieved by getting interconnectors between, for example, Belgium and the Netherlands, as well as Belgium and France and France and Spain. Frankly, we ought to be using the sunshine in Spain and the wind in the United Kingdom and Ireland. It is mad that we are not doing that but the links are not good enough yet. I agree entirely that is what we should be doing.
On system change, the recent report by the Committee on Climate Change, entitled Land Use: Reducing Emissions and Preparing for Climate Change, is very impressive and relevant for us in Ireland, even though we have different agricultural systems. Am I right in reading that the UK is going towards a national land use plan? It would deal with where forestry is located, what type of farming there is and where that farming occurs. Does Lord Deben think it is useful and important to have such a land use plan as part of how we manage climate change?
Yes it is. I do not think it is quite as directive as the Deputy has made it seem. To give an example, if we are to do something about flooding, we are going to have to plant trees in the right place and we are going to have to plant the right sort of trees. All of that is really difficult because the right trees are not the trees which the public think of when there is talk of forest trees. They are not broadleaf trees. The right trees are actually conifers because, being much older and having existed since prehistoric times, they have an ability to absorb carbon for a longer time. They also produce wood which can be readily used in furniture and in building so that the sequestrated carbon is maintained. We have a big story to get right all across the board. That is part of the process but it is not just adaptation we are trying to achieve in this case. We will also need to do much more in respect of soft defences against flooding and a great deal more on how we deal with land use as far as the sea is concerned. Rising sea levels are a serious part of what we are faced with.
I was interested to hear Lord Deben's account of travails with the UK Treasury. It is the same in every country. We have been watching from a distance as the UK Treasury has been getting energy policy completely wrong. When it comes to parliamentary committees, however, with which the Committee on Climate Change engages, is that done with each sectoral committee or is there any collective parliamentary system in the House of Commons or the House of Lords to engage with on this issue?
There is a Department for Environment, Food and Rural Affairs, DEFRA, select committee that deals with the issues of agriculture and land use. There is also a select committee for the Department for Business, Energy and Industrial Strategy, BEIS, which specifically deals with climate change and business and energy. The BEIS select committee does consider itself as overlooking the whole collection and we use it in that sense. There are also other select committees for each of the Departments and we try to use those effectively to try to get the particularities of climate change listened to.
The membership of the Committee on Climate Change is very impressive. It is science heavy, in that there are only one or two economists, unless people are disguising their economic credentials. Does Lord Deben think that is the right balance? We tend to have a climate committee which has many economists on it and fewer scientists. I know Lord Deben has to be careful and diplomatic here-----
No, we have some pretty tough and feisty economists, particularly the chief executive of the Institute for Fiscal Studies. I do not think that is a problem. The point about the scientists is that they all contribute different things to the committee. For example, when I became chairman, the one thing I insisted upon was having a behavioural scientist on the committee. We had never had that. One of the problems we all face is that we have to move on from getting what is right in science and economics to helping people to take these things on board. We need a behavioural scientist to give us advice on doing that.
I think, therefore, that the balance we have is the right one. I have nearly got it to 50:50 between men and women and I am quite proud of that. It is necessary then to go and seek people. Nobody is appointed on the basis of gender but women are sometimes less willing to put their names forward, so we do have to work on that. That is an important aspect. It is one of the areas where there is a real need for a range of people and women bring a different way of looking at things from the men on the committee. That is what I find.
Lord Deben is very welcome. Simply speaking, when people build their houses, in Ireland or anywhere, much thought and effort has to be put into those homes and people are happy with the outcome until they live in those houses for a while. If there was then a second change, they would do many things differently. From his experience, and because Ireland is a phase behind the UK, if Lord Deben was on this side of the table with a second chance on climate change policy, what different directions would he like to see taken?
If he had a blank page from which to work in the context of the UK Committee on Climate Change, are there any directions Lord Deben might have taken or any issues he might revisit?
Agriculture was mentioned. Ireland never had an industrial revolution. The reason our percentage of agricultural emissions is so high in the overall context is that we did not have the heavy industries that Britain did. From a transport perspective, a person in London might never put his or her head up from the underground but we do not have the same public transport facilities here. With those two perspectives in mind - agriculture and transport - we are starting from a different position. If he had a second chance, and having looked at our model, is there any different approach Lord Deben might have taken?
If we could have started afresh, we would have been better to have pressed the Department for Environment, Food and Rural Affairs, DEFRA, to get its figures right earlier so we could have started on land use earlier. We could not do the work on it because we did not have the figures. I was not prepared, nor was my predecessor, to put out information which was not absolutely correct according to the statistics and the science. I should have said in my opening points that the other crucial aspect is that if one has a climate change committee, it has to get a reputation for being accurate and scientifically based and not be a campaigning group. It is not an NGO. It has to be very scientifically based. As I was saying, addressing land use is one of the things I would have done if I had been running it at that time - although, looking back, I cannot be sure I would have thought of it. Deputy Neville referred to "quick and easy". There is no quick and easy and, therefore, one has to get it started much earlier.
The other thing that might have been done differently would have been to start pressuring the UK Government earlier with regard to the need for electric vehicles, which will be important. I think we hit the ground a couple of years later than we might have done on that, thereby enabling the Government in the UK to set targets which are just not sensible. We cannot wait until 2040; we have to make the changes in 2030 because, otherwise, the figures do not add up. We have got to do this together. It is all part of the same market, so is very important for Ireland also. The motor car companies are behaving disgracefully. If people go out and try to buy an electric car today, they are put on a waiting list unless they can afford a Tesla. That is because the motor car companies are busy trying to sell the cars they can make cheaply now and they do not want people to buy electric cars. At the same time, they are telling a different story to governments. I think we have to be much tougher, as we have to be tough with the building companies. The house builders have got to be forced to build to a higher standard. Those are the things I would have started earlier.
I thank our guest for his presentation and for his directness and honesty. I do not know of many people in this House who want to hear phrases such as "Tell it like it is", "Don't blame it on somebody else" and "If you can't do it yourself, don't ask others to do it". We had the farming organisations here recently saying that if we do not increase the herd and export the cattle, then the Brazilians or the New Zealanders will do it. It would drive anyone mad that the argument that we would not make a start ourselves is wheeled out so much. I really appreciate our guest's honesty.
The whole issue of land use, what we eat and how we produce what we eat must be the subject of a major discussion. There is no better country than Ireland to have that discussion. We have lots of fallow land and lots of farmers who want to remain so and who could diversify. We need to have that discussion in an honest way.
If he does not mind, I will call refer to our guest by the title "Mr." because I find it strange referring to someone as "Lord".
I know he is from the House of Lords but I find it hard to use the title "Lord" in reference to him.
Something I have noticed in England recently is the pressure from the fracking companies and the response of the people. I have been in awe of the protesters. They have gone out of their way to get their voices heard in a democratic way, although they have been blocked by local authorities left, right and centre. The protests at Blackpool and other locations in Lancashire have in some ways been quite scary in the sense people feel they have to do that. In other ways, fracking is also quite scary. As the representative of the Committee on Climate Change, will our guest comment on the attempt to increase the use of fracking and also on the protests? I would like to use the opportunity to say I would extend my solidarity to those protesters and to the young people involved in the extinction rebellion, where they blocked the bridges around London and glued themselves to Westminster. What young people are saying to us, as we have seen in Sweden and Australia, is "Listen to us, it is our future". They are tired of old farts like me not listening to them. I would like our guest to comment on that.
I want to ask about the mechanisms of the Committee on Climate Change. The first recommendation of our Citizens' Assembly - it enjoyed the support of 94% of the assembly's members - was that we should establish a new and independent body with a broad range of functions and powers to deal with climate change and to ensure it is at the centre of policy-making, with some legislative scrutiny and oversight. The resistance to that from representatives and from the Department of Finance so far has been quite passionate. They do not believe in this at all and they do not want to see it. Can our guest tell us, as Members of Parliament, why he thinks that would be a good idea since he is part of a parliament? He might give two or three main reasons he thinks it would be a good idea for us.
I also want to ask about the value of a carbon budget, which I think is needed here. I understand the UK carbon budget is set at a certain level through the use of science, which is very important, and those who exceed that level are breaking the budget. What penalties are there for the UK Government or the state for overstepping the mark or can they offset the budget by means of carbon offsets? Does our guest agree with that or think it should be allowed, or is it just another market mechanism that fails to actually deal with emissions? I have some other questions but I will leave it at that for now.
There was quite a lot there. We compiled a report on fracking. We have to distinguish between the issue of fracking and the protests on the bridges in London, a matter to which I will return. We have to follow the science in this regard. If one is going to insist that people accept the science relating to climate change, then one has to follow the science in respect of other matters. The science relating fracking is very clear. As long as one does three things, fracking is perfectly reasonable. First, one has to ensure that any gas produced from fracking is a replacement for gas that would otherwise be imported from somewhere else and is not additional. Second, one has to ensure that there are proper environmental controls in place. For example, sometimes there is a rogue well which bursts upwards and has to be capped immediately. Controls for that need to be in place. Third, one has to ensure that infrastructure is not built which then gives an excuse to go on using gas beyond the point at which it is possible to do so within the envelopes which we have put in place. That is what we have said and fracking has to be done within those restrictions.
People might not want fracking. However, we must remember we will need gas until the early 2030s, as we have said in the context of our budgets. Let us say, as an example, that a reasonable amount of gas is found and a company wants to frack. It will be producing gas with less environmental impact than the gas that would be imported from other countries, many of which are not believed to be taking any of the steps they should take.
I am not an absolutist on this. I believe if we can get some fracked gas at a lower carbon cost than the imported gas for that period as long as it does not give the excuse for continuing longer - that is part of the deal - that is the right thing to do and the science certainly indicates that. To get people to believe in climate change on the basis of science, we must use science across the board.
I find the protesters rather different from the Deputy. I have a great deal of sympathy with the protesters on the bridges of London; I will come to that in a moment. However, I find the fracking protesters wrong because they are trying to say their non-scientific position should be forced on the public because of the scientific position on climate change. That seems like an illogical position. That is why we did the independent report and why the Government is supporting it.
On the campaigners, the greatest problem with climate change is that even though we believe in it now, we are not moving fast enough. The urgency is tremendous. It is very important for those who care about it to remind people of that. While I am not sure that all their tactics are right, I have a sympathy with people who get out there to encourage us to move faster. That helps us enormously. It helps the good side of Government enormously and has a good effect on some of the sillier members of government who do not take this seriously. I have a greater degree of sympathy with that.
Of course, the Deputy equated it with what is happening in Australia. In Australia there is every reason; it is a very bad government which is not doing anything on climate change and should be ashamed of itself. Any protest there is different. At least in Britain we have an all-party consensus. It does not matter to me what sort of government we have because it will do the same programme. There is no doubt about that. We are fortunate; Australia is in a much worse position. The present government under Mr. Morrison is worse than the previous one - I did not think that could be. The previous one was no better than that led by Mr. Abbott. If one cannot be better than Mr. Abbott, then one really is in a mess. They have a reason, therefore, to be powerfully opposed.
On the issue of the independent body, I believe that treasuries are always opposed to this because it means they are restricted in what they can do. However, they have to be because climate change demands that we have long-term plans. Treasuries like to able to move things very rapidly and in general terms that is right. However, we are not in that situation; we are in an extinction situation. This is a really serious thing. Treasuries do not like it, not because they are not green or because there is something evil about them; it is simply that those in the treasury do not want that kind of control. We had it in Britain. When we managed to get a parliamentary majority for the Climate Change Act which was unthought of, the adviser to the Labour Government went into the department then responsible for climate change, flung the Bill across the table and said - I will not use the word she used - "There you are; you've got your Act." They were furious not because they were opposed to it, but because it meant the Treasury no longer had that control and that is exactly where they are now.
We need to say to those in the treasury wherever they are, including here in Ireland, that we know what they instinctively want, but they cannot stay there because we are fighting a battle which will distinguish human beings as being really human. We either win this battle or we lose the battle for our own existence. Therefore, we must win this battle. Part of it is about us being human and we need to find new ways of expressing that.
Having an independent committee is crucial. I would give it the powers that we have but I would make a distinction. I know what the Citizens' Assembly suggested, but it is quite important that I do not have the powers to legislate about particular answers because that brings me into the political arena. I have the powers to fix the budgets and keep them fixed. Governments must find the way of meeting those budgets. As I have said, it does not matter to me how they find the way, but they have to do it. My power is to make sure they do it.
The Deputy asked me what the penalties are. The penalties are that this is justiciable. They would be taken to the High Court, which would insist that they produce policies that would meet it because that is what the law requires. We must reduce our emissions by 80% by 2050 and we must meet the targets in the budgets - the fourth and fifth carbon budgets, which are the next two budgets. The law can be brought into play at the point at which it is clear that the government is not taking the measures it ought to do. The courts will not prescribe what the government must do, but will point out to the government it has a target to meet and it must prove to the courts that it will meet it; that is what the law requires.
That is the power this committee ought to have. I would not ask me to do the legislation because if I do that, then I am choosing between, for example, electric cars doing so much and houses doing so much. That is a decision for government democratically reached. What is not a decision is how it adds up. I do the sum; government can do bits of the sum but it must add up to the figure that I and my committee do. That is the power and that is the distinction. If it is done any other way, the Government will claim it is above politics but it will become politicised. The moment it is given legislative powers, it then has a competition with the Dáil. There is no other way out of it. The committee should not do that. The Dáil makes those decisions and those choices, but the committee sets the standards against which those decisions have to be made. I do not know how we managed to invent this, but it is really a very good invention.
That is useful. However, I take issue on the science. We have banned fracking in Ireland and we did so on the understanding that the science has settled on the fact that 80% of known fossil fuels should be left in the ground. That flies in the face of what Lord Deben is arguing. It is a bit like what he said earlier, that if we cannot do it, somebody else can. However, if the gas is extracted, be it in Europe or elsewhere, why would people want to take more out of the ground in Lancashire or Blackpool?
Under the budgets we have set, we will take more gas out of the ground in Dubai or Russia in the coming years. By saying 80% will be left in the ground, it means that 20% will not be left in the ground. That will happen anyway. However, if we produce it at home under the tough measures we have, we will not buy it from Mr. Putin. If we buy it from him, he has not got any of those measures in place. If, for example, one were producing 100, one would not be allowed to produce 120 because one is producing it at home; one must keep it at 100.
There is an issue in this regard. The science is clear. The Deputy can say the science requires us to keep 80% in the ground, but that means we must decide where the 20% comes from. The science is clear that fracking properly with these tough measures means producing gas with less emissions than by taking gas from many of the existing sources today. In order to stick to the science, it is not feasible to claim that fracking is unscientific, which is what the campaigners do.
It is a choice one makes. I would prefer to get what we need for gas from a source that is not controlled by Mr. Putin, because it would ensure that the polluting effect was significantly less. If someone was to take that approach, however, they should not think that they will have a market after around 2032 because there will not be one.
I welcome Lord Deben and Mr. Stark and I thank them for their frank views on the matters in question. Lord Deben mentioned his agricultural background. In Ireland, and across the world, producers are looking for more for their product while the consumer is looking for that product at a lower price in the supermarkets. To achieve what we want in the area of climate change, additional costs will be involved. How do we square the circle in this regard?
We have to accept that some circles cannot be squared. We are, for health reasons as well as climate change-related reasons, going to have to eat less meat. The way to do that is to cut out the meat that is produced in the least climate-friendly way, which will mean emphasising the meat that Ireland is best at producing. Ireland is the best at extensive meat production and that is why people buy Irish beef. They do not buy it because the cattle are fed on beef lots but do so because they are fed in a traditional way.
One of the questions was about food prices. All of us have lived our entire lives with food prices coming down and none of us can remember a time food prices went up. It is only very recently that we have begun to see a slight change. Politicians have, in a sense, promised that prices will always go down but I am afraid to say that they will not, not just because of climate change but because there will be some 1 billion more middle-class people in the world by 2030, all of whom will have the opportunity to buy food for more than subsistence.
The pressures on food are going to be considerably greater and members of the committee will be aware of the damage that has been done to our food industry. I sit on the food and drink sector council in the United Kingdom and I am a passionate supporter of the food industry. I suggest people look at the damage done to the food industry by fraud. Fraud took place because people were trying to produce meat at an unacceptable price. We are going to have to talk truth. The truth is that if we grow food properly, it will not be as cheap as it was and the proportion of our incomes that we spend on food is not going to continue to fall. Whatever political party we belong to, we will not be able to solve that problem. Our job is to try to manage the transition to a situation in which food prices are more stable and people do not expect 14 meatballs for €2. This will mean helping the poorest and making sure farmers are incentivised. It also means reform of the CAP so that the money goes in the right ways, as opposed to some of the wrong ways. Above all, it means us telling the truth and we have not been prepared to do that.
I believe that communication around this area is crucial. We have to tell people about the situation as it is, as Lord Deben is doing today. How did he go about doing that across the water when he started the process? How did he start to educate people as to what was going to be involved, what the consequences would be and what the implications would be of what needed to be done? What is the communications strategy across the board, for the agricultural sector, the consumer and the ordinary Joe Public?
He also mentioned intensification in agriculture and I believe British farmers are more factory-orientated than Irish. Is he referring to a reduction in the herd in this context?
In the UK, we are faced with health advice that suggests we reduce the volume of meat we eat dramatically, and much more than is necessary for climate change reasons. We have not, therefore, found ourselves in the position we would otherwise have found ourselves. We are talking about cuts of between 25% and 50% in the meat industry but the health people are talking about much more. We are at the beginning of a process and we are finding considerable support among farmers who want to do that and who want a higher price for well-produced meat. We all eat much more than we need and we could spend the same amount buying the volume of meat we want. Some restaurants mix up quality and quantity but in the best restaurants, the quantity is not great while the quality is particularly good. This can be managed.
Most people are bored to the back teeth with most things related to climate change and it is not the big issue they want to talk about, though they believe in it and they notice that the rain comes down in a different way, that spring comes earlier and that the weather is different. My view is that we should talk about it in other contexts. For example, the Royal Botanic Garden in Edinburgh is going to point out to the vast number of people who go around the garden to look at the specimen trees that the trees have come out 17 days earlier than they used to, which is because the bees do not come out at the same time. At the point at which somebody is interested in something, one should tell them about it. The Forestry Commission has agreed that it will do the same thing in its forests and will tell people that it is planting different trees because of climate change. We are pressing for news bulletins to mention climate change in the context of the stories they are reporting. It may be controversial to say this, but I believe it is important to get the same reaction to leaving out the climate change aspect of a report as one would get to leaving out the sexist angle to a story. There is a terrible row when news bulletins do not recognise the part women play in society and women and their supporters spend a lot of time getting back at broadcasters and newspapers to make sure they do not make such omissions. We have to do the same with climate change and make sure that people cannot ignore it. At long last, the BBC has started to treat it seriously but we have had awful trouble in the past. I was, for the first time as chairman of the climate change committee, asked to comment on the COP meeting in Poland recently.
I did not have some lunatic Lord Lawson sitting there telling me about a science he did not understand. The conference accepted that this was a proper conversation, and we then had a proper conversation about how well COP had done and what it had missed.
There has been a change, which we must keep going. My communication strategy is to ensure that the implications of climate change are talked about when other matters are being discussed. Take bottled water, for example. I hope everyone else does the same as me. If people offer me bottled water in a restaurant, I insist upon having tap water. Often, I politely explain why it seems to me to be barmy to do otherwise when our islands have perfectly good water. Therefore, if people want flat water, they should have it out of the tap. I do not know where the water in front of me is from, but I am sure it is out of the tap, which is as it should be. That is a small action, but it is what we have to do with everything - when an issue comes up, talk about it quietly. It is no good having a public campaign because that is not what people want to spend their leisure hours learning about. Rather, it is about inserting this matter into the conversation at the right points.
I thank Lord Deben for attending. I will follow up on what he said about Katowice, COP 24 and the enormous contribution of Sir David Attenborough to the discussion. Someone of his stature has a significant ability to influence. Could Lord Deben roll him out as often as possible or engage someone like him? When he spoke, it went worldwide and had an impact to the extent that it brought tears to my eyes, it was so stark.
The land use report went into some detail on the rewetting and restoration of peatlands, which is a matter that our committee has discussed at length. What, if any, incentives, regulations or tax mechanisms does the UK use to support the rewetting and restoration of peatlands?
I thank the Senator for her comments about Lord Attenborough. There is a good reason for talking about him in any case because he is very encouraging for those of us who are slightly older. If someone can still go on doing like he does at his age, it means I have a long time to go. I am keen on that. He also has a voice that is listened to. Katowice was much more successful than any of us dared hoped. With Mr. Trump, we in Poland thought it was bound to be a disaster, but it was not, which is important.
The peatlands arrangements are a part of our environmental support system. We will have to do much more about the situation and we have significant planting issues that we must sort out. There is much work to be done. The Secretary of State for Environment, Food and Rural Affairs, who is responsible for this area, is Mr. Michael Gove and I disagree with him on almost everything except this. He seems to have got hold of the issue of the environment in a remarkably intelligent and driven way. He produced a document on waste yesterday that is worth this committee's consideration. It is significant and goes much further than most of us had expected. We will be pressing for more work to be done.
This is one of the issues that Ireland has a special need to address. Peat is a very serious area of damage and, I am afraid, Ireland has historically done things that it should not have done. We all know that. There is no point in disagreeing, as that is what happened. Therefore, the replacement of peat and attempt to repair the damage are important.
This is one of the pressures that Ireland can bring on the EU. That is why I am a passionate European. This is the sort of thing in respect of which the whole of the Communities ought to be helping us make up for the sins of the past. This is one of those sins. It is one of the reasons that CAP needs real reform. Just like deficiency payments in Britain prior to that, it was created to ensure that we had food to eat. That should not be its purpose today. Rather, its purpose should be to enable farmers and land users to move from where they are to where they have to be in the context of climate change. That will be a major battle. Ireland has a special role to play because it is an agricultural country that recognises that we have to do something in the immediate future. Ireland has tended not to be on that side but is increasingly moving to it, so it has a large role to play.
We next have the second report on land use. The one we published was the preliminary report. We were trying to clear the ground. I am sorry, as that was a bit of a pun and I did not mean it. We tried to make it clear what we would be addressing. We will follow that report with a second one this time next year.
We have an aviation report that is relatively imminent. The Department for Transport has produced the preliminary part of its report. We put some more in, then it did the same. So far, it has been moving in the right direction. We must push it a bit further.
It is difficult to know how long it will take us, but we will produce a key report at some point in late spring in response to the UK Government's request for us to say how the UK ought to move towards net zero. That will be a difficult report to produce. We must first define what we mean by "net zero". Do we mean net zero greenhouse gas emissions or net zero carbon emissions? We must then express how that move might be done. We are working on that report now.
Yes. The system has been successful. It has also exposed a problem. If a nation is one of the longest standing countries with a grid system, it will find that the grid was not built for this. Rather, it was built for big generating centres. There are still people who hanker after that. I tease my colleagues in the Conservative Party that they like big things that they can build and look and point at. Somehow or other, they feel that windmills are a bit like fairies, that is, they are not really there. The great achievement of offshore wind is that we have shown people that it is not an impractical joke system. Next to onshore wind, it is now the cheapest way of producing electricity.
It is an amazing achievement. We should occasionally remind ourselves of how far we have come in the past ten years. It is amazing. Nobody would have thought that we could have moved as far as we have already.
Deputy Neville and Senator Paul Daly spoke about farming. It is very tough and very difficult, but we have to recognise how much can be done. Ten years ago nobody thought that the United Kingdom would end up with as many wind farms as it has now and become the leader in wind technology. Nobody would have believed that. Similarly, today nobody would believe that Ireland could be the leader in how land use is changed, both in terms of peat use and in agricultural use, globally.
On the issue of wind energy, an area in which Ireland has tremendous potential, one of the barriers to entry for us is our legislation, which is blocking our capacity to develop that area. How did the UK get around that?
We got around it because those who campaigned against onshore wind made a great fuss about saying that we should have wind offshore. We said yes to that. It was what they wanted and so we did it. I faced a lot of opposition to onshore wind in my own constituency. People there did not want onshore wind energy production but rather offshore. The energy there is now being supplied by offshore, in very big quantities. They are now complaining about the fact that because the energy is offshore, it has to be brought onshore, and so something must be built to put the electricity into. This is not an easy game. We simply have to get over the problem. Onshore wind energy is now the cheapest means of electricity production available, and governments have to be frank with people. They should say that, without windmills, electricity will be more expensive and that bills will be higher. It is surprising how people begin to change once that is done.
Another thing which could be done, which Britain did not do but which Ireland should do, is to ensure that the locality with the windmills gets some of the advantages so that it is worthwhile. The Germans have been very successful with this approach. Some 50% of their wind energy is owned by local communities and co-operatives. If there are three windmills on a local hill, a person there knows that his or her electricity is significantly cheaper than normal, if not free. He or she is getting cheaper electricity in exchange for providing the opportunity to generate electricity to the community.
It is important to remember that once the windmills are in place, people who did not like them before change their minds, which is surprising. I live in the countryside, but up the road from me is the little town of Eye. It is a very small, historic town, and there are three windmills there. The people there hated them. They were so angry about them, and planning permission was very difficult to achieve. Now they are part of the scenery. We recently had a wonderful local rendition of a ballet at three locations in the town, the third of which was out on the sward, in order that the windmills would be in the background as the sun went down. They are now seen as something quite different. Ireland should not forget that aspect.
Lord Deben has made continual references to science policy and its importance. His last point was very interesting. I listened to a BBC Radio 4 interview with a German farmer who was asked why wind turbines and wind generation were considered more successful in Germany than they were in the UK or Ireland. He made the point that when he looked out of his kitchen window, the turbine he saw was his turbine and did not belong to someone else.
Agriculture and transport are portrayed as the big villains in the area of climate change, but we often forget the potential solutions that agriculture can present as we attempt to mitigate its effects. We need to take a holistic approach to this, because there is no magic bullet which will solve all of our problems. I farm in Northern Ireland and work in Queen's University Belfast in the Institute for Global Food Security, which was born as a result of food fraud and the horsemeat scandal in the UK and a concern over the integrity of food and food security issues. We spend our time looking at agriculture, food, health and nutrition. We look at issues such as food waste, the carbon footprint of agriculture and food integrity. The reality is that there are more people dying in the world from obesity than starvation at the moment, which is obscene. Everything we look at is underpinned with science. We substantiate and validate our findings.
I was interested to hear Lord Deben discussing fracking. He has an interesting perspective. From my own experience in Northern Ireland, the UK and Dublin, and thinking about the role and function of governments, the fact that politicians have a four or five-year term, from election to election, jumps out at me. One has to make an impact, make a difference and be seen to be doing the right things if one wants to be re-elected. My concern is that, in the court of public opinion and in the media, we can sometimes make knee-jerk decisions that are reactions to pressure which will have an impact in ten, 20 or 30 years which may be unintended. Given that, I would like to hear Lord Deben's opinion on the status of evidence-based policymaking. In my opinion, governments need the support of evidence-based policymaking which is underpinned with science and fact rather than sentiment and emotion or based on what is popular at a particular time. We look at the mitigation and adaptation objectives, strategies used and land use policy, and it is critically important that we base our findings on facts. Where does Lord Deben stand on that point?
On Lord Deben's point about Michael Gove's report on waste, released yesterday, we are working with a UK-based company which is focused on accelerated aerobic digestion. In 24 hours, food waste can be turned into a product that will power a CHP plant and produce heat and electricity. Science can offer solutions and answers to some of these problems. I am interested in Lord Deben's opinion on government policy and evidence based policy.
The Senator is quite correct. There are two timetables in play. the political timetable, encompassing the mandate of four or five years, and the climate change timetable, which is a continuous battle we are fighting. We are trying to win the war on that front. It is true that politicians are concerned to make an immediate impact, which is perfectly understandable. Science-based policy is very important, and the UK Government, in terms of listening to scientific evidence, has improved considerably. It was not nearly as good at taking it on board 20 years ago when I was a minister, except in specific areas. It is difficult because it is always possible to find one rogue scientist with a different opinion from the general view. It is also the case that some of the conclusions are very unsettling. The vice chancellor of the Senator's university has been the leader in food safety, and is a man of huge strength, in my view. We relied on him enormously. He is a thoroughly nice man as well.
The scientific advice in terms of diet is largely ignored, and the UK Government is totally unable to deal with the problem of obesity. It is good at telling other people what to do, but it is not enacting its own advice in the NHS or in all sorts of other areas, even though the science is so clear. The Senator is correct to say that the situation with scientific advice is getting better. It is better than it was, but it has to get better still. So many of the measures we want to take to mitigate climate change have other important advantages as well. In the taxi on the way to this meeting Mr. Stark and I were talking about the issue of soil fertility. Not only do we have to return fertility to soil so that it can sequester carbon, but also because at the moment it is so diminished, not only in the UK but elsewhere too, the trace elements in the vegetables and fruit we are supposed to be getting our five a day from are not as good as they were.
We need to improve the fertility in order that the fruit and vegetables will actually hand on what we need. The same applies to obesity and the amount of meat we are eating and all of those things come together. That is important.
We have no claim on the public unless we get the science right. This is not a matter of opinion or campaigning and it is why I have to be really tough about the difference between the Committee on Climate Change and the NGOs. I very often disagree with NGOs because I have to keep the science right. The fact that I am not a scientist is helpful, in a sense, because I ask the difficult questions - in other words, the stupid questions. It is very helpful to ask scientists what they mean and ask how I would explain a certain bit of science if I was speaking on a platform. One thing we must say to scientists is that they are not always very good at explaining what they mean. Politicians have an important role in getting scientists to speak a comprehensible language that resonates with the public and connects to the way people live. We want to try to do that.
Ireland has a special role to play because Northern Ireland has not been as good as the rest of the United Kingdom. Scotland is doing best, Wales is doing second best, England is third, but I am afraid Northern Ireland has not done well and that is partly because there are still people in politics in Northern Ireland who do not believe climate change is happening. They are the same people who believe the world was created 86,000 years ago. There is a real problem there and Ireland has got to show it. Ireland has done a great deal for encouraging Northern Ireland to understand the realities of the world and it is tremendously important that Ireland helps. This is a co-operative matter and Ireland and Northern Ireland can do an enormous amount of work together.
One of the great advantages we have with climate change is that it is not the old argument. The Church of England and the Catholic Church are working together on these issues because there is no history of argument, we never fell out on this. Catholics like me can sit together with people who have a different view and we can do a lot of these things. The same is true about the North and the South. It is possible to do some work here because there is very little baggage so we have to try very hard.
Most of the funding comes from the Vote of the Department for Business, Energy and Industrial Strategy and part of it comes from the Vote of the Department for Environment, Food and Rural Affairs, DEFRA. Specific money comes from work the committee does quite separately through our employment by the devolved governments in Scotland and Wales. We can bid for money when people ask us to do more. For example, we told DEFRA that neither it nor us could do our work unless there was serious work done on land use that would cost a significant amount of money and we needed more people to do that. We got the money and, frankly, we have been extremely well treated by the Government on this. There might be a situation in the future whereby we would not be well treated and that is why I would like a system with an independent authority. We could then tell that authority that the Act requires us to give advice and we cannot do that unless we have a budget. We have never had to worry about that but, if we ever did, I would have to turn to the public and say that, if it wants this job done properly, either the Government pays for it or we find the money independently. I would be quite surprised if the Treasury would not pay in those circumstances because the last thing it wants is the committee to have an independent source of income.
I listened with interest to Lord Deben's commentary about communicating through the BBC. The roles that RTÉ, the State broadcaster, and the meteorological service have in communicating to people have exercised us at this committee. What has the meteorological service in the UK done in getting accurate information out to people?
It has been extremely helpful because it has been able to draw on probably the leading meteorological service in the world, used by the United States rather than its own meteorological service in a number of areas. It has been able to use that very distinct scientific quality to support the science in an effective way. The previous head of the meteorological office, Julia Slingo, had a very determined effect. Dare I say this message is sometimes better coming from a woman who gets up and says it in that sort of way. She was a surprising success while under particular attack from Lord Lawson because she did it so well. The Met Office has been very helpful.
We cannot do what we need to do without carbon capture and storage. There is a silly argument about whether it should be carbon capture and usage or carbon capture and storage. We do not have the uses we would need to make it really worthwhile. We have to be able to store carbon because there is a great gap otherwise which we cannot fill in all our targets which is why we are pleased that the Government has finally understood that this has to be done and the only alternatives are hugely more expensive and therefore we have got to do this. There is no reason the United Kingdom could not be a leader because we have the advantages of holes down which to put it. This is a post-fossil fuel situation and the places where we cannot do it are very difficult. For example, we have been trying to work with the Welsh Government because its problem is that its biggest emitters are all in that south corner of Wales where there is not a natural place to store the carbon, so there is an issue there. Carbon capture and storage is crucial.
We are considering carbon tax, which was another recommendation of the Citizens' Assembly. Has the Committee on Climate Change considered the fee and dividend model of carbon taxation? I do not think the UK went down that route.
We considered all sorts of things amongst ourselves but, in a sense, we eschew commenting on taxation systems. Our job is to fix the outcome and we have to prove that is possible within the present context. We would perhaps say that if the speed of the switch to electric cars was increased, or if more was done about land use, a certain level could be reached, or through a whole series of other things that the Government decides. I can conceive of situations in which we might suggest the Government ought to look at the taxation system in particular ways but the problem is that, in the end, we have to be practical. We do not know what the result of a particular tax would be and, in a sense, it is where a government should be acting. The taxation system is, in the end, the prime role of a government and it must make that decision. All we would do would be to say that among our scenarios, there is a possibility of decreasing the use of fossil fuels by a different taxation and I can imagine doing that but we would not go further than that.
It is that we managed to convince the government that it should allow £7.6 billion to be spent in transforming the electricity system. That must be significant. Getting a Conservative Party Chancellor of the Exchequer in a very tough time to do that and defend it right the way through was of great importance, despite the attacks made by newspapers and suchlike on what they thought were green taxes. Connected with it was we realised nobody listened to the climate change committee when we talked about the price of energy. Nobody understood what a kilowatt hour was, let alone the cost per kilowatt hour. We were the ones who decided to talk about bills and what people actually paid. This enabled us to show that the effect of the measures we were taking was to lower the amount of electricity people needed. If they had new boilers or toasters, they all used less electricity. The clincher for us was we were able to say one was paying about £9 a month more than one would otherwise pay for the green measures. However, bills are £20 a month less because one is using less electricity. There is a saving of £11 a month on that basis. For the first time there was a connection between what people understood and what we were actually doing. I consider this to be one of our real triumphs in communication. One of the reasons I say that is that it annoyed the doubters enormously. They were so angry because it got rid of their only real argument which was fairly pathetic one that we were laying all of the weight on the poor who were having to pay for it. The poor were benefiting significantly, even though our system in the United Kingdom was not as sensitive to deprivation as it should have been.
We started well, which is really important. The science becomes more and more clear and people's experience of climate change becomes greater. It then becomes more difficult to defend the opposite line, which must be accepted. The third thing is that we are very tough about not becoming party political. Part of the reason for this is that it is known that I have been a politician all of my life and that I have to keep my independence. It would be very easy to make points as somebody who sits as a Conservative in the House of Lords. The element that has been very effective is that we have clamped down and been really tough on anyone who tries to use climate change as a party political operation. As a politician, I know that in oppositon it is very much easier be green. All parties are greener in opposition than they are in government. In opposition one does not have the pressures of delivering electricity next week, or, for example, a protest march. We are very careful. The only time I speak politically is when I wish to object when a party of any kind tries to use climate change as differentiating, except when it proposes going further than the government, of which I am all in favour, but not when it is used as a party political weapon.
No. In the election before last when I had just become Chairman, the Conservative Party put out an entirely incorrect statement which it had copied from a particularly ill-named and mischievous organisation, The taxpayers' Alliance, which appears to be allied with nobody and does not represent taxpayers. It seems to represent people who do not want to pay tax. It had produced some quite fictitious figures for the cost of energy. I had to say publicly that the Tory Party was wrong to use it and that it was unacceptable. It was convenient because if I were to say it about any other party, nobody would think I was being partial, but it was the only time.
On the carbon budgets that the committee sets, how effective have they been across the various sectors? The committee has been successful in the case of renewables, but what about in the transport and heavy industry sectors?
In total, they have been successful. The government has met the first and second and probably the third budget, but it will not meet the fourth and fifth budgets, unless it makes some very big changes for which we must press very hard. It has been spectacularly more successful in electricity generation, but that was necessary because one cannot do one thing without the other. There is no point in having electric cars if they are using fossil fuel energy. One has to do it in order to facilitate this change.
It is arguable that the fact that we are flat-lining in general and not going up is a success. It has not been successful enough, but it has been a success. The fact that there are budgets means, for example, that this very week - yesterday - we have had the Department of Transport producing its first aviation report and accepted in it the restrictions the climate change committee placed on it. Previously, there would have been equivocation. We are being successful, but I return to the point I made to Senator Marshall that it is all about urgency and the comment of his neighbour when talking about campaigners. We ought to be very worried about how slow all of this has been, how much has to be done and how we all have to do it. We have to say to people that the one argument that is unacceptable is that one cannot do it because somebody else will take my place. If we do that and are in the "After you, Claude" world, it will not solve the problem.
We are rolling it out quite rapidly. There are always arguments about it as to whether we have the right kind. One of the problems with smart metering is that when we started to have laptops, some people never got one because there was always going to be one that would be better one than the one they were going to buy and they could not settle on any one in the end. There is a problem like it with smart metering technology. We are, however, using it and there is a lot of other technology available. Ireland has been wonderful because it has invented this fantastic system where one keeps the chickens and then collects the manure to produce the energy for the next lot of chickens. One uses only approximately 50% of the energy, with the remaining 50% being put back into the grid. It is an Irish invention. Before I joined the climate change committee, we did some work for them which we would not be able to do now. I am enthusiastic about these initiatives. Very often it is these exciting things, if they come out of left field in technology, that really impress. There is a man who has just done some work on the issue of turbulence, for example, and shown how one can now be 60% more accurate in the case of an aeroplane. This means that it does not have to move so far when it wants to escape turbulence as one knows where it is. As a result, the amount of energy and fuel used by the aeroplane is reduced and it does not have to fly excessively high because one knows precisely where there is turbulence. It is a fantastic piece of technology which is not on the list of things to reduce emissions from aeroplanes.
Very ofteurn it is these exciting
Frankly, we use any country that is doing better than us to ask why we cannot do it as well. We benchmark against each bit of the United Kingdom. We are absolutely adamant to say to the English Government, so to speak, that the Scots are doing much better. The Welsh are doing much better on waste and this document on waste produced by the Department for Environment, Food and Rural Affairs, DEFRA, is as good as it is partly because we kept saying that the Department does not want the Welsh to beat it. We enjoyed that.
No, it has not. I laid down the rules, when I was Minister, which made sure that organic farming was genuinely organic and not fraudulent, which sometimes it can be. We are talking about extensive farming and there are many bits in the organic argument which, scientifically, I find difficult to take. I do not understand why it should be right to use, for example, copper sulphate but not right to have potassium. I do not see that their rules about a number of things make sense. I have strong views on the remarkable work of the woman who was much the leader of it. She made people respect the soil. Even though I do not accept the organic argument of the Soil Association, I do accept the fundamental view that the soil is important and that we have misused it, and I come back to the comments of the Pope about that. It is this misuse, through greed, that has put us in the position in which we are. We have allowed the soil, which we should have been protecting and looking after, to be diminished because we have misused it. She was right.
Are there any other questions? I thank Lord Deben and Mr. Chris Stark for coming before the committee this afternoon. It has been a worthwhile engagement and I appreciate them taking the time to travel here especially to share their views and experiences with the committee. As there is no other business, the meeting is adjourned.