Malcolm Chisholm (Edinburgh North and Leith) (Lab):This is the most important debate on the bill; indeed, this has been the key issue throughout the whole process. We all know that cumulative emissions are what matter and that, as a result, early action is crucial.
It looks as if we can show that the Parliament is united around the key issue of the interim target. Of course, there are debates to come about whether it will be modified. I am on the side of the argument that is reluctant to change from 42 per cent. The 34 per cent target was always rather unambitious because the trajectory from 1990, if we had reduced at the rate that we have been reducing, would have led us to a 32 per cent reduction by 2020. We need to be far more ambitious than that. The whole point of a target is to stretch and change behaviour.
Of course we must listen to the expert advice, but the experts will be influenced by the policy options that we are prepared to bring forward. That is why the months that follow are crucial. We must think outside the box and be more ambitious in bringing forward policy changes that will make achievable a target that is far more ambitious than 34 per cent. Even the Government's delivery plan shows that far more than 34 per cent can be achieved, so let us concentrate our minds after today to ensure that we do not have to change the 42 per cent target in the bill, which we can all welcome today .....
..... Malcolm Chisholm (Edinburgh North and Leith) (Lab):
As Des McNulty said in the debate on group 6, carbon credits should be used to meet the emissions reduction targets in the bill only as a last resort. Our first priority must be to reduce our own emissions and take our fair share of the global effort that is required to avoid dangerous climate change.
As was also said in the debate on the previous group, the Scottish Government cannot interfere with carbon credits that installations in Scotland purchase under the EU emission trading scheme, but it can ensure that any carbon units that it buys are truly additional and contribute to sustainable development in the countries where they arose.
Two major concerns have been levelled at the use of carbon credits under Kyoto mechanisms - whether the clean development mechanism or the joint implementation mechanism. The first concern is about additionality. Academic research from Stanford University has shown that between one third and two thirds of all clean development mechanism offsets represent not real emissions cuts but activities that would have taken place anyway. The second concern relates to sustainable development. The Stern report goes into great detail on some of the problems in implementing the clean development mechanism. It says that the mechanism is
"in its current form ... making only a small difference to investment in long-lived energy and transport infrastructure ... While a substantial international flow of funds is being generated through" the clean development mechanism, "it falls significantly short of the scale and nature of incentives required to reduce future emissions in developing countries."
According to the World Bank, only 10 per cent of CDM projects by volume in the 15 months to March this year involved energy efficiency, fuel switch, biomass or other renewables activities, which Stern says are critical to the long-term reduction of greenhouse gas emissions. I would like the Government to give a commitment to take on board those concerns. If the Government has doubts about the credits that it should buy, it can refer to the Gold Standard Foundation, which is an international non-profit organisation that operates a certification scheme for gold-standard carbon credits.
Amendment 113 would delete section 18A(4), which allows ministers arbitrarily to designate some categories of credits as not counting against the limit on the Government purchase of credits. In effect, that would make the Government's power to purchase credits unlimited. We recognise and welcome the Government's stated intent to keep the purchase of credits to a minimum, but we call on it to accept that the bill must support that aim and not create loopholes that would allow future Governments to reject that commitment and indulge in the excessive purchasing of credits, at the cost of action in Scotland. Section 18A(4) appears to be a giant loophole, but I look forward to any explanation that the minister has for it.
In particular, I look for a commitment in relation to amendment 107. I move amendment 107.
Des McNulty:
I hoped to speak after the minister had given some of the assurances that Malcolm Chisholm has sought, but I will reinforce the points that he made. Section 18A(4) could be a large loophole. I am sure that the minister does not want that impression to continue, as he said that a cigarette paper should not be able to pass between the parties or between the Scottish Government and the UK Government on these issues. I raised at stage 2 a similar issue to that which amendment 107 addresses. At that time, the minister gave assurances about how he would proceed. It would help if he repeated those assurances and went a bit further than he did at stage 2 to inform the Parliament about the Col 18713 approach that the Scottish Government wishes to take.
Stewart Stevenson (The Minister for Transport, Infrastructure and Climate Change) S:
I respect absolutely the principle that underpins amendment 107. Broadly, I think that members in the Parliament do not differ on the policy objectives that they wish to pursue. However, the amendment is unnecessary, because ministers can act at their own hand on the matter. Also, the amendment has a flaw that makes it impossible to agree to.
I will explain the flaw. Paragraph (a) in amendment 107 would mean that ministers could credit the net Scottish emissions account with carbon units that represented "a reduction in greenhouse gas emissions (or a removal of greenhouse gas from the atmosphere) that would not otherwise have occurred". I appreciate that Malcolm Chisholm has sought to address issues that we identified at stage 2 when the Transport, Infrastructure and Climate Change Committee discussed an amendment from Des McNulty.
However, amendment 107 would prevent the Scottish ministers from using one of the most fundamental carbon units that is available under the Kyoto mechanisms - the assigned amount unit. Parties with commitments under the Kyoto protocol have accepted targets for limiting or reducing emissions. Those targets are expressed as levels of allowed emissions or assigned amounts. Allowed emissions are divided into assigned amount units. Emissions trading allows countries that have emission units to spare - emissions that were permitted but not made - to sell that excess capacity to countries that are over their targets. AAUs therefore represent an emissions allowance and not "a reduction in greenhouse gas emissions (or a removal of greenhouse gas from the atmosphere) that would not otherwise have occurred", as required by paragraph (a) in amendment 107. Paragraph (b) in amendment 107 would create a specific sustainability duty in relation to the origin of carbon units.
However, such a duty is made unnecessary by the duty in section 61A, which was created by a combination of Labour, Liberal Democrat and Government amendments at stage 2. Section 61A says that, in exercising the functions that the bill confers on them, the Scottish ministers have a duty to "take into account the need to do so in a way that contributes to the achievement of sustainable development." That will apply to the crediting of carbon units to the net Scottish emissions account. Col 18714 I recognise absolutely that Malcolm Chisholm does not come lightly or early to the issue. He referred to the important gold standard, which is a measure of what we should consider.
I hope that he is reassured about sustainability and that he acknowledges the drafting problems that I described in amendment 107 that would affect ministers' ability to use assigned amount units to credit the net Scottish emissions account. I hope that he is satisfied with my assurances and that he will seek leave to withdraw the amendment on that basis. If he says in closing that there were gaps in what I have said, I might be able to shed further light.
Amendment 113 would delete section 18A(4), which allows specified units to be excluded from counting towards any limit that the Scottish ministers are required to set on the quantity of carbon units that may be credited to the net Scottish emissions account in given periods. Having the ability to exclude some types of carbon units from counting towards the section 18A limits is extremely important. In practice, it is intended to prevent carbon units that are used by installations that participate in emission trading schemes such as the EU emission trading scheme from counting towards section 18A limits. Carbon trading is one way in which the international community expects to reduce emissions.
The joint effort that has been put into the EU ETS and the joint commitment to it throughout Europe will lead to early reductions in the most polluting sectors throughout Europe. That is important. The traded sector in Scotland accounts for more than 40 per cent of our emissions. Even though the Scottish ministers do not participate directly in the EU scheme, they cannot ignore it. We are simply the accountants to the scheme. Of course, our approach is entirely consistent with that of the UK Government in the carbon accounting regulations that it has made under the UK Climate Change Act 2008.
In the advice to the UK Government that it published in December, the Committee on Climate Change recommended that any restriction should not extend to units such as those from the EU. If section 18A(4) were deleted, EU units would take up most of the carbon units that we would be allowed to credit to the account and in some years would even breach that amount. That would create very serious difficulties and, of course, run counter to the advice of the expert Committee on Climate Change. Given Parliament's future scrutiny of the regulations and the problems that are inherent in amendment 113, I ask Malcolm Chisholm not to move it.
Malcolm Chisholm:
The wording of amendment 107 refers to the Scottish ministers purchasing units rather than just accounting for them. The more substantive point relates to the assigned amount units to which the minister referred. It was somewhat disingenuous of him to say that they are an allowance and not a reduction. The fact that they are made available results from a reduction somewhere else in the world. I understand his point, but he did not tell the whole story.
As I indicated in my opening speech, we are talking not only about assigned amount units but about emission reduction units under Kyoto joint implementation projects, certified emission reductions from the clean development mechanism, and renewable units under Kyoto on the basis of land use change and forestry.
I am slightly reassured by the minister's remarks on sustainable development, but I am not totally persuaded by the case that he made. The minister said that amendment 113 was a way of revisiting the last debate. Given that he won the vote by 60 to 59, it is worth testing the Parliament again, just in case any member happened to be having coffee or in the toilet at the time of the vote. I understand his reasoning, but not deleting section 18A(4) has the potential to create a dangerous loophole. I will press my amendments in the group.....
..... The Deputy Presiding Officer:
The result of the division is: For 60, Against 61, Abstentions 0.
Amendment 107 disagreed to. June 24th 2009 (Column 18680-1, 18711-5, 18717, )