Greenhouse Gas Emissions (Kyoto Protocol Registry) Regulations 2021

Lord Teverson Excerpts

Tuesday 13th April 2021 Grand Committee

[Lord Teverson (LD)]

My Lords, I must admit that when I first looked at this instrument, I was severely disappointed with it. I can normally find in any secondary legislation at least 25 points of criticism to talk about for six minutes. Looking through these regulations, I could see nothing contentious at all.

That was until I started reading the explanation for them, which raised a number of concerns. One of them, which has been talked about a number of times, is the gap in trading. Given that we knew there was going to be a notice in this area, how come we have a gap in trading, even though only 112 organisations deal with it? I suppose that having to send our registrations on carbon abroad is one interpretation of global Britain, but that concerns me. I noted that the Minister said that the system was due in May, I think. He did not say that it would actually happen in May. I would be very interested if he would confirm that the system will be operational next month, so that we can all, let alone the users, have confidence in it.

I was also rather concerned by the last bullet point in paragraph 7.6 in the Explanatory Memorandum, which says:

“Amendments include … ensuring that provisions regarding the operation of KP registries are compatible with the software for the UK KP registry.”


That seems the wrong way round to me. Surely we design the software to meet the needs, rather than the needs to fit the software. I am interested to understand why it is that way around. Can the Minister assure me that we are not just buying an app from the Apple shop, or whatever? It seems very strange that we are not designing something that is right for this, but, rather, are having to change our systems to meet the software. I tried to look up the value of one of these traded units but could not find it, so perhaps the Minister could tell us, without conferring, the current-day price of these units. That would be very interesting to know.

I move on to an area of potential confusion for us all here between the Kyoto trading system and the new UK ETS. I realise that that is not the direct subject today, given the very important role of this new UK ETS, but it would be useful if the Minister could help us to understand this. Its first trading day is due in May, so it would be very useful to have clear understanding and to be certain that it will happen at that point. I know there is a wish, which I applaud—it may be a hope—that there might be a connection between the EU ETS and the UK ETS in future, giving greater liquidity for the UK market. I would be interested to understand from the Minister whether those conversations have started and already take place, or even whether that is still the Government’s wish or objective.

Lastly, in that area, consumption figures were mentioned, as was offshoring, which is one of the problems of having high prices on national emissions. Are the Government considering or investigating further a carbon border tax, which has been mentioned more broadly in the western world?

I agree absolutely with my noble friend Lord Redesdale about methane. One of the areas of climate change concern is that methane emissions have increased quite substantially, and what is perhaps even more worrying is that most authorities do not understand why that is the case. Any insight the Minister can give us on that would be very useful. The consumption figures are extremely important. I congratulate Defra, which looks after consumption, rather than BEIS, which looks after production, for that time series, and I encourage government to give it more publicity and more time.

I will not go into the broader issues of climate change and COP 26, which has been covered very adequately indeed by the noble Lords, Lord Whitty and Lord Howell, and by the noble Baroness, Lady Bennett, in particular, but even on these smaller issues, not least the UK ETS, it would be very good to have confirmation from the Minister about those important areas.