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Climate Change Bill [HL]

This comes back to what I was saying about the previous clause. Defra’s own documentation says that the CRC, which is the first of the schemes, is expected to cover 52.1 million tonnes of carbon dioxide equivalent, which is a little under 10 per cent of the UK’s total emissions. I am not sure whether that is after rationalisation and overlaps. At the moment the EU ETS, according to Defra, accounts for some 52 per cent of carbon emissions in the UK under phase 2; we now have this scheme, which goes down to 10 per cent. Having spoken to the Carbon Markets Association and that sort of organisation, I seriously believe that we are already down to a level at which these schemes get quite uneconomic to operate in cost-benefit terms. That brings us back to one of the fundamental things about the Bill: while we all strongly support trading schemes, they have an important role but they cannot be the whole answer. I suspect that much beyond the CRC, at 10 per cent, the answer is really none of this and that it is regulation and all sorts of other things that stop carbon emissions. I entirely agree that the CRC is hugely less administratively expensive than the EU ETS, but below that level the administrative costs will be large enough to be a burden to the businesses that are then not covered. The CRC already covers all those businesses above £500,000 of electricity or energy costs a year. I would be interested to understand from the Minister what the one after the CRC is likely to be. Surely we need to start using other instruments after that, because I am concerned—as I said earlier on, when the Minister was unable to answer, although I can perhaps understand why—that even with the CRC there is not sufficient liquidity in the market for the serious financial institutions that make these things work, for which London has become a great centre, actually to get involved.