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Energy Bill

Without going back over the Climate Change Bill, perhaps I can point out where the noble Lord, Lord Woolmer, is not correct in his analysis. Most CDMs are traded by commercial organisations that have no interest in the UK carbon account concept, so it does not affect the demand for them among commercial organisations. The noble Lord, Lord Woolmer, is right—and I know the noble Lord, Lord Jenkin, has said this many times in this House—about the price of carbon. It is the only way that this will work within a market area, as the noble Lord, Lord Woolmer, rightly highlighted. I do not think it is in that scheme at the moment, but it needs to be in it post-2012. To make sure that that price of carbon happens, are the Government insisting in the EU-ETS post-2012 negotiations that the power industry pays through auction for all its allocation of EU-ETS? Once that regulation is laid down at European level, that is the way the price of carbon comes in. I looked at the spot price a couple of weeks ago, and phase 2 of the EU-ETS is between 20 and 30 euros, which shows the credibility of that scheme. I know it gets more complicated outside the energy industry where there are international competition issues, but within the power industry we do not have them, and auctioning post-2012 EUAs is fundamental to making this technology work.