TUESDAY 20 MARCH 2001 _________ Members present: Mr John Horam, in the Chair Mrs Helen Brinton Mr David Chaytor Mr Dominic Grieve Mr Jon Owen Jones Mr Tim Loughton Christine Russell Mr Malcolm Savidge Mr Simon Thomas Joan Walley _________ MEMORANDUM FROM THE DEPUTY PRIME MINISTER AND SECRETARY OF STATE FOR THE ENVIRONMENT, TRANSPORT AND THE REGIONS EXAMINATION OF WITNESSES RT HON JOHN PRESCOTT, a Member of the House, (Deputy Prime Minister and Secretary of State for Environment, Transport and the Regions), RT HON MICHAEL MEACHER, a Member of the House, (Minister for the Environment), MR DAVID PROUT, Private Secretary to the Deputy Prime Minister, MR PETER BETTS, Head of Global Atmosphere Division , DETR, MR DAN OSGOOD,Global Atmosphere Division , and MS GABRIELLE EDWARDS, Global Atmosphere Division , examined. Chairman: Welcome, Deputy Prime Minister. I understand Michael Meacher may join you when he finishes his statement in the House. Thank you for coming along this afternoon, I know it is a busy day for you. You will recall that this meeting had its origins in the meeting we had to postpone after the break down of The Hague talks and we want to talk to you before you embark on further talks in a very short time. We want to concentrate on the COP6 discussions, what happened there, the aftermath and what may happen now. Mr Chaytor. Mr Chaytor 1. Thank you, Chairman. Deputy Prime Minister ---- (Mr Prescott) Do you not want me to say one or two words beforehand? Chairman 2. Not really, we are a bit pressed for time. (Mr Prescott) I always rely on that for another half an hour. 3. If you would like to make it very short. (Mr Prescott) I will leave out what I would have said except I do want to say a couple of things. One is that Michael will be with me, of course, but I have also brought along with me the Head of our Global Atmosphere Division because, as you know, at COP6 it is partly involved with the negotiations that go on with the Civil Service first and then the politicians and they may be able to give a fuller reply to some of the questions you might want to ask on COP6. Secondly - it is rather an awkward way of putting it - I just want to apologise that I did not come in December but we were in the middle of going to Oslo and trying to resuscitate the failure that had occurred at The Hague, and also to apologise for this afternoon, to thank the Committee for understanding those difficulties. My last point, to curry even more favour, is I would like to say the Environmental Audit Report, since I first came to this Committee and said "I hope you have got the power to snap at our heels", was an excellent report. We will be responding in a positive way and I think the recommendations are something that will make the Committee much more effective and we have a lot more to do about targets. I wanted to put that on the record and hopefully that puts me in a good light before starting. Chairman: You are sucking up very well today, Minister. That will not prevent us asking tough questions about COP6 which is an entirely different matter. Mr Chaytor. Mr Chaytor 4. Chairman, thank you very much. Deputy Prime Minister, I wonder if I could start off by asking a question or two about the reasons for the failure to reach agreement at The Hague. First of all, can I ask did you feel that there was a significant shift in opinion between Kyoto and The Hague on behalf of the Umbrella Group? Have they become less willing to negotiate, less convinced of the science of climate change? Was there any change between the original conference and what happened at The Hague? (Mr Prescott) Yes, I think there was a change between Kyoto and The Hague and it happened at The Hague. We just lost our political courage and political will to make an agreement quite frankly. That was on the European side, in my view. The developing countries were quite happy to see whatever agreement could come between the Umbrella Group and, indeed, the European Group, which were the two major groups in that really. I think the break down of negotiations was largely because we were not prepared to come to an agreement with the Umbrella. Of course, in all agreements it requires you to compromise and the issue is always compromising. Let me give you an example. At Kyoto the target that the Europeans set for a cut in the COř greenhouse gases was 15 per cent. That was an impossible target. I think we all knew that was just "hopefully you might get that target". Eventually we had to negotiate and we got a target which was eight for Europe, seven for America, six for Japan. They were very high against the predictions that America would not do anything, Japan would be no more than one or two, but I think everybody found the political will in those last few days to find agreement. That was in a much more hostile setting where a number of the motorcar industries and the big energy users in America had got together in these alliances and were pressing very hard for no agreement. We still got the agreement, admittedly working through the night for it but the will was there to do it. I think you have got to recognise whilst at Kyoto, to be fair, we were setting targets, at The Hague it was how you achieved those targets and much of the technical matters on which you had to agree was where there was not a lot of work done, whether talking about the sinks, the science, all of those things were involved. All of those had to be worked out before The Hague. Whilst I think a great deal of movement had been made, it was not sufficient to convince some of our European colleagues that you could compromise on a deal. I think that was unfortunate. Others will have a different view but since you are asking mine, certainly other countries may have said "we are not prepared to accept that kind of deal". There was great compromise on the Umbrella side and I think we could have settled an agreement, but we did not and hopefully we will go on to the next stage. 5. So you think the failure was more on the European side than on the Umbrella side? (Mr Prescott) I thought the question was were the Umbrella sticking very hard at not getting an agreement. The fact is they were quite prepared to change on their position in the CDMs, whether they could use sinks in the CDMs, which would have been a big way of getting out of no domestic controls. They were quite prepared to accept those principles in those negotiations but what happened as we got to the later stages was the Americans who were mainly doing the negotiations, but there were very powerful voices from Australia, from Canada, they worked very closely as a group, they began to see there was less unity on our side and pressures were coming in from their own countries and the negotiators then began to step away from where we had got to the edge of an agreement. That was unfortunate. To be fair to the Europeans, and in this sense I include myself of course as a European, in those negotiations being handled by Mr Pronk, who was the Chair of the COP, and the President, Mme Voynet, both of them asked me if I could get an agreement with the Americans and the Umbrella Group. At that stage we were united but unfortunately the deal was not acceptable. 6. Looking at the European Union side, in your statement to the Committee you say that at the final moment it was not possible to get a majority of the European Union countries to agree. Could you tell us what the voting figures were and which European countries were opposed to the agreement? How big was the disagreement? Was it a narrow majority or a large majority? (Mr Prescott) There was not a vote. It is a kind of collection of voices that goes on really. This is one of the difficulties of these kinds of conventions, it is not really put to a vote. At Kyoto you had to get consensus. There was no laid down "if you get 25 per cent, 30 per cent, 55 per cent", there was no formula for it, it was totally consensus. That meant at Kyoto we had a Chair that rolled over the opposition in a way and everybody else was so exhausted they said "oh, yes, great". That is how these great moments come in history, I think. We got agreement. We had a Chairman who had quite a lot of courage and he brought about the Kyoto Agreement and that was a major achievement, however it came about. When it came to The Hague and in the Europe Group we did not have a vote because you sound voices. Here if I am critical of a political position, and I would like to put it to the Committee and this is just my own judgment on it, some of the Green Ministers in it, namely the German representative and the French, are from the Green Parties. Frankly I think they are very much concerned with the negotiators outside from a Green point of view than they are from national governments. They are all in minority positions but have quite strong voices. Therefore, if they get together and strongly say "we are not going to do it", although there was some division between the French and the Germans, if you cannot get a strong enough consensus among the majority of them you really cannot go forward. The way they do the negotiations in Europe is the Presidency has a very strong position and the Presidency in this case, to my mind, had not really shown the will to want to find an agreement and, frankly, the Commission were not much help either. 7. So the French and the German Green Parties have disproportionate influence? (Mr Prescott) They were stronger outside but to be fair to the German Minister, he was trying to find an alternative route, he did want agreement and at the last minute tried to suggest another compromise. I am afraid the President took the view that it was over and Mr Pronk agreed with her. Many of the negotiators by late Saturday morning had gone so the whole thing just fell. They were hurrying to get out in order to allow an oil conference to take place the next day in the conference hall. I do not know whether they booked it to make sure that we were short on time but it was a problem. 8. Can I ask a couple of questions about some of the details of the agreement, particularly on the question of compliance and the ideas for a compliance regime. We understand that one of the ideas was that there should be for those countries who did not comply with their initial targets a penal increase in emissions reduction targets in a future period, so if you do not hit your targets in the first period you are penalised by having a huge increase in your targets in a later period. Is this the dominant idea in terms of the compliance regime? What other ideas are there? What is the favourite idea at the moment? (Mr Prescott) The issue of the penalties, whilst they were in the original document by Mr Pronk, did not really get a great deal of attention because you needed to be further along the line to get agreement. It was one of those areas you would have had to thrash out once you had got the core of the agreement and the core of the agreement was for the developed nations themselves to agree these issues as to whether there was going to be a domestic level forced on them, which the Umbrella did not want, or whether there was going to be the issue of the CDMs and how they applied. Each had different vetoes, if you like, and we did not really get into a great deal on penalties. Indeed, the same argument on penalties came within the European bubble because the argument then came "what if somebody in the European sector does not achieve their share of the bubble?" Overall we had eight per cent internationally and then it had to share out. If we did better than other countries the question came "because we are doing better does Europe claim that or do we put a penalty on those that are not achieving it?" I think we tended to look away from penalties, quite frankly. The real issue was to see if we could get an agreement between all developed countries, known as the Annex 1 countries, to this process. 9. If I could ask about another aspect of potential question and that is the question of supplementarity. We understand that the European Union position originally was that there should be an absolute cap on the extent to which the various Kyoto mechanism could be used to reach the emissions target. Then we are told that there is now a discussion about a qualitative cap from the supplementarity issue as opposed to a quantitative cap. That does not make sense to me. Can you explain this question of supplementarity and the different kinds of caps that have been suggested? (Mr Prescott) That may have come at the later stage about the qualitative caps. Michael was dealing very much with those. Were you involved with the discussions in the Civil Service? (Mr Betts) As part of the compromise package we would have been prepared to move away from a quantitative cap towards language that said that "a significant proportion" of each developed country's effort would need to be done at home. This would have been set out in national communications and it would have been assessed through the compliance process. 10. So rather than saying "by 50 per cent" it would be "a significant proportion"? (Mr Betts) Correct. That was part of the package where the EU would have been effective winners on the sinks element of the package. (Mr Prescott) You have to remember in all these that the Americans particularly but also the Australians, the Canadians and the Umbrella Group were against any ceiling whatsoever. They just said that we should be able to come to an agreement, we should not have any restrictions on these matters. Basically they had some doubts to a certain extent whether it should apply to developing countries. We have now seen the new President suggest that he finds that unacceptable. I must say that is quite at variance with what he agreed with Michael at the G8 with the Environmental Agency. There were really strong lines. It is like the 15 per cent argument, at the end of the day you have to break away from those positions and find agreement. The ceilings were certainly one of the more difficult ones although in the last minute negotiations they were quite prepared to do that and accept it. 11. If I can ask one more question about the state of the science. Was this an issue for the Umbrella Group? Is there still an ongoing dispute about the science of climate change on behalf of the Umbrella Group? I mention this in the context of the floods we had in the autumn which some people said were not the result of climate change but were the result of other weather conditions, and also in view of the Second Report of the Intergovernmental Panel on Climate Change that was published at the beginning of this year in February. (Mr Prescott) Yes. 12. I notice in President Bush's statement earlier this week, or last week, about his change of policy on carbon dioxide emissions, he says quite forcefully that the science of climate change is still incomplete. Is this a problem? Are the Americans still resisting the conclusions of the Intergovernmental Panel? (Mr Prescott) Certainly nobody in the Umbrella Group was doing that, we all accepted that, and indeed it was reinforced by the latest UMM scientific report. If President Bush is saying that now I think it is quite different from what we heard from the Americans before and that is quite clear because Vice President Gore was the man who played a major part without any doubt in reaching the Kyoto Agreement. He had to come then and lift it up from zero to minus seven, that meant almost a 30 per cent cut in their emissions over the period of time we were talking about getting to the 1990 levels. We never found in any of those negotiations that anybody disputed the science on which it was based. There was a lot of it at Kyoto but certainly not at The Hague. One of the reasons I felt quite strongly about the break down was I could see President Bush coming and holding a different view. To be fair to President Bush, I do not know whether that really is his view. I have heard his latest statement but that came after his Environmental Agency statement at the G8, which Michael attended, where they agreed the Kyoto targets. Since talks are going on, and I know there have been exchanges between the Prime Minister and the Foreign Secretary and Mr Powell about these matters, we got the impression it is still a negotiating matter, a discussion matter. We have agreed that COP6 now will be extended to July instead of May and that was at the Americans' request. I assume it is to come and enter into the debate. If they are going to tell us they do not accept the science they might as well come in May and tell us that as much as in July. I think it just shows a new administration trying to look at all the problems. Perhaps this is not at the top of their agenda at the moment but it is certainly under discussion and we are wise at the moment just to read what is said either by the President or the Agency at the moment and wait until they come to make a more definitive statement at COP6. Christine Russell 13. Could I ask you what degree of consensus was reached at The Hague regarding a funding package for developing countries, as far as helping them with transferring technology and other measures to enable them to reach compliance? (Mr Prescott) This is quite an important element. The developing countries were not too concerned at The Hague agreement. They said, "It is for you to sort out what you are going to do about your agreement on implementing and achievement of those targets" in the first period, which was the essence of the Kyoto agreement. On the development package which Mr Pronk was very strong about, he was able to put together a package that was very much dependent upon agreement and moneys on a scale which was acceptable as well as the other things involved in the clean development mechanism technology that the developing countries were quite prepared to accept and were very happy with. Again, it was one matter you would come back to if you had the core of the agreement in the developed countries. My impression was that they very much welcomed and wanted the fund and were looking forward to it; whereas the Umbrella countries were looking at how you sort out emissions trading and sinks. All these were seen as economic advantages to developed countries, whereas at Kyoto they were doubtful about it. By The Hague, they could see a great deal of money and gain, not pain, coming from those kinds of techniques involved in bringing out emission trading, dealing with the definitions of sinks, dealing with development mechanisms. All those were part of the Kyoto agreement. 14. Was there agreement or would it have been premature to reach agreement between the individual EU countries as to what contribution each one would be liable for towards the funding package; or was it just an agreement in principle rather than having any amounts worked out? (Mr Prescott) The European countries were very strong on development aid and there was a great deal of measure of agreement. There is always a tendency for some countries to want to try and develop a kind of bilateral, but you could not solve this matter bilaterally. The French always took the strong view that they had a number of countries developing which were French; we have strong connections with the Commonwealth countries and it is inevitable in these international negotiations. You do what you can in the countries that have common views about it. The problems at The Hague were not the developing countries but the developed. Mr Owen Jones 15. Could I take you back to the last question that David Chaytor raised about the acceptance or otherwise of the Americans and the scientific bases. David may have been quoting from a letter that President Bush wrote to Senators Hagel, Helms, Craig and Roberts on the 13th of this month in which he said, "... we must be very careful not to take actions that could harm consumers. This is especially true given the incomplete state of scientific knowledge of the causes of, and solutions to, global climate change ...". A couple of years ago I had a meeting with Newt Gingrich over global climate change. I was not the only person at the meeting. It was very enlightening because Newt Gingrich denied that global climate change was occurring at all. Do you think the President believes in global climate change and believes that carbon dioxide has a role in it? (Mr Prescott) I used to meet Jesse Helms on occasions and he believed in the science of missiles, but leaving that aside these were highly intelligent people who do choose to say that the science is not proven as far as they are concerned. That is very difficult when you see the last report that has come out. It is very hard to reject it and an important difference to take into account that may be the vital factor here is the switch around in American industry. Up to then, if you take the car industry, the heavy energy users, they were all against it. They were there in force at Kyoto. They were not at The Hague, even oil companies. The BP purchase of the American Oil Company changed the attitude overnight. Business people have begun to recognise that there is some profit in this. I do not say they are motivated solely by profit but it has turned it from pain into gain. The Americans have been very successful in developing emissions trading and some of these ideas. To that extent, President Bush may well take more into account the business view, if the business still holds to that view. Bear in mind it was President Bush's father who led to the setting up of the Rio conference. If the Americans had not played a part in that, it would not have got off anywhere at that time. We must wait and see. It is an illustration in this first few months. It may arrive at that view. Now we have the President's letter, I am a bit confused about that and I wonder whether that was a reaction to the Environment Agency spokesman who signed up to the Kyoto targets at the G8. (Mr Meacher) It is difficult at the moment to understand what exactly is American policy on climate change. I did meet Christine Todd Whitman who is the Bush Cabinet Environment Minister at Trieste and she made it perfectly clear, first of all, that the US was committed to taking action over climate change; that President Bush did believe in the science of climate change and she waxed lyrical about her multi-pollutant infantry which included CO2. The Bush letter has moved away clearly from the Kyoto Protocol, despite the fact that Mrs Whitman signed up to a communique which contained a phrase about supporting the environmental integrity of the Kyoto Protocol. It may be that he has had considerable difficulty with his multi-pollutant infantry, including CO2, because of the situation of California, the impact on energy prices and consumer prices and that he has chosen to take a short term way out. Whether that indicates a longer term view remains to be seen. The United States is now engaged at a high level review of climate change policy. I think it is at an early stage. There is now currently an announcement about the new representative to replace Frank Loy as the state department negotiator. We will have to see what line she takes. It is premature to take a view too early as to how far the Americans are either moving away from the Kyoto Protocol, which I still find it difficult to believe they will, or whether they are looking for some significant or fundamental restructuring of the Kyoto Protocol, which itself could also be difficult. This is not just a matter of environmental treaty; it is a matter of foreign policy relations between America and the rest of the world. (Mr Prescott) We should not underestimate the concern of developing countries. The one strong issue for them was decided by the Bonn conference in 1995. They agreed that the developed countries, annex one, 40-odd nations I think, had to agreed targets themselves and show that they were committed to making the change. If now, as the suggestion could be from President Bush's letter, that he is now saying, "All these countries who are in the developing countries are not committed to targets", if you are now reversing that agreement, which they originally signed, and saying it now applies to all, I have grave doubts that you will be able to get an agreement with the developing countries, who tend to feel that perhaps we have poisoned the world well ahead of them and perhaps we should do something about it first. 16. I do not think you would get any disagreement from most of the Committee on that. You were very frank with the Committee about disagreements within the European group, particularly your disagreements with some of the other ministers. Do you think it could be argued that these public disagreements within the European group weaken the unity of the European negotiating position? (Mr Prescott) I think unity is better than disunity. In the nature and politics of these kinds of agreements, it is not easy to keep everything quiet. For example, all the way through the negotiations, particularly the green representatives were told the green party was outside. The green party would be demanding more and more, shifting and changing. It is very difficult to do negotiations under those kinds of circumstances, some wanting to show that they are championing inside the negotiating group and there are divisions and compromises to be found. If you go outside to these groups you get a lot of hostility and that affects the politicians in different ways. I can always recall the Kyoto agreement, where many of the Europeans felt that to accept this agreement was going to cause them a lot of trouble with the environment groups abroad in their own countries. They were staggered to find that the environment groups after a lot of hostility to keep the 15 per cent were much more realistic saying, "Thank goodness, you have got an agreement. We did not think you would get an agreement." It is up to the politicians to make the judgment then as to how far they can go but in that process of negotiation there is a play off because the NGOs are part of the conference. To that extent, it does make for difficulties. If you want to suggest there is a compromise and that 15 per cent is no good, which we had to argue, you are not going to get that agreement and you must find a compromise, in the process of compromise the political forces are not just inside the European group. They are outside. You have to do it against that background. Even with those divisions, we concluded a very good agreement at Kyoto and I think it would have been possible to do it also at The Hague. Unfortunately, for one reason or another, it did not come about. What is true is that the opponents you are negotiating with are aware of the different opinions in the groups, but that is not unique. Whether it is trade negotiations or environment negotiations, people know what is going on in each group. It is an inevitable part of it. 17. I was not privileged to read most of the world's press but I was privileged to read our press following the meeting. If I was a member of the Umbrella Group, I think probably I would take some comfort from the fact that the press were portraying the breakdown of the meeting as a row within the European group rather than as a lack of agreement between the European group and the Umbrella Group. We appear to have got the blame. (Mr Prescott) I do not think it affected the negotiations for the Umbrella Group. They know these differences from talking to them. They just say, "Is it possible to get agreement? Can you deliver?" The fact that I came into that group at the request of Madame Voynet, the president of the group and the president of COP6, carried authority because people say you can see we are doing a deal. It is exactly as it came out at Kyoto, but this time it did not happen. In regard to the press though, the press have nothing but hostility in the main to these things, in my experience. They are not prepared to put a case fairly one way or the other. They are more interested in the personality and the conflict. I am supposed to have stormed out of a meeting. That is absolute rubbish. The meeting had come to a decision an hour and a half before. Why I was moving quite quickly, I had discovered I could get a flight back to Humberside and get home for Saturday when I thought it was not going to be until Sunday. Adding to that by saying you are feeling gutted gives a bit of colour so I have to accept my responsibility for that, but that had not affected the negotiations in any way. It did affect the presentation of what was going on. I take the opportunity again with Madame Voynet. I did not say that she was particularly tired. When it came to the final deal, she said she was too tired to really consider the complexities of it and I am not surprised. We had been negotiating two or three days. You are tired. I was tired. Everybody was tired. So we were at Kyoto but the difference is we did an agreement. (Mr Meacher) I will not forget that last night for quite a long time. It was in many ways similar to Kyoto but it was slightly different. It was agreed that the four strategic issues would be dealt with by the key group of negotiators in a particular room. The first one was going to be developing countries, which we all accepted. After three hours, and we were getting to three or four o'clock, still that particular issue had not been settled. It did become clear that if we carried on at that rate we were not going to get through the agenda or have an agreement. I do say, and I am no sycophant as John knows very well, if it had not been for John Prescott we would not have got that close to an agreement. We got very, very close to agreement solely because of his skill and determination to force the relevant partners to face up to each of these issues in parallel with the key people brought together, the relevant questions put and a settlement made. It may be outside the procedure of a normal formal procedure but that was exactly what happened. If we had not done that we would not even have got within miles of an agreement but we got within inches of it. I thought that we actually had got an agreement, as I said perhaps unwisely on Radio 4. I was convinced of that, I would not have said it otherwise. What actually happened just before I made that radio broadcast was there was a meeting of EU Ministers and most - I say this without any blame - were not taking part in the negotiation and were in their hotel rooms asleep. A meeting was called at about seven o'clock in the morning as I remember and the details were put to them such as we had and they said round the table, perfectly understandably, that they had not got enough information to be able to make a judgment, they wanted more information. I thought that was totally fair. We said that we would get more information within the next two or three hours and we could have a further meeting. The French Presidency, who had always had some difficulty about the degree of concessions which should be made in order to get an agreement, again a perfectly fair judgment that ministers have to make --- Chairman 18. What was that difficulty? (Mr Meacher ) Sorry? 19. What was that difficulty? You said they had some difficulty all along. (Mr Meacher) She had difficulty because the central issue was the balance between trying to get the Americans, in particular the Umbrella Group, to give priority to domestic action, which they did not want to do, and what phraseology would be applicable which would be short of requiring that action to be at least 50 per cent domestic action on the one side and, secondly, the really critical issue was on sinks, how far one should be able to use sinks under Article 3.3 in your own country or sinks in developing countries under Article 3.4. Some of us took the view that although there is always a bottom line in these negotiations, no-one is going to get everything they want and one has to make some concessions to get an agreement. We did get an agreement with all the relevant partners in one room, which was repeated again in another room and I took to be formalised. (Mr Prescott) Including President Voynet. (Mr Meacher) It was the case, I think, that the French Presidency judged the earlier meeting, at which not one single EU Minister opposed the agreement but several said they had not got enough relevant information, and took that as a lack of a mandate to proceed to reach that final agreement. I understand why she did that. We have to have an understanding of other people's positions. It was these kinds of very delicate sensitive judgments that had to be made under time pressures as we were moving remorselessly to the conclusion of this at about four in the afternoon because, I know this is unbelievable, it had to be used for other purposes. 20. Just to interrupt you, are you saying that it was not so much the content, the issue, so much as the view of the negotiations that was taken by the French Presidency which led to the collapse, that another person might have taken a different view in forcing it through on the same content? (Mr Meacher) I think that is possible. The point I was making that John cannot make is we would not have been in a position to make these judgments about should we have had the agreement, could we have got it. We were inches away and if he had not taken that initiative - something John is very good at - of knocking people's heads together and forcing them to come to an agreement to settle matters or to say "we cannot make an agreement", that would not have been done. It desperately needed doing and it is only John Prescott, in my experience, at these international negotiations who has the determination and skill, for which he is so often not given the credit, for doing this. (Mr Prescott) That was absolutely correct, of course. 21. Everybody is sucking up to everybody else this afternoon. (Mr Prescott) It is very kind of Michael but he did play quite a crucial part in the whole negotiation. We act as a team. I would like to record in front of your Committee the skill of the civil servants who were absolutely superb. 22. That is taken as read, you are full of praise for the civil servants. (Mr Prescott) At Kyoto it was the skill of our people who negotiated that agreement and it was the skill of our people that put this package together. Sometimes they get a lot of knocking and we get a lot of the praise saying "we are up there", but without their back-up, and they were really superb ---- 23. I fully recognise all of that and great credit to everyone concerned, including the civil servants obviously. What we are trying to get at here is what was the nature of the content. (Mr Prescott) There was one content point that was very important in the process. We were able to say to the European groups when we met as a European Group that they had agreed that sinks, which was always the concern about developing forests, could be used as part of the contribution to the target they had got by doing it in developing countries. The Europeans were set against that and said "we do not want that". We got the Umbrella Group to agree that was the proposition. The Europeans were quite staggered at that but when they got awkward and they wanted more the Americans and the Umbrella Group withdrew from it. That was what kept the attention of the Europeans. We were able to say to the Europeans "look, you said they would never do that and this is in this agreement" and then people started walking away from it when it got difficult. To be fair about Mme Voynet, she did go round the table and a number of the other European countries who did not understand the agreement, were not actually involved and just came in, and said "I am sorry, we do not have enough information". My main concern was this was one window and it would be lost. To be fair, we have not mentioned the next window where we hoped to try to get over it again at Oslo, which got cancelled. Frankly that was a failure of political courage and political will again. Mr Jones 24. I asked in my earlier question whether the Americans accept some of the science behind the causes of global warming. Whatever the uncertainties amongst them, the uncertainties that exist over the effectiveness or otherwise of sinks is rather greater. Was it the uncertainty about the effectiveness of sinks that was behind some of the European Ministers' problems? (Mr Prescott) Yes, that was part of it but it was connected to the ceiling. Michael was very much involved in negotiating those powers. (Mr Meacher) You are absolutely right that there is great doubt about sinks. 25. There is some evidence that some so-called sinks may actually contribute towards carbon dioxide rather than reduce it. (Mr Meacher) Oh, they do. I was about to say that trees sequestrate carbon, there is absolutely no question about that. The problem is, and as one gets older one learns this, when they are young or middle aged they absorb carbon but as they get older they yield it up. If they burn they no longer sequestrate it but you get a double-whammy because it all goes up in smoke and COř into the atmosphere. There is also the real problem about sinks, to make a distinction between what is the sequestration effect of a forest being there where it happens naturally, as a natural phenomenon, and how much human agency adds to this. The view that we took was that countries should get credits for the amount of increased sequestration which takes place as a result of things from human management as opposed to the simple existence of a natural phenomenon. There was no agreement about any of these matters, certainly how you calculate the latter, we simply do not know how that is done and we need a lot more experience. That was why we said that sinks should not ideally be in Article 4 in the Clean Development Mechanism in developing countries, that we needed experience up to the first commitment period of 2008-12, we could review it perhaps in 2005 or 2008, and use that scientific knowledge and we may be able to incorporate in a reliable, quantifiable way how much those sinks should contribute to targets but we should not do that immediately. 26. How confident can you be, given the uncertainties of science about the sinks, that you do not achieve an agreement based around targets which actually do not deliver anything at all or maybe deliver the reverse of what you want? (Mr Meacher) Indeed, that is exactly the point. 5.2 per cent of Annex 1 emissions might save in the order of a quarter of a billion tonnes of carbon a year. If we allow in sinks in domestic countries it could well add something like a billion tonnes, which was agreed under the Kyoto Protocol, and if we allow it in the CDM possibly another 0.8 billion tonnes. To be fair, I mentioned a quarter of a billion tonnes but between a quarter and a billion tonnes depending on certain conditions. Even on the most optimistic scenario, if we allowed sinks in unqualified there could be a doubling of the level of COř emissions actually permitted under the Kyoto Protocol, which would be an absolute nonsense. That is why we have to treat this with enormous care. The American view was not necessarily to disagree with us scientifically, they have never challenged us on any of these figures, it was simply that they have a problem on the Hill, they have a problem in the Mid West, they want to get a lot of credits from changes in land usage in the Prairies and they want to use their forests to the full in order to minimise any impact on their domestic economy. That is politically an easier way of trying to reach their targets. Since they are probably now 20/25 points above their Kyoto target, and they are supposed to be seven points below it, anything that gives them an easy way of achieving the target is clearly desirable. It is not a difference about science, it is about political accommodation to an embarrassing external target. 27. Is it your view that we do need to secure a political deal on sinks before we can move forward on anything else? (Mr Meacher) Absolutely. (Mr Prescott) Do not forget the important point about that, which some of our European colleagues sometimes want to forget, is that Kyoto was agreed and, yes, they are targets but they were based on a technology and science we were not too sure about as to how you could measure targets and emission trading. In the period of time in between Kyoto and the COP6 and moving to agreement all of this had to be worked out but it was a pretty new area. It has not necessarily got the preciseness and it does not help with the targets but they are an inevitable part of it and it is consistent, I think, with your criticism of targets that you made in your last Environmental Report. It is good to have targets to measure against but sometimes the things on which they are based are not all that accurate although it was part and parcel of putting Kyoto together. Mr Chaytor 28. If I can just step back a moment to the question of the deal that you are both saying was informally agreed by all the European Union Member States. (Mr Prescott) The leaders of them. 29. The leaders, sure. (Mr Prescott) Because the French, the Swedish, the British, the Germans, the Commission, they were all in that room and they then took it back to the full European Group and that was when it all began to fall apart. 30. So the leadership agreed what was on the table but they wanted more time? (Mr Prescott) They would take it to the Group. But in between arriving there and at the Group they said there was not enough information. 31. Has that view ever been published in written form? Can you tell us exactly what was agreed there? I followed the reporting of the conference with interest but nowhere did I read what the sticking points were. What I understand from what you have said this afternoon is that there was an agreement over supplementarity and the original sticking point of 50 per cent was relaxed to become a form of words that was "a significant proportion" and there was an agreement that sinks could not be used in developing countries. Were those the two points that were negotiated with the Umbrella Group and were they agreed by the leaders of the European Group or were there other points? Does this exist in a written form somewhere? If not, would it be possible for the Committee to have a note about exactly what was agreed because that would inform our understanding of what is likely to happen in the future. (Mr Prescott) We could give you a note of what that negotiating position was at that moment. Do remember, it was the full conference that made the decisions. There was an executive group that was set up to negotiate it but they had come to the end of the road and they could not get any agreement, hence the reason could we get the real people who were going to have to make decisions on some kind of agreement. We put forward negotiating positions on what we thought of each one of the positions and the Americans particularly, on behalf of the Umbrella Group, had theirs. We can give you a statement at that point in time when we brought in the leaders, the French, the Germans came in, and listened to what we had to say. They then went back to their group to study and to consider our group, and we went back as well. In the meantime, when it got difficult and we said, "We want more information than this" or, "Let's negotiate again", at that late date, you either accept or reject. As the discussions went on and the President called us back to ask how far we had got, people began to change their positions. The Americans began to say, "We did not quite mean that", because otherwise they would be outflanked. There comes a time in any negotiation when that is it. You can either accept it or reject it. If you accept some and you want to build on it again, it becomes very difficult. We can give you a paper which we took into the Europe group, giving our judgments of what was on the table, which was a paper given to us by the Americans and the Umbrella Group. We thrashed through those bits but quite properly we then went into the European group and, if they were not prepared to accept it or said, "We need more time or information", as we said to them, "If you let this go, the whole deal goes. Secondly, if you do not decide now, there are only a few hours left." We are talking minutes left, an hour or so. "If you do not accept that now and you start negotiating again, frankly, you may find a change in the political situation in America and the fear is that it may be a different attitude." I do not know whether that is going to happen but there are signs of it at the moment and we are in a more difficult situation. You have a memorandum that is our understanding of that agreement. We put our understanding because, once it went into the group, people started saying, "I want a bit more on this. I want a bit more on that" and everybody walked away from it because the Americans particularly, do not forget, have to go and answer to their Senate. They did not want, "Did you agree this?" when they had thrown it away. Agree it in the context of agreement, fine, but if you have not got agreement you were prepared to give that away and when it came to Oslo that is what the problem was. In Oslo, they began to back off the negotiations. Mr Thomas 32. Following on from that and the evidence you have just referred to which you presented to the Committee, the outline you have given us on where things may go now is that there is a paper which Mr Pronk has prepared which was the subject of the almost agreement, which has been now subject to further comments and views and so forth, was not able to take in Oslo but could now come back in early April for further discussion. It is a question as to whether these are the right tactics. Is it right to work with a paper that has failed? We could not, you could not and the Europeans could not quite get it together. Are you convinced that you are taking the right line with this or, in order to get this to work, because ultimately the prize of getting this to work is what everyone needs, even if it does take a bit more time. Is it better to put all bets off on that and to look again at the whole issue of the sequestration of the sinks and the clean development mechanisms and, okay, if it needs to go back to the drawing board, let's try a different path? How much consideration have you given to that? (Mr Prescott) I think the paper is bust. I do not think you can go back with that now because people in those late stage negotiations were prepared to do something. They might not now. Anyway, the administration has changed. The administration might not be the same to the American negotiator now, so Mr Pronk is producing another paper. The issues are still the same, the formulas that you find agreement on, and now President Bush seems to be suggesting that anything that is just for the developing countries in the first stage is not acceptable to me. That is a fundamental change. Michael, in the Environmental Group in the European Union, has been dealing with some of these negotiations. (Mr Meacher) We do accept exactly as you are saying that it would not be appropriate to continue with a paper which we have really had two go's at and not succeeded. Jan Pronk, the Dutch Environment Minister and President of COP6, has put together another paper -- I am not sure if it has been published. I think it is going to be published very soon -- on the basis of consultation with all the parties, trying to put forward a set of proposals which might bring them all together. 33. Does that include America? (Mr Meacher) Yes, absolutely, although the American position is completely unknowable. They have this major review and we are getting very contradictory reports from what senior ministers are saying in Washington. (Mr Prescott) If the paper was to suggest that we reopen it all again and the developing countries have got to fix themselves some targets, you can forget about getting any agreement. 34. The Kyoto Protocols are not open for negotiation; they are agreed. There might be a previous administration in the US, but nevertheless that is the international agreement. (Mr Prescott) You still have to ratify them. 35. It has not been ratified yet? (Mr Prescott) No. That requires so many nations to do so. You can sign up for it at its first stage of the protocol but if you do not actually sign the ratification -- and indeed there was an argument at one stage that perhaps some of the Europeans entertained the idea that you could get enough to sign up without the Americans. Frankly, I doubt it. Secondly, an agreement in this case without the Americans is not going to be very workable because many other countries will say, "Why should we bother if the Americans are not?" 36. If I can put it to you in your terms, how gutted are you today that Bush has very recently questioned not only the negotiations that happened in The Hague but the actual climate change itself? (Mr Prescott) The gutted response was one reaction. I thought we had missed an opportunity. The events since then rather confirm that. I am sad about that because it was one opportunity, like Kyoto. Kyoto had every chance of failing but to fail on this one when we had Kyoto, I was gutted. Now we are in the process of negotiations and the reality of global negotiations. The Americans have elected another President and the President is entitled to put his point of view. I am entitled to argue with it and no doubt others will agree with America. That is into the public arena. Therefore, you live with that. You try to find agreements. If you say that all the developing countries have to come in and line up targets, I think it will make it impossible but who knows? Every country has to reassess when a major player like the Americans in this sense says, "We do not want to play that game" or, "We are not prepared to sign up for that." That does not mean we give up arguing and saying, "You have got it wrong." I have already said that I think public opinion in America has been moving as fast as it has here. It is no coincidence that many of those big industries began to change their views and that is a lot to do with public opinion. I have a lot more faith in public opinion than the media statements and we will keep arguing our case. The weather will keep reminding them perhaps that something is wrong and perhaps also the whole business of electricity provision in California might concentrate minds as much as floods here. They are not going to get away from those pressures. They are going to continue to be there and the public is aware that something is going on. They will want some response. Mrs Brinton 37. Have we any timescale of this fundamental review of climate change policy on behalf of the new American President? We have timescales set for other negotiations but if they are still fundamentally reviewing it it seems a big, black hole at the centre of those negotiations. Have we any idea whatsoever what is in Bush's mind? (Mr Prescott) If I can refer to the American request for a delay in the meeting at COP6 to July, it can be interpreted in a number of ways, I suppose, but if they were saying no in May I assume that was to assess the position. They know it is a very important, global issue. That is encouraging and if there are views and discussions that are going on the Prime Minister in our case, the Foreign Secretary, other people and Michael at the G8 meeting in Italy -- we all make a very clear view and it is interesting at the G8 meeting they did sign up to the Kyoto, so July is the time when we will know what the American position is. (Mr Meacher) They certainly said that they would complete the review in time to be able to engage seriously in the resumption of 16 to 27 July. (Mr Prescott) Also, the American President said he was concerned about energy, electricity, prices and things like that. There are different ways you can achieve your targets and that is up to the government, to make its decision. He might not want to do something in one section but he can probably achieve it in another. It does not rule out the possibility that he can meet his political difficulties as he sees them and yet achieve the same targets he is committed to. Mr Loughton 38. Could we move to the post-COP meeting in Canada in December between the EU and the Umbrella Group, where they discussed ways of moving forward? I gather you said that it emerged that the two sides now had different understandings of the political package which had been discussed in the early hours of 25 November in The Hague. Could you tell us when the different understandings of your last minute deal arose between the EU and the Umbrella Group? Were they there all along and just an inevitability about the length of the negotiations, or was the Umbrella Group stepping back in the cold light of day from commitments which had been given in reaction to vacillation by the EU before? (Mr Prescott) He was at a meeting of officials in Canada where they discussed that so I will ask Peter Betts about that. I would not be surprised if people said there is confusion because the main negotiator, Frank Loy, having done the business and put it on paper, then said, "I was not prepared to go that far." He began to change his position, which is understandable. If you do something thinking you are going to get agreement and then you find it is done, you are not going to put yourself into the negotiations on that basis of what you agreed there. (Mr Betts) We had thought in The Hague that sinks were excluded from the CDM. That was our understanding from the Umbrella Group. We also thought that Article 3.4 sinks, in the jargon, would apply only to three main parties, the United States, Canada and Japan. When the officials got to Ottawa, we learned from the Umbrella Group that they were now saying it had not been agreed that sinks would be excluded from the CDM. There would simply be a review before a decision was taken and it had never been agreed that only three countries would get Article 3.4 sinks. That possibility would be open to all developed countries. (Mr Prescott) Russia was particularly apprehensive about being left out of that. Everybody then began to look at it and Russia said, "Why are we not in it?" Let's face it: Bush had a pretty good deal out of Kyoto. (Mr Meacher) To be fair, Sweden and Finland were also interested in this. This is another area where divisions of interest between wanting to restrict CO2 from sinks are separate from a national interest and being able to take advantage of a rather convenient source. All of these tensions began to build up once that so-near link was broken. 39. In part you are blaming a lack of time for the negotiations for COP6, but are you talking about time for the technical effort by the officials or time for the politicians to break the logjam and the deadlock? If it is the former, was not two years long enough? If it is the latter, is it not a shame that the Umbrella Group did not want to pursue further, informal negotiations in Oslo in December? (Mr Prescott) It was more to do with political will than technical terms because we knew anyway that, even if we agreed it, there were certain things that you would need to dot the I's, cross the T's and go on to the next meeting. What we wanted was a political framework that allowed you to go on to the next meeting in July and the developed countries had agreed among themselves what the principles were. The principles would be taken to the overall conference. The real problem then was that many of the negotiators, particularly for the developing countries, had gone. Some of the negotiators on the European had gone. They had gone well before I even left. It was not possible to make it back to the main assembly that has to make the recommendation for which there is the political agreement. I still believe that was the political will. Oslo was still an opportunity. Hopefully we would come to some agreement, but it had become more complex. The other countries to this agreement had been left out of it and the Umbrella began to say, "I am not going to do that" or, "I am not going to do this". It became more difficult. The Europeans in our discussions -- the French were still of a strong mind about this, and felt it was not enough and in my view there was a bit of fancy dancing went on about who was going to be blamed for the result of the fall-out of talks in Oslo. The reality is that once you get into that frame of mind you have not got negotiations. If you have not got the goodwill to meet and settle that agreement, it was not there; it was not on the Euro side and it was not on the Umbrella side. It had become more difficult and it had become too late to do anything. People then were beginning to say "let us wait until COP6 I", or whatever it is called, "in July" and hopefully they will do that but my main concern was that the American situation may have changed, and it may have. 40. But before that you have spoken about the possibility of inter- ministerial consultation in New York in April chaired by Jan Pronk in advance of COP6 Part II, to give it its full title. What is the purpose of that meeting in April in New York? (Mr Prescott) Michael, you went to that one. Is that the sustainable conference? (Mr Meacher) Are you talking about the next CSD conference? 41. The Jan Pronk meeting in April. (Mr Meacher) The extended bureau at the end of the Commission for Sustainable Development which is 17-20 April? 42. Yes. What is it for? (Mr Prescott) You attended that. (Mr Meacher) No, we have not come to it but I would expect to be going to it. 43. The meeting in April, next month. (Mr Prescott) I am sorry. (Mr Meacher) One or other of us will be going. 44. What for? (Mr Prescott) The President has a new paper and we will discuss the Pronk paper and that will be starting again. When we come back we will hear the opinions through the Civil Service, who meet at these meetings, as to what exactly will be the American position. If their position is we are not just going to have an agreement for developed countries and it will have to be everybody then the whole thing is completely opened up again and I do not think we will get any agreement signed ahead of the next conference. 45. Are you going to lay the foundations for COP6 Part II or is it to see whether there is any point in COP6 Part II, in which case will it go ahead? (Mr Prescott) It will go ahead. At the meeting of the Executive of the European Groups you have still got to take into account the Umbrella and the developing countries. We have agreed now that the conference that would have taken place in May should be extended to July at the request of the Americans in order that they may make their assessment. Our meeting in April in that sense is an opportunity to look at the Pronk paper, see what the latest position is of the Americans and adjust ourselves ready for the meeting in Bonn. (Mr Meacher) There is a whole series of preparatory meetings, "prep coms" as they are called. We had an extended session after the EU Environment Council a fortnight ago precisely to discuss climate change, the latest information, to take note of latest positions and how best we form an alliance partly to keep America on track, if possible, with developing countries, with other big countries like Russia and certainly keeping our lines open with China, etc. We all tried to concert tactics in preparation for the next meeting. That is exactly the same purpose a month later in New York in April. 46. Having said all that, what are the prospects for the meeting in Bonn in the summer? (Mr Meacher) I think really everything does depend - I hate to say this - on the American position. It is true, as John said, that we can ratify Kyoto, we need 55 countries and 55 per cent of total global emissions represented by those countries to ratify. We can do that without the US but it would be an extraordinary thing, in my view, to allow the world's largest polluter to go on polluting and the rest of us tighten our belts in order to meet these targets. There is something extraordinarily bizarre and perverse about that. That is why it is so important to keep America on track. We just do not know at this point where these contradictory signals coming out of Washington are going to lead to. I cannot believe that the United States is going to walk away totally from Kyoto. If they do they will have to return, in my view. It will not necessarily be to Kyoto but to something similar. I find it very difficult to believe that given the movement in public opinion amongst industrial leaders and the fact that republican senators have said to us "it is not that we like Kyoto, we like climate change, but this is something we have got to address". There are undoubtedly persons at top level positions in the administration who believe that this is a serious issue that the United States has got to be a partner in. (Mr Prescott) And there will be a different Presidency on the European side. (Mr Meacher) That is also true. Mr Savidge 47. And possibly on the American side. Sorry. (Mr Meacher) It is a mosaic and each time the kaleidoscope changes. It is very difficult to say. I do not think we would do it if we thought that we were bound for failure. We do think there is a good possibility of success but I would not put it too high. Mr Loughton 48. Minister, when you last gave evidence on climate change negotiations in 1999 you said that the major problem was the prospects for "hot air" trading. What has happened on that? Has it been overtaken by more important events or put on the back burner or what? (Mr Prescott) It was an essential issue. This is a very good example of the trading emissions, "hot air", etc. In all those areas they were the things that clinched it at Kyoto. People signed up on the basis that you could do emissions trading or CDMs, etc. I think it persuaded an awful lot of industry to take part and they could see there was a possibility due to the experiments the Americans had done in this area on emissions trading and trading actually achieved. BP here were doing some of the internal trading. That was quite an important gain. Frankly, those things will not be lost but, of course, you need an international treaty to be able to trade in it. It was an essential reason why a number of people signed up. The "hot air" issue was one of the difficulties about Russia. Russia got - I perhaps ought to be careful about my words - a very good deal out of it but that was because it was tired at the end and everybody wanted an agreement. Now they are well placed with "hot air" to want to do the trading but you want an international agreement for it. (Mr Meacher) "Hot air" remains a problem but, to see it in perspective, Russian "hot air", because of the looseness of their targets, might involve something like 300 million tonnes of extra COř and they are getting all the financial benefit of the credits. If you then look at sinks, and of course sinks has overtaken "hot air" as the big essential loophole, I have already mentioned the figures for sinks at the top estimate threshold are between one and three-quarters and two billion tonnes, so it is a very different scale, but "hot air" still remains a problem. Joan Walley 49. I want to try to draw out lessons that can be learned from what has happened. The way that the discussion has gone so far, I realise that we have got to draw a line under what has happened and when the meetings come back in July we have really got to start afresh. Given the fact that we have got a new US Presidency and a different European Presidency as well, I just wonder given the various concerns that have been set out about, for example, principles like contraction and convergence, which I know our Environment Minister has been very involved with, do you think that things could change so much that things that might have been impossible or perhaps not even thought of at the earlier stages of the debate that we have had are things that could be brought up afresh in readiness for July? (Mr Prescott) I do not think we actually go back to square one completely. The fact that we had Kyoto means that the world has basically accepted that targets have a role to play, albeit it is the developed countries to begin with. The big key often was to try to find the connection to the developing countries and that was what we were working quite strongly on until it broke down. We have those targets and we have the mechanisms by which countries are prepared to make their adjustments and changes which we have been talking about, whether it is "hot air", CDMs, emissions trading, all those kinds of things, and people have accepted that these are the mechanisms that can help achieve those targets, they were written into Kyoto. Therefore, we have that and are hoping that is not thrown out because eventually it was to applying to developing countries but the first stage was to make sure it applied to the over 40 developed countries. The big question now is going to be if the Americans stick to their line of saying it has got to apply to everybody immediately then I think the reaction of the developing countries where you have to get consensus will be to go back to quite a strong exchange between the parties, between the developing countries and the rich countries, and we will go back to the old arguments we were having before Kyoto. That would be sad. That would be a step backwards, I do not think there is any doubt about that. It will hang on what the general positions are. Since this is quite a global position, I think, for countries like America the argument is "do you want to lead" and the Americans usually like to lead. I can remember the conversations that Michael and I had in the later stages of negotiations in Kyoto and the real importance for the Japanese was that they wanted to be less than the Americans and the importance for the Americans was they wanted to be less than the Europeans and it was always at what per cent, so whatever level you went to could we have that relationship and we had to say to the Americans "if you do not want to lead the world any more, we will do it". 50. Given the whole changed position now of the American Presidency and given, if you like, the scope that there is for even more UK leadership in trying to reach some kind of agreement, what has been your response? Have you had an official response? (Mr Prescott) From? 51. Have you actually given an official response? (Mr Prescott) From the Americans? 52. To the Americans on the fact that Russia has now changed its stance completely and is not saying what was said by Christine Whitman at an earlier stage? (Mr Prescott) Our position is for the Prime Minister and Foreign Minister to obviously engage in a dialogue with the American administration and say "look, we think this is the position". We were very encouraged by the Environment Minister G8 meeting but since then we have had the American President give his opinion and we will continue to engage with them at all levels. 53. If one of the things that has changed across Europe is greater understanding, what scope is there between now and July, for example, for that special relationship that our Prime Minister has with America to use that special relationship to try to bring about greater public awareness about the importance of the Kyoto Protocol and the importance of it being ratified and the importance of America taking a key role in that? (Mr Prescott) I think public opinion and the NGOs are quite powerful in these matters really and the changing opinion in American public opinion is the same as it has been in Europe. They are conscious about the weather considerations and what they see on the television and that has made a difference in America as it has here. No doubt the President will want to take that into account. They do not need any encouragement, the people are very committed to this. Where it would be quite strong was if the American President was to say "as far as I am concerned, I am not doing it just for America, it is going to be every country" and that would be read by everybody who sees that as a step backwards in agreement unless you can get those countries to agree. We have used a lot of energy and time particularly on major countries like China and India. We have travelled a lot to those countries to argue the case with them to find agreement prior to these conferences, but they feel it is a bit of a cheek if the developed countries start to lecture them on what they should be doing about greenhouse gas emissions, COř, all that. They say "you did it, just show you are going to do something. Yes, we do want our industrialisation but do not start telling us what we have to do in the first stage until you show you are prepared to do something about it yourselves". I find that to be a very powerful argument and we do have to make that stand, it was accepted by all the developed countries. If we are now throwing that away, or if America says they are no longer going to accept that, that is a serious setback, there is no doubt about that. You have got to remember the other timetable is I think it is in 2002 that we have Rio 10 when all the nations will come together and talk about what a wonderful world and how we have got to save it for our children's children. Hopefully that will put pressure on them to get agreement but it is so easy to slide into rhetoric. 54. Do you think that in the meantime in terms of Rio plus ten there will be scope for Europe to go ahead and supply ratification irrespective of the US? (Mr Prescott) Again, I have to say to my European colleagues in this sense that it is fine to be in the vanguard and say "we want 15 per cent", and the person who pushed that very hard to the President was the Dutch Minister and she did not last six months after because they found that very difficult to achieve, but there is one thing about rhetoric and another about targets to achieve them. Britain has given its programme and in the programme produced by the Commission it showed that we were well ahead of any country in setting in hand the programmes to achieve the targets that we had agreed in the UN and in Europe. Most other countries have not even begun to implement those policies. There are very big questions. We are taking a lead and we show that we do it by the policies and we have tried to highlight that in the documents before you. 55. Some would say that the way we have been able to meet those targets, much of it has been to do with dash for gas and now we need to start going much more quickly down the routes of alternatives. (Mr Prescott) In the first stage it was more to do with smash the pump. 56. In terms of the US and what we can do between now and July, is there any scope for the Prime Minister being able to perhaps have some special meeting with the President to discuss this? Is there scope for the US electricity companies in this country to have some kind of meeting here whereby we can perhaps ask why they have been lobbying so strongly with their US links against what we are trying to achieve on Kyoto? (Mr Prescott) I hear a great deal of European arguments in this country but when we were negotiating we were a much more powerful force being a European continental negotiator than we were as a European nation. It was not the Brits up front, it was the fact it represented the European case, quite a powerful case, and that is a powerful influence in any international negotiations. Anyone who is involved in those negotiations knows that to be true. I think at the coming Stockholm conference where the Prime Ministers are meeting under the Presidency of Stockholm, they will certainly be talking about that. There is a great opportunity for Europe to lead the way. In fact, I think it did play a very powerful part and without Europe we would not have had a Kyoto agreement. There were individual contributions and we might talk about the divisions but at the end of the day it was Europe as a nation of European nations with its powerful influence that brought that about. What we have is a margin of disagreement between ourselves, but there is more going for the agreement. The leaders are very much committed to it. Under the French presidency, they made a very strong statement about it and I think we have a chance of leading in that way. We should take it and I think we will. We spent so many years in these negotiations. If you just say to the developing countries, "We are not doing it now unless you guys do it", forget about any agreement. Mr Grieve 57. I did wonder whether the US or the United Kingdom position were really so far apart. The government here has taken a number of decisions. One is not to tax the use of energy in the domestic sector, so we have not got carbon taxes. Secondly, the desire to see a reduction in electricity prices for domestic users. Thirdly, we had the whole business of a moratorium on gas fired power stations. Curiously, looking at those three issues on carbon emissions, those strike me as being rather compatible with the sort of noises which President Bush himself has been making because, if you look at what he has been saying, apart from the dislike of Kyoto as a mechanism, the, perhaps rather vague, utterances he seems to have been making seem to highlight exactly the same points and concerns which are a desire to see a reduction in carbon gas emissions but a dislike of fiscal mechanisms to achieve it because of an anxiety over economic consequences. Do you share that view or do you think that you are in fundamental disagreement with President Bush and the American administration in terms of their approach? (Mr Prescott) I do not know what his view is. We must wait and see. We had a great deal of agreement with the previous administration under Vice- President Gore. Without his initiative, we would not have got a Kyoto agreement because at the end of the day it boiled down to Japan, America and European negotiators agreeing a package. If he says that the developing countries have to do exactly as the developed countries before there is an agreement to ratification, I think you have a real problem, but I will wait to see what happens. How you achieve your targets can be done in different ways. They are being done in different ways in Europe and perhaps in America. Is he saying he rejects the targets? As I understand it in one case, he has said that he rejects the Kyoto targets. That is going right back to square one. If you say, "I do not want to do the same things as you do", who would want to destroy their car industry which previous administrations did, frankly, but it did give us that environmental advantage. There is no doubt, if we were ahead as we were in most other countries of achieving those targets, it largely became because of the change of the use of coal. I had to recognise that was one major contributing factor to Britain achieving its targets. The Americans might find it very difficult to impose the kind of European fuel cost to their cars but there might be other ways of doing it and that is what trading is very good for. We were concerned and the Europeans were. You can do it all by sinks and trading if you want and do nothing about anything in the domestic economy. What we are strong about, if we are doing it in our domestic economy, so should you and that was one of the differences between us. There are different pathways to achieving the objectives. If the American administration is saying to us that the targets at Kyoto are not acceptable either, you do not have an agreement on anything. We have an agreement. We have all signed for it. We have to wait and see whether America will say they are not going to agree it. Mr Savidge 58. With the President's letter, I take a less happy view of it than Dominic does. When I see a letter that starts by saying, "My Administration takes the issue of global climate change very seriously", but then goes on to make the point, "... I oppose the Kyoto Protocol ...", reneges on its only environmental campaign pledge, says it will give priority to commerce, costs and consumers rather than to carbon reductions and says, "We have incomplete scientific knowledge", I have to say if it was anybody else who had written that I would be questioning either their intelligence or their integrity. Since it is the allegedly elected President of the United States, I could not possibly do that or ask you to do that but do you not find a certain inconsistency between the initial warm words and what he then goes on to say? (Mr Prescott) I am reminded that, when President Reagan came, there was an awful lot said about him but he did achieve some remarkable things in certain global negotiations. I had a similar view about Thatcher at the time, but using conventional opinion is not necessarily right. It is the early stage of the administration. They are having to take into account all sorts of things. Since they have asked for the July meeting, we should do them the courtesy of waiting to see exactly what happens. The President has to deal with all sorts of things, commitments etc., but since he has asked for July and since the environment person appointed, who Michael met, has no problems about signing at Kyoto, assuming the debate is going on, I would wait to see the conclusion of it. I would like to see that they will go along. If they accept Kyoto targets, I would like to see them say that they have extra responsibility as a developed country. If they can accept those two propositions, we have a chance of working out an agreement. We need to work out an agreement, quite frankly. Most of the world and most of our electorate knows something has to be done. Something has to change. I will wait to see those forces exercise their pressures on an American President or even the European president. Mr Grieve 59. Have you been having direct dealings with people like Christine Whitman of the EPA, who seems to have adopted the new administration, a point of view which in theory would seem to me to lead inexorably towards the Kyoto targets? (Mr Prescott) I could not go to that conference but even during the negotiations in the conference I did think the Americans played a considerable part in it and I do know that they wanted to find an agreement and I was in personal conversations with Vice-President Gore about that, because they came to an agreement at Kyoto and we had the same exchanges of what the American commitment was for an agreement. I was convinced they would do an agreement at The Hague as they did at Kyoto. Despite everybody saying the Americans would not go to zero, they did a good job and that could have happened on this occasion. It is a new administration; they represent the American people now and we should treat that very seriously and listen to what they have to say. We were encouraged after Michael's discussion at the G8, but we have to wait and see. (Mr Meacher) I think that is right. Let us be perfectly frank about this: there is a power struggle going on in Washington. There are very different elements with different views of climate change. The state department was more pro climate change at Kyoto than, say, the domestic, economics department. There is a struggle and it is not clear at this stage how exactly that is going to be resolved or what the balance of forces is going to be in July. A good deal depends on this new negotiator but decisions may well be taken at a higher level, at President or Vice-President level. That is where the power is being wielded at the moment, but we have to see results and we have to keep open the possibility of an agreement. We cannot responsible simply write off what the Americans do because they are so important in terms of a generation of greenhouse gas emissions. I repeat what I said earlier: this is not just an environmental issue. This is a fundamental issue of foreign policy relations between all the major countries of the world. (Mr Prescott) The key will be who they appoint as negotiator at the end of the day because the President is not going to be involved in this from day to day; it is that negotiator. We will measure that. There has always been a conflict between the state department negotiations and the Environmental Agency in these circumstances. We have found it before but it is usually the negotiator who is the key. Chairman: Thank you very much indeed. That was a very useful session. Thank you once again for coming along at relatively short notice, considering all the other things you have to deal with today. In return for me saying I look forward to what you have to say about the environmental audit report, we expect a favourable response.