Rural Affairs, Climate Change and Environment Committee

Meeting date: Wednesday, September 7, 2011

Official Report 431KB pdf

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Committee on Climate Change (Advice to the Scottish Government)

Item 3 is the Committee on Climate Change’s advice to the Scottish Government on emission targets for 2023 to 2027 and credit use in 2013 to 2017. This is an important time for us to have a chance to speak to that committee’s officers. I welcome our witnesses, who are Dr Ute Collier, team leader for devolved Administrations, and Laura McNaught, senior analyst for the UKCCC, to which she is seconded from the Scottish Government.

Good morning. Would you like to make initial remarks?

Yes. Thank you for inviting us to the meeting. I extend apologies from our chief executive, David Kennedy, and our chair, Lord Adair Turner, who, unfortunately, cannot be here. They will come to Edinburgh at the end of the month and they have written to all committee members in the hope of arranging a meeting then, when the committee would have additional opportunities to explore issues with the advice that we have provided.

For our advice on the targets for 2023 to 2027, we did a thorough analysis that looked at Scotland-specific issues. I assure members that we have a lot of data on Scotland. We used a sector-specific basis to come up with as good a proposal as we could produce. As is obvious, we are talking about 12 to 16 years into the future, so the uncertainty is huge, but we tried to come up with a proposal that provides opportunities for cost-effective abatement and economic growth and for reducing as far as possible any adverse impacts on, say, fuel poverty. Lots of opportunities exist in energy efficiency and renewable energy. The proposal is definitely a feasible option for Scotland and would continue the emission trajectory that Scotland has set with its targets to 2022.

11:00

Thank you very much. I want to follow that up by looking at your relationship with the Scottish Government. Generally, how does that relationship work and how does it aid the production of the figures that we are talking about?

We are independent advisers. We work with the Government and officials in Whitehall in the same way as we work with officials in the Scottish Government. We work with them closely and exchange plenty of information. As far as we can, we always try to work from the same evidence base. In the end, it is up to us to make our proposals independently. We try to make sure that what we propose is not a huge surprise to Government, because it has to work with our figures and we have to ensure that it understands where we are coming from. We have a lot of interaction during the production of any piece of advice, for example through phone conferences. That happens at all different levels and often involves speaking to the analysts.

Yes, we regularly join in the analysts’ meetings.

But, in the end, the advice that we provide is very much independent.

You are dealing with large sections of the Scottish Government, as climate change is cross-cutting and involves many departments.

Absolutely, but our first port of call is the climate change unit. The analysts group that Laura McNaught is working with is very much a cross-cutting group, is it not?

Yes.

If that is the case, we have to find ways of making sure that fair and safe cumulative emissions are discussed. Having reached agreements about targets for the earlier period, we are now looking much further ahead. How does that process begin? How do you take things on from the estimates that have been made and what has been agreed to up to 2023?

Sorry, could you clarify your question?

We have agreed targets up to the 2020s. How are you going on from there? What are you building your work on to make recommendations?

Our starting point for everything—even the shorter-term targets—has always been the 2050 target. As we have explained before, we got to that very much by looking at what a safe target for the climate is. We are starting with the global picture. We revisited that recently in our fourth budget advice for the UK, where we got the Met Office to do some additional new analysis for us, given that we had moved on a couple of years since the first piece of advice where we recommended the UK 80 per cent target. The Met Office Hadley centre, which is one of the most well-recognised global climate modelling units, told us that the science is still very much where it was two years ago in terms of what a safe target is for global climate change. We feel that a possible increase in the global climate of around 2°C is a safe target. From that point, we look at what we need to do in terms of per capita emissions globally to have a target that is shared equally. We start with the figure of 2 tonnes per capita and then work back from that. Obviously, there are all the issues to do with cumulative emissions, so we work back and say, “We need a global peaking of around 2020 in emissions. Clearly, the developed nations have to start earlier with their reductions and we probably need a stabilisation from developing countries at some stage, too.

Our advice on cumulative emissions, which we provided to the Scottish Government earlier in the year, was very much based on the need for Scotland to make its fair and safe contribution, keeping in mind cumulative issues.

Under the 2020 targets, equal annual emission reductions of about 3.5 per cent will be required. However, that is a very rough estimate and does not look at what is feasible. The analysis that we have just provided does not take the equal annual percentages approach, which does not take into account what might be possible in, say, industry in any one year. That is quite important because it cannot be expected that, in any one year, certain big emitters, such as cement works or other industrial installations, will make huge technological changes. Nevertheless, installations have lifetimes and there will be opportunities to replace them with low-carbon options.

As a result, our analysis takes a bottom-up approach. We are still aiming at the same targets of 80 per cent by 2050 and 60 per cent by 2030 but, instead, we have looked at all the sectoral opportunities and set out the options for each sector. That has resulted in a slightly different trajectory that is not based on achieving 3.5 per cent each year but based on achieving say, 3 per cent in 2023 and 3.7 per cent another year.

Thank you very much for that thorough introduction.

I want to ask about how the projections are determined and, as a consequence, how far ahead we can make predictions. The emissions figures are based on UK data that have been disaggregated to Scotland. However, a somewhat worrying report in The Scotsman last week suggested that Scotland exceeded its emissions target in 2010—in fact, emissions went up about 9 per cent—while emissions went up 5 per cent in Wales and 2 per cent in the UK as a whole. If the data are collected at UK level and then disaggregated, how are you able to work out that Scotland has exceeded its target more than the rest of the country—either because it was colder in winter or whatever—and how can we determine whether the Scottish Government’s reports on proposals and policies are working?

Let me start with the article in The Scotsman which, as so often, misrepresented what we said. You might or might not have seen that yesterday the Scottish Government published actual emissions data. The fact is that we are always two years behind with data from Scotland and the other devolved Administrations. That means that, although we received the UK data for 2010 in June, I think, the Scottish data for 2009 came out only yesterday. The Scotsman reported on data that we received from the European Union emissions trading system, which is limited to power stations and large energy-intensive industries. Emissions from those installations have increased, but that is not entirely surprising given the major impact that the 2009 recession had on emissions. In 2010, there was a small amount of growth not only UK-wide but in the Scottish economy.

As a result, the article was not quite right but, of course, we also had a cold winter that year. When that is added in, we expect the emissions data for 2010 to show an increase, although we think that the level will still be below the targets that have been legislated for.

Laura McNaught will explain how things work with the Scottish data.

For the non-traded sector, which includes the residential, road transport and non-traded industry sectors, we commissioned an update of the model to create the projections for Scotland. Although the model takes UK energy demand as its starting point, we also commission forecasts of Scottish economic growth for each sector and take into account differences in the projected growth in household numbers. As a result, when we disaggregate, we take Scottish circumstances into account as far as we can.

There is a lot of data available on what the housing sector here looks like so that, when we model the housing sector, we are not starting with the UK averages but are looking at a very detailed picture of the housing sector in Scotland. When we look at opportunities for renewable heat, we know exactly what could go where, which is very helpful. There is a lot of data on transport, as well.

We incorporate Scottish transport models and, when we are looking at the abatement opportunities, we do that on a bottom-up basis where possible. For example, the modelling for the opportunities for low-carbon heat in the residential sector is done from the bottom up using the Scottish housing stock data. Where possible, we conducted our industry analysis on a site-specific basis so that the picture we got of Scottish emissions was as accurate as possible.

That is doable especially for energy-intensive industries, as we know exactly where the emissions come from and we can undertake individual studies.

That is helpful. I was confused by the article that I read last week and the figures that were published yesterday, which showed that emissions had fallen by 7 per cent.

I understand what you are saying about the detail that you have on particular sectors, but there is a suggestion that the overall figures are affected by factors such as recession, economic growth and the climate. Given that those are such variable factors—we are continually revising what we think economic growth will be and we do not have good models for predicting what the climate will be like in the future, whether we will have harsh winters, and so on—how reliable is the data? The next RPP will be for 2023—10 years from now—and I imagine that economic growth and the climate are difficult to predict. How confident can we be about RPPs that are set so far in advance?

You have hit the nail on the head. Any projections into the future are incredibly uncertain—we have only to think back 16 years to 1995. There is uncertainty about economic growth. The other side of the coin is that there is a lot of uncertainty about the technologies. That can work both ways. In 1995, I am sure that we had no idea that we would ever have iPhones—we did not even have the internet then. Similarly, when we look forward to the 2020s and very ambitious reductions in emissions—a 56 per cent reduction by 2027 from the 1990 level—we are making certain assumptions about technologies. We have quite a few technologies now that do not work very well, such as electric vehicles—we can buy an electric vehicle now, but the battery life is not very good. The assumptions that we have had to make are based on engineering studies that show that there will be improvements in battery technology. We also assume that there will be improvements in the costs of offshore wind and so on.

In all that, the level of uncertainty is high, but that is very much the nature of forecasting, whether it is economic forecasting or technology forecasting. As you know, the climate models also have a large amount of uncertainty about them. We have given our best estimate of what will be cost effective in the 2020s. In reality, you will have to look at all the figures at some stage in the future. The legislation requires you to set targets now, and the best that we can do is provide you with our best estimates, which are based on all the information that we have now from detailed studies. Maybe in five or 10 years’ time, we will have to look at everything again, and that will be the case at the UK level as well. We cannot say that the probability of reaching a specific scenario is X, and climate scientists cannot do that for the climate either.

Thank you. I want to ask about the measurement of transport emissions. Are standard and universally acceptable figures now available for ferries and for lorry transport on land?

I think that we took some kind of average of emissions from ferries in shipping. Did we not?

11:15

Domestic shipping emissions were part of the model that we commissioned for the non-traded sector. That is projected forward on the basis of projected economic growth.

If we could get some more detail about that, that would be helpful—perhaps you could write to the committee. Under the Climate Change (Scotland) Act 2009, Scotland has responsibility for shipping and aviation that the UK act does not confer. It would therefore be useful for us to have a little more detail about how you are setting up the measurement of that.

We will be happy to provide that. We have a fair amount of detail on shipping specifically, because it is an area in which there are still quite a lot of uncertainties. We are currently performing a shipping review for the UK Government, but it will help us with figures for Scotland as well.

I am sure that we will be able to ask you about that again in due course.

My question follows on from Elaine Murray’s investigation. It is about the differences that we are seeing between the Climate Change Committee and the Scottish Government’s “Low Carbon Scotland: The Draft Report on Proposals and Policies”, or RPP as it is called. The projections are quite different, particularly for the business, public and transport sectors, and we have already heard about the article in The Scotsman that claims that those sectors saw a 9 per cent rise in emissions in 2010. What discussions are you having with the Scottish Government to get rid of the slight confusion over the different figures?

We have had discussions about that, have we not?

Yes. We are in regular contact about all the emissions projections that we use and all the underlying assumptions. We share a lot of the information on that, so it is an on-going discussion to ensure that we are all using the same information and that it is as up-to-date as possible.

Unfortunately the RPP did not face any parliamentary scrutiny. Is it fit for purpose or does it need further scrutiny?

We have not, at this stage, scrutinised the RPP, but the scrutiny is forthcoming. We have been asked to provide a progress report on Scottish emissions by January next year. We have not had the opportunity to look at the RPP in any great detail so, at that point, we will look into it and we hope that it will provide further insight into the issues. At this stage, all we can say is that it is broadly consistent with what we have said.

One of the differences is that our target advice includes suggestions and recommendations for different sectors. We generally provide a couple of different scenarios, including a number of measures and technological options. However, we have never said to the Scottish Government or the UK Government, “This is what you must do.” We are more likely to say, “Here’s an estimate on how you might get there.” We then expect the Governments to provide the detail of the policies, which we can scrutinise when we do our progress reports.

I look forward to hearing your report. Thank you.

The implications of revised data are an issue, and “Scotland’s path to a low-carbon economy” is obviously at the centre of our interest in scrutinising how the Government is behaving.

We move on to the issue of land.

How does the Climate Change Committee incorporate new and revised data, and within what sort of timescale is that done? I am thinking particularly of the upcoming projections on agriculture, land use, land use change and forestry. How does that mechanism work and how timeous is it? Is there any advance knowledge of how that will impact on your recommendations to the Scottish Government regarding the agriculture sector?

As you probably know, agriculture is the most problematic sector with regard to measuring emissions. The energy sector always has very good data because it is very simple—for example, a litre of petrol produces so much CO2. However, there are real issues about measurement in the agriculture sector. There is continuous refinement of such measurement and work on it is on-going. We said in our letter to the minister that new estimates are coming out this year. However, the Department for Environment, Food and Rural Affairs is carrying out a project that involves all the devolved Administrations; that is not due to report until 2014, when we can expect further refinements.

For our advice in this case, we had to take the old estimates and data, because obviously there is always a timing issue. We could provide additional data if we were asked for it. Generally, we do that whenever we have to do a progress report or give advice on targets. We always use the most up-to-date data available to us. Subsequently, we use any new data only when we are requested to do so, because otherwise we would just be continuously updating data in our models and so on. That is not very efficient, especially if we get something else to do—for example, if there is more inventory work to be done at DEFRA.

Our advice in this case brings us back to the uncertainties that we still face. Of course, all our advice is subject to uncertainties. We are therefore not entirely convinced that it makes sense at this stage to integrate new projections and estimates and then to have to do something else. We will certainly have work to do when the new agriculture data is produced in 2014, but we might also have work to do before then. We need to think about when might be the best time to look at some of the data again.

The targets are legislated for on the best available data. However, we must accept that data will change and that that will have to be worked out in the process, which will possibly mean having to revisit the targets. However, even if we integrated new LULUCF information this year, the figures would possibly be within the margin of error anyway for this period. We would not be talking about a 50 per cent change in emissions for 2027, because they are just relatively small amounts.

Thank you. I understand the parameters within which you work. However, agriculture is obviously an important sector in Scotland. If you have the best available data but it does not incorporate key information, that seems to me to be a gap. It begs questions about the reliability of the data on which recommendations are based. I am not sure whether there is a specific, concrete plan to tighten that up or when that would happen. You mentioned that you would have a greater focus on agriculture information by 2014.

No, sorry; that is not us. DEFRA is undertaking that project with the devolved Administrations to get much more detailed estimates of emissions in the agriculture sector.

So, you will be able to refer to those estimates. I accept that, but I am not sure how reliable the data is when it excludes for the coming years information that is very relevant in Scotland.

We are not excluding the information. It is based on the best available knowledge. There is on-going work on emissions information for the agriculture sector and we must accept that. The agriculture sector is an important sector as far as emissions are concerned, but it is not responsible for 80 per cent of emissions—I think that it accounts for about 20 per cent of emissions in Scotland.

The figure is about 14 per cent.

It accounts for 14 per cent of the overall picture. The more detailed work will provide results in 2014. Emissions could go up or down. We do not know what will happen. Will the estimates go up or down by 5, 20 or 30 per cent? We do not know. Working back from those changes to the targets that are being set, the impact could be a difference of about 1 per cent. That is just a rough estimate. I do not think that that is a major problem for the setting of targets now.

It is also important to keep in mind the EU emissions trading system.

We will come on to that.

Yes—I simply point out that that is another major uncertainty. We do not know what will happen in the 2020s. That is why we have said that the targets will have to be revised at some stage anyway. Maybe there is an opportunity to look at everything—any new agriculture estimates, as well as EU ETS changes—together.

Another factor might be the time lag for obtaining the Scottish data, which you mentioned was two years.

Yes, we have raised that time lag as being a major problem but, unfortunately, it is out of our hands.

So that is another factor in the mix.

Yes.

It has been puzzling me why we have that time lag.

That is a good question. We do not know. It results from the way in which DECC or the Office for National Statistics—

It is the national atmospheric emissions inventory that produces the figures. I guess that the time lag must be to do with the difficulty of disaggregating the data and producing more detailed, bottom-up data for the devolved Administrations. It is out of our hands, as Dr Collier said.

That is always a problem for us when we report on the devolved Administrations as part of our annual progress report at UK level, which we do in June. This year, we had to use the data for 2008, which is not helpful to anyone, but we cannot do more than point out to the UK Government that there is a problem.

So if a finger is to be pointed, it should be pointed at the Office for National Statistics.

The NAEI publishes the data, but it is funded by all the devolved Administrations and the UK Government.

Thank you.

It is good to know that we have a new acronym to contemplate—LULUCF.

It stands for land use, land use change and forestry. You should blame the United Nations for that one.

It is good to know where it came from. At least we will remember it.

What are your views on peat restoration and the part that it might play in CO2 emissions reduction in the future? Thinking ahead to Durban, can we anticipate such a contribution being recognised as counting towards Scotland achieving its targets?

There are several different issues with peat. There is no doubt that peatland restoration can play an important role. We have said that about 55 per cent of the carbon in the UK’s soils are locked up in peatland soils, and we know that there is a lot of peatland degradation.

The first problem, of course, is that anything to do with land use involves huge uncertainties. Research is being done on the carbon benefits of peatland restoration. There are issues of timing, because those benefits might be realised not in year 1 but over a period. We do not know how long that period is, so it is very difficult to set targets.

The more immediate problem is that there is no way of getting credit for peatland restoration. Accounting is all based on the UN framework convention on climate change inventory, which does not yet recognise peatland restoration. Efforts are being made to include it, which would need agreement at UNFCCC level. I gather that the Intergovernmental Panel on Climate Change is also working on guidelines. However, when such agreement will be reached is anybody’s guess. As members know, a number of issues are stuck in the international process. Another meeting will take place in Durban, but we do not know whether we will get agreement there.

We do not know whether peatland restoration could be counted. We have recognised it as an important aspect on which to work and do further research work, but we could not include in our projections for 2020 a figure for peatland restoration.

11:30

I will ask a small supplementary question about a bit of a hobby-horse of mine. As a former farmer of an area of permanent pasture, I have long believed that permanent pasture has a role to play in carbon capture. To your knowledge, is work being done on the carbon-capture characteristics of permanent pasture? Does the potential exist to gain credits for that?

Work is on-going on the subject. We are working on a bioenergy review, which involves a lot of discussion about the carbon benefits or costs of planting, say, short-rotation crops on permanent pasture—that might produce too much of a carbon hit. If you wanted me to provide detail, I am sure that we could find that. I cannot say offhand which academic institutions are working on the matter, but a huge UK programme deals with all such issues.

If you had any more information, I—and, I am sure, the rest of the committee—would find it useful.

I will have a conversation with my colleagues who know the details.

I will continue with the issue and talk about forestry land use sectors. The Forestry Commission says that peaty soils are not to be planted on, because doing so is alleged to release carbon that a tree would take 30 years to negate. However, there are peaty soils and peaty soils. I am not sure whether the Macaulay Land Use Research Institute is looking at the issue. Planting on deep peat would obviously be inappropriate, but that might not apply to loam-based soil with traces of peat. Is work being done on that?

I would have to come back to you on that. All that I can say is that that is a major concern. When we consider whether bioenergy makes sense in carbon terms, we absolutely need to know all the details of the soils and what the hit would be—the time over which possible absorption might or might not take place.

That issue will take up quite a bit of our time, given its importance to Scotland in the next few years.

As we know, the EU’s ETS works on the cap-and-trade principle. Given the continuing uncertainty—which you pointed out—about whether the EU will agree to move to a more ambitious 2020 emissions target of 30 per cent, the Committee on Climate Change recommended that the option of credit purchase should remain open to the Scottish Government for 2013 to 2017. Will you explain in more detail the reasoning behind that recommendation?

When we made that recommendation, we had to work with the emissions data that we have. A lot of uncertainty is around. The recession has caused an emissions decrease, which could well mean that Scotland stays well within its targets, but who knows? That depends very much on where we go this year, next year and the year after.

It does not look as though the EU will agree on 30 per cent soon. If we assume that there will be no agreement on the 30 per cent target within the period that we are discussing for credit purchase, we must assume that the EU ETS will not be tightened. Because of the issue about net figures, that means that Scotland will have to achieve very ambitious reductions in the non-traded sector. The recession has an impact on the non-traded sector, for example, on heating and transport fuels, but the impact is not as big as that on the industrial sector.

Our best guess is that, if the EU does not go further, it could be difficult for Scotland to achieve its targets, especially in the later part of the period. Therefore, we do not want to say that Scotland should not buy credits. We still believe that the ideal scenario is for Scotland to achieve the targets domestically, through energy efficiency, transport measures and so on, but it is too early to say what is possible. At this stage, we do not want to close off the option of buying credits.

What additional or complementary measures could the Scottish Government take, given that we do not think that we will have the 30 per cent target at the EU level?

We are simply saying that it could be difficult to achieve the targets. On additional measures, unfortunately, measures often depend on the availability of budget, which is a big issue. In the non-traded sector, much will depend on measures at UK level. There is undoubtedly huge scope for emission reductions through home energy efficiency, but most of that will be driven by UK Government measures for Great Britain. There are measures such as the green deal, the home energy efficiency scheme and the energy supplier obligation. The Scottish Government has the opportunity to take additional energy efficiency measures, but we need to wait and see whether it is necessary to go beyond what is in the RPP. Energy efficiency is always the obvious area in which additional measures could be taken, although that is very much subject to the budget.

We turn to the fuel poverty angle. I ask Jenny Marra to frame a question in that direction.

I recently lodged a parliamentary motion on fuel poverty this winter that has received cross-party support and which is supported by Energy Action Scotland. We all know that domestic fuel bills have rocketed over the summer, which is in the warmer months, and that the changes will have a major impact on households. I have asked the Government to introduce a strategy to attempt to deal with the issue this winter. I am aware that there must be mutual measures on energy efficiency to ensure that we achieve the 42 per cent target. If you were advising the Scottish Government on a strategy for this winter, what would you incorporate in that to ensure that we hit the targets while trying to address fuel poverty? As your remit covers the UK, do you know of good examples of actions in the other devolved Administrations or at Westminster that we could emulate in Scotland?

With fuel poverty, the large problem that we have is that fuel prices have gone up by much more than the Department of Energy and Climate Change ever anticipated in its estimates. Energy efficiency is important for mitigating fuel poverty, but we are now getting to a stage at which, for many households, even if the house is relatively energy efficient, the fuel bill will still be a problem.

Energy efficiency will only get you so far. In theory, you could refurbish a house to the passive house standard that is used in some European countries. A passive house needs next to no heating, but refurbishing houses to that standard would be difficult and extremely expensive. I am not sure that that will help us, so we need to have other social measures. Quite a few of those measures are out of the Parliament’s hands—we are talking about general social benefits such as winter fuel payments. Many organisations have considered targeted winter fuel payments. At the moment, everyone over 60 gets winter fuel payments. There is a pot of money, but trying to discuss targeted payments with the Treasury would be very difficult.

You asked me for good examples. There is an interesting example in Wales, where there is a refurbishment programme called arbed, which has tackled quite a high number of homes with difficult measures such as solid wall insulation. The programme is expensive, but it has pulled in quite a lot of European money and achieved high standards of energy efficiency. Programmes such as that, focused in areas of extremely high deprivation, such as the valleys in Wales, are very good but very costly, so you need to find a budget for them. At the moment, you know what the challenges are. You need to pay attention to the fact that energy efficiency will not solve all our problems and that we need to consider all the other social policies we have available.

To go back to the RPP and the 2009 act, one of our committees has said that it is confident that the Scottish Government will propose measures that will let us reach our 42 per cent target. In your opinion, since the 2009 act was passed, has the Scottish Government put in appropriate measures to reach that target? Are we on track to reach it?

As I said, we will scrutinise the RPP later this year. I am afraid that we cannot go into any detail at this meeting.

Will the Scottish Government reach the target? It is difficult to say at this stage. Of course, a lot of measures in some key areas are coming from London. In our progress report this year we were quite sceptical about what is being proposed on energy efficiency by DECC, and what is coming in under the Energy Bill, which will be important in Scotland as well as in the rest of the UK.

There are still opportunities to tighten what is being proposed but we have made our point that a lot more needs to be done, for example on transport. Some of that is at the UK level, too. We are happy to come back on the RPP specifically, but there is a major question on whether there are enough measures at UK level to help us get to the targets. We can come back to you on the Scottish Government’s proposals.

Thank you for that. We will move on to issues relating to remote and rural communities.

At one stage, the Scottish Government requested some supplementary advice from the CCC in order to better inform the annual targets laid down by the 2009 act. As part of that supplementary advice, the CCC identified three specific issues for those living in remote and rural communities.

As a representative of a constituency in the extreme south-west of Scotland, I always take the opportunity to say that extremely remote and rural—though perhaps not so much island—communities do not all exist in the Highlands and Islands. We have them in the south of Scotland as well.

The three main issues identified are renewable heat generation, renewable power generation and plug-in hybrid vehicles. Can Dr Collier expand on the impact that the CCC’s advice will have on people in remote and rural communities?

11:45

Renewable heat is an important part of the solution for residential emissions. We need energy efficiency, but also renewable, low-carbon heat. There are different solutions for urban areas and rural areas. In rural areas, off the gas grid, people are paying a lot of money for their heat because it is often oil-based. That creates an opportunity to switch to renewable heat, especially in a system with a renewable heat incentive. We have calculated that, under the current system, that switch is extremely cost effective for rural communities. This meeting is looking at 2023 to 2027 and we do not know the future of the renewable heat incentive. As of next year, however, switching to a biomass boiler for a rural property would be extremely cost effective, especially if there were a rural woodchip or pellet supply. That links to opportunities in Scotland to expand short-rotation forestry and short-rotation coppice. The Scottish Government has a particular interest in this area. The climate is suitable and it is an opportunity for farmers to diversify. It does not mean that they must plant trees on all their fields, but they can use field margins for short rotation coppice and so on.

For island communities, renewable power generation presents interesting options for profit-sharing. That does not seem to have happened much in this country, although there is some. The Danish example is of rural communities jointly purchasing wind farms and setting up profit-sharing partnerships with energy companies and I can see that happening. We think mostly of wind power at the moment, but it could be wave power as the technology develops. That is where Scotland is doing research and development and I expect that Scotland could lead on those technologies.

Our vision for the transport sector in the 2020s involves electric vehicles. I mentioned earlier that there are assumptions about batteries improving, but there could still be issues about limited range. Depending on the areas under consideration and whether journeys are longer in rural than in urban or semi-rural areas, such vehicles might not be suitable in terms of range. We must ensure that the development of the technology and Government incentives keep that in mind. Rather than incentivising pure electric vehicles, plug-in hybrids have a role. That is an electric car that you can plug in, but also has an engine that runs on another fuel.

You talked about biomass and its economic benefits and attractiveness. I take it that it is not part of the CCC’s role to look at other aspects of this policy, such as competition for productive agricultural land. We must take food security into account when coming to a balanced view on the best use of land, if the encouragement of coppicing takes some of the most productive agricultural land out of production. I take it that the CCC does not take that type of argument into account when coming to recommendations.

Actually, we do see that as part of our role, because the Climate Change Act 2008 talks about that. We need to keep in mind other issues, including sustainable development.

I think that I mentioned earlier that we are carrying out a bioenergy review in which we are considering those issues. There are a number of issues relating to bioenergy, one of which is the carbon issue. It is clear that we still release carbon when we combust biomass, so we need to ensure that bioenergy really saves carbon and that the land use aspects actually deliver carbon savings.

There is no point in trying to implement a climate change policy that causes food security problems. Globally, there is quite a lot of evidence that the rush to biofuels in Europe and the United States has contributed significantly to the current food price hikes. Most of the proposals in this country, for example, for biomass power plants will be based on imports, and there are real concerns about the implications of that for food security and biodiversity. We are looking at the global picture and the UK picture in our bioenergy review. The question is whether there is an opportunity for the sustainable expansion of biomass in this country, especially as we somehow need to feed an expanding global population and there is perhaps a role for the UK in increasing its agricultural exports. That is certainly an issue in the other devolved Administrations, not only in Scotland. We were in Belfast yesterday and it is very much an issue for the agriculture sector there.

We will publish the bioenergy review in November and we hope to impact on the UK Government’s bioenergy strategy, which is being prepared with input from the Scottish Government as well.

I am comforted to hear that. Thank you very much.

I return to alternative and renewable fuels for transport, including cars. The previous Government had an ambition to have 100 per cent of publicly owned vehicles using alternative fuel by 2020—I am not sure whether that ambition has changed—but research has shown that the figure has declined in the past four years and that still below 5 per cent of publicly owned vehicles use alternative fuels. Are you considering that matter? Research shows that more than 20,000 vehicles in Scotland alone are publicly owned by councils, police boards, health boards and so on.

We have always said that we feel strongly that the public sector needs to set an example on everything from energy efficiency to transport, but I urge a bit of caution on alternative fuels at this stage. There has been quite a rush into biofuels and we are now seeing that they have some negative impacts. The Government has its strategy and we are going to report.

As members are aware, there are EU-level targets for transport fuels, which the UK Government has translated into an 8 per cent average contribution by 2020, I think. It could be argued that the public sector should go faster, but I am not convinced that biofuels are the right way forward, especially as, currently, most of them are made from food crops such as oilseed rape. Most of the biofuels that we have in the UK are from oilseed rape and sugar. A lot of research is being done on lignocellulosic fuels—basically, the whole plant rather than just the seed is used. Woody waste can even be used, which would, of course, be great, but we have not made progress in the area and we are not convinced at this stage that biofuels are the right way forward. Members will see more details about that when we have completed our review, but that is our initial feeling.

We look forward to that.

In the document accompanying the draft Climate Change (Annual Target) (Scotland) Order that was published on Monday there seems to be a strong reliance on the use of carbon capture and storage to enable us to reach our targets. It seems to be expected that that will happen within the next 10 years, and that it will contribute a significant amount to the Scottish economy at the same time. It is two or three years since I saw a presentation on carbon capture and storage, but at that point it did not seem to be very near market. Has sufficient progress been made to make it a likelihood during the next 10 years?

That is a difficult area. At this stage we feel that we have to believe that some progress will be made. Our scenarios rely heavily on the decarbonisation of the electricity sector. In Scotland alone it might of course be possible to go 100 per cent renewable, but that will be much more difficult in the UK as a whole, especially within the timescale that you mention. So we said that we need to expand the nuclear sector. We accept that Scotland does not want to go there and it does not have to. The rest of the UK can build its nuclear plants but Scotland does not need to.

We then said that we will need CCS as well. Fossil-fuel plant, especially gas, has some advantages because it can be ramped up to provide peak-load electricity and so on. However, a rush to use gas without sequestration would leave us with far more emissions than we can afford to have by the end of that time period. We also feel that we need to make some progress with CCS in the industry sector.

Whether sufficient progress has been made so far is anyone’s guess. We are still in the early stages.

Have the contracts from the UK CCS competition been agreed?

I am not sure what stage it is at, but I am aware that the CCS plant in Scotland is the one remaining viable competitor in the first round.

Longannet.

Yes.

We are straying into Economy, Energy and Tourism Committee areas, but the issue impinges on what we do.

I wish that I could give the committee a more positive answer but, at this stage, it is difficult to know what will happen.

In our scenario work, we have asked what will happen and what we will do if CCS does not work. It will mean that we will have to ratchet everything else up, especially electricity energy efficiency, which will be very challenging. Of course, it is all challenging. Everyone talks about stress testing these days, so we have done a bit of stress testing on our different scenarios and we have something like a menu of options of what we could envisage if one of the big options does not deliver.

The proposed annual targets are in the draft Scottish statutory instrument that has just been published. Have either of you had a chance to see it or form any views on it?

We saw it yesterday and it is basically in line with what we have proposed. We still believe that this is a good way forward for Scotland, notwithstanding some of the uncertainties that we have discussed.

This has been the first opportunity for the committee to get to grips with the issues; many members have not dealt with the subject before. We thank you for the clarity with which you have explained your part and I am sure that we will hold you to more account the next time around. I thank Dr Collier and Laura McNaught for their evidence.

We agreed to move into private session, so we will clear the witnesses and the public gallery. I remind members that the next meeting of the committee will be on 14 September 2011.

11:59 Meeting continued in private until 12:10.