Official Report 281KB pdf
Welcome to the fourth meeting in 2009 of the Economy, Energy and Tourism Committee. We have a couple of guests with us this morning—Sarah Boyack and Nigel Don—who have a particular interest in the Climate Change (Scotland) Bill, and will be entitled to participate in the discussion.
Convener, before you invite the members of the panel to introduce themselves, I would like to ask for clarification of one point. An aspect of the bill that we appear not to have been asked to consider relates to the privatisation of the forestry estate, which seems to be based on the proposition that it should be done in order to promote renewable energy. That clearly gives it an energy aspect. Which committee is considering that matter? Should this committee be asked to comment on the matter, as it involves energy?
My understanding is that the Rural Affairs and Environment Committee is addressing that part of the bill.
Will that include the energy aspects?
I presume that it will, but we will confirm that.
That would be helpful, because we might want to comment on energy-related issues at some point in the proceedings.
Thank you for that.
I am deputy director, climate change division, which has responsibility for the bill as a whole. I and my colleague Cameron Maxwell can provide general context and background information if the committee wishes us to do so, and we can perhaps say something about the delivery of the bill and the duties that it contains.
I work with Philip Wright in the climate change division. As he says, we have an interest in the delivery of the targets in the bill.
I am principal for non-domestic energy in the building standards division of the directorate for the built environment. I am examining the existing non-domestic building aspects.
I am assistant head of the building standards division, and I have a particular interest in non-domestic buildings.
I am deputy director for renewable energy. I had hoped to be joined by my colleague Sue Kearns, who is our expert on heat, and the team leader within my division, but she is not here yet. The heat aspect of renewable energy and the heat action plan sit within my division.
I am the deputy director, energy markets division, and I am here to talk about the energy efficiency promotion measures in the bill.
Perhaps someone from the Scottish Government could outline the purposes of the bill, particularly in relation to chapter 3 of part 5, and explain the provisions that it contains. I understand that there are some thoughts about amendments at stage 2, so it would be useful if panel members outlined them.
I will briefly outline the background to the bill, and my colleagues will address the individual elements. The first four parts of the bill relate directly to climate change. Part 1 covers the setting of the targets, including the 80 per cent reduction in all greenhouse gas emissions by 2050, and the interim target of a 50 per cent reduction by 2030. Parts 2 and 3 cover the advice and reporting aspects, and clearly set out the requirements on, for example, annual reporting on different aspects of the bill, such as targets and performance. Part 4 covers the enabling powers to place duties on public sector bodies if the need should arise. Part 5 is an amalgam of various provisions that are linked to climate change and will help to support the delivery of the targets. Chapter 1 of part 5, on adaptation, is about placing a duty on ministers to report on the action that they plan to take to adapt to the impact of climate change, based on the United Kingdom-level risk assessment.
I will talk about renewable heat. It is fair to say that there is a UK-wide question about how renewable heat should be addressed in legislation. Ministers already have the ability to promote renewable heat, and the inclusion of renewable heat in the statute reflects its importance. The need to build a commercially viable renewable heat industry and to ramp up provision from the current estimate of less than 1 per cent of demand to the target—on which we consulted—of around 11 per cent of demand in order to meet the 2020 targets will, effectively, involve the development of a whole new industry. It is acknowledged that in order to do that, the main lever must come through a UK-wide mechanism—there must be a market lever and a regulatory mechanism. In February, the Department of Energy and Climate Change will issue a consultation on the renewable heat incentive.
Shall I deal with the energy efficiency provisions?
Yes, please.
The reason for including section 48, which will require the Scottish ministers to
Section 50 covers existing non-domestic buildings. The Sullivan report, which was published in December 2007, set out recommendations for the improvement of new buildings and existing non-domestic buildings, for which enabling powers could be included in the bill. Buildings account for more than 40 per cent of the emissions in the UK. However, as only 1 per cent of the building stock is replaced annually by new build, it will take a considerable time to achieve a significant improvement in the overall building stock. The aims of the provisions are to improve the energy performance of existing non-domestic buildings and to increase the contribution that such buildings can make to the mitigation of climate change. The provisions are required to enable the Scottish ministers to make regulations that provide for the assessment of the energy performance of non-domestic buildings and the emissions of greenhouse gases that are produced by or associated with such buildings.
I thank the witnesses for their helpful opening remarks. This is a general question on a matter that is of concern to me and, I am sure, other members of the committee. Given how the bill has been formulated, we are being asked to take an awful lot on trust. Alec Millar has indicated that a number of provisions were still subject to consultation when the bill was introduced and might be significantly amended at stage 2. It is difficult for the committee to give the bill meaningful consideration at stage 1 if we do not know what shape it will take.
We can provide a mock-up version of regulations, if that would help.
It would help, but it would have been more helpful to explore such matters as part of our stage 1 consideration.
On renewable heat, we are not anticipating any great unanswered questions around cost implications for Government, local authorities or other stakeholders. The inclusion of section 51 reflects the importance that ministers attach to renewable heat. The detailed steps that will be taken towards meeting the target will be contained in the action plan to which I referred. The section is a sort of marker that flags up the issue. Heat is not mentioned anywhere in the Scotland Act 1998, so it is kind of devolved by omission. We have taken this opportunity to flag up the issue, given the importance of the heat sector in meeting the overall renewables targets and the targets for 2020.
As the briefing note states, in March to June 2007, there was a consultation on a draft energy efficiency and microgeneration strategy for Scotland. In June 2008, the Scottish Government published a consultation analysis, which summarised the points raised by respondents. The key difference in the bill is the intention to promote an action plan for energy efficiency rather than a strategy. The purpose is to focus on actions, but a clear statement has been made that the intention is to base the action plan on the results of the consultation that has already taken place—the consultation will feed into the action plan. The aim is to publish in March an outline of what will be in the plan.
I am particularly interested in how we deal with areas that are off the gas grid. At the moment, people in those areas use heating oil, liquid gas, coal and so on. Some 25 per cent of homes are off the gas grid; many are in the Highlands and Islands and have all sorts of other problems, too. The options that appear to be available, such as cavity wall insulation, would not be applicable to a lot of the housing in the north—traditional stone cottages, for example—which would not benefit from them. We need to consider external and internal cladding, which I believe is very expensive. Solar power, biomass, heat pumps and all the rest need to come into play, too. I understand that the current grant schemes are insufficient to stimulate demand for those things. I think that Jamie Hume said that the UK legislation will pick up on that and create incentives to stimulate demand for biomass and so on. Does he think that that UK legislation will be sufficient to deal with the problem and help develop biomass, solar power and so on?
Colleagues at Westminster recognise that those issues are fundamental, particularly for Scotland. I referred earlier to the difficulty of assessing the entire market and the issues that arise, measuring the extent to which solutions are being found and assessing how best to provide an incentive that works for consumers and which will benefit individuals in the circumstances that you describe.
What Jamie Hume said is correct. We can take action at devolved level. For example, under the energy assistance package, which will be introduced in April to help alleviate fuel poverty, people will be able to get air-source heat pumps, if those are appropriate, in off-gas-grid houses. Through the Scottish biomass heat scheme we aim to help businesses in off-gas-grid areas and to encourage demonstrator district heating schemes. We are aware that in Scotland we must concentrate on opportunities for renewable heat in off-gas-grid areas.
It is encouraging to hear about what we can do at a devolved level. Have you explored other incentives for people who install such schemes, such as council tax reductions?
Our approach so far has been to agree that the renewable heat incentive is the right UK-wide mechanism to address the issue. Detailed questions are being considered as part of the consultation. There will be a lag, because the provisions will not come into force for 18 months or so. In the meantime, the action that is taken in Scotland will include action through the grants schemes and support mechanisms to which Sue Kearns referred, and the action plan that we are producing will cover issues to which I referred, such as community awareness, skills needs in relation to installation and so on.
Dave Thompson's suggestion has not come up. We consulted on the renewable heat action plan under the renewable energy framework, which is supportive of the production of a plan and a grants scheme. I think that people are thinking—they are right to think—that the main incentive will come from a UK regulatory mechanism. We do not know the details of that, so it is difficult to comment on whether additional incentives will be needed to make the approach work.
The bill will confer on the Scottish ministers a duty to
It is proposed to focus on the promotion of energy efficiency in the general sense, which is consistent with the nature of devolved legislation. There is an expectation that what has been done in the context of the 2006 act will continue. There is no intention to undermine the current approach.
However, the bill will repeal section 179 of the 2006 act, which requires the Scottish ministers to prepare a plan for "improving", rather than just promoting, energy efficiency. Do you accept that the approach in the bill dilutes the existing statutory provision?
That is certainly not the intention, but I hear what you are saying.
It might not be the intention, but is it the effect?
I do not have an answer to that. We can consider that point. It was certainly not the intention.
I am hearing both an answer and the absence of an answer to the question. The effect of the bill has to be our primary concern. Is it feasible to keep the new provision in the bill without repealing the existing provision in the Housing (Scotland) Act 2006?
The intention of the bill is to provide a comprehensive approach to energy efficiency. Therefore, it seems to make sense to include the housing provision in the bill. It was certainly not our intention to dilute the current approach and we will reflect on the point that you raised.
Do you recognise that it might be opportune to consider whether amendments could be lodged at stage 2 that would maintain the existing requirement to improve energy efficiency, rather than merely to promote it?
It is certainly the Government's overall intention to improve levels of energy efficiency in Scotland across the board, and particularly in domestic accommodation.
That is helpful.
The additional requirements relate to business and industry. They also relate to the public sector, in which a series of activities is already under way. The consultation on energy efficiency and microgeneration looked at a number of other areas, too, such as energy standards for equipment. Many of the issues are reserved or are subject to European legislation. An energy efficiency action plan has to recognise that we need to cover the approach in both reserved and devolved terms. A comprehensive approach is the best way to achieve progress.
You have described extending the provisions, limited though they may be, to a range of different buildings. How do the provisions fit with the sections that Mr Millar has described in relation to existing non-domestic buildings? In other words, what is the application of the action plan for promoting energy efficiency in relation to existing non-domestic buildings? Is there duplication or a mutual reinforcement? What is the relationship?
Section 50 looks at the building itself. We are talking about the building fabric and the comfort factors of the building, rather than business energy use and that sort of thing.
On the business sector, one of the actions that we are undertaking is the setting up of a loan fund for small and medium-sized businesses to enable them to put in place improvements to their premises and to their activities as businesses. We are looking at that comprehensively. The aim is very much to ensure that the specific measures in section 50 and in the proposed action plan under section 48 are complementary and reinforce one another.
I forgot to mention in my opening remarks what may be a relevant point on the advice that the Scottish Government will take from a body called the UK Committee on Climate Change, which was established under the UK Climate Change Act 2008. That committee produced its report, "Building a low-carbon economy—the UK's contribution to tackling climate change", in December, and energy efficiency is a key feature. The Committee on Climate Change views energy efficiency as playing a vital part in reducing emissions.
I mentioned a practical example in the form of the carbon emissions reduction targets scheme. The CERT scheme is run under regulations that are set out in the Energy Act 2008, which, although it was passed by Westminster, applies in Scotland just as much as it applies in England. However, it is generally accepted among energy companies and the Scottish Government, and more widely, that the way in which the scheme has been operated in the UK has tended to favour investment south of the border, rather than north of the border. The exact reasons for that are still being established and discussed in the context of the CERT strategy.
I begin by focusing on section 51, which relates to the promotion of renewable heat. Section 51(1) states:
At stage 2, we intend—subject to ministerial approval—to turn that into an obligation to produce an action plan and update it regularly. We need to do that to create a policy focus and keep the issue within that focus.
So you intend to lodge an amendment to deal with that.
Yes.
Do you also intend to draw up a timescale? The timescale for the energy efficiency plan is 12 months. Will there be a timescale for the heat plan?
Yes. We have a renewable heat target for 2020; the indicative figure that has been discussed is for 11 per cent of heat to come from renewables by 2020. In order to reach that target, we will have to monitor progress, so we will need to produce a plan and update it regularly.
What timescale is likely to be set in the amendment?
We intend to produce the first renewable heat action plan this summer, and we will then work out a sensible interval for updating it. We are considering updating it once every two years.
I will move away from renewable heat and back to energy efficiency.
The 12-month period was proposed in recognition of the importance of consultation in the preparation of the plan. A consultation will have to be carried out and responses will have to be analysed. We must ensure that the final version of the plan has been subject to that process and is as solid as possible.
I accept that consultation takes time. Is it the Government's intention to take as much action as it can do before the bill is passed, so that energy efficiency can make a meaningful contribution to the 2010 target?
Yes, absolutely. A series of measures is already under way and to some extent the plan will bring all that action together. Discussions are going on about how to reinforce such measures in other areas. The reason for having an action plan is to ensure that the matter can be considered comprehensively, so that activity can be added in areas in which there are gaps.
I will add a couple of points about the timing of the action plan's publication and about how quickly we can take effective action. It is worth noting that all European Union member states are required to produce by summer 2010 a renewables action plan that shows how they will meet the 2020 targets. The UK Government consulted on its renewable energy strategy in summer 2008 and is due to publish the final version of the strategy in summer 2009. It will then have a further 12 months in which to produce an action plan.
In light of the various measures that we have discussed around energy efficiency, buildings and renewable heat, it would be useful to set the overall context and explain some of the work that we are doing. We have the bill, the interim emissions reduction target of 50 per cent by 2030, the emissions reduction target of 80 per cent by 2050, and annual targets. As an important piece of the climate change work that we are doing, we are trying to set that work in the context of the short to long term to see where all the measures will come in. As has been mentioned, energy efficiency measures sit in the short to medium term, because it is cost effective to deliver a lot of energy efficiency measures. We are trying to identify where the key mitigating, carbon-saving measures will come in in the short, medium and long term, particularly to 2020, but also to 2030 and 2050, and the steps that we must take now to deliver them.
I want to follow on from what Cameron Maxwell said about targets and the mitigating action that we need to take now. I have two concerns. First, as the convener said, there are big fluctuations in costs to local government. It has been said that the proposals will be self-financing, but I cannot see that happening; rather, I can envisage costs to local government being a barrier in the current financial climate. What do you have to say about that? Will you comment on non-domestic buildings in particular?
The intention is that the roll-out of the non-domestic buildings provision will be gradual. We are considering the regulations that will follow on from the primary legislation, which will be subject to regulatory impact assessments and the affirmative resolution procedure. Before those regulations are implemented, research will have to be done, and we will have to ensure that we get the best value and that the recommended measures are cost effective. The figures that accompany the draft regulatory impact assessment for the primary legislation have a wide range to provide a context for what are only enabling provisions.
What is the timescale for the process?
It will take a number of years. People will get an initial assessment of their carbon and energy performance, after which an action plan will be worked up to give a timescale for implementation. As Alec Millar said, the consultation brought up the issue of whether the cost-effective recommendations should be mandatory. That issue might involve a stage 2 amendment, but we need to discuss the matter with our minister.
The skills gaps are a significant issue with different aspects. My perspective derives from having started work in the area only relatively recently. Several studies in recent years have considered the skills gaps and needs in renewable energy, the heat industry, energy efficiency and so on, and they have pointed to a challenge and an opportunity.
We have heard evidence over past months about the skills gaps. I presume that you consult people who work in the relevant areas, and I believe that much of the work has been done, so I am keen for best practice to be fast tracked. Like the convener, I am concerned about the woolly nature of things that we are asked to take decisions on. If we are to consider a skills action plan, the relevant work should be done now rather than in the future. I am concerned about timescales and cost implications.
I can offer a bit of reassurance. We are working on key elements of the renewables action plan and the heat action plan now, mapping out the critical powers, deciding what needs to happen between now and 2020 and beyond, and building on existing intelligence. Doing that hand in hand with industry is fundamental to our approach. We recognise that it is important to engage with industry, skills providers and potential employees—all the key stakeholders—in order to deliver.
It might reassure committee members to know that there is a core skills group on renewables. It is led by the Scottish Further and Higher Education Funding Council and Skills Development Scotland, and it includes developers, colleges and a small heat installer. We are on the group, too. It is looking into what we can do to gain quick wins in filling the skills gaps in renewables—we are considering all forms of renewables, including microgeneration and heat—as well as the long-term measures that will have to be put in place.
I am aware of that work. If we are going to train more people, there will be cost implications. Big discussions have been held in the Parliament on increasing the numbers of training places and modern apprenticeships. How will the action plan take those costs into account?
We will have to work out—more fully than has been done to date—a cost benefit analysis for all the proposals on renewables and low-carbon solutions. That analysis will be a key strand in the action plan, and the numbers for hardware, such as buildings and equipment, will have to be clear. Some renewables technologies will have infrastructure implications. We are developing our understanding of those implications and considering exactly what will be required in the long term—the investment that will be required and how it will feed through.
Marilyn Livingstone mentioned the costs for local government. The bill will simply place an obligation on the Government to provide an energy efficiency action plan. No obligation to spend any money will flow on to local authorities or anyone else. The issues will have to be tackled on their own merits.
I apologise for making a further supplementary point, but I want to pick up on the costs to local government.
For clarity, can you indicate where the instrument originates from?
It is a UK-level instrument, although the issue is devolved. The Scottish ministers support it and are partners in it. It is a domestic commitment rather than being EU-driven, although it complements the EU emissions trading scheme.
I have spoken about analysing the costs and considering the cost benefits to which we have referred, and which Colin Imrie picked up on. We are heading towards an understanding of the commercial opportunities in heat, energy efficiency and renewables for Scottish firms in the supply chain. We need to develop a fully informed understanding that, although investment is needed, there are commercial opportunities in job creation and so on. We must get smarter about channelling resources in order to realise the maximum benefits for the Scottish economy.
To return to energy efficiency and microgeneration plans, can you give us a flavour of what your consultation has revealed about the ease or difficulty for people in taking up some of the options? What constraints on take-up have arisen in relation to permitted development rights and planning legislation? That is a starting point—I want to get a feel for the issue to understand why you have adopted such an approach in section 48.
We have acted on a key element of the consultation responses to the strategy that were published in May by establishing one-stop-shop advice centres for consumers. Those are now in place in the west, east and north of Scotland. Increasing the availability of advice is viewed as an essential element in the process of helping people to find ways to change their behaviour. That was one of the strongest points in the consultation responses, in addition to more general issues of raising awareness.
It would certainly help. Although the stated intention is generally welcomed, I am concerned about the difficulties of applying it.
I was going to make a point earlier on why we have included certain provisions with amendments trailed for stage 2. As much as anything, it is to get our ducks in a row so that we can deliver early action.
That is helpful.
With Christopher Harvie's forbearance, I will let Sarah Boyack come in at this point, as her question is on a similar issue.
I want to follow up on Philip Wright's comment about having all the equipment in one's arsenal to tackle the issue quickly.
We will have to come back to you on that as Scottish planning policy 6 is not in my policy area. We will take a note of what you have said and get back to you.
Would it be possible to get an update on the impact that the Merton rule has had? I know that the authorities that are pushing its use are monitoring its effect.
I do not have any—
I do not mean from you personally. Perhaps some information on its implementation could be provided after the meeting.
We can always ask.
That rule might not be such a panacea; in fact, it might have had some unintended consequences. Some developers have installed a biomass boiler when they could have used the gas grid, just so that they could tick the box and meet the obligation. When that has been done in urban areas, it has caused some air quality problems, and some local authorities in urban areas now view biomass in a fairly negative light. We are having to consider that, and guidance on air quality and biomass installations for urban authorities will be produced shortly. The rule can have unintended consequences.
You talk about unintended consequences, but is it not the absence of clear emissions guidelines from Europe that has caused the uncertainty? I know that my local authority was forced to drop such proposals from its schools developments because there was uncertainty, but there is no evidence of health problems. Such schemes are widely implemented south of the border and in rural areas. The unintended consequence is due not to the application of the planning policy but to the absence of clear guidance on standards from central Government.
We are catching up, in that we carried out research on air quality and biomass last year. The intention is that air quality colleagues will produce guidance for local authorities on how to site such kit appropriately. We need to ensure that there is appropriate siting and that abatement technology is put in place. The UK Government is catching up as well, in that it is also producing guidance. I certainly agree that we need to get up to date on that.
However, to be clear, the requirement should be not for biomass but for any form of renewables on site.
Developers have opted for biomass because they know how to put boilers into developments. Biomass is easier for them because they just need to think about installing a biomass boiler rather than a gas boiler. The problem is that developers have not always thought properly about whether heat pumps or similar technology is more appropriate.
My other question was about incentives, which Dave Thompson also asked about.
I cannot offer a particularly conclusive answer on that as we have not discussed the issue since I have been in post. Perhaps Sue Kearns will know whether previous consultations have considered it as a policy option.
The issue has never come up in the context of renewable heat.
However, the issue has come up in the context of discussions on proposed energy efficiency measures. We do not have a specific answer at this point, but I am happy to come back with more details on that, permitted development rights and the Merton rule.
That would be helpful.
We will look at Sarah Boyack's suggestion. We might be interested in taking the idea forward and considering how it might work. We will come back to the committee with our thoughts on that.
First, I want to ask for a definition of targets, which loom considerably in the bill. An American school of thought associated with the Chicago school—not of economics but of management studies—is highly sceptical of arbitrary numerical targets, or ANTs. How international are the targets? The British economy managed to maintain a fair degree of moderation of increase in emissions, but that can largely be put down to the abandonment of manufacturing. Manufactures have been imported from China, where there are no such inhibitions. Is there an element of avoidance of moral hazard in the selection of targets?
On our approach, I referred earlier to the need for engagement. As we discussed previously, it is notoriously difficult to achieve movement on some issues. Members might also be familiar with the support of our minister—Mr Mather—for John Seddon's systems-thinking approach, which argues that a target-driven approach is not the way forward. As I said, the challenge is to produce an action plan that focuses clearly on what practical things need to be done, by whom and by when if we are to achieve progress. We want to focus on that to create enough of a centre of gravity around which all the different players can coalesce so that, by making visible what everyone is doing, we can move forward in an agreed way rather than just provide people with an arbitrary target.
Jamie Hume is right that this is about changing the way in which we operate collectively. However, a small number of outcome-based targets can focus the mind. There is no doubt that the European decision to go for getting 20 per cent of all energy from renewable sources has focused minds positively across Europe and the UK on the importance of renewable generation.
I want to elaborate on that. Most of our targets will have been made as a result of the enormous economic growth of the past decade. We are not going to see that growth in the next decade, even at our most optimistic.
I echo what Colin Imrie said, and in that context, the Scottish Government's decision to go for the more ambitious 20 per cent target rather than the UK's target of 15 per cent, is significant and focuses minds in the way that Colin Imrie described.
I will answer Christopher Harvie's point from a more general, climate change point of view. You make good points about your short-term concerns, but it is essential that we keep an eye on the long term. That is why we have the 80 per cent target, which was informed by science and comes from the global situation. That is then reflected back to the EU and the individual countries. Yes, we have an economic recession. We will take our emission reductions from anywhere during this early phase, but we must keep our eye on the long-term goal—the 2020 European target, the 2030 target in the bill, and the 2050 target.
And meanwhile, over the past 10 years, we have committed ourselves to a retailing policy that has led to the building of vast supermarkets across the country. These buildings not only have social implications but are associated with colossal heat loss and demands with regard to the mobility of freight and customers. How do we reverse that kind of development?
That might be slightly outwith the scope of the bill, although I suppose that it could come under section 50.
As I stressed with regard to the energy efficiency action plan, energy efficiency must be promoted across the board. An essential element of that will be every town's big supermarket, and the various implications of such an approach will have to be considered. I do not envisage the energy efficiency action plan tackling such a fundamental planning issue, but it might well come up in other forums.
Larger retail outlets such as Tesco and Asda will have to take action under the carbon reduction commitment. As Colin Imrie has made clear, the matter that Christopher Harvie raises is more of a planning issue, but I believe that my planning colleagues are taking it very seriously and are trying to reverse some past decisions.
I thank the convener for allowing me to sit in on this morning's meeting. I have been wondering what interests I should declare. I do not think that I have any, although I suppose that, as a former member of the Institution of Chemical Engineers, I have an abiding interest in the laws of thermodynamics. In that context, I was struck by Alec Millar's comment that 40 per cent of heat loss comes from buildings. I hope that I have got that right; if so, my first question is about where the other 60 per cent comes from.
No. More than 40 per cent of CO2 emissions come from buildings. Domestic buildings contribute 25 or 26 per cent and non-domestic buildings about 17, 18 or 19 per cent.
Okay. Do you know how much come from power stations?
I think that that is a different sector.
It is quite difficult to answer that question. We can give you the statistics if you want, but I should point out that power generators supply the domestic sector, which means that, although power stations emit CO2, the energy that is produced is used in homes. Direct CO2 emissions from the domestic sector come from the use of solid fuel, while the electricity supplied by power stations is caught by the EU emission trading scheme. The relationship between power stations, home energy use and emissions is a tricky one.
That is my very point. Energy efficiency anywhere is, of course, an important issue and surely the best way of reducing energy costs is simply not to use the energy in the first place. We need to recognise that a very large proportion of CO2 emissions comes from power stations and I am slightly concerned about ensuring that the relationship between what is in front of us and the global target—by which I mean the target for the whole country—for reducing emissions is being properly addressed.
A key part of the bill is the net Scottish emissions account, which we will use to report whether we are achieving our targets. Key to that is the EU emission trading scheme, which allows trading between EU countries. I can go into more detail on that, but I very much doubt that the committee will want me to do so. The emissions associated with the electricity used in the home are actually emitted from power stations, which effectively have an allowance. If a station exceeds its allocation, it has to buy allowances from another country, which is where the savings will be made. All we will take into account in the net Scottish emissions account will be the allocation to, say, Longannet power station. That is factored into the arithmetic that we will follow when we report on progress against the annual targets, which have still to be set. The relationship is very complex.
I have no desire to get us into that complex relationship. Is it not possible that carbon capture and storage, for example, at Longannet could make far more difference than everything else that we are talking about added together?
I will answer that, as I am responsible for power generation in general. We are developing policies in parallel that envisage that, over time—by 2020 and then 2030—Scottish power generation will be predominantly low carbon. That will happen through a combination of promoting renewable generation and accelerating the introduction of carbon capture and storage in thermal plants. You are right that the introduction of carbon capture and storage will make a significant difference, as will the increase in renewable energy.
I have a point that is partly about timescale and partly about cost effectiveness. Carbon capture and storage will have to go through a development phase, so there is a requirement to take up cost-effective energy efficiency measures now. We might have decarbonised electricity and heat in the long term but, in the short to medium term, we will not have those in sufficient quantities, so we should choose cost-effective energy efficiency options. In the long term, it is useful to compare the cost of saving energy with the cost of producing energy using carbon capture and storage, because that will not be free.
Sarah Boyack's proposed member's bill, which she has discussed with ministers, covers microgeneration as well as energy efficiency. Why is there no direct reference to microgeneration in the Climate Change (Scotland) Bill?
The reason why the bill refers to energy efficiency and not microgeneration is that microgeneration is considered, in the context, to be a reserved matter and outwith the scope of the bill. However, as I said, it is our clear intention to cover microgeneration in the energy efficiency action plan.
The judgment that microgeneration is reserved raises wider questions about some of the other aspects of the bill. Nigel Don raised the issue of where emissions come from. The most recent Scottish Government figures that I have seen suggest that 45 per cent of energy is used for heat and about 26 per cent is used for electricity. The bill has provisions on renewable heat. The Government proposes a target of 11 per cent of heat coming from renewable sources but, in setting that target, what account is taken of electricity as an alternative to existing sources of heat?
We are certainly considering the impact that electricity-to-heat technologies will have on the grid. We have to factor that in and we are thinking about the issues, such as the use of heat pumps. Another aspect is that the move to electric vehicles will have implications for electricity generation.
Absolutely. That is what I want to understand. Much of the detail is not there at the moment but, hopefully, it will be by the time the bill gets to stage 2. The Government talks about 11 per cent of heat coming from renewable sources. Does that include heat taken from the grid?
At the moment, it is biomass, solar and heat pumps. Part of the renewable electricity that is generated, the target for which is 50 per cent, will go towards the renewable heat target. That is how we are looking at it at the moment, but I agree that there is more thinking to be done.
Does that create a risk of having potentially conflicting targets or tracks of development? In other words, by seeking to promote renewable heat separately from renewable electricity, you must run the risk of missing the point.
I was talking about where the targets were derived from. It is about meeting the overall 20 per cent target for energy—electricity, heat and transport. There is flexibility within those three categories of usage. If we see a big shift towards electric vehicles, the energy will be renewable only if the electricity is from renewable sources. That is why it is important to track progress and make the necessary adjustments. I do not think that the targets are incompatible.
On the energy efficiency action plan, I think that you said in response to Gavin Brown that there would be a need to consult again. Would such a consultation be the third in three years? It would certainly be the second. What do you expect to learn that you have not learned already before publishing a plan?
In publishing a plan, it is important that we ensure that it is up to date and reflects the developments since the previous consultation, which was in 2007. There will be a number of developments. I give the clear commitment that we will not seek to reinvent the wheel. What has already been learned through the previous consultations will be included in the document that is produced.
If I understand the bill correctly, the plan will be updated every 12 months in any case.
The intention is to provide a final version of the plan, following the consultation, within 12 months of the act coming into force and to review the plan at least every three years.
Section 49(3) states that there should be a report on the plan within 12 months of its publication. If I understand the section, it also says that the plan should be updated every 12 months thereafter. Is that meant to be every three years? What does the 12 months in section 49(3) refer to?
Section 48(3) states that the plan must be published 12 months after the act comes into force. Section 48(4) states that the Scottish ministers must review the plan and, in effect, publish a new one. The maximum period of time set out is three years. Section 49 states that ministers must report to the Parliament every year on the implementation of the plan.
That concludes questions from members. There are a number of areas on which officials have indicated that they will come back to us, and it would be helpful if they could do so as soon as possible—we are on a fairly tight timetable, as we must report to the lead committee. It strikes me, however, that there are a number of significant policy matters that still require to be clarified. It might be helpful for the committee to invite the minister to give evidence to clarify some of the policy issues, for example on whether the Government intends to lodge an amendment to provide for a renewable heat action plan, which has been referred to.
In the meantime, I thank the extensive panel of officials for their very helpful evidence this morning. We look forward to their further responses to the points that were raised.
Meeting suspended.
On resuming—
We will now hear from our second panel on the Climate Change (Scotland) Bill. We have an opportunity to hear from a range of organisations about how content they are with the general principles of the bill and whether they want it to be amended. Should we toughen up the expectations of the Scottish ministers or, as we heard last week, introduce mandatory energy standards for new houses at national home energy rating 7 at least? I invite the witnesses to introduce themselves and to make brief opening remarks before I invite questions from members.
I am senior policy officer with WWF Scotland and today I am representing Stop Climate Chaos Scotland, which is a campaigning coalition of more than 30 organisations.
I work as a strategy manager for the devolved nations at the Energy Saving Trust. My job involves leading our policy work for Scotland, Northern Ireland and Wales. The Energy Saving Trust works to reduce carbon emissions in the household and road transport sectors. Through our network of advice centres, we advise around 130,000 people on energy efficiency every year.
My name is Fergus Tickell, not Fegus, as it says on my name plate. The "r" has been thrown away, in the words of the Proclaimers song. I am managing director of Northern Energy Developments—a renewable energy company that specialises in bioenergy from wood. I am also on the board of Scottish Renewables and I have been a member of the FREDS bioenergy and renewable heat groups.
I am the Carbon Trust's manager for Scotland and I head the trust's activities with businesses and public sector organisations.
I am the senior press and parliamentary officer for the Association for the Conservation of Energy, or ACE for short, which saves time. We undertake research and we campaign to reduce overall energy demand to ensure a secure and sustainable energy future. Our work reflects the interests of, and is largely funded by, our members, who are major manufacturers and installers of energy-saving equipment throughout the UK. ACE is a member of the Scottish fuel poverty forum and—as of last month—of Stop Climate Chaos Scotland. We are also a regular contributor to the energy debate in Scotland.
I sympathise with Fergus Tickell; I am very used to getting one of the letters in my name dropped. I have not managed to train this committee not to do that.
We share many of the concerns that members have expressed—in particular the convener's concern that the bill is a work in progress with many gaps. We have heard that a lot of measures will be introduced at stage 2, but that might mean that they could be rushed through.
I will make a couple of points that relate to the conversation with the previous panel. It has been made clear in the past couple of hours that people understand what energy efficiency means. It is about ensuring that we get maximum benefit and utility from every kilowatt hour of energy we use.
I will confine my remarks to renewable heat. I do not know nearly as much about energy efficiency as the others on the panel.
As others have said, it is great that the bill recognises the importance of energy efficiency and renewable heat, but an area in which it could be strengthened is regulation of the domestic sector. The bill allows for some regulation in the non-domestic sector, but there is nothing on regulation in the domestic sector. Given that the domestic sector is responsible for about 34 per cent of Scotland's energy demand, it would be useful to include provision for regulation of the domestic sector in the future. That is not to say that we want regulation now; rather, it is that promotion and incentives will take us only part of the way.
I second Elaine Waterson's remarks on the domestic sector. Given that the sector is responsible for more than a third of our emissions, there is a gaping hole in the bill in that respect. Regulation of the sector was recommended in the Sullivan report, "A Low Carbon Building Standards Strategy for Scotland", which suggested that we should consider existing building standards, enhance energy performance certificates and keep an eye on the future direction of the European energy performance of buildings directive, which will strengthen energy efficiency requirements. I agree that we should have provision in the bill to enable or enhance EPCs.
I ask Chas Booth to elaborate on the rearmament that we need to do to take us from peashooters to cruise missiles.
Elizabeth Leighton has described the cruise missiles that are needed. The bill's big gap is in respect of domestic energy efficiency. As Elaine Waterson said, domestic use accounts for about 34 per cent of final energy demand and about a third of emissions. Tackling domestic energy efficiency ties in with many agendas, including the carbon agenda. In the context of the bill, we are discussing statutory targets that will come into force this year, but there is already a statutory target for fuel poverty, which the committee discussed last week. At current rates of investment and with the current powers in our arsenal, the Scottish Government will not meet that target, which is to abolish fuel poverty by 2016. We need considerably increased investment and powers to ensure that we bring buildings with the poorest energy efficiency up to standard. If we do not make a real effort to do that, Scotland will be cursed with a group of people in the hardest-to-treat houses who will be permanently fuel poor.
It is important to emphasise the urgency of the issue. As I said earlier, the apparent omission of the commercial and industrial sectors from the renewable energy framework and the approach to renewable heat means ignoring the lowest-hanging fruit in respect of the mass use of renewable heat.
I am not sure that I totally agree with Fergus Tickell. The business sector is similar to the domestic sector, and energy efficiency is the easiest and quickest win. I agree with him that, particularly in Scotland's national drinks industry, the waste streams of certain industrial processes are energetic. Initiatives around them, such as the one that Diageo is progressing at the Cameron Bridge distillery, represent a very big prize. Generally, however, I would argue that energy efficiency is the best, easiest and most cost-effective win for industry.
As part of our energy inquiry, the committee visited the Cameron Bridge distillery to discuss the proposed biomass plant. I am aware of similar initiatives around Scotland, such as the one at the Quaker Oats plant in Cupar.
Earlier, I asked the civil servants about the state of the information they have. The frustration that you feel seems to be related to our having focused money to apply. We can make it easier to apply that money by having a clearer picture of current evidence, for example, on the ease or difficulty of the uptake of each of the methods of energy efficiency that we have been talking about, or the constraints that arise from permitted development rights. Is there a need for us to have a clear view of what is holding us back? If so, should we include in the bill provisions to deal with that or should we ensure that the following secondary legislation deals with such detail? Many of the things that you have talked about are things that need to be done, but we have to decide what should be included in this enabling bill.
Enabling provisions on the domestic sector must be in the bill. We have waited a long time for the civil servants to arrange a consultation on existing homes and climate change. The intention was to have something ready that could go into the bill, but time has dragged on and, unfortunately, we are not in that position.
I think that the intention is to have many initiatives delivered by the means that you describe. Am I right in thinking that, apart from the issue around domestic buildings, which you would like to be included in the bill, there is nothing else that you think should be included?
I think that Chas Booth wants to answer that.
My concern is not just about what is missing in terms of which areas are not covered—the domestic sector is the big one. I am also concerned about what is missing because measures that are included in the bill do not go far enough. For example, the provisions on non-domestic energy only give ministers the power to require a wider roll-out of energy performance certificates. We think that energy performance certificates are useful, particularly with regard to rented buildings, because they inform the tenant what their approximate fuel costs will be.
Does Rob Gibson want to follow that up?
No. The point has been made and we shall note it.
You will hear no disagreement from me about the need to push on as quickly as possible. If we are to meet our targets, we must get serious. You might have heard me ask earlier about a couple of serious barriers. I think that Elizabeth Leighton talked about area-based initiatives. We have heard evidence about skills shortages in the Highlands and Islands, which do not have skilled people to install heat pumps—that is a huge skills gap. I want to hear your views on the skills and training agenda. With the best will in the world, even if our action plan is up and running and we have funding for it, if we do not have people to deliver measures, that is a huge barrier.
One reason why area-based approaches are recommended is that they can achieve economies of scale. However, significant investment must be provided to create the demand, so that industry invests in Scotland and SMEs are kept in Scotland to develop skills and fill the skills gap. Then we can win the energy efficient economy that Colin Imrie talked about earlier—we can win those jobs. If we do not have the right level of investment linked to the right amount of regulation, that cannot happen. Provision will be too spotty and there will be a scatter-gun approach such as we have now across Scotland—a stop-go approach.
I disagree with Marilyn Livingstone: there are skills shortages throughout the supply chain, not just in renewables. There is a shortage of people who are skilled in ordinary energy efficiency. The Scottish energy officers network, which is the local authority energy managers meetings, is like musical chairs, only with more posts than people. We need energy managers who are trained in ordinary energy efficiency as well as people who can install renewables technologies.
How far away are we from knowing where the gaps are?
A long way, I suspect. My evidence is anecdotal; it is not hard evidence. I have heard of people changing jobs, and vacancies just sit there. People have come to me to ask whether I know of anybody who can fill a post. I know that there are gaps, but I do not have hard, numerical evidence of that.
Skills are a major issue. The fundamental point is that people are not going to skill up to install and maintain renewable heat systems unless there is demand for those systems. Especially in difficult times, businesses do not spend money speculatively in the hope that some Government policy will work in the relatively short term. That is a fundamental issue, and the two things must go hand in hand. Scottish Government ministers must realise that addressing the skills gap is a key part of the promotion of renewable heat and energy efficiency.
I echo the point that Elizabeth Leighton made about permitted development and the importance of microgeneration technologies having permitted development status. Not only is it a hassle for consumers to have to go to the planning department and wait for a significant amount of time before they get planning permission, but there is a cost associated with that.
I want to make a quick comment on skills. I disagree slightly with John Stocks. On manufacturing energy efficiency equipment, our industry has a lot of capacity at the moment because of the downturn in new build, which has dropped off dramatically. One of our members has mothballed one of their factories in England, and another has put on hold the development of a new factory where insulation materials were to be manufactured. At the moment, we have capacity.
I want to raise one bogeyman that has not appeared so far: methane. Various statistics show enormous increases in the production of methane, which is a highly toxic substance. Its impact, in association with ozone, is reckoned to be up to two thirds of the impact of carbon dioxide. A lot of methane comes from human and animal waste. All those cows grazing quietly in a field are economically more pernicious than Jeremy Clarkson.
You bring up a valid point; we need to look at land use across the board, whereas the bill tends to focus on forestry. However, your point is outwith the scope of today's discussions.
I think that almost all the large landfill sites in Scotland, and probably almost all in the UK, now capture methane from landfill gas for electricity generation. I will not comment on the contribution of cattle, but it is clearly substantial. Vegetarianism is probably the only answer for us in that regard.
I have a couple of questions that follow on from our earlier evidence session.
As I said earlier, I think that the effect of repealing section 179 of the 2006 act and having a requirement simply to promote energy efficiency would be a dilution. From my discussions with civil servants, I understand that they have difficulties in that area as a result of trying to understand exactly where the line between devolved and reserved matters is drawn. However, surely it is not beyond the wit of civil servants to sort that out, maximise our powers and make it clear that the bill should include a requirement to improve energy efficiency. If there are issues outwith that, they could be noted. I would prefer that approach rather than going to the lowest common denominator and saying that we want to promote energy efficiency, because promotion is, after all, more about words than action. Improving involves a commitment to action.
I agree with Elizabeth Leighton and Mr Macdonald that the effect would be to dilute the provision in the 2006 act. I understand that the reason for repealing the provision is that it is thought that there would be an overlap, but does that matter? I do not know. Perhaps it does, but surely there must be some way forward that ensures that section 179 of the 2006 act is not diluted.
It strikes me that repealing the provision in the 2006 act is unnecessary and that the two provisions could comfortably live together if the officials' description of the bill as building on existing legislation is accurate. Is that the view of the witnesses, too, or has someone come across a legal obstacle to that?
I can see no legal obstacle.
My next question is about another issue that was raised earlier: incentives, primarily for householders, but also for community schemes.
My understanding is that the arrangements have been effective in incentivising the take-up of insulation measures and in attracting CERT funding by creating partnerships of local authorities, energy companies, utilities and local community groups. Additional incentives could make Scotland a more attractive funding environment for the CERT scheme. The funding environment is one of the reasons why we do not have our fair share—in inverted commas—of CERT funding.
I agree with Elizabeth Leighton that council tax incentives have, in theory, a big role to play in encouraging consumers to take action. We at the Energy Saving Trust did a huge amount of consumer research a number of years ago in which we explored the idea of council tax incentives with consumers across the UK. A key finding was that the level of incentive does not have to be that high. Talking to people about tax rather than energy efficiency is much more exciting for them and has a big impact. That approach has a big marketing advantage as well. As Elizabeth Leighton said, many of the schemes down south have been particularly successful and have incentivised significantly greater numbers of people to take action than would have been the case if just the CERT scheme had been available.
The previous witness panel mentioned the provision of grants through the community and householder renewables initiative, the biomass support scheme and so on. Those grants are welcome as a way of getting something going in the heat sector, but they are inefficient as a way of delivering support. They tend to be challenge funds to which people must apply in almost a competitive way to secure funding. They also tend to be irregular, so there is no continuity and the skills base is not developed. I therefore welcome consideration of a renewable heat incentive.
On tax incentives, the whole package is needed. We deal with a range of technologies and installations. Jamie Hume suggested earlier that we do not need to consider council tax incentives because the renewable heat incentive will come on stream, although not for 18 months or so. However, that incentive will not apply to the many householders who simply want to do up their loft or have cavity wall insulation. Even solid wall insulation will not be covered. We need a range of measures that will fit the range of needs for the range of houses.
I have a brief comment on council tax discounts. Last month, the Northern Ireland Executive announced that it is introducing rate rebates—it has rates, rather than the council tax. Under that scheme, houses that are renovated to the highest energy efficiency standard will receive a five-year rate rebate, which is a substantial incentive. It is disappointing that, yet again, Scotland is being overtaken and another devolved nation in the UK is taking the lead.
I was not aware of the Northern Ireland scheme. It would be worth while for the committee to have more information on that. However, the danger with that approach is that it is non-targeted. With a five-year rebate for houses that achieve the best energy efficiency rating, the ones that are nearest to achieving that already will get the rebate fairly easily, but people for whom that is hard to do will not necessarily be able to afford it. Does such a scheme target resources where they are most needed, which is the hard-to-heat and hard-to-insulate housing?
I do not accept that houses that are already fairly energy efficient are necessarily easier to get to the zero carbon level. Your colleague Rob Gibson was one of the MSPs who engaged in the MSP home energy challenge that we ran with Friends of the Earth Scotland last year. At the start of the year, Mr Gibson's house was the most energy efficient, but there was a limited number of measures that he could install to make it better. He could not take any insulation measures, because his house was already fully insulated, and his options were limited to microrenewables. On the other hand, Mr Harper, who won the prize, achieved that by topping up his loft insulation, replacing his rather ageing boiler with a more energy efficient one and installing draught-proofing. Therefore, it might not be easy to get houses that are already energy efficient to the zero carbon level.
I will resist the temptation to say that I am disappointed that Mr Harper's house was so badly insulated.
In much of what has been said, there is a suggestion that part of the reason for the deficit in CERT spending in Scotland is precisely a result of the absence of such schemes. Are there any other opportunities in the bill that will help to ensure that more CERT money is spent north of the border? Are there any opportunities that are not taken in the bill to improve the attractiveness of Scotland for energy company investments?
To clarify, Scotland does not get its fair share of CERT money. Under the predecessor to CERT, which was called EEC—the energy efficiency commitment—Scotland received about 7 per cent of the funding, yet we have 9 per cent of the homes. If those proportions are still the same, we are clearly not getting our fair share. On how the issue should be addressed, I welcome the Scottish Government's establishment of a CERT strategy group, through which it is discussing with the energy companies how they can ensure better investment in Scotland.
And that would presumably help to address Iain Smith's question, too.
Yes.
I will respond on what might be done in the bill to encourage greater investment through the existing CERT scheme as it is run now. One approach would be to ensure that there are clear targets and a clear reporting procedure on the energy efficiency action plan—perhaps with a view to improving it. If it is clear what the targets are, it will be clear to industry what direction is being taken—there will be annual reporting and scrutiny, and that will drive more investment.
John Stocks said that there should be a definition of energy efficiency in the bill. Will you, either now or by way of a written submission, give the committee more detail on what ought to be included?
It would be a challenge to draft some words for the bill on the hoof, so I will hang back and submit something in written form. Primarily, there must be an obligation on us all to get the absolute maximum utility from every unit of energy that we use in a building. That would be a reasonable definition of energy efficiency. I would like to revisit the point, however.
It is a difficult question, in that we do not know what might emerge at stage 2. There needs to an absolute commitment to finding an effective financial mechanism to support the installation of systems. There has to be clarification at some point in the progress of the bill that the intention is to promote renewable heat in all its forms and for all its uses. The lack of recognition of the commercial potential for renewable heat is a major problem.
My point relates to the definition of energy efficiency. We need to keep our eyes on the prize, which is to reduce emissions and, therefore, our energy demand. Often we focus on energy efficiency, but that will not necessarily lead to a reduction in energy demand. An AAA-rated fridge that is big enough for someone to walk into it does not lead to a reduction in demand. We need to keep an eye on that issue in the action plan. We must understand how improvements in energy efficiency can lead to reductions in demand, and what they mean for reductions in emissions.
I agree. Demand should be included somewhere in the definition of energy efficiency, as we need to minimise demand for our activity.
You are welcome to have a stab at an amendment in writing and to send that to the committee.
The energy efficiency plan has been touched on. I questioned the Government on whether a 12-month period was needed between the activation of section 48 and publication of the plan. That is important, because if the plan does not come into force until the middle of 2010, it will not have a big impact on the 2010 figures. If we fall at the first hurdle in 2010, we will have further to go to catch up, which could have a detrimental effect on momentum and motivation. I appreciate that consultations take time, but how quickly do you think a plan could be pulled together, once section 48 has been activated?
We were first promised an energy efficiency strategy on 7 December 2004, so we have waited quite a long time for it. As recently as November last year, the Scottish Government committed to setting
Although some energy efficiency issues are devolved, others are reserved, and much of what Scotland needs to do to deliver on its plan will have to build on what is happening at Great Britain or United Kingdom level. That means that, to some extent, the Scottish plan will have to wait for the UK Department of Energy and Climate Change to finalise and publish its action plan and wider strategy, because that will give Scotland a better sense of what policies will be delivered in the country under reserved powers and what it will need to add under its devolved powers.
We could get into something like the iterative phase of consultation, with things simply going on and on. The Government could publish what it knows now; after all, a lot of research and reviews have been carried out and I, too, have been at meetings where we have been told, "This is just around the corner". Something must be sitting on a computer somewhere.
Does the action plan have to wait for the legislation to be passed, or can it be developed in parallel?
There is no reason why it cannot go ahead now.
I absolutely agree.
A couple of comments in the financial memorandum struck me as being quite strange. For example, with regard to the renewable heat and energy efficiency provisions, the Government claims essentially that no additional costs will fall on the public purse. Is there any point in having an energy efficiency action plan that does not result in additional costs to the Scottish Government?
I have not read the financial memorandum in detail—
There is no detail in it.
The Government might be driving at the fact that energy efficiency has a negative net cost. In other words, you get back the money that you invest as a result of, for example, lower fuel bills. However, there will need to be some public sector investment to deliver the carbon savings set out in the bill.
I think that you are being rather optimistic. If that was the case, the financial memorandum would have given some indication of the costs and likely return on investment.
I might have misunderstood the question.
The financial memorandum states that the duty to promote an energy efficiency action plan
As I understand it, the suggestion in the DECC consultation is that, as with the renewables obligation, the cost of a renewable heat initiative would ultimately be recovered from the consumer.
Does that mean that the incentive funds that we have discussed might well be implicitly ruled out before the plans are even published?
I suppose that the question is whether the Government should be building into the financial memorandum some up-front funding for all of this, even if it ultimately gets the money back.
Even if the Government does eventually get its money back, incentives such as the loans scheme that we talked about would, like the small business loans scheme, involve some up-front provision.
I think I misunderstood the question about resources. Were you referring to resources within Government to deliver the energy efficiency action plan?
Yes.
There is a question about that. I have heard that publication of the energy efficiency action plan has been delayed partly because the Scottish Government's energy efficiency team is very small. They are dedicated and hard-working and do fantastic work, but they must be underresourced if they are, say, having to brief ministers for budget negotiations with the Greens and negotiations with Sarah Boyack over her bill, and to produce an energy efficiency action plan, all at the same time. Surely they should have the means to chew gum and walk at the same time—or whatever the phrase is. As a result, internal resources in the Scottish Government might well be an issue, especially if—as the previous panel made clear—energy efficiency will be a key delivery mechanism for cutting carbon.
There are number of successful loan funds, including the central energy efficiency fund, which operates in the public sector in Scotland, the Salix fund, which operates with Scottish money in the higher and tertiary education sector, and the small business loans schemes we and the Scottish Government operate. Although those schemes are self-financing, they have had to receive up-front public money. Any thoughts that we might have harboured of getting private sector money to bolster our own loans scheme have been temporarily put on ice with the current situation in financial markets.
That concludes questions. I thank the witnesses very much for a very informative and helpful session that will, I am sure, inform our report. If any other points come to mind after you leave, please feel free to send them in writing to the clerks.
We agreed earlier to take evidence from ministers on the matters that we have just discussed. Is it the intention to decide on further steps following that evidence?
Yes. We have to prepare a report for the lead committee within the timescale that has been set out, but the clerks and I will discuss how to fit an evidence session with the minister into our programme.
Meeting closed at 12:28.