MPs' concerns over UK carbon plan

MPs voiced concern over how the emission cuts were calculated

MPs have asked the government to provide evidence that the EU Emissions Trading Scheme (EU ETS) is helping cut the UK's greenhouse gas emissions.

The Environmental Audit Committee has sought reassurances that the reduction in CO2 emissions are a result of the EU ETS and not "merely coincidental".

It said carbon trading schemes were too complex and that greater transparency was needed to assess their success.

The EU ETS is the main tool for European governments to cut emissions.

Phase I of the EU ETS came into force in January 2005 and will run until the end of 2007.

Q&A: Emissions trading

It covers 11,000 power stations and industrial plants, which are responsible for about 45% of the EU's carbon dioxide emissions.

Firms are allocated a quota of how much CO2 they are allowed to emit. Organisations exceeding their allowance have to buy credits from companies that have been able to cut their emissions.

Phase II of the scheme, which requires each member state to set a cap on the amount of carbon emitted into the atmosphere, is scheduled to begin in 2008.

Fact or fiction?

The committee took the unusual step of seeking further clarification from ministers, who had already submitted a response to the MPs' original report, published in February 2007.

Environment Secretary Hilary Benn had used his response to state that Phase I of the scheme had delivered an estimated saving of 5.9 million tonnes of carbon (MtC) each year.

However, the MPs said that the reductions of emissions deemed to have been saved under the scheme may not match what had really happened.

Another area of concern raised by the committee, chaired by Conservative MP Tim Yeo, was the lack of transparency in the scheme's methodology.

It cited the definition of "business as usual" as one example.

"The government attempts, on the basis of historical data and various other factors, to estimate what the level of emissions from UK installations in a certain year would have been in the absence of the EU ETS," it explained.

"The main problem with this approach is that it is a counterfactual exercise; it is clearly impossible to be certain about what level emissions would have grown to in an alternative future."

In his response, Mr Benn said that official publications would offer more clarity about emission reductions in the UK and overseas.

He added that the Department for Environment, Food and Rural Affairs (Defra) was currently looking at ways to simplify the regulations and reporting process of the EU ETS.

The minister said the review's findings were expected to be handed to ministers later in the autumn.