Considered in Grand Committee
My Lords, I beg to move that the regulations, which were laid before the House on 25 February 2021, be approved.
The statutory instrument is laid under the power of Section 8(1) of, and paragraph 21 of Schedule 7 to, the European Union (Withdrawal) Act 2018, to address deficiencies of retained EU law that arose from the withdrawal of the United Kingdom from the European Union. The purpose of this SI is to amend retained EU law related to the UK’s Kyoto Protocol registry to ensure that it will be operable in the UK. The statutory instrument is not introducing any new policy; it is simply ensuring continuity of the UK Kyoto Protocol registry, independent of the EU’s registry system.
As a party to the Kyoto Protocol, an international climate change treaty with which I am sure Members are familiar, the UK has a legal obligation to maintain a Kyoto Protocol registry. This registry enables the UK and UK-based account holders to hold and trade Kyoto units. Kyoto units are each equal to one tonne of carbon dioxide and can be traded on the international carbon market. Kyoto units held by the UK Government are used to demonstrate compliance with our emissions reduction targets under the Kyoto Protocol. Emission reduction commitments under the Kyoto Protocol covered the period from 2008 to December 2020. However, due to the time lag in collecting emissions inventory data, final accounting cannot be completed until several years after December 2020, hence the continued need for a registry. Future registry requirements under the Paris agreement, as the successor to the Kyoto Protocol, are due to be decided at COP 26 in November.
While the UK was a member state, the UK’s Kyoto Protocol registry was housed in the EU’s Consolidated System of European Registries. The UK has now established its own domestic platform to house the UK’s Kyoto Protocol registry, independent of the EU system. This platform is due to be operational in May 2021. The UK Kyoto Protocol registry enables the holding and trading of Kyoto units, just as a bank account does with money.
As an industrialised country with emission reduction targets under the Kyoto Protocol, the UK is allocated a number of units, known as “assigned amount units”. These units are held in the UK Kyoto Protocol registry. When finalising accounting for the Kyoto Protocol commitment period, countries have the option to trade or cancel any surplus units if they have met their emissions reduction targets through domestic action. The registry enables this activity.
Private entities can also open accounts in the registry to hold and trade Kyoto units generated through the clean development mechanism under the Kyoto protocol. The clean development mechanism allows a country with an emissions reduction commitment under the Kyoto protocol to implement an emissions reduction project in developing countries. Such projects can then earn certified emission reduction credits, each equivalent to one tonne of carbon dioxide, which can be counted towards meeting Kyoto targets. This mechanism can enable more cost-effective emissions reductions, and the emissions credits generated can be traded, thereby creating a carbon market.
This statutory instrument is about continuity and compliance rather than any substantive changes to policy. By amending the retained EU legislation relating to the Kyoto protocol, this statutory instrument provides a clear legal basis to operate and administer the UK registry domestically. This SI does not have any significant impact on businesses, charities, voluntary bodies or the public sector. The Environment Agency will continue its role as administrator of the UK Kyoto Protocol registry, as it did before our departure from the EU.
There are currently 112 businesses with accounts in the UK Kyoto protocol registry. The units and transaction history relating to these accounts are being transferred from the EU system to the new UK system hosting the UK Kyoto Protocol registry. As I mentioned, the new UK system is due to be operational in May 2021, which is when account holders will be able to register on the UK system to access their newly migrated accounts. Trading Kyoto units via the UK Kyoto Protocol registry should be possible from June this year.
Businesses with accounts in the UK Kyoto Protocol registry were given advance notice about changes to the registry while the transfer from the EU to the UK system takes place. The Environment Agency, in its capacity as administrator of the registry, continues to provide updates to account holders, and we are not aware of any concerns being expressed by those account holders. All four Governments of the UK nations have agreed with the purpose and content of this statutory instrument.
I therefore conclude by emphasising that I see the measures contained in these regulations as important, since they will ensure the UK’s ability to uphold its international commitments under the Kyoto Protocol, following our departure from the EU. I hope on this basis that noble Lords will feel able to support these measures and I commend these regulations to the House.
My Lords, I thank the Minister for these regulations, given that Brexit means that we are no longer party to the EU recording of emissions for Kyoto registry purposes.
I have three questions, two operational and one rather fundamental. First, can the Minister assure the House that this methodology for calculating greenhouse gas emissions will not be changed unilaterally by the UK and that, in terms of trends, we will be compatible with both past reported trends for the UK and the EU system of reporting, as well as simply meeting the requirements of the Kyoto registry?
Secondly, while the figures in this log will not determine what allowances can be traded in the new post- Brexit UK emissions trading scheme, can I assume that they will be compatible with it?
Thirdly, and more strategically, do the Government recognise that the methodology of determining individual nations’ contributions to greenhouse gas emissions, taken on its own, is fundamentally misleading? It reflects reduction within the national emissions’ geographical boundaries, not the national demand generated by that nation’s society and economy, which would produce a very different impact on global emissions. For example, the UK final demand will include demand for imports, in the production of which greenhouse gases will have been emitted in China, say, or on the high seas or in the air, in transporting them to the final user or consumer. The global total will be the same, but the relative contribution of each nation to that total will be radically different, and the implied policy priority for each nation will therefore also be radically different. To put it crudely, if countries such as the UK and the United States, or companies in those countries, in effect offshore or export their dependency on greenhouse gas emissions by shifting production to the Far East, it is our economy, our final user and our supply chains whose behaviour needs to be addressed, rather than, or as well as, those of the Far Eastern nations.
This, then, is an issue that the Kyoto mechanisms and registry need to address. I do not say we do not need this production-based data—we absolutely do—but it needs to be augmented by a parallel index analysing, as best we can, the carbon-equivalent content of each nation’s final demand. Production-based data is important and we need to keep it, but we also need demand-based data. Do the Government recognise this as a priority and, if so, is it an issue that will be discussed at the forthcoming COP 26 later this year, when the Government will be in a highly influential position to get the nations of the world to agree to work on a parallel system of demand-based greenhouse gas figures, as well as the figures covered in the regulations today?
My Lords, as this is an SI, there is obviously little we could do to change it, even if we wanted to, but it makes sense that this SI goes through post Brexit. Its importance is its link to the trading regime. I have always been a sceptic of the trading regime, unlike my noble friend Lord Teverson—we have both been in the House long enough that we were debating this between 2006 and 2009. However, trading has taken place, with differing levels of success. A friend of mine was a carbon trader and I asked him how he made up his mind whether to buy or sell. He said, “It’s very simple. When it’s sunny, I sell, because people want to buy on a sunny day, and when it’s raining, I buy, because people want to sell.” It was as simple as that, and he made quite a lot of money using just that simple methodology, which shows that it had less to do with the actual price of carbon and more with how traders felt about carbon on that particular day.
As we are moving to a registry, I will ask the Minister one thing. We now perhaps have the opportunity to become a little innovative in the way we move forward. Could we not look at a registry not just of carbon dioxide and greenhouse gases but based around methane? Methane constitutes 23% of our emissions and we could do a great deal to focus on it. There is a great deal that we could do internally on the methane marketplace that would have a major effect on climate change, because methane production is not always linked to fossil fuels.
My Lords, I thank my noble friend for his clear exposition of this SI. I am delighted that the Government have been showing strong commitment to addressing climate change, and of course I support the aims of the regulations and the amendment of EU law as it now applies to UK—which is, sadly, required following our departure from the EU. I also support our work to comply with our assignment amount units and targets under the Kyoto Protocol in order to reduce emissions.
In my brief time today, I shall ask my noble friend a few questions. What are the advantages from the extra costs incurred in setting up our own domestic registry, independent of the EU-wide CSEUR software platform, and how much is it expected to cost? Was there any opportunity to remain part of the EU system? Will my noble friend also provide an update on the progress so far and the Government’s confidence level in meeting the May deadline for transferring accounts over to the new UK system and for verifying the information from those accounts when they are transferred from the CSEUR?
This SI also removes obligations from the Environment Agency to comply with EU law. Now it only has to comply with our international climate law obligations. Will this departure from EU rules have any impact on the trade in certain sectors or products? I wonder whether my noble friend could comment on any assessment that may have been made of the implications of departing from the presumably higher EU standards.
Finally, following on from the remarks of the noble Lord, Lord Redesdale, could my noble friend comment on the possibility of bringing together the various different schemes? We have already established our own emissions trading scheme for greenhouse gases, and we are now setting up our own registry for the Kyoto Protocol. Are there plans under consideration to bring together all our climate change obligations so we can monitor them in a comprehensive fashion?
The next speaker on the list, the noble Lord, Lord Berkeley, has withdrawn from the debate, so I call the noble Lord, Lord Bourne of Aberystwyth.
My Lords, it is a great pleasure my good friend the noble Baroness, Lady Altmann, and I thank my noble friend the Minister for setting out so clearly the effect of these regulations.
I support these regulations, which amend retained EU law. We clearly need to do that in order to ensure the continued application of the UK’s Kyoto Protocol obligations, which, as my noble friend said, persisted from 2008 to 2020 but will clearly go on for several years after that. That is the importance of these regulations.
Along with other noble Lords, I am keen to hear from my noble friend that we will carry on in the same way. I think he gave that reassurance, but I hope that that will be carried across in our ambition to COP 26. As he said, there will be a fresh assessment made at COP 26, and I will say something about that in a minute, if I may.
I am also concerned by the hiatus, which my noble friend touched on, between the end of the transition period and the new regulations taking effect in, I think he indicated, June 2021. Clearly there is a gap there. I think I understood him to say that that gap has been catered for and that the 112—I think he said 112—businesses that are potentially affected by this are aware of this, and I hope that they have been given guidance on how that will affect them in the period before our own registry takes proper effect in June 2021. I would welcome that reassurance.
We as the United Kingdom have a historic opportunity with COP 26, and it is incredibly important that we seize it and go forward with at least the ambition that we had in the EU—and I hope beyond it—to show that global Britain really does mean business. I know my noble friend will say that this is a matter for the usual channels, but I hope that he will be able to convey to the usual channels and to other parties the importance of having a meaningful debate in your Lordships’ House well ahead of COP 26 so that we can express our collective ambition so that can be carried forward, because this is of crucial significance not just for our country but for the entire globe.
With that, I am more than willing to support these regulations, which make sense, but I would welcome my noble friend’s reassurance with regard to the hiatus and, I hope, to a meaningful debate on this issue.
My Lords, I echo the final question asked by the noble Lord, Lord Whitty, about the true nature of our carbon footprint in the world. I will also point out that global emissions are again set to rise, and that, while the goals of greening our economy and aiming for net zero are admirable, they and the Kyoto regulations, in whatever form we now take them on board in the registry, fall far short of what is needed to tackle climate change.
I am sorry to strike a slightly negative note. However, as Jeremy Warner remarked in last week’s Sunday’s Telegraph,
“unless China and the rest of the developing world are on board, all efforts to reach a net zero world are doomed. It matters not a jot what America and Europe do to reduce their emissions if the rest of the world isn’t doing the same.”
The Kyoto Protocol is 24 years old, but here we are still struggling to curb rising greenhouse gases, both CO2 and, even more of course, methane, which is 28 times as lethal. We really do need accurate and frank guidance on how to avert world climate catastrophe, which we are just not getting from the Committee on Climate Change and other authorities. This could be the opportunity to get the change needed.
As I said, global emissions are set to rise, after a pause during the pandemic, whereas to reach Paris accord targets they should be falling by at least 7.6% per year. Rising emissions in the big emitting countries, particularly from coal burning and particularly in Asia and Africa, are about to outweigh by far any reductions we can possibly make, so carbon concentrations in the atmosphere are set to continue growing almost unabated.
Coal of course produces about 46% of carbon emissions and, unless the technology for capturing and using carbon from these world sources is vastly improved and cheapened, and applied to all coal burning throughout Africa and Asia, there is not the slightest chance of meeting climate goals, which presumably is what we are about. This is where there should be an all-out concentration of resources and brainpower.
Present policies, although they involve enormous expenditure of national resources and are desirable in our narrow national interest, are not addressing the key issues. There is no safe haven here at home from climate change. What we need is not Kyoto or Paris but a multinational endeavour, a Manhattan-scale project, at least on the scale of China’s belt and road initiative.
Without this kind of new strategy emphasis, the rise in global emissions will continue. Kyoto, Paris, net zero and all the rest will do almost nothing to check the real drivers of global warming. That is the honest and frank message that I would like to see come from these discussions to shape policy priorities, and it is the real message and policy direction which the next generation deserves and which should shape the whole approach that we take at COP 26.
My Lords, in following the noble Lord, Lord Howell of Guildford, I respectfully disagree with his suggestion that any blame for lack of progress lies with the Committee on Climate Change. It is providing the advice that is needed. The failure is with government action, and I agree with the noble Lord on the extraordinarily urgent need for action.
I thank the Minister for his introduction to this statutory instrument. As he outlined, it establishes the new UK registry that is currently in development. As our own Secondary Legislation Scrutiny Committee noted with dry restraint:
“Until then, UK businesses that wish to trade KP units will have to open KP accounts in other countries’ registries.”
Once again, the Government are scrambling, still belatedly filling in basic gaps nearly six years after the Brexit referendum. This is continuity and compliance, as the noble Lord said, with an international agreement signed more than 20 years ago.
However, I will look primarily not backwards but forwards, as the noble Lord, Lord Whitty, did with his important focus on consumption emissions rather than just measuring territorial emissions. This debate comes on a day when both the Guardian and the ENDS Report carry articles from respected international figures expressing concern about the damage done to the UK’s moral authority, as chair of COP 26, by domestic decisions. Christiana Figueres, a key Paris climate talks figure, said:
“There have been recent decisions in the UK that are not aligning with the ambition of the net zero target. It is worrisome. There are raised eyebrows among world leaders watching the UK.”
What we have here is a problem not just with the decisions being made on roadbuilding, coal mines and airport expansion, but with the failure to deliver policies—the kind of slow, snail-like progress that we are seeing here today. Just look at a list of what the Government are supposed to deliver before COP 26: a heat and buildings strategy, a transport decarbonisation plan, a Treasury net-zero review, an England tree strategy, a hydrogen strategy, an industrial decarbonisation strategy, a nature strategy, and a net-zero strategy. Of course, we are still waiting for the crucially important Environment Bill, in the country ranked 189th in the world for its state of nature.
I do not expect the Minister to have complete answers to all these concerns today, but I ask him for an acknowledgement that the Government have heard these concerns from highly respected, knowledgeable, non-partisan international figures and are at least reflecting on them, and ask him whether he might acknowledge, at least privately, that attaching the label “world-leading” to every government claim is counter- productive and serves only to highlight, as today’s SI does, that the UK is currently profoundly unprepared for the climate emergency and nature crisis.
A “legally binding target” for net zero for 2050 is, in terms of its impact on members of the Government today, precisely meaningless. What matters is action— practical, workable, effective action today—to slash emissions by 2030. That is something the Government have to show progress on, once they are done with the catching up that this statutory instrument demonstrates.
My Lords, I am delighted to follow the noble Baroness. I welcome my noble friend Lord Callanan to his place and I look forward to his views. I also welcome the noble Lord, Lord Teverson, to his position and thank him for his excellent chairmanship of the outgoing EU Sub-Committee on the Environment.
I thank my noble friend Lord Callanan for his clear exposition of the statutory instrument, which I support as it gives a clear legal basis on which the UK register will function. Does he share my concern that there will be a number of months before any trading can take place? Is my understanding correct that these account holders have now left the international register and cannot start trading until June this year? If that is the case, I understand from paragraph 7.3 of the Explanatory Memorandum that his department is encouraging account holders to register with other countries. If that is the case, can he explain what the cost and administrative burden on these account holders will be? Does he accept my concern that this is a burden with which they could well do without? Is it the department’s intention that they continue to register on two registers—the UK’s and another country’s register—or is this meant to be a short-term fix for the five months until our register becomes operational?
Further, is my understanding from A5 in appendix 1 of the Secondary Legislation Scrutiny Committee’s report correct that the account holders have to register for two UK registers, effectively holding a register for the UK emissions trading scheme as well as for this one before us on the ETS allowances? Again, can my noble friend comment on what the cost and administrative burden to these companies will be?
Can my noble friend also assure me and other noble Lords who have asked him about this that we will not lower expectations on reducing greenhouse gas emissions now that we have left the European Union? What will be the mechanism? Will there be a role for the OEP under the Environment Bill in this regard?
My final point is that there has been no public consultation, but there has apparently been an ongoing communication with account holders. That is slightly alarming. Could my noble friend explain to us precisely what those forms of communication have been? If they have not been sufficient, is it therefore any surprise that no account holder has registered any dissent?
My Lords, I must admit that when I first looked at this instrument, I was severely disappointed with it. I can normally find in any secondary legislation at least 25 points of criticism to talk about for six minutes. Looking through these regulations, I could see nothing contentious at all.
That was until I started reading the explanation for them, which raised a number of concerns. One of them, which has been talked about a number of times, is the gap in trading. Given that we knew there was going to be a notice in this area, how come we have a gap in trading, even though only 112 organisations deal with it? I suppose that having to send our registrations on carbon abroad is one interpretation of global Britain, but that concerns me. I noted that the Minister said that the system was due in May, I think. He did not say that it would actually happen in May. I would be very interested if he would confirm that the system will be operational next month, so that we can all, let alone the users, have confidence in it.
I was also rather concerned by the last bullet point in paragraph 7.6 in the Explanatory Memorandum, which says:
“Amendments include … ensuring that provisions regarding the operation of KP registries are compatible with the software for the UK KP registry.”
That seems the wrong way round to me. Surely we design the software to meet the needs, rather than the needs to fit the software. I am interested to understand why it is that way around. Can the Minister assure me that we are not just buying an app from the Apple shop, or whatever? It seems very strange that we are not designing something that is right for this, but, rather, are having to change our systems to meet the software. I tried to look up the value of one of these traded units but could not find it, so perhaps the Minister could tell us, without conferring, the current-day price of these units. That would be very interesting to know.
I move on to an area of potential confusion for us all here between the Kyoto trading system and the new UK ETS. I realise that that is not the direct subject today, given the very important role of this new UK ETS, but it would be useful if the Minister could help us to understand this. Its first trading day is due in May, so it would be very useful to have clear understanding and to be certain that it will happen at that point. I know there is a wish, which I applaud—it may be a hope—that there might be a connection between the EU ETS and the UK ETS in future, giving greater liquidity for the UK market. I would be interested to understand from the Minister whether those conversations have started and already take place, or even whether that is still the Government’s wish or objective.
Lastly, in that area, consumption figures were mentioned, as was offshoring, which is one of the problems of having high prices on national emissions. Are the Government considering or investigating further a carbon border tax, which has been mentioned more broadly in the western world?
I agree absolutely with my noble friend Lord Redesdale about methane. One of the areas of climate change concern is that methane emissions have increased quite substantially, and what is perhaps even more worrying is that most authorities do not understand why that is the case. Any insight the Minister can give us on that would be very useful. The consumption figures are extremely important. I congratulate Defra, which looks after consumption, rather than BEIS, which looks after production, for that time series, and I encourage government to give it more publicity and more time.
I will not go into the broader issues of climate change and COP 26, which has been covered very adequately indeed by the noble Lords, Lord Whitty and Lord Howell, and by the noble Baroness, Lady Bennett, in particular, but even on these smaller issues, not least the UK ETS, it would be very good to have confirmation from the Minister about those important areas.
I add my thanks to the Minister for his introduction to the SI before the Committee today. As he said, the Kyoto Protocol and its mechanisms have been crucial in setting up co-ordinated international regimes to combat climate change. The treaty agreement has focused on green development through sustainable technology and investment. It has helped countries to meet emission reductions targets, removing carbon from the atmosphere cost-effectively, and has certified trading through registries to encourage industries and companies towards sustainability.
This statutory instrument continues the necessary arrangements to set up a complementary UK protocol registry following the UK leaving the EU emissions trading scheme, and I approve of it. However, as others have commented, the Government have not yet got the UK registry operational in time for the end of the transition period. The UK Kyoto Protocol registry will not become available until May this year, albeit that that is now only a few weeks away. Can the Minister confirm that everything is on track and that the trading of KP units will begin in June this year? Granted that priority has been given to the UK emissions trading scheme to be operational at the end of the transitional period in January, can the Minister confirm that this scheme has been embedded successfully and that the preparatory work undertaken so that the necessary international connectivities can proceed under this protocol will now proceed smoothly?
The Secondary Legislation Scrutiny Committee highlighted in its 48th report the possible impacts on businesses. Interestingly, neither the department nor the Environment Agency has received complaints from businesses about interruptions or costs as a consequence of this failure to maintain continuity with the EU registry. As the noble Lord, Lord Bourne, has asked, will any issues become more pressing by June, when businesses bear the costs? While being reassured that any damage may prove to be minimal, does the Minister expect any consequences at all? Perhaps he could comment further on the point that the UK KP registry serves as a distinct and separate policy from the UK ETS registry. Along with the noble Lord, Lord Teverson, I think that an understanding of these technicalities would be most helpful.
At this point in the process of establishing the UK regime, the future objectives and priorities of the scheme closely resemble those of the EU. Does the Minister’s department have any variations in mind that might enhance the UK’s path towards net zero? Any changes to the scheme, including calculations on emissions, must have only that intention and direction in mind in order to avoid the offshoring of emissions.
We are also somewhat in the dark regarding the Government’s intentions. The weakness of this statutory instrument is that it is silent on all this. How similar to and how compatible will it be with the EU scheme? Indeed, what links may there be at all? As my noble friend Lord Whitty asked, will the UK scheme address carbon demands within the UK economy or merely reflect production? Will it add to the focus on the need for more attention to methane emissions, as the noble Lord, Lord Redesdale, asked? There are also issues about possible competitive distortions in state aid to certain industries. The greater challenge is halting the relentless increase in global warming, as emphasised by the noble Lord, Lord Howell. It may well be a challenge to the Minister, but if he could reveal anything at all, that would be most helpful.
I thank all noble Lords for their contributions to the debate. The noble Lord, Lord Teverson, summed it up well. This is fairly uncontroversial territory and I am pleased that most Members are supportive certainly of the principle of this legislation. As I expected, most of the questions did not focus on the content of this fairly dry statutory instrument but covered a range of other areas connected to our emissions reduction and greenhouse gas policies. However, in an effort to be as helpful as possible to the Committee, I will endeavour to answer as many of those questions as I can.
The noble Lord, Lord Whitty, asked whether the methodology for measuring greenhouse gas emissions will not be changed by the UK. I can assure him that the UK will continue to report greenhouse gas emissions under the Kyoto Protocol using exactly the same methodology as it did when we were an EU member state. The noble Lord also asked whether the Kyoto Protocol allowances would be compatible with the UK ETS. I can tell him that, under the UK ETS, the Kyoto Protocol units will not be able to be converted to allowances, and international credits are not permitted in the UK ETS at this time. However, the Government and the devolved Administrations are open to reviewing the usage of offsets in future, especially in deciding how best to implement the carbon offsetting and reduction scheme for international aviation, or CORSIA as it is known, alongside the UK ETS.
The noble Lord, Lord Whitty, also suggested that the UK should include imported emissions in its climate target. That issue was also raised by the noble Baroness, Lady Bennett. In our view, targets should strive to follow the best available science and methodologies to account for emissions and it is currently standard international practice to set such targets based on territorial emissions. Including imported emissions would, of course, risk double-counting emissions that had already been captured in other countries’ national efforts.
The noble Lords, Lord Redesdale and Lord Grantchester, asked about the important subject of methane, as well as carbon. I can tell them that methane is covered under the KP and calculated as a CO2 equivalent, following internationally agreed methodology provided by the IPCC.
My noble friend Lady Altmann asked about the costs of the new domestic registry system and plans to bring together all our climate commitments. The UK KP register has been developed as part of the same IT project as the UK emissions trading system registry. The two systems share a lot of the same IT functionality and we are able to maximise economies of scale and increase value for money by housing the two separate registries on the same system. I know that she will approve of that.
My noble friend Lord Bourne of Aberystwyth asked whether we have provided guidance to businesses affected by the change in the registry. The answer is yes, we have provided regular updates to account holders about the changes. Account holders were given advance notice that the UK KP registry would be inaccessible for a period while the transfer from the EU to the UK system took place. They were advised that, should they wish to trade Kyoto units before the UK registry had been successfully transferred on to the new domestic platform, they could open a KP account in another country’s registry. As yet, we have no evidence to suggest that any businesses with accounts in the UK KP register have felt the need to take that step.
My noble friend Lord Howell rightly expressed concern about the urgent need internationally to reduce emissions and he made some good points, particularly about the number of current coal-fired power stations built by China and elsewhere. That indicates the challenge that faces us for the COP meeting, but I reassure my noble friend that we are making progress on international efforts to address these matters. That is certainly a priority for the Government through our presidency of COP and we will continue to make those points strongly to other member states, jointly with Italy and in partnership with many other countries.
The noble Baroness, Lady Bennett, in her predictable manner, made many of the same points that she always makes in these debates, not many of which had anything to do with the subject facing us in the statutory instrument, but let me reassure her that over the past three decades the UK has achieved record clean growth and has met its climate change commitments. Those commitments are indeed world-leading. I understand that they will never be enough for the noble Baroness, but nevertheless we think that we have made considerable efforts. Between 1990 and 2019, our economy grew by 78% while our emissions decreased by 44%, which is faster than any other G7 nation. The Prime Minister is building on that progress and has set out his 10-point plan for the UK to lead the world into a new green industrial revolution. This innovative programme sets out ambitious policies and significant new public investment to support green jobs, to accelerate our path to reaching net zero by 2050 and to lay the foundations for building back greener.
The noble Baroness, Lady McIntosh, asked about the impact of the changes to the KP registry on account holders. The instrument impacts a limited number of organisations that hold the Kyoto Protocol registry accounts. Our analysis has shown that the costs to businesses are expected to be minimal, as the instrument allows for the continued functioning of businesses through the operation of a UK KP registry, rather than making any substantive changes to existing policy. As I mentioned, account holders were advised that, should they wish to trade Kyoto units before the UK KP registry had been successfully transferred on to a new domestic platform, they could access another county’s register, but so far, as far as we are aware, none has done so.
I can also tell the noble Baroness that the UK will not be lowering its climate standards or commitments as a result of leaving the EU. Our UK ETS is more ambitious than the EU system that it replaces—I know that this will be hard for some noble Lords to appreciate, but it is true. From day one, the cap has been reduced by 5%, which just goes to show that, as usual, we can do things better than the EU does.
The noble Lord, Lord Teverson, asked about the gap in trading for account holders following the end of the transition period. As I said, we have provided regular updates to them. I earlier covered the point about what they could do in the meantime. The value of CERs, the most commonly traded unit on the Kyoto Protocol registry, is approximately 20p.
The noble Lord, Lord Grantchester, asked whether the registry will be ready for June and why there are two separate systems. I can reassure him that the scheme will be ready for trading in June. That may be a commitment that I will regret, but I give him it. We are working closely with the Environment Agency and the IT software developer and keeping in regular contact with account holders to ensure that the transition goes smoothly. The registry must be connected to the UNFCCC international transaction log. Before being reconnected, it must pass a series of tests that meet the international standards. The registry is currently undergoing those tests and is on track to pass them. Once those tests are passed, the register will be able to go live.
In response to the question of the noble Lord, Lord Teverson, about linking the UK ETS with the EU ETS, of course we recognise the importance of international co-operation on carbon pricing and the important role that international carbon markets can play. We are indeed open to linking the UK ETS internationally in principle. We are considering a range of options, but no formal decisions have been made at this point on any linking partners.
I hope that I have been able to reassure noble Lords, following the breadth of their questions, that the statutory instrument is worthy of their approval. I think that the only remaining question was from the noble Lord, Lord Bourne, about scheduling a debate. In asking the question, he predicted the answer: this is a matter for the usual channels. I am sure that the Whip has taken careful note of his concerns and will relay them to the Chief Whip, who will consider them accordingly. With that, I commend the regulations to the Committee.
The Grand Committee stands adjourned until 3.35 pm. I remind Members to sanitise their desks and chairs before leaving the Room.