"We see ourselves as a bridge between the EU and the US"

  • 29/04/2004

The UK is in a peculiar position, as it shares close ties with the United States but is part of the European Union. The US however, is less proactive on climate change issues, and is unwilling to join the Kyoto Protocol. What are you doing to bring your partner in line with the international community on this issue?
The UK is in a unique position and we do have our foot in both camps. However, we do see ourselves as a bridge between the EU and the US. We are very active, proactive and involved in the EU and have close and friendly relationships with many of our EU partners. But, it is also true that we have a close and friendly relationship with the US for historical and cultural reasons. But we don"t agree with the US on climate change and we have said so.

Tony Blair, actually, in his speech to Congress recently referred to the fact that countries like the US and the UK have a responsibility to engage in the Kyoto process. I think that was the one bit of his speech that he didn"t get a standing ovation for. We are not afraid of saying so to them. We have already gone past our Kyoto target of 12.5 per cent and are at around 14 per cent now. So, we don"t agree when people from industrial countries like ourselves say that these reductions are ruinous to the economy. We have done some very sophisticated modelling on the impacts of carbon reduction and carbon trading. We also believe that while there is a cost, the fact is that the British companies who got their energy efficiency up and their greenhouse gases down are benefiting from their increased competitiveness and reduced energy costs. So, it is not all negative for the industry to meet the climate change targets, tough though they are.

The industry does not seem to agree with you on the cost of mitigating greenhouse gas emissions?
They are not hugely enthusiastic about the targets but it"s perhaps not fair to say that. Some sections of industry have been publicly quite supportive. Even Digby Jones, the chief executive of the Confederation of British Industry, who did make some critical comments about the targets that we have set, has said that he is not against the UK going further than other countries and setting the pace, because there are advantages in doing so. He has his concerns about the detail of the targets and the impact it may have on the UK industry in terms of its of its competitiveness.

So, how do you intend on allaying those concerns?
I think that Digby Jones underestimates the fact that in relation to European carbon trading targets, it is binding on all European countries. It is not discretionary. And while we have set ourselves such tough targets, tougher than some of the other European countries, some of them have got an even bigger gap to cover to meet their existing targets. So, they are going to have to take some very tough decisions to achieve what they agreed to, let alone going past that. Other European countries do face being fined in the European courts if they do not meet their targets.

We cannot mitigate climate change unless the world is in it together. And the instrument to do so is the Kyoto Protocol, which awaits Russia"s ratification. Now it seems that Russia"s decision on Kyoto is stuck because the EU demands Russia to change its energy pricing as a precondition for its entry into the World Trade Organization. What is the UK doing to break this deadlock?
Russia knows it is important that they ratify, which is not unrelated to its attitude. We have been actively engaged with Russia and the way that we have been doing that is to demonstrate to them that it is in their economic interest to ratify. Russia is a bit worried about the effects on its economy and on its industry. We have some of the world"s best science, the best modelling on climate and the economics of it and we have been demonstrating to Russia that they have economic benefits to gain by ratifying Kyoto and the carbon trading scheme. We are pushing that argument very strongly.

But the issue is not the science or the economics. Russia is playing the advantage it has to gain entry into the WTO. So, is the EU going to soften its stand on energy pricing in Russia?
We obviously are negotiating with Russia and indeed all the WTO partners. And energy pricing is obviously one of the issues that we will be talking upon. I don"t think that we want to be held to ransom on issues, but we always try to reach a position that we can all agree upon. And sometimes, that does involve a bit of give and take.

Genetically Modified Organisms (GMOs) is another issue on which the UK is caught between its European partners and the US. And here, you are much closer to the US than the EU.
Not really. Germany has just announced that they are going to give approval to GMOS. That"s before us.

The recent field trials on GM crops in the UK show a negative impact on biodiversity. So, what is on the UK"S GM agenda now?
We have been incredibly cautious and methodical on the whole issue of GMOS. There was a moratorium on commercialisation while field trials were conducted. And it is the biggest and most detailed study of its type in the world. It has attracted a lot of attention because of the outcomes. We have also held a detailed economic evaluation, and a scientific review of all the published information. This is a global review looking at all the international science. We have also had a national debate to involve the public and let them have their say and to discuss the arguments. We have also set up an independent Advisory Committee on Releases to the Environment (ACRE) with all independent scientists who represent a cross-section of the opinion as well. We also have the Advisory Committee for Novel Foods and Processes as well, which deals with GM foods. So, we have a whole battery of measures and controls. The EU has now agreed to threshold limits and labelling limits, which we were keen to have. We also have our own controls and we are reviewing those. We have our GM inspectors. We are in the process now of responding to the advice from ACRE.

Now, as you quite rightly say, what the field trials said was that two of the three crops came out worse on biodiversity than conventional crops. Maize turned out to be twice as good. This is despite the claims by some groups that the test was unfair. So, if we were going to approve maize - we haven"t made that announcement as yet and will be doing that around the end of February - then there would be more tests as the ACRE has advised that.

The British scientific community is quite keen on getting GMOS, quite like India. But the public doesn"t want it. How do you tackle such a major divergence? You do have to take the public into confidence…
Whether we like it or not, GM products are a fact of life. It is a global market. We have GM maize on sale, which for years has been mainly used for food processing in the UK. So there is nothing new about GM products being in the UK market, and of course, it is widespread globally. So, the way to deal with it is to ensure that there is proper labelling and traceability that allows consumers to choose. So if consumers don"t want to buy GM, they don"t have to. We also agree to the Cartagena Protocol on Biosafety, which calls for the same kind of test globally. So, if you can"t have a GM product in a country like the UK, you can"t use the product in developing countries because they must go through the same process of scientific evaluation. But, I don"t believe, at the moment, that there is much of a market for GM products in the UK. So it is likely that whatever we do in the foreseeable future, GM crops will not be prevalent in the UK, because there is no market demand.

Another recent study, based on 100 years" marine trawl data on fish catch, showed that the schools of fish found around Britain"s coast have completely changed due to global warming. Could you comment on this?
We have some good science on fisheries. We have the Centre for Environment Fisheries and Aquaculture Science that did the work for us. We also work with the International Convention on the Exploration of the Seas, which is a collaboration of North Atlantic scientists. So, we have good science on this issue. And the biggest impact on fish stocks is overfishing, which is a real international problem.

But is declining fish stocks also because of climate change?
There is a climate change impact. There is some evidence that cold-water species like cod, which are in severe decline in the North Sea, are moving further North because their peak years of reproduction are linked with low water temperatures. And the North Sea is warming. While I emphasise that the biggest impact on cod is overfishing, it is likely that global warming is having an impact on its productivity, its reproduction rate and causing it to go further north. And it is also the case that other warmer water species are beginning to appear in the North Sea. Some of the Mediterranean species, which are warm-water species, are spreading far north. So, there are changes, which are linked with temperature changes.

A recent United Nations Environment Programme (UNEP) intergovernmental meeting explored the possibility of creating an intergovernmental panel on environmental change. But that proposal met with widespread opposition…
There has been widespread opposition, I"m afraid.

Now, this appears to be a part of an approach to convert UNEP into a body that coordinates the work of various MEAS, which is very diffused at the moment.
We strongly support that approach. We have joined France in a working group to look at the idea of UNEP becoming a more formal body, an intergovernmental body. But the US is not very keen on this and in fact, the G-77 are not very keen either. So, while we are certainly sympathetic to the approach and we are prepared to look at it, at the moment, there is too much opposition.

So what are the UK and the EU, which strongly supported this proposal, going to do?
What we need to do, now, is to ensure that bodies like the UNEP, the Commission on Sustainable Development (CSD), and the Convention on Biological Diversity (CBD) are effective bodies and not just talking shops. There are too many international talking shops and people meet somewhere usually quite nice for a week and produce a worthy ministerial statement that then usually gets watered down to become so vague as to mean anything. And everyone goes home thinking they"ve done something useful. I don"t think that is very useful. That"s not what we feel in the UK. We want to see fine words translated into action and we are committed and we are prepared to go it alone.

Johannesburg did bring out some useful agreements in relation to targets and action plans, not as many as people would have liked but it brought out some, and in fact water and sanitation was one. Now we really want to see some progress on this. We want to see progress on things like forestry in relation to good governance certification. We are the world"s fourth largest consumer of timber products. We want to use that power to help countries that are putting good management in place, squeeze out the illegal timber and poor management, because if you close markets off, then you bring about a complete change. So those are some of the practical things we can do. And we can do that as an individual country, through the EU collectively and also internationally through the various conventions that we are very active in. We have also doubled our aid budget. And we are totally committed to moving forward on the targets that we have agreed to in Johannesburg and other international forums.

But many of the less developed countries do not have the technologies nor the wherewithal to put better governance practices in place. There doesn"t seem to be much happening in terms of support for them there…
It is happening but it is not happening fast enough. For example, we have signed a MoU with Indonesia, where we are providing financial and technical support on their governance, procedural and certification processes. We are also doing some work with Cameroon. We accept that creating enforcement and regulation mechanisms is one thing. You also have to help countries put their certification and their management and governance systems in place. I accept that we have got to build up the capacity and that is part of our development programmes. But there is so much fraud and corruption and crime. If we can just stop the illegal market, then we can remove the incentive for that illegal activity, which is what we are trying to do.

Even the increase in UK"S aid budget is still way below the target of 0.7 per cent of GDP as official development assistance set more than a decade ago. Even the target of 0.4 per cent for 2005-06 is not sufficient for achieving sustainable development. Don"t we need more?
You do need more and that is why the budget has been doubled. And I accept that we haven"t hit the UN target and I don"t think any country actually has. But you have to bear in mind that we are the world"s fourth largest economy. So, 0.4 per cent of our GDP is a lot of money and it does make a difference. But, I quite agree. We have financial pressures and priorities, too. Nevertheless, we have been able to find more money for overseas development and we will continue to do so. Also, our aid budget is not the only form of help we offer. We help in terms of sharing our technology and our science with developing countries and by inviting people to work with us who take back the skills.

More resources can be generated for sustainable development provided developing nations are allowed to develop through fairer trade. Now, unless and until the EU does something about its agricultural subsidies, we will not have meaningful outcome out of the current round of negotiations in the WTO, supposedly the development round...
I quite agree. But, that applies to the US as well. We have led the way through the reforms we reached in the mid-term review, which are quite fundamental. And I don"t think people, not even in the EU, have grasped how fundamental those changes are. Production subsidies have been taken away. The link between subsidies and production has been broken. The subsidies haven"t been completely removed. They will receive direct payments, rather than production payments. So, there will no longer be incentives, which was the worst part of the Common Agricultural Policy (CAP). People were growing crops whether there was a market for them or not, and it didn"t matter because they were being paid. If there were no market, then of course, their produce would be taken under the CAP systems and would be disposed in the world markets with the consequences on developing countries, which we have always objected to in the UK.

We have a very clear position on this. We believe that the CAP should be fundamentally reformed and the subsidies should be swept away and the export guarantee should be abolished. We are very clear and very hardline on this, though I wouldn"t want to claim that our view is completely shared on this within the EU. But we have made a lot of progress. We have come a long way in relation to CAP reform. The biggest change now is that there is no longer an incentive to grow crops when no one is going to buy them. And if no one buys their crops, then they are going to be stuck with them. There is no more intervention and no more subsidy. So, what will happen is that the market will change and the farmers will make a lot more market-oriented decisions. And the result of that will be lesser surpluses dumped on the world markets, which will help world prices. Ironically, it will also help farmers in EU. CAP is hurting EU farmers because it distorts prices and it hasn"t worked in their favour. It hasn"t certainly worked in the consumer"s favour and has been terribly damaging to the environment. I do see big changes in EU agriculture as a result of the mid-term review and I think those changes will be very beneficial for developing countries.

Decoupling subsidies from production is only a small step. A penny in the pocket of the farmer is penny in the pocket of the farmer and that will distort prices.
I agree. But, it"s not a small step. It"s a big step, a step on the way. The other thing that we are doing in the UK - and we are the only country in the EU to do so -- is that we have taken up the option of diverting 10 per cent of the total payments into our environmental budgets. So we are diverting money meant for agricultural subsidies into our environmental and agri-environment budgets, and are instead using that to fund environmental management programmes that are, of course, non-trade distorting. And while it was strongly opposed in the negotiations, many other EU countries are showing interest at what we are doing and we expect Germany to follow suit. Even Ireland is very interested, while France, a big defender of subsidies, has found itself more isolated on the issue. France does not want any change. They love subsidies. They are quite cheeky. They say it is the European way. It isn"t.

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