Defra plunges climate control into chaos

UK - The pig industry is bewildered and angry. It has successfully reduced energy use - but it now finds the figures have been loaded by government in such a way as to turn a 'pass' into a 'fail'.
calendar icon 27 January 2003
clock icon 6 minute read
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NPA is active on members' behalf in Brussels & White-hall, and with pro-cessors, supermarkets & caterers – fighting for the growth and pros-perity of the UK pig industry.

National Pig Association is seeking an urgent meeting with Defra to thrash out some simple sums.

It wants to know why the pig sector has failed to reach its energy reduction target under the Climate Control Levy scheme, when Defra's own figures clearly show it has exceeded the target reduction by a significant margin.

Under the scheme, which has about 500 pig producer members, producers who achieved a 'pass' jointly reduced CO2 emissions by nearly 22,000 tonnes more than the minimum required saving of four percent.

Meanwhile producers who failed to hit the target showed a total deficit of 10,903 tonnes.

In other words, some farms reduced carbon dioxide emissions by more than they had to, whilst others reduced by less than they had to. "But as it is a pool scheme, all the industry had to do was to make sure the pluses exceeded the minuses," says Nick Bird of Farmex, a member of the NPA Climate Control Levy Group.

The pig industry argues that it is a very simple sum to reach the all-important net figure:

CCL pig sector scheme
Surplus 21,848
Less deficit 10,903
Total +10,945

The figures show the pig industry scheme has passed the four percent target by a significant margin.

However some members have signalled that -- as allowed for in the scheme rules -- they want to prevent their surpluses being used as part of pool figure. In other words they want to "ring fence" their personal surpluses as a buffer against any future shortfall against their own individual targets.

But even with ring fencing, currently estimated at 5,156 tonnes, the pig sector has still exceeded the four percent reduction by over 5,000 tonnes/CO2.

This should mean, argues NPA, that it has hit its first target and members can continue receiving their 80 percent reduction on Climate Control Levy as they move forward to the next milepost target set by government.

But Defra has done the sums differently. According to its calculations the industry is c.1,421 tonnes of C02 short of its target. This means that for the scheme to succeed NPA would now need to persuade producer members to un-ring fence c.3,735 tonnes of CO2.

Defra's sums are produced from their spreadsheet which is described as a "massive, complicated mess" by Nick Bird at Farmex. "Figures whiz from side to side, with all sorts of adjustments that seem to appear from nowhere."

Defra argues that whether the sector target is passed depends not only on whether producers hit the four per cent reduction figure -- but also on adjustments for "carbon trading" and/or "ring fencing".

Carbon trading is the process whereby a producer can buy carbon in order to reach his target.

But carbon trading has nothing to do with real energy saving, argues Nick Bird. "You can't see it or touch it. It's something that doesn't exist. It's not even trading in CO2 itself, which you can't see, taste, smell or touch. It's trading in the right to produce CO2. What kind of nonsense is that?

"Government told us the object was to reduce carbon dioxide emissions. We've done that. Whichever way you do the calculation, and by whatever method it has been done, that is exactly what the industry has delivered. On target, and on time.

"But now government is saying we have to allow for trading in this theoretical product - carbon dioxide that hasn't been produced."

Carbon trading, he says, has nothing to do with the aim of the Climate Control Levy which is to reduce emissions and save the planet.

"If there was no ring fencing or allowance for theoretical carbon trading, there would be no question: the industry would have passed the test. As it is - according to government's biased calculations - we have failed."

Hugh Crabtree, who chairs the NPA Climate Control Levy Group, argues that neither carbon trading nor ring fencing help reduce global warning.

"By insisting that ring-fencing was allowed, and making sure NFU [the scheme administrators] had to tell farmers they could do it, and making sure the NFU wasn't allowed to advise its members not to, Defra created exactly the situation which it seems it was trying to engineer - a paper commodities market in energy."

The concept of emissions trading was not introduced by government until late last year so it is not surprising that the pig industry has been caught unawares. What NPA wants to know, is why government is trying to encourage trade in a non-existent commodity.

"Emissions trading means, quite simply, trading in the absence of carbon dioxide - the right to produce CO2. This is a logical absurdity, but is much more attractive to government. It's clean, it's greenand it doesn't actually involve doing anything, other than pushing paper (and money) around," says Nick Bird.

The net result is that the pig industry has failed to meet its target reduction even though in reality it has reached and comfortably exceeded target.

Producers are now being pushed by Defra in the direction of have to buy the right to produce more carbon dioxide from "carbon traders", or else pay more tax to government.

It is insisting that all deficits are made up by CO2 purchase.

This is out of the question for producers since it would mean about half the scheme members having to pay about 390,000 in fees for accounts that need less than 20 tonnes each.

The indications are that buying just one tonne of CO2 would involve a brokerage fee of around 3300. "It's a nonsense," said Hugh Crabtree. "The civil service have made a complete cock-up of the whole thing."

Current NFU advice to some very confused pig farmers is to buy carbon dioxide if that's what Defra says you have to do (assuming you want to stay in the scheme) but also write direct to Defra if you have legitimate queries about their data not matching your own or if you think PMWS has prevented you hitting your four percent target.

Make sure you include the facility number in the correspondence and lay out in a table the output and energy consumption figures for the baseline year and the first milestone year with appropriate comments attached.

The contact is Duncan Egerton, Climate Change Team, Ashdown House, 123 Victoria Street, London SW1E 6DE.

Source: By Digby Scott, National Pig Association - 27th January 2003
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