Whitehall departments could trade carbon, says Ed Miliband

Low-carbon departments could one day help those in danger of busting their target, minister suggests
Allegra Stratton, political correspondent
guardian.co.uk, Wednesday 25 February 2009 16.34 GMT

Ed Miliband, the climate change minister. Photograph: David Levene
Individual government departments may be allowed to trade carbon allowances when new carbon budgets come into force in April, the climate change secretary, Ed Miliband, said today.
Miliband said arrangements under the plans – which will require all Whitehall departments to consider the carbon cost of policy decisions – were still being finalised, but it was possible low carbon departments could one day help those in danger of going over their targets.
In his first session in front of the newly created energy and climate change select committee, Miliband said: "There will inevitably have to be a process whereby, if a department breaches its carbon budget, then there will have to be implications."
He said this might include finding "space elsewhere".
When asked to explain where this would come from, he said: "The other departments coming in under their carbon budgets", adding that a form of carbon trading was one of the options being considered.
Miliband made clear that he expected all departments to "step up" to the task of trying to meet their targets and that it must be an "exacting discipline".
He said his department was "pushing at an open door" when dealing with the drive to low carbon policies in certain Whitehall departments, singling out the existing zero carbon schemes run by health and education for mention.
Anne Main, the Conservative MP for St Albans, said the idea would lead to "horse trading" between Whitehall ministries.
"What will happen is that, in the months before a carbon budget is due, a carbon intensive department will scrabble around trying to buy a bit more from a better department," she said.
"That's just not in the spirit of the thing and will not change the behaviour of those poorly performing departments."
The five yearly "carbon budgets" will be announced next month and will be policed by the climate change committee, which will report to parliament on the progress made annually. Ministers may ignore its recommendations.
Miliband told the committee he would like to see more than one "clean coal" power station piloted.
He is understood to be pushing the Treasury for further funding of carbon capture and storage (CCS) technology after being warned that private energy companies would not fund the unproven technology – which could possibly cost as much as £250m-£1bn for each power plant.
Miliband said the government should be more ambitious in the development of technology that captured and stored the carbon dioxide emissions from coal-fired power stations.
He added: "We've got to go beyond carbon capture and storage. I personally don't think that's adequate.
"I also think we should have more than one demonstration."
At the moment, there are three groups hoping to win the contract to become the demonstration site.
He said officials were looking into the European Investment Bank funding further CCS plants, but denied his department had fallen out with the Treasury over the funding model.
He said the nature of the technology required government support.
The energy secretary will visit the US next week to meet Barack Obama's climate change advisers, Todd Stern and Carol Browner.
His brother, the foreign secretary, David Miliband, met Hillary Clinton in early February.