Back to the Scottish Parliament Subordinate Legislation Committee Report
Archive Home

Business Bulletin 1999-2011

Minutes of Proceedings 1999-2011

Journal of Parliamentary Proceedings Sessions 1 & 2

Committees Sessions 1, 2 & 3

Annual reports

SP Paper 30

SL/S3/07/R13

13th Report, 2007 (Session 3)

Legislative Consent Memorandum on the Climate Change Bill

Remit and membership

Remit:

1. The remit of the Subordinate Legislation Committee is to consider and report on-

(a) any-

(i) subordinate legislation laid before the Parliament;

(ii) Scottish Statutory Instrument not laid before the Parliament but classified as general according to its subject matter,

and, in particular, to determine whether the attention of the Parliament should be drawn to any of the matters mentioned in Rule 10.3.1;

(b) proposed powers to make subordinate legislation in particular Bills or other proposed legislation;

(c) general questions relating to powers to make subordinate legislation; and

(d) whether any proposed delegated powers in particular Bills or other legislation should be expressed as a power to make subordinate legislation.

(Standing Orders of the Scottish Parliament, Rule 6.11)

Membership:

Jamie Stone (Convener)
Richard Baker
Jackson Carlaw
Helen Eadie
Ian McKee
John Park
Gil Paterson (Deputy Convener)

Committee Clerking Team:

Clerk to the Committee
Gillian Baxendine

Senior Assistant Clerk
David McLaren

Assistant Clerk
Jake Thomas


Legislative Consent Memorandum on the Climate Change Bill

The Committee reports to the Parliament as follows—

Introduction

1. At its meeting on 27 November 2007, the Committee considered provisions in the Climate Change Bill which confers on the Scottish Ministers powers to make subordinate legislation. The Committee submits this report to the Transport, Infrastructure and Climate Change Committee under Rule 9B.3.6 of Standing Orders.

2. The Scottish Government provided the Parliament with a legislative consent memorandum 1.

Delegated Powers Provisions

Regulations

Clause 36: Trading schemes

1. This clause provides the relevant national authority (defined in clause 39 as the Secretary of State, the Scottish Ministers, the Welsh Ministers or the relevant Northern Ireland department) with the power to set up trading schemes relating to greenhouse gas emissions, by subordinate legislation. The Explanatory Note (paragraph 156) gives the Carbon Reduction Commitment as an example of a trading scheme, described in the Legislative Consent Memorandum (referred to in this Report as “LCM”) as “involving large, non energy intensive users such as local authorities, hospitals and retail.”

2. Clause 36(2) defines a “trading scheme”, and clause 37 defines (very widely) activities that are regarded as directly or indirectly causing or contributing to greenhouse gas emissions, for the purposes of the definition of “trading scheme”. Essentially, a trading scheme either operates to limit or encourage limitation of activities that cause greenhouse gas emissions, or encourage activities that directly or indirectly contribute to reductions in emissions. (“Greenhouse gas” is also defined by clause 64 of the Bill.)

3. Initially, the power to make regulations is drafted so as to be exercisable independently by a relevant national authority, permitting different forms of trading schemes to operate in each jurisdiction (so that Scottish Ministers can make trading schemes by regulations, so far as that is within the scope of their executive competence and the legislative competence of the Parliament.)

4. Neither the Explanatory Notes to the Bill, nor the LCM, explain why it is considered useful or appropriate to have this provision enabling differences in forms of trading schemes in relation to greenhouse gas emissions, between Scotland and the other jurisdictions.

5. The Committee invites the lead committee to raise the following issues with the Scottish Government––

(a) the absence of justification and reasons expressed within the LCM for regulation-making powers that enable different trading schemes to operate over different parts of the UK;

(b) the way the powers are proposed to be used for Scotland; and

(c) how it is intended that regulations made under this Bill will interact with the proposed Scottish Climate Change Bill.

Clause 38 and Schedule 2: Matters that may or must be provided for in regulations

6. Section 38(1) and (2) introduce Schedule 2, which gives further details of the various matters that regulations on trading schemes either may or must include. Section 38(3) enables the regulations also to make provision about their application to the Crown.

7. Trading schemes can either be under Part 1 or Part 2 of Schedule 2. Part 3 deals with administration and enforcement of schemes. Part 1 schemes will operate by limiting or encouraging limitation of activities that result in greenhouse gas emissions. Part 2 schemes will operate by encouraging activities that result in reductions or removal of greenhouse gas emissions. Schemes can be made that operate to achieve results by combining different elements of Parts 1 and 2.

8. Paragraphs 157 to 170 of the Explanatory Notes to the Bill usefully explain further the various matters that may or must be included in a trading scheme, and the further provisions for administration, provision of information for, and enforcement of schemes, in Part 3. In short summary, schemes may include provisions for trading periods, activities and scheme “units”, participants, allowances (but not in return for payment), purchase of credits which may off-set activities, trading in allowances or credits, including with non-participants; (Part 2) targets, certificates to confirm activities trading in certificates, circumstances in which trading operates.

9. It is evident to the Committee that––

(a) these are very important provisions which will enable regulations to regulate activities which will either limit or encourage the limitation of the emission of greenhouse gas, or that cause or contribute to emissions (directly or indirectly), or which will encourage reductions in greenhouse gas emissions or removal of such gas from the atmosphere. The regulations would also establish a trading system in “allowances” or “credits” (including payments for these), to regulate activities; and

(b) while some elements where contained in regulations shall be mandatory, the whole contents, requirements and limitations of trading schemes shall be left to the regulations made by the national authorities under the Bill.

10. Further, in relation to the activities that may be regulated, the Committee notes that this is a very wide power, given the definition in clause 37 of activities regarded as indirectly causing or contributing to greenhouse gas emissions: including the consumption of energy, and use of materials in whose production energy was consumed. This appears to encompass, potentially, any forms of activity at all.

11. The Committee has two areas of concern in relation to these regulation powers. First, the LCM does not offer justification why these extremely wide powers are warranted, depending on what schemes and restrictions are intended. It may be claimed that flexibility is required through regulations for the proper operation and effectiveness of trading schemes, taking into account that schemes will contain measures to control greenhouse gases in new and developing areas of science, and also perhaps to avoid schemes becoming outdated, with the flexibility to adapt to other jurisdictions. On the other hand, the types of controls which can be included in regulations, and the potential areas of activities and industries regulated are extremely wide indeed.

12. Second, it is unclear how proposed regulations for Scotland under the Bill will interact with future provisions in any Scottish Climate Change Bill. There appears to be at least a potential for conflict between overlapping schemes or regulation of activities, depending on what the policy intentions of the Scottish Government are.

13. Taking into account that the LCM and the Explanatory Note to the Bill highlight that the UK Government envisages the Carbon Reduction Commitment as a Part 1, Schedule 2, scheme, it may have been possible for the Bill to have taken the approach of specifying the scheme or schemes envisaged in more detail, for example, by specifying the participants in the scheme, the regulated activities, the allowances or credit limits applying, etc. It may have been possible to have proposed that regulations may be passed by the national authorities where it was sought to vary the particulars of such scheme or schemes as set out in more detail initially in the Bill.

14. The Committee considers that it is also not clear on the face of the Bill in relation to trading schemes, or further explained in the LCM or the Explanatory Note, which schemes (and activities to which they apply) may be the subject of regulations made by the Scottish Ministers, as being matters within the legislative competence of the Parliament.

15. The Committee draws the attention of the lead committee to the absence of justifications or reasons expressed within the LCM for these powers, including the approach taken that further details of trading schemes (and activities regulated by schemes) shall be left to regulations under the Bill, and the way in which these powers are proposed to be used for Scotland.

16. The Committee invites the lead committee to consider whether clarification should be sought as to which types of schemes, and activities to which they apply, may be the subject of regulations made by the Scottish Ministers.

Clause 40: Procedure for making regulations

17. The Committee is content with this provision.

Clause 41 and Schedule 3: further provisions about regulations

18. The Committee is content with these provisions.

Clause 42 and Schedule 4 (Information)

19. Schedule 4 contains specific provision enabling the regulations under Part 3 of the Bill to include powers to obtain information by the national authorities, the Environment Agency and Scottish Environment Protection Agency, from electricity suppliers and distributors, and potential participants in a trading scheme.

20. Clause 42(2) has a “sunset” provision, that the information –gathering powers (but not the information-sharing powers) in Schedule 4 will cease to have effect on 1st January 2011, when it is anticipated they will no longer be required.

21. Paragraph 182 of the Explanatory Note to the Bill states that the intention behind these specific provisions in the Bill is to allow information to be gathered for the establishment of the Carbon Reduction Commitment scheme.

22. The Committee invites the lead committee to consider whether an explanation should be sought from the Scottish Government on why it has been considered appropriate to set out these provisions specifically in Schedule 4, in relation to a planned Carbon Reduction Commitment scheme (for example in relation to information obtained from electricity suppliers), while the further details of trading schemes are left to the regulations under the Bill.

23. The Committee notes that in so far as it would expect that the provisions set out in Schedule 4 would either be contained in regulations establishing or expanding the requirements of a trading scheme, the regulations would be subject to draft affirmative procedure, and it would agree that this would reflect the potential significance of these provisions.

Clause 46 (powers to make consequential provision)

24. The Committee is content with this provision.

Powers to make directions or guidance

Clause 33 (Powers to give guidance)

25. Clause 33(1) provides that the national authorities, jointly, may give the Committee on Climate Change established by the Bill guidance on the matters it is take into account in the exercise of its functions.

26. The Committee has no particular concerns on this power, but it does wonder why in all cases (except where the Secretary of State issues guidance under clause 33(2)) guidance requires to be jointly issued. Particularly, it is not clear why this should be the case for functions carried out by the Committee on Climate Change in Scotland that may relate to devolved matters.

27. The Committee invites the lead committee to consider whether further explanation should be sought from the Scottish Government on why guidance under this clause requires in all cases to be issued jointly by the national authorities, including in relation to functions of the Committee in Scotland that may concern devolved matters.

Clause 34 – powers to give directions

28. Clause 34(1) provides that the Committee on Climate Change may be given directions on how to carry out its functions. The Committee must comply with directions but cannot be given directions as to the content of any advice or report. Again, any directions on functions generally or its functions set out in Schedule 1 are to be joint from the national authorities.

29. Clause 34(3) provides that directions on the Committee’s duty to provide advice and assistance under clause 30, or on trading schemes under clause 40, is to be given by the national authority seeking the advice or assistance (including the Scottish Ministers).

30. The Committee invites the lead committee to consider whether an explanation should be sought from the Scottish Government on why directions under this clause require to be issued jointly by the national authorities, including in relation to functions of the Committee on Climate Change in Scotland that may concern devolved matters.

Clause 43 – powers to give guidance

31. The Committee is content with this provision.

Clause 44 – powers to give directions

32. By clause 44, the relevant national authority may give directions to the administrator of a trading scheme. The administrator must comply with directions. The Scottish Ministers are the relevant authority in relation to any matters within the legislative competence of the Scottish Parliament. This would appear to depend, therefore on consideration of the subject matter of the directions, of the particular trading scheme, and whether the matters relate wholly to Scotland. This will include general and specific directions.

33. This is a wide power to give directions to administrators of trading schemes, which in relation to Scottish Ministers, is unlimited in relation to subject matter, except for the directions requiring to relate to matters within legislative competence.

34. The Committee invites the lead committee to consider whether the Scottish Government should further explain the reasons for this power, and the way it is proposed to be used.


Footnote: