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Tim Yeo, MP and Chairman of the Environmental Audit Committee


Tim Yeo, MP and Chairman of the Environmental Audit Committee, discusses his involvement with clean technology companies, the roles of politics and business in addressing climate change, the environmental rationale behind his Private Members Bill, the Energy Saving (Daylight) Bill – and his other views on other environmental issues with Anne McIvor, editor of Cleantech magazine.

 First published in Cleantech magazine November/December 2007. Copyright Cleantech Investor 2007 As an investor in clean technology companies and Chairman of the board of Eco City Vehicles, which recently listed on the AIM market of the London Stock Exchange, what are your views on the prospects for the sector?

Clean technology is one of the most exciting sectors in terms of investment and is likely to remain so. Eco City Vehicles is a good example of the sort of business opportunity which is emerging in this space. I have been involved in discussions with this particular company for more than a year and have become increasingly enthusiastic about its prospects. Eco City Vehicles has adopted a very pro-active stance towards the environmental challenge and I believe this will translate into growth for the business.

You are also on the board of AFC, another AIM listed company. How do you view the role of AIM in nurturing UK clean technology companies?

AIM is the ideal market place for these types of businesses. One of the strengths of AIM is its ability to accommodate newer, younger companies by offering a listing on a truly international market more cheaply than the main market of the London Stock Exchange. AIM is a success story for the City and clean technology companies are contributing to that success. We can expect to see a steady stream of cleantech businesses listing on AIM in the future.

How do you regard the role of AIM vs. the role of private equity and venture capital?

Different businesses will take different routes to fund raising. There are many venture capital operations providing a valuable role in financing clean technology companies. However, AIM is a more appropriate route for some companies. AIM was particularly suitable for Eco City Vehicles in that it provides a mechanism for valuing the shares owned by the staff: the senior management all have share options in the company.

Eco City Vehicles is a taxi services company which has applications for Low Emissions Zone (LEZ) compliance. What are your views on the London LEZ?

The LEZ is a pointer to the way in which cities around the world are moving. Concerns about air quality and greenhouse gases are certainly not confined to London. The LEZ concept is a good one and it has my support.

What do you think of the Congestion Charge in London? Has it been effective?

The London Congestion Charge has been a more controversial measure than the LEZ. My view is that it was too crude and that a more sophisticated mechanism might have been used. I fully support the principle of road pricing. However, technology should be applied to make road pricing much more targeted. It might have been more logical to have introduced an emissions charging zone than a congestion charging zone. The priority has to be tackling emissions of greenhouse gases from surface transport. And an emissions linked charge would, in my personal view, have received greater public support. The Mayor’s proposal to raise the charge for the most polluting vehicles (while the zero-emission vehicles do not pay) may be a step in the right direction. However, it is significant that other UK cities have not followed London’s lead in introducing congestion charging; the principle was rejected in Edinburgh in a referendum.

What are your views on the extension of Stansted Airport?

I have actively opposed the extension of Stansted Airport, not just because the Stansted flight path is over my constituency. The idea of building another runway at Stansted based on projections for future growth at the same rate as historic growth is ludicrous. The rise in traffic at Stansted has been due to the emergence of cheap, low cost flights. We will not see the same rate of growth in budget travel in the future.

Do you offset your carbon emissions when you fly?

Yes, I offset with PURE the clean planet trust. PURE uses only Kyoto compliant credits, so I am very comfortable about the standard of carbon reduction projects which are generating the offsets.

You are a member of the board of Eurotunnel. Are trains a better solution than planes?

The extent to which Britain has fallen behind other countries in respect of train travel is a tragedy. France has some 15 times more high speed rail track than the UK. There is enormous scope for trains to electrify and source renewable energy. Eurotunnel shuttle trains run on electricity, much of which comes from nuclear sources.

Is nuclear energy a ‘clean technology’?

I am pro nuclear energy. It is difficult to see how we can generate enough electricity to meet demand without resorting to nuclear power. Nuclear energy currently accounts for around one fifth of the UK’s electricity requirements and we are still struggling to meet our renewable target.

I fully recognise that I am at odds with much of the green movement in respect of my opinion on this subject. Nuclear is certainly a low carbon source of energy (though NOT a zero carbon energy source). However, it’s difficult to describe it as a ‘clean’ technology given the nuclear waste issue. I am confident that technology will be developed which will be able to deal with nuclear waste in the future. However, that day hasn’t arrived yet.

What are your views on offshore wind?

I have fought against a particular onshore wind proposal in my constituency, on visual grounds. However, offshore wind has a role to play. Wind can never be the main answer to the electricity supply question as supply from wind is intermittent. Offshore wind does not throw up the same problems as onshore wind – but there are other issues, notably the level of transmission losses from a wind farm located far out to sea.

What are your views on biofuels? Do they offer an opportunity for the British farming industry? What are your views on the ‘food/fuel’ debate?

My Committee is about to commence an enquiry into the subject of biofuels and will report next year. In my opinion, the priority for land use must be food. It is not morally justifiable to use land which has the potential to feed hungry people to be used to make fuel for Americans. Having said that, there is a role for biofuels and new technologies may offer the potential for more efficient biofuel production in the future.

Biofuels can distort the market for agricultural land and have already contributed to moving us out of an era of low food prices. In the UK, the availability of set aside land makes the ‘food/fuel’ debate less of an issue. Biofuels do offer a potential opportunity for farmers in Britain, but in most of the world farmers would be better off growing crops or raising animals.

As a keen golfer you will be aware that large volumes of water are required to maintain golf courses in many regions of the world. Do you anticipate future conflict over water resources in regions where leisure activities such as golf compete with other more critical requirements for water?

I am hopeful that the R&A <the governing body for the Rules of Golf in most of the world> will follow the lead of the French national authority, which has negotiated a ‘concordat’ with the French Government. French golf has agreed to adopt sustainable course management procedures which will minimise water consumption. In return, the French Government has guaranteed to supply enough water to ensure the basic maintenance of golf courses in times of drought.

I am optimistic that technology will contribute to finding solutions to the water challenge in the future. One of the companies in which I am a director, AFC, is developing fuel cells which will provide the power for reverse osmosis potable water production units in developing countries. The AFC application, when it becomes operational, is likely to offer much potential to alleviate the water problem.

You plan to reintroduce your Private Members’ Bill, the Energy Saving (Daylight) Bill. What was the environmental rationale behind this Bill?

My Bill, which was rejected earlier this year but which I now have the opportunity to resubmit, proposes to alter the clocks to make the evenings lighter, in both summer and winter. It would mean that in winter we will be on Greenwich Mean Time plus one hour (the equivalent of British Summer Time) and in summer on GMT plus two hours. The environmental rationale is that we can save electricity by not having to switch our lights on until later in the evening. This will result in a reduction in the energy peak load level, even accounting for the higher demand in the morning. Even a small reduction in peak demand can have an important impact on overall costs as we will no longer need to have so much generating capacity in reserve. This could cut everyone’s electricity bills and it will also help cut carbon emissions and therefore address climate change.

You have openly criticised Tony Blair’s track record on climate change on more than one occasion in the past. Do you think Gordon Brown will do a better job?

I would love to think that Gordon Brown will do a better job than Tony Blair, but so far there have not been many signs of that. The last five years at Treasury have shown Mr Brown to be reluctant to take the bold steps required to make the changes needed to address the issue of climate change. He is risk averse by temperament, which I’m afraid means he is less likely than others to take the bold steps we need. However, Mr Brown will have my full support on appropriate measures he takes to tackle climate change. The climate change issue overrides party allegiance!

David Cameron is known for his ‘eco’ credentials. Would a Conservative Government lead the world in tackling climate change?

I fully encouraged David Cameron in his adoption of the environmental mantle after his election as Conservative Party Leader and he has got off to a tremendous start in raising the profile of environmental issues. I strongly believe there is potential for Britain to regain a leading position in the world in this area under a Conservative Government. Britain was probably the most influential nation in terms of the climate change agenda under the Conservative Government of Margaret Thatcher. Influenced by Sir Crispin Tickell, Mrs Thatcher was instrumental in kicking off the climate change debate internationally in a speech to the United Nations in 1989 and Britain set the pace during the years running up to the Rio Summit in 1992. However, this leading position was given up under the leadership of Tony Blair, who failed to follow up on the momentum.

Britain still commands much respect on the world stage, however. The US in particular is very interested in how Britain is tackling the problems, especially with respect to mechanisms such as carbon offsetting. There is scope for Britain to lead the way again in the future!

What is the role of business in tackling climate change?

It is important to recognise that the climate change issue straddles the areas of politics and business. The smart people are those who recognise the business opportunity. Companies which are already active in businesses with climate change applications will have a huge first mover advantage – as has already been demonstrated with hybrid cars. There is a growing interest on the part of business and companies such as the London Stock Exchange in climate change issues.

Al Gore has recently become a partner in west coast US venture capital firm KPCB. Should politicians be active in promoting environmental business?

Al Gore is a one off. As a former Vice President of the US he commands international recognition and he has been focused on this one issue for a long time. His involvement in investment in clean technology is a very positive thing and will serve to remind people that the green agenda is not inimical to business. As a capitalist, I believe strongly that it is possible to make money by investing in businesses which are involved in the environmental area. What unites most of the businesses I have become involved with as a board member (Eurotunnel, ITI, Eco City Vehicles and AFC) is that they are all promoting low carbon activities.

How do you view the role of supranational bodies such as the UN and EU in the fight against climate change?

Environmental issues, especially climate change, are increasingly supranational issues and bodies such as the UN and EU have critical roles to play. My Committee engages actively with the G8 Plus 5 initiative which was formed to improve cooperation on climate change.

The EU plays an increasingly important part in determining environment policy, specifically with regard to areas such as transport, which is a reasonable thing. With respect to the EU, it is probably fair to state that my stance is less sceptical than some of my Conservative Party colleagues. As an institution, the EU is here for the long run – especially now that it comprises 27 nations as members. I consider Britain to be a net gainer at an EU level, although I would criticise the institution in general as being too bureaucratic. EU standards apply to businesses at all levels – including companies such as Eco City Vehicles and it is important for British business that the UK plays an active role in influencing EU policy. I am personally engaged in EU politics and visit Brussels regularly. The EU has led the world in carbon trading through the EU ETS (Emissions Trading Scheme). Phase 1 of the ETS was flawed (my Committee compiled a critical report). However, Phase 2 looks set to be better. The next two years will be critical ones for the EU carbon trading scheme.

How important is the role of the Committee you chair, the Environmental Audit Committee, in influencing policy on climate change in Westminster?

Select Committees play an important role in the Westminster Parliamentary System. The composition of Committees reflects the balance of MPs in Parliament. The majority of my Committee, therefore, are members of the Labour Party. By convention, the Chairmanship goes to a member of the minority party.

Select Committees in Westminster are not entirely analogous to select or special committees in the US. Unlike committees in Washington, we cannot propose new legislation. However, in many respects we perform a similar role to US committees.

My Committee, the Environmental Audit Committee, is very instrumental in influencing policy and its current remit is to focus in particular on climate change issues. The Committee has the power to pull witnesses from all areas of government, including ministers, civil servants and the Environment Agency. It produces twelve reports annually.


Tim Yeo, MP for South Suffolk, was a member of the Thatcher and Major Governments. In his last Ministerial post, as Minister of State for the Countryside and Environment, he developed climate change policy and established the Energy Saving Trust. He was a member of the Shadow Cabinet from 1998 until 2005, when he resigned in order to speak freely about issues such as the environment. Since then he has served as Chairman of the cross-party Environmental Audit Committee.  He sits on the boards of five companies and is an active investor, focusing in particular on companies with applications for reducing carbon emissions.
 
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