10 DOWNING STREET LONDON SW1 2AA 26 September 1996

Dear Lord Melchett

Thank you for your letter of 21 August which addresses a number of environmental issues in and around the United Kingdom, especially in the Western Waters area.

The Second Assessment Report of the Intergovernmental Panel on Climate Change (IPCC) reminds us that the threat of climate change is one of the greatest challenges that we face. John Gummer made clear at the recent Conference of the Parties to the Framework Convention on Climate Change, in Geneva, that the United Kingdom believes that the IPCC has demonstrated the scientific basis for precautionary action to achieve significant reductions in emissions of greenhouse gases. We do not accept the arguments of those, including certain oil and coal producers, who deny climate change or claim that their financial interests should be put first.

The UK is playing a leading role in responding to the threat of climate change. We are strong supporters of the Framework Convention on Climate Change, which I signed on behalf of the UK at Rio in 1992. The Convention has as its ultimate objective the stabilisation of greenhouse gas concentrations at a level that would prevent dangerous man-made interference with the climate system. It commits the UK, as a developed country, to return emissions of greenhouse gases to 1990 levels by 2000. As a result of our wideranging climate change programme we expect to meet that commitment and for carbon dioxide emissions to be between 4 and 8 per cent below 1990 levels by 2000.

Sadly, the UK is one of only a few countries that are expected to meet their Rio commitment. John Gummer said at Geneva that no developed country has any excuse for not taking action now and proposed a number of cost-effective measures which all countries could take. Removing subsidies which perversely encourage the use of fossil fuels is a key prerequisite for the success of policies which will reduce greenhouse emissions.

The Rio commitment is only the first stage. We are engaged in developing targets for reducing greenhouse gas emissions beyond 2000 for the next Conference of the Parties in Kyoto in December 1997. The UK has called on developed countries to sign up to reduce emissions by up to 10 per cent below 1990 levels by 2010 - a challenging but achievable target. European Ministers in June agreed that significant reductions in greenhouse emissions are necessary.

It is vital that we reduce the contribution to greenhouse gas emissions of the burning of fossil fuels. However, to jump from there to banning fossil fuels would put at risk the progress that we and industry are already making. Using fuels with a lower carbon content reduces the impact of fossil fuels. Liberalisation of the energy supply industry has allowed generators to do this in the UK. There is also great scope for improved energy efficiency which we are promoting throughout the economy, such as our strategy of increasing fuel duties in real terms. The measure is encouraging drivers to drive more efficiently and manufacturers to produce vehicles that are more energy efficient. And we are helping new and renewable energy sources, such as solar electricity, to get a foothold in the market through the non fossil fuel obligation (NFFO). These are all part of our existing programme to deliver savings by the year 2000. When we have agreed post-2000 targets we shall decide what further measures may be necessary.

These actions will promote the more efficient use of fossil fuels and continue to reduce greenhouse gas emissions. Nonetheless, existing fossil fuel resources are being consumed and additional reserves need to be found to ensure the country has the resources to sustain it into the next century. The region to the west of the Shetland Islands represents one of the remaining offshore areas in the UK where oil and gas reserves may be found. This area is being opened up for exploration in an environmentally sensitive manner.

You refer to the potential contribution to meeting UK energy needs of solar power, particularly photovoltaics (PV). However, the size of available resources is only part of the equation. The costs of converting that resource have to be taken into account.

The New and Renewable Energy Programme of the Department of Trade and Industry (DTI) is responsible for assessing when the different forms of renewable energy are nearing the stage at which commercial deployment becomes feasible; stimulating an initial market through the NFFO; removing inappropriate market barriers; stimulating the development of new technologies; and encouraging the development of internationally competitive industries. The Programme has already carried out a number of projects on PV, including the study to which you refer. The DTI considers that the use of PV panels on commercial and industrial buildings will be a significant opportunity in the medium term. The costs of generating electricity from PVs are falling: unfortunately, they remain high when compared with conventional forms of energy, and with some other forms of renewable energy such as wind power, energy from waste and landfill gas. That is why there are currently no NFFO projects based on PV generation.

The possibility of incorporating PV into the refurbished DTI Headquarters and in the new Department of the Environment building was considered at the time, but was found to be uneconomic. I am sure that you will appreciate that the need to control Government expenditure means that resources must be used efficiently.

Nevertheless, the Government is committed to supporting the development of PV. In addition to expenditure from the DTI New and Renewable Energy Programme (approximately £500,000 a year), the Engineering and Physical Science Research Council is supporting more fundamental research as part of its clean technology programme (£1.3m this year), and the Technology Foresight Challenge will also be providing £1m to support a project to put PV panels on a hundred schools.

You also refer to the deep water fish stocks to the West of Scotland.

I can assure you that the Government has not been encouraging over-exploitation of this fishery. On the contrary, we are supporting scientific efforts to improve our understanding and protection of such stocks with a view to exploiting them on a sustainable basis. At the international level, we participate in the work of the Advisory Committee on Fishery Management (ACFM), which has established a study group on deep water fisheries. At the domestic level, the Scottish Office Marine Laboratory in Aberdeen is also actively engaged in a consortium which is carrying out research into the deep water stocks. One of the particular aspects being looked at as part of the research is the interaction between such stocks in a fragile environment. This will usefully add to the information which is already available from earlier research, such as that carried out by the Scottish Association for Marine Sciences and the Directorate of Fisheries Research Lowestoft.

On the basis of what is presently known, we would certainly accept that the nature of these deep water stocks are particularly vulnerable to over-fishing. However, effort allocations have already been introduced in relation to deep water stocks in certain parts of the Western Waters area and, if ACFM advises that it is necessary, total allowable catches can be introduced.

As you are aware, such measures are subject to international agreement. However, you may rest assured that we fully recognise the fragility of the stock and will take this into account in future discussions with the Commission and other Member States.

The Government regards next year's special session of the United Nations General Assembly as an important occasion for reviewing progress since Rio and in setting the agenda for the next few years. I understand that you were invited to a joint UNED-UK/DOE seminar at Green College, Oxford on 24 June, but that you were unable to attend. You may be interested therefore in the enclosed copies of the DOE's paper for the seminar and of the chairman's conclusions.

Yours sincerely

John Major