An independent and respected arbiter should measure compliance and progress and a set of mechanisms to address instances of non-compliance must be developed. The assessment criteria adopted should be as international as possible to allow a fair assessment of progress being made and to ensure that compliance is not at the expense of competitiveness. Some mechanism for returns should be established. There will be an additional administrative burden on companies. The extent to which 'flexible mechanisms' should be used in achieving the legally binding target.
Flexible mechanisms are the key to achieving lowest cost emissions reductions for our sector.
The UK oil and gas industry has consistently demonstrated its ability to innovate in both the development and utilisation of new technologies and in its business mechanisms and initiatives to reduce costs through such concepts as 'partnering'. The greater the freedom allowed to use this ability, the more likely it is that the twin objectives of compliance and commercial viability will be achieved. An increased tax burden would affect competitiveness and reduce, or eliminate completely, the ability of our member companies to invest in the development and installation of new technology. Investment currently earmarked for the UK would be rapidly switched to other areas of the world that offer a higher return. The Climate Change consultation paper holds up the voluntary agreement of the Chemical Industries Association as a successful example of such an approach.