Report stage, 3rd reading in the Commons
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The Parliamentary Under-Secretary of State for Energy and Climate Change (Joan Ruddock)Labour- Quote
- I beg to move, That the clause be read a Second time.
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Mr. SpeakerCrossbench- Quote
- With this it will be convenient to discuss the following: New clause 14—International aviation and shipping emissions ‘(1) The Secretary of State shall lay before Parliament a report including— (a) a projection of the level of emissions he expects to arise from international aviation and shipping which are the result of UK economic activity, (b) an explanation of the methodology used to make this emissions projection, and (c) the way in which any carbon budgets have been adjusted to take account of such projections. (2) When making the above projection, the Secretary of State shall have regard to international carbon reporting practice. (3) The projection shall cover any year for which a carbon budget has been set, and may include any other years that the Secretary of State considers appropriate.’. Amendment No. 68, in clause 10, page 6, line 26, at end insert— ‘(i) the emission of greenhouse gases from international aviation or international shipping that the Secretary of State expects to arise during the budget period, as reported pursuant to section 15(5A).’. Amendment No. 72, page 6, line 26, at end insert— ‘(i) the emissions of greenhouse gases from international aviation or international shipping that the Secretary of State expects to arise during the budget period.’. Amendment No. 69, in clause 27, page 15, line 24, at end insert— ‘(5A) If emissions of a greenhouse gas from international aviation or international shipping are not required to be included in the statement by virtue of subsection (2), it must state the level of such emissions that the Secretary of State expects he will have to report in accordance with international carbon reporting practice for each budget period for which a budget has been set.’. Government amendment No. 36. Amendment No. 3, in clause 29, page 16, line 9, leave out out from ‘Kingdom’ to end of line 13. Government amendments Nos. 42, 43 and 50.
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- Joan RuddockLabour
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- Before setting out my reasons for tabling the new clause, I should like to pay tribute to my hon. Friend the Member for Oldham, East and Saddleworth (Mr. Woolas), who led on all the earlier stages of the Bill, and my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs, who led the discussions in Cabinet. International aviation and shipping have long been contentious issues in relation to climate change and the subject of much Back-Bench interest, as illustrated by the huge support for the early-day motion tabled by my hon. Friend the Member for Edinburgh, South (Nigel Griffiths). The Government agree that action to reduce emissions from international aviation and shipping will be vital to global efforts to tackle climate change, which is why we are taking forward a range of measures to reduce the impact of international aviation and shipping on the environment. Discussions on including international aviation and shipping in a post-2012 regime under the Kyoto principle have begun, and the UK is actively lobbying for support within the international community. Following pressure from the UK, legislation to include aviation in the European Union’s emissions trading scheme has been signed off in Europe, and it is expected to save about 200 million tonnes of carbon dioxide by 2020. We are also working with the International Civil Aviation Organisation on international aviation and climate change to try to reach agreement on targets that will drive increased action on emissions in the aviation sector. We continue to press for an international emissions trading scheme for the maritime sector under the International Maritime Organisation. The Government recognise the need to give serious consideration to how emissions from international aviation and shipping are approached in the Climate Change Bill. That is why we agreed to the approach proposed by the other place: that either those emissions should be included in the Bill’s targets and budgets within five years of Royal Assent or an explanation should be laid before Parliament stating why that has not been done. I want to attach as much certainty and transparency as possible to this requirement, and amendment No. 36 would do exactly that. It would change the deadline for inclusion or explanation from within five years to 31 December 2012. That definite date is nearly a year sooner than what is currently provided for in the Bill. Furthermore, in response to the views of the shadow Committee on Climate Change, new clause 15 places a new duty on the committee to advise the Secretary of State on the consequences of including emissions from international aviation and emissions from international shipping in the targets and budgets. The committee would be required to provide that advice at the same time as it provides its advice on each carbon budget. That requirement would begin in 2011, when the committee advises on the level of the 2023 to 2027 budget, and would apply every time it advises on carbon budgets thereafter. The duty would remain in place to the extent that emissions from international aviation and shipping were not included within the Bill’s targets. If emissions from international aviation were included in the future, the committee would still be under a duty to provide advice on international shipping emissions, but if, at some point, all emissions were included, the advice duty would no longer apply.
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Mr. William Cash (Stone) (Con)Conservative- Quote
- Would the Minister care to comment on a problem that could easily arise if, on the one hand, the committee has a legal duty to give effect to the provisions that she has mentioned and, on the other, clause 6 gives the Secretary of State a power to amend in the light of European law? What would happen if European law said one thing and the committee, which had a duty to give advice to the Secretary of State, said another? Which would prevail?
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- Joan RuddockLabour
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- I know that the hon. Gentleman has some difficulty with European law, but I assure him that the committee would undoubtedly make proposals that would be consistent with European law.
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Mr. John Gummer (Suffolk, Coastal) (Con)Conservative- Quote
- Could the Minister help the House by telling us what the Government are doing to further these discussions, particularly in respect of shipping? Some indication has been given, particularly by the Danes, that we might not have been as advanced as some other countries in trying to find a suitable way to handle the difficult issue of shipping emissions. Can she assure the House that the Government will lead on this matter? The UK is historically a shipping country, so we would like to see that happen.
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- Joan RuddockLabour
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- I agree with the right hon. Gentleman about how important it is for the UK to be in the lead. I do not know what the Danish opinion of us is, but there is competition between our countries at times, not least in respect of offshore wind. I understand that we have been very active in the International Maritime Organisation, that we have made proposals and that we have made funds available to assist in this process. We want to do our best, and I take the right hon. Gentleman’s comments seriously. I was explaining how the duty would cease to exist if all the emissions were included in an international agreement. The shadow committee has been considering this question in some depth. Lord Turner’s recent letter to the Secretary of State gave his view that “the scope of the Climate Change Bill should not be extended to include international aviation and shipping”. His reason was that it was “not clear how international shipping emissions could be sensibly included in UK budgets”. He added that although “there are methodologies that could sensibly allocate emissions to the UK level (e.g. bunker fuels), these differ from the methodology that has been proposed for entry of aviation into EU ETS. We do not believe that the EU ETS methodology is an appropriate basis for inclusion of international aviation in UK”.
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Mr. Mike Weir (Angus) (SNP)Scottish National Party- Quote
- Did not Lord Turner also say that aviation and shipping should be included in the 80 per cent. target? If they are not to be included in the budget, how will that be reflected in the 80 per cent. target, and what will be the impact of that?
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- Joan RuddockLabour
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- The hon. Gentleman is correct in that Lord Turner made reference to the 80 per cent. target and to shipping and aviation emissions, but there has been considerable misunderstanding on this point. I will explain precisely what he has said and how we have responded positively to that.
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Dr. Ian Gibson (Norwich, North) (Lab)Labour- Quote
- Does the Minister agree that Lord Turner’s assessment is for the short term and, as he goes on to say, we need to look at this important issue in the long term, as it needs a deliberate policy?
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- Joan RuddockLabour
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- It is apparent to all of us that we have to have short-term solutions and answers to the problems of climate change, and we also always have to plan for the long term. My hon. Friend is absolutely right about that.
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John Hemming (Birmingham, Yardley) (LD)Liberal Democrat- Quote
- I am slightly confused about this issue. Last Monday, the Prime Minister said that we needed a constantly rising supply of oil, notwithstanding the use of renewables. Does the Minister have any idea of whether our oil consumption is expected to fall over time—whether or not aviation and shipping are included—and in which year would we first see a fall?
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- Joan RuddockLabour
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- I shall not speculate on the extraneous matters that the hon. Gentleman has raised. The central point of what Lord Turner actually said was that policies are needed to constrain aviation and shipping emissions, but—despite these—it is unlikely that emissions in these sectors will be reduced by 80 per cent. in 2050. The consequence is that more effort is likely to be required from those sectors covered by the Bill. Government amendments Nos. 42, 43 and 50 are consequential to Government new clause 15, and ensure that appropriate references are made throughout the Bill to the proposed new clause. Amendment No. 69 and new clause 14 would both require the Government to publish regular projections for emissions from international aviation and shipping. We already publish projections of future CO2 emissions for international flights from UK airports and intend to continue to do so. The last reports were published in 2003, 2004 and 2007. I am happy to commit the Government to publish at least one forecast of international aviation emissions for each budgetary period sufficient to inform decisions on setting carbon budgets. Publishing projections of aviation emissions any more frequently would not deliver any benefits, as the long term drivers of the forecasts do not change significantly on an annual basis.
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Steve Webb (Northavon) (LD)Liberal Democrat- Quote
- There is a danger that we will get caught up in technical minutiae and lose sight of the big picture. The Minister has just said that it is unlikely that we will be able to reduce aviation emissions by 80 per cent. by 2050, so because we will not get tough on aviation, the rest of the economy will have to take the hit on carbon. Surely it is time that policies such as the expansion of Stansted and Heathrow came to the top of the Government’s agenda, as we might then stand a better chance.
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- Joan RuddockLabour
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- The hon. Gentleman cannot accuse the Government of just ignoring the issue. As he must know, we have been very active within the EU in ensuring that those emissions become part of the European trading scheme. That is the way we will deal with those emissions in the first instance. We hope, in the long term, that we shall do so through some global agreement. As the hon. Gentleman knows perfectly well, if within a trading agreement some sectors are allowed to grow and as a consequence some cannot grow so much, that is a principle of trading. The cap that is set, which repeatedly goes down, will ensure that overall emissions are reduced. We have to have that in sight; it is the long-term goal. The bigger picture is to get an 80 per cent. reduction by 2050.
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Mr. Andy Reed (Loughborough) (Lab/Co-op)Labour- Quote
- Do we have to be so pessimistic about the contribution that aviation could make to the trading scheme? In the foreseeable future, other technologies may come along. For example, Loughborough university is looking at a variety of ways of replacing aviation fuels. Will the Minister try to ensure that there is some flexibility to allow those technologies to come forward to help to reduce the figure for aviation?
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- Joan RuddockLabour
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- I was, of course, paraphrasing what Lord Turner had said. It was not my personal view that emissions from aviation might continue to grow and could not be reduced by 80 per cent. by 2050. We can be optimistic, can we not? My hon. Friend makes a good point—there is new technology and we are very supportive of that. We know that new aircraft are producing lower emissions than existing ones. Much can be done in that field, although I am sure that much more will eventually have to be done, too.
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Jo Swinson (East Dunbartonshire) (LD)Liberal Democrat- Quote
- May I draw the Minister back to her remarks about the reporting on different sectors? She has mentioned the publication that the Government intend to produce on aviation emissions, but she has not so far said what publication will be produced on shipping emissions. Surely there is sometimes a danger that aviation is focused on as the real problem, when in fact emissions from shipping are considerable and are predicted to as much as treble by 2050 if left unchecked.
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- Joan RuddockLabour
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- I understand the hon. Lady’s point, and I shall come on to that eventually. The reason why aviation gets so much attention is that most of us have direct experience of flying, while fewer of us have experience of shipping. I shall explain what we are doing about shipping, too.
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Mr. Tim Yeo (South Suffolk) (Con)Conservative- Quote
- The Climate Change Bill has been used as an example of British leadership in the field of climate change, and quite rightly so. Britain is a leading maritime nation, too. I believe that the shipping industry is also looking for a lead from the British Government, which at the moment it is not getting. Ships being ordered today have a 30-year life, so that takes us three quarters of the way to 2050. If there is no sign of urgency about the inclusion of maritime emissions in the British Government’s approach, that will be an unfortunate missed opportunity. The Chamber of Shipping gave evidence to the Select Committee on Environmental Audit this morning and made the point that its members are looking to the Government for some suggestions about how maritime emissions might be counted and included.
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- Joan RuddockLabour
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- Obviously, the hon. Gentleman has an advantage over me in that he was present in his Committee meeting this morning and I was not. However, we will investigate all options for reducing emissions from international and domestic shipping. That includes considering improved technology and better operator practices, which, as I am sure he is aware, can make a considerable difference. We also support the development of a global emissions trading scheme through the International Maritime Organisation. We have said clearly that should progress within the IMO prove too slow, we will consider other options, including those proposed at an EU level, to reduce greenhouse gas emissions from ships. That includes investigating the feasibility of including shipping emissions in the EU ETS. We are not at all inactive on those issues, but the fact is that they are extremely difficult to deal with.
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Bob Spink (Castle Point) (UKIP)Independent- Quote
- Let me take the Minister back to a technical minutia. Is she convinced that the methodologies for measuring emissions, particularly on the international scale, will be robust enough in the longer term?
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- Joan RuddockLabour
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- I am sure the hon. Gentleman may know a little more about the technical minutiae of this matter than I do, but the Government are very conscious of the problem. We are always in discussions and seeking to improve the methodologies, but the fact that there is no agreed methodology at the moment means that we would face difficulties if we followed some of the amendments and simply included the present levels of emissions.
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Dr. Gavin Strang (Edinburgh, East) (Lab)Labour- Quote
- I am grateful to my hon. Friend for giving way, and the whole House will welcome the direction in which the Government are moving on this matter. I was interested to hear her say that the reason for the much greater focus on aviation than on shipping was that we tend to fly. That may be true, but it had never occurred to me. Does she agree that we in this country are still making far too many short flights—for example, from Edinburgh to Manchester? Clearly, the way forward must be to put much more investment into the railway, and to ensure—not necessarily through taxation, but by some other means—that there are not so many flights over short distances within the UK.
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- Joan RuddockLabour
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- I have, dare I say it, some sympathy with what my right hon. Friend says. The Department for Transport is developing a climate change strategy of its own and, as I said earlier, we are clear that a growth in emissions in one sector of the economy will eventually have to result in more emission reductions elsewhere. If we get to the point where all journeys are included, that mechanism will have an effect. Furthermore, all domestic flights are already included in our emissions calculations.
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David Howarth (Cambridge) (LD)Liberal Democrat- Quote
- The Minister said that there was no agreed methodology, and that has been the argument all along, right back to the Joint Committee that considered the draft Bill. However, does she agree that any methodology that we adopt, even unilaterally, is sure to be closer to the end result than doing nothing would be? If we adopt a reasonable methodology now, we will have a smaller adjustment to make in the future.
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- Joan RuddockLabour
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- If I were allowed to make some progress with my speech, I might be able to make the counter-argument. However, I do not accept the hon. Gentleman’s point because, although we could adopt a methodology now, it might have various undesirable effects, not least in the international negotiations.
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Mr. Graham Stuart (Beverley and Holderness) (Con)Conservative- Quote
- I am grateful to the Minister for giving way; she has been extremely generous. Will she share with the House what she expects the cumulative impact of aviation and shipping emissions to be between now and 2050, as currently measured by the Government? She will know that, in any long-term policy to reduce emissions, the important thing is the cumulative budget between now and then. What amounts are we talking about, and what share would they take of the overall budget allowed for the UK?
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- Joan RuddockLabour
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- I think I would be very unwise to answer that question directly. I am sure I could find some projections, but the amounts involved are a long way ahead and will depend on global agreements, if we get them, and on emissions trading. We cannot honestly predict the extent to which aviation might or might not grow, as that will depend on the decisions that will be taken—here, in the whole of Europe and, I hope, globally. I might be able to produce a figure for the hon. Gentleman, but I am not sure that it would advance any of the arguments that are being made.
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Mr. John Redwood (Wokingham) (Con)Conservative- Quote
- When the Government came to office, they inherited a fairly easy win on the Kyoto targets with the dash for gas from power generation. They strengthened their target, but why did they fail to hit that strengthened target?
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- Joan RuddockLabour
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- At the time, we made a prediction about what would happen to our economy, which in fact has since grown massively—
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Martin Horwood (Cheltenham) (LD)Liberal Democrat- Quote
- Not now.
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- Joan RuddockLabour
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- Of course, we are currently in some difficulties, but we have been able to grow our economy massively over the period to which the right hon. Member for Wokingham (Mr. Redwood) alludes. At the same time, we have reduced our emissions to such an extent that not only will we meet our Kyoto commitments but we will do so more than twice over. That shows that this Government have done rather well in this particular field.
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Justine Greening (Putney) (Con)Independent- Quote
- rose—
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- Joan RuddockLabour
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- I will give way, and then I will make some progress.
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- Justine GreeningIndependent
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- I am grateful to the Minister for giving way. Will she clarify how the Government will track emissions? As she knows, an important decision on Heathrow is coming up. According to the Government, the emissions associated with that policy will include emissions only from outgoing flights, not from incoming flights. Common sense should tell us that extra incoming flights would not be able to land if the airport were not expanded. Will she accept that what is important in Government policy is the decisionable part of emissions? How will she approach issues such as Heathrow? In such cases, if emissions are not calculated correctly, we will take the wrong decision.
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- Joan RuddockLabour
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- As the hon. Lady will know, a decision has not yet been taken on Heathrow. When I continue with my speech, I will make it very clear how we are approaching the issue of emissions. I will also make it clear that if emissions are contained within the EU trading process, for example, the cap will determine what the emissions are and how the matter will be dealt with. If she will let me continue, our position will become much clearer. To answer an earlier question, there are currently no UK Government forecasts of emissions from UK international shipping. The nature of the shipping industry makes recording shipping emissions particularly difficult, and there are a number of data constraints. The Government continue to seek improvements to the evidence base on international shipping emissions, principally through our role at the IMO. I therefore cannot accept amendment No. 69 or new clause 14, but I hope that the House will accept my firm commitment that we will continue to publish our projections on aviation emissions regularly. Amendments Nos. 68 and 72 would require the Government and the Committee on Climate Change to take into account projected greenhouse gas emissions from international aviation and shipping when making any decisions relating to carbon budgets; that answers an earlier question. Amendment No. 68 makes specific reference to the projections that would be required by amendment No. 69. As I have explained, we do not agree that it is right to legislate for the publication of those projections. However, I am pleased to say that we can accept amendment No. 72 in the name of my right hon. Friend the Member for Scunthorpe (Mr. Morley). The Government believe that when setting or advising on budgets, due regard should be given to emissions from international aviation and shipping; my right hon. Friend and the shadow Committee on Climate Change have made that clear. We are saying that we will have due regard to emissions from aviation and shipping, as the Committee recommended, but we cannot account for them domestically at present. There are a few technical problems with amendment No. 72; for example, it refers to “budget” rather than budgetary periods, and refers not to the Committee on Climate Change, but only to the Secretary of State. It does not refer to “targeted” greenhouse gases, which is how such gases are defined in the Bill. The Government will therefore return, before final consideration in the Lords, with a version of the amendment that has benefited from parliamentary counsel’s redrafting; I hope that all parties can agree to that. Amendment No. 3 would simply require emissions from international aviation and shipping to be included in the Bill’s targets and budgets within five years of Royal Assent. That would have to be done, and nothing else could be done. We all agree that we are talking about global issues, and that a global solution would be the best way forward; I hope that I have made that clear. Such a solution would be much more difficult if we had a domestic deadline for deciding what the UK’s fair share was. It is possible for us to reach international agreement, through the United Nations framework convention on climate change, the IMO or the International Civil Aviation Organisation, that the best way to deal with international aviation or shipping emissions is through a sectoral approach, rather than through allocating such emissions to individual countries. In fact, that is one of the approaches already under discussion. The point is about methodologies. We could end up with a completely different proposal, so it would not be appropriate for us to make a unilateral decision. Indeed, we are already starting to see such an approach at EU level, where it is likely that under the EU emissions trading scheme, aviation emissions will be allocated to airlines rather than to individual member states.
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- David HowarthLiberal Democrat
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- I thank the Minister for giving way, perhaps at the right part of her speech now. If we in the UK take the lead, will we not shape the international debate and push the final solution of the problem to a position closer to what is in our interests, rather than in other countries’ interests, whereas if we leave the negotiations to others we will not do that?
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- Joan RuddockLabour
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- I have to tell the hon. Gentleman that there is no question of our leaving the negotiations to others. We are right there in the forefront of the negotiations. It is the UK Government who pushed for the inclusion of international aviation and shipping emissions in the EU trading scheme. We succeeded in persuading other member states that that should be done, and it will be done. Adopting a measure in the Bill that could be completely out of line, as the amendments suggest, with what we are negotiating in Europe is obviously the wrong thing to do. The questions concerning shipping emissions are even more complex. If we were to include shipping emissions in any of the existing agreements or future agreements such as global agreements, we would have even more problems than we clearly have with airlines. I have outlined how we might deal with aviation through the European trading scheme, but the difficulty with ships is that they can go for many weeks without refuelling, and can take on fuel from tankers in international waters. If we based our calculations only on fuel that has been sold in the UK, it would appear that shipping emissions declined over the past 10 years and then began to rise again. However, we know that that is not the case. We know that shipping has continued to increase, so we must assume that emissions have increased as well. Clearly, relying on bunker fuels is not the answer.
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- Mr. GummerConservative
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- I am sympathetic to the concept that the Minister advances: that her hands should not be tied by writing into the Bill of answers that may well be the opposite of what will be in our interests or in the interests of reducing emissions. Does she agree, however, that the concomitant is that the Government must be extremely loud about the negotiations, making sure that people realise that we are taking the lead and that there is no excuse for delay on this front? Shipping is hugely important to the United Kingdom and hugely important if we are to do something about emissions.
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- Joan RuddockLabour
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- The right hon. Gentleman is correct. We want to remain in the forefront and I am sure he will keep us up to the mark. Finally, and especially if we are acting alone, there is the risk of perverse impacts, such as planes and ships filling up elsewhere and coming to the UK with a heavier fuel load, of air traffic simply diverting from Heathrow to Amsterdam or Paris, or of some ships with UK-bound cargo diverting to a continental port from where the cargo is delivered to the UK by another ship or another mode of transport. All those scenarios could increase emissions, rather than reduce them.
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Mr. Peter Lilley (Hitchin and Harpenden) (Con)Conservative- Quote
- Can the hon. Lady assure us that despite her distinguished lifetime career advocating unilateralism, nothing in the measure will unilaterally hamstring our aviation or maritime industries if other countries do not follow suit?
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- Joan RuddockLabour
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- I have just explained the complexity of including shipping emissions, whether unilaterally or within the EU emissions trading scheme. There are real difficulties. I gave the example of the calculations based on bunker fuels purchased in the UK and the fact that they gave a totally incorrect reading of what has been happening to UK shipping. The right hon. Gentleman should understand the complexity of the matter. It has to be sorted out and we have to find a way forward. That means that it is not sensible to adopt a measure today on our own behalf. As I have said, we need a flexible approach to the evolving international context. I hope people understand that we are anxious to make progress on international aviation and shipping emissions, but we need to do that first in a European context and then in the global context. We will do what we can to take account of the necessary factors. I hope that amendment No. 3 will not be pressed to a Division.
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Gregory Barker (Bexhill and Battle) (Con)Conservative- Quote
- We warmly welcome the Government’s change of heart and measured response in including emissions from international aviation and shipping in the Bill. We support new clause 15 and its accompanying amendments Nos. 36, 42, 43 and 50, which I understand are important tidying measures. Although we also recognise the real and practical difficulties, which the Minister has explained, of including aviation and shipping and although we acknowledge the danger of perverse incentives if we get the issue wrong, we think it right that aviation and shipping are included. Conservative Front Benchers have consistently argued that aviation and shipping should not be exempt from accounting for the pollution for which their sectors are responsible. Furthermore, as the Minister said, not including aviation in the Bill would have perverse incentives. For example, it would incentivise an individual passenger, from a carbon point of view, to take a short-haul flight to Paris rather than the Eurostar. That cannot be right. We should also be mindful of the positive way in which the shipping sector and certain responsible airlines have contributed to the debate: they have made important and constructive suggestions on the way forward. We must not forget that shipping is among the most carbon-efficient forms of heavy transport. Sea freight emits between 30 g and 90 g of CO2 per tonne of freight per kilometre, whereas the equivalent figure for road freight is between 130g and 190g, and that for aviation is obviously much, much more. We must therefore be cautious about always twinning aviation and shipping in this debate, as their carbon efficiency profiles contrast and they face different challenges specific to their sectors. We all acknowledge that there are difficulties with the measurement and apportionment of these emissions. However, it is important that we do not allow such issues of methodology, complex as they are, to let us lose sight of the principal aim of the Bill: to achieve a net reduction in emissions across the whole UK economy in sufficient proportion for us to play our fair part in keeping man-made global warming below the dangerous 2° level. The necessity of eventually including all sectors of our economy in that task was reconfirmed to us earlier this month by the advice of Lord Adair Turner’s Committee on Climate Change. Mindful of that advice, we are sympathetic to amendments Nos. 68 and 69, tabled by the hon. Member for Edinburgh, South (Nigel Griffiths). We are also sympathetic to amendment No. 3 and new clause 14, tabled by the hon. Member for Northavon (Steve Webb). Methodology is crucial, so the Government need to publish their methodology for making their aviation and shipping emission projections, as would be required by new clause 14. That is particularly important to us. We welcome the announcement just now that the Government have taken on board the intent embodied in amendment No. 72. The right hon. Member for Scunthorpe (Mr. Morley) has done a great deal of work: he has campaigned outside the House and brought together a large consensus on the measure. We welcome the fact that the Government are prepared to take the issue on board and, having redrafted it with the help of parliamentary counsel, bring it back to the House of Lords. That is typical of the spirit in which the Bill has gone through the House. Having made our support for this proposal clear, I should like to sound a note of caution regarding the definition of aviation and shipping that the Government have chosen. Although we welcome the fact that they intend to include emissions from aviation and shipping, the measurement of emissions from the movement of goods and passengers should account for all stages of the journey rather than merely singling out the carbon footprint of flights and sea journeys to and from the United Kingdom. In that way, we could avoid unintended consequences such as encouraging more polluting methods of travel outside the UK. My party is committed to working with the Government in their efforts to secure the all-important international agreements on aviation and shipping emissions that are crucial if we are to crack this problem. The Bill has come a long way since it was first introduced in another place last year. Now, on Report, one of the last outstanding totemic issues is finally being dealt with. If we can come to an agreement on this, it will turn the Bill from good legislation into world-class legislation. However, the caveats on definitions that Conservative Members spoke about at length in Committee and in the other place still remain. Although we are concerned about the definition of aviation and shipping, rather than our chosen definition of international trade and transport, we are not opposed to including aviation and shipping in the carbon budgets from the outset. Our concern is rooted in our wish to ensure that we do not, through well-meaning but poorly designed legislation, offer a perverse incentive to use more carbon-intensive modes of transport, such as road freight, over the more efficient moving of goods by sea. For example, if shipping becomes heavily regulated, particularly unilaterally, there might be an incentive for ships to dock at Rotterdam—or worse still, Istanbul—and then drive across the continent to enter this country via the channel tunnel. That is why we argued in Committee for aviation and shipping to be described as international trade and transport. We wish to prevent any system of measurement from being skewed in favour of more carbon-intensive methods of transport, which could happen if shipping and aviation are included without reference to other modes of transportation. Let me give some practical examples. If one were importing oranges from Spain into the UK and sent them over on lorries, only the short leg of the journey, by ferry, would be included in the UK’s carbon allowance. If one sent them by sea, the whole journey would be counted, making transporting oranges from Spain by sea far more carbon-expensive. That would create a significant incentive for the use of road freight over sea freight, despite its being many times more carbon-intensive. If national-level emissions trading schemes were in existence through the transit states, the disincentive to use road freight would be strong enough to deter that, but if we introduced our system before some or all of our neighbouring European transit states, Britain would perversely incentivise the movement of goods away from direct shipping and towards the more polluting form of road transport. Similarly, when importing goods from China, the best way in terms of cost and the environment is for the container to be shipped directly to the UK. If we define only aviation and shipping without reference to other means of importing goods, that could mean it would make economic sense to ship goods only as far as Rotterdam and then move them by lorry into the UK in order to minimise the amount of carbon officially being counted. I hope I have made the point sufficiently clear without sounding as though we are opposed to the inclusion of aviation and shipping, as per the amendment, but it is very important. We are in favour of these measures, and we have always argued that there should be no sectoral exemptions for aviation and shipping, but the definition of the process can still be improved. We would be keen to work closely with the Government on establishing a means of description that is more effective and would secure the international agreements on aviation and shipping that are vital if we are to find a truly holistic solution to this very important international problem.
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- Mr. RedwoodConservative
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- Is my hon. Friend saying he is worried that the Government have not done enough work on possible dispersion of industry and activity out of the UK and into other centres? That would seem to be an own goal of the worst kind because it would not reduce carbon output, but it would reduce the number of jobs.
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- Gregory BarkerConservative
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- That is a far more concise way of putting the rather laboured argument that I was trying to make from the Dispatch Box. This is a complex area. It is not beyond our ken to crack it, and some very sensible points have been made from colleagues on the Opposition Benches about the unintended consequences of including aviation and shipping. We do not want to lose sight of the principal aim of including those sectors in a way that makes them responsible for their own carbon pollution, but my right hon. Friend is absolutely right, and with his experience as a former Secretary of State and from his considerable business career he is well placed to understand the complexities and dangers that could be posed to our competitive position. That should not, however, prevent us from offering to work constructively with the Government on the matter; if they unable to do it, an incoming Conservative Government would certainly want to work closely with the aviation and shipping industry to ensure that a satisfactory answer was reached in order to allow carbon measurements to be made, but in a way that did not harm unduly our international competitive position.
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- John HemmingLiberal Democrat
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- I am a little confused by the Prime Minister saying that we need an ever-increasing supply of oil. Does the hon. Gentleman believe that as a result of the Bill there will be a reduction in the amount of crude oil used by this country?
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- Gregory BarkerConservative
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- I do not think there is going to be an immediate reduction in the amount of crude oil used as a result of this Bill, because the Bill is simply a framework. It is a form of regulating and auditing our emissions; it sets targets. What we need to follow the Bill is a really ambitious transformational set of policies, which will allow an incoming Conservative Government to effect the sort of dynamic changes that have been so absent during the past 10 years, but without harming our international competitive position. The big danger of the Bill is that people place too much emphasis on the targets and auditing mechanisms contained in it, which are then mistaken for policies that will deliver the transformation to a low-carbon economy that is imperative. We will not find them in the Energy Bill. A whole range of policies are sadly lacking from this Government, but would not be lacking from an incoming Conservative Administration.
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Mr. Elliot Morley (Scunthorpe) (Lab)Labour- Quote
- I warmly welcome the contribution to the debate made by my hon. Friend the Under-Secretary, particularly her acceptance of amendment No. 72, which stands in my name. I would like to emphasise that it is in my name only because it was tabled very late, and I want to pay tribute to my hon. Friend the Member for Edinburgh, South (Nigel Griffiths), who has been very active in this matter. I am pleased to support the amendments that stand in his name and those of many hon. Friends, many of whom are present. My hon. Friend the Under-Secretary knows that the issue we are discussing is of key interest to many members of the public and non-governmental organisations, and I agree with the hon. Member for Bexhill and Battle (Gregory Barker) that the improvements to the Bill and the scrutiny as it has gone through the parliamentary process have turned it into a piece of world-class legislation that gives a strong international lead. By accepting the amendment to take aviation and shipping into account, the Bill will send a clear signal internationally that including such emissions is the way that we have to go. I accept that there has also to be international agreement on the matter. It was a great failing of the original Kyoto protocol that the bunker fuel agreement was not included. We all know the reasons for that—it was not possible to get international agreement, particularly given the resistance from the United States and others. We all know that whatever the outcome of the forthcoming elections in the US there will be a change of position, and I hope that that transfers to including aviation and shipping in the post-Kyoto 2012 framework, as we must. The European Union emissions trading scheme helps in that respect, and it may drive that change. I would confirm what my hon. Friend the Under-Secretary said: the agreement on including aviation was reached under the UK presidency of the EU. It was a British initiative and a British priority. The UK presidency managed to get that agreement, which I believe to be so important. I also understand the point that the hon. Member for Bexhill and Battle made about perverse incentives, although the logic of that is to include all sectors of the economy—at some point, surface transport must be included in the EU ETS—but those are matters for future negotiation. I reinforce the point that many groups are pleased about this. I acknowledge the contribution of the Friends of the Earth Big Ask campaign, which included the two key elements: the 80 per cent. target, which has been conceded, and the inclusion of aviation and shipping, which is being conceded tonight. That will strengthen the Bill; the two issues are vital.
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Mr. Nick Hurd (Ruislip-Northwood) (Con)Conservative- Quote
- I congratulate the right hon. Gentleman on his amendment, which I support in principle. I note that the Government are minded to accept it, so I press him to define a little more tightly or expand a little on what he understands by “taken into account”?
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- Mr. MorleyLabour
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- There must be provision and planning, as there are for the 2012 time limit, to ensure that aviation and shipping are taken into account and included in carbon budgets. Lord Turner’s committee acknowledged that, although he recognised the current difficulties with agreeing international methodology and getting international agreements. It is imperative to achieve those and I hope that that will happen by 2009, when the all-important forum of the United Nations climate change convention at Copenhagen takes place. To fail to secure international agreement would be a global disaster. However, including such elements in the Bill demonstrates that the Government are serious about the matter. They are giving a clear lead to the rest of the world that those elements must be included if we are to move to a low-carbon future.
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- Steve WebbLiberal Democrat
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- Although we welcome the new clause and the Government’s acceptance of the spirit of amendment No. 72, which the right hon. Member for Scunthorpe (Mr. Morley) tabled, we remain concerned that the guarantees that the nation—and, indeed, the planet—seeks from the British Government about aviation and shipping are not firm enough. Although we may have confidence in the Under-Secretary and the new Secretary of State—any Secretary of State whose first act is to add his name to a Liberal Democrat amendment cannot be all bad—what about their heirs and successors? Can we be confident that future Secretaries of State, who are perhaps not so committed, will be bound by the amendments? We contend that they will not and that, in addition to the new clause, we need new clause 14. We welcome the supportive comments of the hon. Member for Bexhill and Battle (Gregory Barker) about new clause 14, on which I suspect we will test the opinion of the House later. We are concerned about new clause 15 because of its advisory nature. “Advise” or “advice” appear nine times in it—it is an entirely advisory clause. That would be fine if the Government were bound by the advice but, by definition, one is not bound by advice. Amendment No. 3 would remove the opt-out. The Government have the option after five years of saying, “This is all terribly difficult—we’re not going to do it.” Our worry is that aviation and shipping are so important that, if five years of the best brains around the globe getting together cannot crack the problem, we are genuinely in trouble. We do not want to give the Government the option after five years of slipping out a written statement on the last day of a parliamentary Session to claim that they had tried hard but could not include aviation and shipping because it was too difficult. There is not enough of a guarantee that those matters will be taken into account. Although I am beginning to understand the theology of such issues, I cannot understand why the new clause and amendment No. 72, as redrafted, guarantee anything. They are a nudge and a wink and a hint from a well-disposed Secretary of State and Under-Secretary, but they guarantee nothing, especially when Ministers change and others may not be so committed. We therefore need to beef up those amendments. New clause 14 states that the Government need to provide projections on aviation and shipping. We welcome the Minister’s assurance that the projections on aviation will be forthcoming and updated, but simply saying that shipping is too difficult, which is essentially the position, is inadequate. We need to resolve those difficulties. We need an approximation to the best guess, and doing that is not a science; it is an art. However, as my hon. Friend the Member for Cambridge (David Howarth) said, doing nothing is likely to be an awful lot further away from the optimal solution than having an approximation, an imputation or an assumption. Our second concern is about the role of national leadership. I fully accept that in time everything will need to be done multilaterally, but we are not playing a game in which we cannot make a move until everybody else has moved. We are talking about a vital issue on which we need to lead by example and bring others with us. If we say, “We’re not going to include these things until everybody else does or until we’ve decided altogether how to do it”, the clock will be ticking in the meantime. That is our profound concern.
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- John HemmingLiberal Democrat
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- Will my hon. Friend give way?
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- Steve WebbLiberal Democrat
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- If it is about oil, no. [Laughter.] Of course I will give way.
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- John HemmingLiberal Democrat
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- I thank my hon. Friend for giving way to my standard question about oil. Last week the Prime Minister said that we needed an ever-increasing supply of oil, which confused me in the light of our objective of having a low-carbon economy, because burning oil creates carbon dioxide and water primarily. Will my hon. Friend share his views on whether we can satisfy the objectives of the Bill, with or without the inclusion of aviation and shipping, while having an ever-increasing supply of oil?
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- Steve WebbLiberal Democrat
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- I am most grateful to my hon. Friend for that helpful intervention. From our perspective we need to get on with decarbonising the economy. The goal of an ever-increasing supply of oil is literally nonsense and should certainly not be an aim of Government policy. The point that I made in an intervention on the Minister is that it might be great that the Department of Energy and Climate Change sets such bold targets, but as long as the Department for Transport, for example, continues to act as if it were a wholly owned subsidiary of BAA, we will not achieve what we need to. It is vital to bring aviation and shipping within the scope of the Bill, so that the other bits of Government, which are perhaps not quite as well disposed towards tackling climate change as the Department of Energy and Climate Change is, are brought into line. The sooner we do that, the smaller the chance that irreversible decisions will be taken on airport expansion—decisions that would undermine the goal that we all share of tackling climate change effectively. We welcome new clause 15 and the advice that will be forthcoming, but we simply do not believe that it goes far enough. In addition, we need the projections provided for in our new clause 14 and a calculation of what that means for non-aviation and shipping carbon emissions. The Minister’s view seems to be that the rest of the economy can just take the hit, because as long as the grand total is okay, we are all happy. However, the rest of the economy might have a view on taking more of a hit than aviation and shipping simply because aviation and shipping were not included in the budgets. There is an equity issue, too. We might have a view, for example, on how fair it is to expect manufacturing to take the entire hit because aviation and shipping have been allowed to run away with their emissions. There is an equity issue to do with the balance of reducing emissions, not only at household level but between different sectors of the economy. Favourable treatment towards one sector, which would be likely if we did not bring it within the Bill, is undesirable for us all.
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- Mr. HurdConservative
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- The hon. Gentleman started his speech with the premise that the Bill places no absolute requirement on the Government to include aviation and shipping in the budgets or the targets. That is correct, but I have struggled to follow how his new clause 14 would change that. I can see that it might improve the transparency of some of the information going into the mix, but it does not change the basic premise of his argument, does it?
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- Steve WebbLiberal Democrat
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- As the hon. Gentleman rightly says, our new clause 14 would require projections on aviation and shipping that would otherwise not be made, which would deliver an impact assessment on the rest of the economy. As he knows, our concern is about the actions of future Governments. The consequence of our proposal would be for other sectors of the economy to exert more pressure to include aviation and shipping, because it would be much more transparent that they would take the hit. That would be an indirect way of bringing pressure on future Governments not to neglect the other sectors of the economy.
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- Mr. Graham StuartConservative
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- Does the hon. Gentleman’s point about the impact of aviation and shipping not show the absurdity at the heart of the Bill? Independent studies show that a 75 per cent. increase in emissions from shipping is expected in the next 15 to 20 years and that emissions from shipping already constitute more than double those from aviation globally. The fact that we are introducing an 80 per cent. reduction today while critical elements of delivering it are not within the power of the Secretary of State shows that we are posturing and not really putting down legally enforceable limits on emissions. In the meantime, we are failing to take the practical actions that could be taken to deliver emissions changes today.
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- Steve WebbLiberal Democrat
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- I partly agree with the hon. Gentleman, in the sense that we certainly need a legal framework and practical, urgent action now. His point highlights the fact that the Government’s approach to aviation and shipping is almost one of “predict and provide”. They are almost saying, “We will let that rip, and then we will pick up the pieces in the rest of the economy.” That is why we cannot go on risking excluding those elements. We are sure that the Government’s intentions are good, but we do not believe that even this Government—and certainly not future Governments—will be bound by what is in new clause 15 or amendment No. 72. We are therefore seeking to add new clause 14 to the Bill.
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- Dr. StrangLabour
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- I think that the whole House welcomes the movement by the Government in this area. I congratulate the Under-Secretary of State for Energy and Climate Change, my hon. Friend the Member for Lewisham, Deptford (Joan Ruddock), and I particularly welcome the fact that the Government are accepting the amendment tabled in the name of my right hon. Friend the Member for Scunthorpe (Mr. Morley). My hon. Friend the Minister rightly referred to the important interim advice from the Committee on Climate Change in the letter earlier this month to the Secretary of State of the new Department from the Committee’s chairman, Lord Adair Turner. I want to highlight two or three important sentences in the letter. The advice provides the basis for the Government’s movement, but it should also send an important message to Parliament and the Government about the decisive action that we need to take on this issue in the coming years. As we all know, the important recommendations were that the target for the reduction in emissions covered by the Bill—between 1990 and 2050, which is quite a long way ahead—should be 80 per cent., and that the target should include international aviation and shipping. In an important point in the letter, Lord Turner explains the reasons for the change. He sets out what has changed since the report from the historic royal commission on environmental pollution in 2000, which is where the original 60 per cent. target came from. He lists six things that have changed, but I shall not refer to all of them today. However, I want to quote one of them. By way of an introduction to that, I want to point out that he suggests that “the dangers of significant climate change are greater than previously assessed which argues for larger global, and thus UK, reductions.” He makes six points, and in point No. 5, he states that “there is now a greater understanding of the range of potential climate change impacts, their regional variation and the possibility of abrupt or irreversible changes. These analyses also suggest greater damages once temperature increases become significant.”
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- John HemmingLiberal Democrat
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- I should like to ask the right hon. Gentleman my usual question. If we are going to reduce carbon emissions, why do we need a constantly increasing supply of oil?
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- Dr. StrangLabour
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- The important thing is the demand for oil. We must use less oil; that is not in dispute. Obviously, we want to use less oil, and fewer fossil fuels. I do not quite grasp the hon. Gentleman’s point—
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- John HemmingLiberal Democrat
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- rose—
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- Dr. StrangLabour
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- I am not going to give way again, because many people who have served on the Public Bill Committee want to take part in the debate. However, we are not going to stop using oil in the next few years—
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Mr. Deputy Speaker (Sir Alan Haselhurst)Conservative- Quote
- Order. I am sorry to interrupt the right hon. Gentleman, but I must remind him that this group of amendments is to do with shipping and aviation. An opportunity for more general comments about the targets for the reduction of emissions will crop up at a later point on the Order Paper.
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- Dr. StrangLabour
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- I am grateful to you for that advice, Mr. Deputy Speaker.
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- Mr. LilleyConservative
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- On a point of order, Mr. Deputy Speaker. Can you assure us that we will have an opportunity to debate the Third Reading of the Bill, and to raise the more general points that the right hon. Gentleman has tried to raise, and which many of us would like to discuss, in the course of assessing some of the new clauses, particularly in relation to their cost effectiveness?
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- Mr. Deputy SpeakerConservative
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- I think that the right hon. Gentleman knows that I cannot give any such assurance. The progress that is made on dealing with the amendments that have been selected by Mr. Speaker depends entirely on the House, so I am afraid that I cannot give any such assurance. However, I have to rule on the relevance of any remarks made to the particular group of amendments under discussion.
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- Dr. StrangLabour
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- I am grateful, Mr. Deputy Speaker. The crucial issue is the global temperature rise that the world has to avoid. There, of course, international aviation and shipping are highly important. Significant observations have been made to the effect that it is not easy to deal with these issues. I was a Cabinet Minister in the Transport Department when we were elected in 1997. The big thing that I grasped very quickly was that aviation was international. It was international organisations such as IATA—the International Air Transport Association—that had to be dealt with. International shipping is, of course, also important.
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- Mr. GummerConservative
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- It seems to me that the Government should be congratulated on proposing these new clauses. We Opposition Members are very pleased to support them. It also seems to me that the Government are in a difficult position. On the one hand, they cannot build into the Bill a unilateral system that might be wholly different from what emerges from negotiation. That is a perfectly reasonable Government position, but if it is to be tenable, the Government must give the House—not just now, but throughout the coming months and years—a real understanding of their commitment to doing the things that will make a reality of these new clauses.
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- John HemmingLiberal Democrat
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- rose—
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- Mr. GummerConservative
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- I think I will leave the issue of oil alone, as it has been somewhat widely discussed but is not entirely germane, Mr. Deputy Speaker, to the issues that concern us at this moment. The Government need to give us the confidence to support them by being much tougher about what they intend to do in practical terms about these issues. First, it is obviously true that we need an internationally agreed system of measurement. In that, the Government need to be particularly attentive, so that we can all make a proper assessment of how successful we, along with other nations, are in reducing emissions. Secondly, it is terribly important to recognise that we cannot do these things except in common with our neighbours. I thought that the intervention on the subject of European law by my hon. Friend the Member for Stone (Mr. Cash), who is no longer in his place, was outside the issue. If we do not do this on a European basis, there is simply no chance of doing it effectively at all. We need to recognise that the environment is not something that can be nationalised—it seems about the only thing that is not being nationalised at the moment, but it cannot be: we must do this on a European basis. It is an obvious fact of life. Thirdly, if we are to proceed on a wider basis, I want to underline the points raised earlier about the danger of making things worse by accident. We know of many issues at the moment—the much-vaunted efforts for biofuels in the United States, for example—that have distorted the international situation very severely indeed. We have to be very careful that we do not do the same. The problem is that, in being careful, we must not put ourselves into a position of excusing not doing anything by saying how difficult it is to do. That is the issue that I want to press on the Minister. If the Minister had come before the House to announce that there would be no third runway at Heathrow and that the ridiculous proposal to expand Stansted would not, in fact, go ahead, the House would have seen that the Government were doing all that they could do in advance of achieving the necessary international arrangements.
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Colin Challen (Morley and Rothwell) (Lab)Labour- Quote
- Does the right hon. Gentleman also oppose the expansion of our ports and docks? I do not know whether Felixstowe has any plans to expand, but should that expansion also be stopped? We are choosing just one target, aviation, which is fair enough, but perhaps the right hon. Gentleman should extend his argument to those other areas as well.
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- Mr. GummerConservative
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- I wish that the hon. Gentleman, with whom I often agree, had listened more carefully to my argument. I gave a series of examples to which the Opposition were committed. It was therefore not unreasonable for me to suggest that if the Government wished to gain the universal support that I believe will be necessary if the Bill is be effective, it would be helpful if they clarified their approach to some of the key matters that are before us. The expansion of Felixstowe, which I declare as an interest in my constituency, is not a matter before us; the matter before us is the Government’s decision on Stansted, and their decision on Heathrow. I know very well that the Minister is not the person making the decision in this instance, and also that, if she were, she would make that decision in a way of which I would greatly approve. However, I do not consider it unreasonable for me to say to her that it is imperative that the Government take seriously some of the decisions which we understand—notwithstanding the essentially light touch of the new clause—will be translated into action. I want to say a little about unilateralism as it applies to aviation and shipping. It may be suggested that Britain should do nothing that might put her in a less powerful competitive position, and in general I think that that is true, but I hope the Minister will not be put off doing anything on that basis, or we shall find ourselves unable to take the lead that we have taken. The Climate Change Bill is unilateral in a very real sense, and so it should be. Although I cannot be accused by anyone of being unilateralist in the sense that the Minister was but—I believe—is not now, I can at least say that unilateralism, in the sense of being a step ahead of others and helping them to make their decisions, is often necessary. T.S. Eliot once said “Being a step ahead of the rest is something that deserves congratulation and you are a hero; two steps ahead, and watch out for the men in white coats.” There is some truth in that. I do not want us to get into a position in which we have so damaged our international ability to trade and compete that we suffer unilaterally, but we do need to ensure that we are taking a step ahead of the rest.
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- Mr. LilleyConservative
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- Do I understand from my right hon. Friend’s logic that, while there is a case for being ahead, if others do not follow us we should cease to give leadership, and that therefore a Bill that binds us unilaterally, by law, to targets 42 years ahead goes too far?
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- Mr. GummerConservative
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- No, I do not agree with that. If I may say so, I think that my right hon. Friend is entirely wrong. The world is faced with the biggest threat that we have ever known about in advance, and for us not to take these measures would constitute a deep dereliction of our duty to this generation, the next generation and the generation after that. I must tell my right hon. Friend that I deeply disagree with the approach that if no one else helps as we go over the precipice, we had better run with them. That is a totally unacceptable position. We must stand up. That is why the Bill is so important, why the Conservative party supported it from the beginning, why it is a triumph of cross-party agreement that we have secured it, and why it is so important to tighten it up in the areas that it does not currently cover. But to do that—
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- Mr. Deputy SpeakerConservative
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- Order. We must not get more than two steps ahead in moving towards Third Reading.
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- Mr. GummerConservative
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- With accustomed care, Mr. Deputy Speaker, you enabled me to get off my chest what I needed to, but did not allow me to proceed too far down that avenue, and I shall not do so. Let me return to the difference between shipping and aviation. I ask the Minister to concentrate on shipping. Shipping can provide the most carbon-efficient mechanism for transporting goods, and we therefore must take care in how we deal with it. However, it is not like aviation in a number of other ways. First, the EU trading scheme does not easily apply to shipping; it is difficult to see how we can use that as a mechanism in the same way as we can with aviation. Secondly, a great deal can be achieved in the shipping industry through taking steps that are not open to the aviation industry. For example, if it were demanded that over a short period ships increasingly used a higher quality of fuel, that could rapidly reduce the carbon impact, but that step is not open to aviation in the same way or over the same time scale.
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Barry Gardiner (Brent, North) (Lab)Labour- Quote
- I am grateful to the right hon. Gentleman for giving way. I have been listening to his comments with great care, and I agree with much of what he has said. With regard to the point he has just made, does he agree that it is important for the Government to be in deep dialogue with the International Maritime Organisation about addressing such matters? It would be helpful if the Minister were to describe the sort of discussions that she has had with the IMO.
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- Mr. GummerConservative
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- The hon. Gentleman is right, and I pressed the Minister earlier about this issue, because there is a feeling abroad that we have not been sufficiently hard-working in this area and that we have failed to produce as much pressure as we should. It is thought that perhaps we should ginger up our role in international shipping, because we do not want the EU to set proper standards for the kind of fuel that is provided for, and used by, ships docking at its ports, including Felixstowe in my constituency, only to find that they therefore unload outside the EU, such as in Morocco or Turkey. We need to find ways of achieving the ends we want without producing untoward results, but that does not excuse us from being seen to be an effective pressure on the international shipping community, which in many respects wishes to be pressed and wants to move. The Government must show that they are doing that. My last point on this issue refers to a question raised by the hon. Member for Northavon (Steve Webb). He talked about the need to include shipping and aviation as a matter of equity. That may be the case, but I think there is a more important reason: if we do not have a system that covers the whole of commercial and industrial life, we will automatically create damaging kinds of discrimination and diversion. There is a commercial reason for doing this, and we ought to be citing it; otherwise, there will be untoward consequences. If we leave out shipping and aviation, not only will other areas be disproportionately affected, but if the carbon costs of imports are not included businesses that rely on imports will be able to compete disproportionately with businesses that manufacture at home. I do not want to be protectionist, but I do want to have equality in this commercial context, so that we ensure that the home-produced product—whether it be food, an area in which I am particularly interested, or manufactured goods—is not disproportionately affected because those businesses are paying the cost of the carbon that they use, whereas other businesses are not paying the cost of the carbon that is used when their product is flown or shipped in from a far-away country. I therefore beg the Minister to take seriously the point that this is not only a matter of theoretical equality, much as I believe in that as an issue. It is a matter of commercial justice and a crucial one for an island that has lost much of its manufacturing ability and ought to gain much back.
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Mr. Andrew Tyrie (Chichester) (Con)Non-affiliated- Quote
- My right hon. Friend has just put forward a very good case against unilateralism in shipping and aviation, as those industries would be adversely affected by it. I cannot understand why he feels that those industries should be protected from unilateralism but other parts of industry should not be protected from it elsewhere in the Bill.
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- Mr. GummerConservative
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- I have obviously not made myself very clear to my hon. Friend. I was making the point that if we do not include those two industries in the Bill there will be untoward results because they are excluded. In fact, I was making the opposite argument. My hon. Friend is a doubter about whether we should be doing all this at all, and the reason for his doubt is that he has not committed himself to the scientific view of the damage that climate change is likely to bring and the fact that human beings are causing it. I understand that someone who takes that view can argue that we really ought to sit back and wait for someone else to do something, because it does not matter anyway. In my view, which is based on the scientific advice, it matters desperately and may matter much more than we think. We therefore have to act rapidly and achieve a delicate and difficult balance by acting sufficiently unilaterally to lead but not going so far as to make it difficult for others to follow by giving them an advantage that they do not want to give up. It is quite a delicate step, and the Government are trying to do that. We as an Opposition have a duty to support them in so far as they are, and they ought to give us a bit more help in supporting them by making clear what they are doing practically to make the amendments a reality.
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Nia Griffith (Llanelli) (Lab)Labour- Quote
- I welcome new clause 15 and pay tribute to the work of my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs and my hon. Friend the Member for Oldham, East and Saddleworth (Mr. Woolas) not only on the Bill but on raising the issue of aviation and shipping on the international stage. We all know that that is where it has to be raised. We recognise the need to count in the emissions from aviation and shipping, but we all accept that calculating how to apportion them to individual countries is fraught with difficulty. As our Climate Change Bill is often referred to as a world first, it is crucial that we include aviation and shipping. We do not want to give other people the idea that those matters can be left out of legislation. They should be included because we need to raise consciousness among many other nations that may follow suit by producing similar legislation. However, we realise that there is still an enormous amount of work to be done to reach an international agreement about how any mechanism might work, and we still need to work hard on the international stage in many other spheres. We all recognise that what we do here can be worth while only if it is mirrored elsewhere in the world. We certainly might be able to use a system involving sectoral emissions, but we must remember that one problem with the EU emissions trading system is that we sometimes lose manufacturing industry from this country because it relocates to a country where the emissions trading scheme does not require it to meet our standards. We may find that, in the aviation and shipping industries, transport routes and refuelling stops become much more about avoiding the emissions being counted than about producing the lowest possible emissions. Our Bill is also important because we do not see it merely as a legal sanction. Once we have exceeded targets, it is too late—those emissions are out there and causing damage. We should see the Bill as an important monitoring tool and as a process rather than as an end in itself.
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- John HemmingLiberal Democrat
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- Will the hon. Lady give way?
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- Nia GriffithLabour
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- I shall give way, but if the matter is about oil, I suspect that you would prefer me not to refer to it at this stage, Mr. Deputy Speaker.
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- John HemmingLiberal Democrat
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- I find it somewhat confusing when we talk about shipping emissions. A significant point about shipping is that the consumption of energy is linked to the fourth power of the velocity, which is an important reason why it is possible to reduce shipping emissions. However, all these things are powered by oil. If we do not take any view about whether we need a constant supply of oil, there will be a problem.
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- Mr. Deputy SpeakerConservative
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- Order. The hon. Lady was prescient. Obviously, we want to have a good debate, but we have a formidable Order Paper before us and we need also to make reasonable progress.
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- Nia GriffithLabour
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- This issue is about counting and monitoring, which is why it is important that we include mechanisms in the Bill such as making provision on advice and listening to the Committee on Climate Change. Those are the tools that we are using. The monitoring and reporting processes, and the targets that we put in place, will make us think about how we achieve the necessary reductions in emissions and how we create a low-carbon economy. Motor manufacturers came to the Joint Committee on the draft Climate Change Bill saying, “You tell us what we have to do and when we have to do it by, and we will need to take decisive actions.” The same applies in respect of aviation and shipping; they need to be included in international debate, because we need to set the parameters on an international scale. If enough of the powerful economies say that ships can come to their countries only if they meet X, Y and Z conditions, a sea change—if I may say that—will begin to take place in how boats and ships are fuelled.
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Rob Marris (Wolverhampton, South-West) (Lab)Labour- Quote
- We are about a quarter of the way into the period from 1990—the base year—to 2050. In the first 15 years of that period, the UK cut its CO2 emissions by 6.4 per cent. Does my hon. Friend think that we can include aviation and shipping and make 80 per cent. cuts by 2050, or does she think that that is fantasy politics?
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- Nia GriffithLabour
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- I think that we need the mechanism of the Bill in order to give us determination. My hon. Friend rightly points out that we have so far lagged behind in making ourselves take the action that will produce the emissions cuts that we all want, and that is the area in which we must move forward. As I say, we cannot make progress on this issue simply on a national basis, but it is important that new clause 15 is included in the Bill to send a clear message to the rest of the world. We will have to continue to use it as a tool both internally in the UK and in our external negotiations. That is why it is important that the wording of new clause 15 not only gives us a certain flexibility, but sets out clearly that aviation and shipping must form part of the advice that we must take in order to move forward and choose what we are going to do to reduce our emissions and meet targets, rather than exceed them.
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- Mr. YeoConservative
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- I declare an interest that is in the register: I am a director of Eurotunnel, which provides a low-carbon transport route between Britain and the continent. I warmly welcome the Government new clauses that we are debating and the Government’s acceptance of amendment No. 72, just as I welcomed the Bill on Second Reading in the summer. The Minister knows that, like me, the Environmental Audit Committee, which I chair, would much prefer the Government to go further and faster in relation to both aviation and shipping. I particularly hope that the Government will be—or will continue to be—in the forefront of efforts to bring aviation into the European Union emissions trading scheme on a basis that really drives carbon prices to a level that will incentivise investment in low-carbon infrastructure, encourage the faster introduction of more efficient aircraft and accelerate the use of more efficient practices by airlines as they move planes both on the ground and in the air. Those benefits could flow quite quickly, but they will do so only if the terms for the introduction of aviation into the scheme are a great deal better than those that applied in phase 1 for the power generation industry.
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- Joan RuddockLabour
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- indicated assent.
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- Mr. YeoConservative
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- I am glad to see the Minister nodding her assent. As I mentioned in my intervention, I also hope that the Government will lead the debate on how to accelerate a switch by the shipping industry to some of the more efficient, less polluting and more low-carbon methods referred to by my right hon. Friend the Member for Suffolk, Coastal (Mr. Gummer). Britain is a great maritime nation, and the shipping industry would respond to a lead from the Government on these matters. Indeed, the industry is looking for a lead, and the evidence given to my Committee this morning suggested that while it is not very concerned about the precise policies, it would like to know how the Government intend to accelerate those changes.
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Mr. David Chaytor (Bury, North) (Lab)Independent- Quote
- I congratulate my hon. Friend the Minister and her former ministerial colleagues on steering the Bill so successfully through Committee and, in particular, on listening carefully to the various representations made over many months, especially on aviation and shipping, as well as on the overall target for 2050. I am struggling to understand how the hon. Member for Northavon (Steve Webb) can believe that new clause 14 is significantly different from the proposals in Government new clause 15, with the addition of amendment No. 72. I support amendments Nos. 68 and 69, but in the absence of my hon. Friend the Member for Edinburgh, South (Nigel Griffiths), I am happy that they should be superseded by amendment No. 72. I urge all Members to consider the context of amendment No. 72, because it would simply add aviation and shipping to those matters that must be taken into account by the Secretary of State and the Committee on Climate Change, which include “scientific knowledge about climate change…technology relevant to climate change … economic circumstances … fiscal circumstances … social circumstances…energy policy … circumstances at European and international level.” Logically, if the hon. Gentleman seeks to suggest that Government new clause 15 and amendment No. 72 are inadequate, he should table additional amendments that spell out how the references to all the other items in clause 10(2) are inadequate, but he is not doing that. There are uncertainties about the method of calculating emissions from aviation and shipping. There are uncertainties about the method of assigning the emissions to different nation states. There is always the question of a future Government who do not have the same determination as this Government to reduce UK emissions. Although I accept those points, I cannot see the purpose of new clause 14. I fear that although we have successfully built up impressive cross-party consensus over many months, there is a bit of game playing going on as we reach the end point. That is regrettable.
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- Steve WebbLiberal Democrat
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- Does the hon. Gentleman recognise that Government new clause 15 is entirely about a duty on the Climate Change Committee to give advice? The only duty placed on the Secretary of State is to publish that advice. Amendment No. 72, as redrafted, puts in place another thing to which the Climate Change Committee must have regard. The duty that we have proposed in new clause 14 is a duty on the Secretary of State with regard to carbon emissions, while amendment No. 3 gets rid of an opt-out for the Secretary of State. It is not taking anything away from the cross-party consensus, but going further and trying to oblige the Secretary of State to do something.
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- Mr. ChaytorIndependent
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- I do not agree. Clause 10 is very specific when it states: “The following matters must be taken into account” both “by the Secretary of State … and … by the Committee on Climate Change”. There is hardly any difference. There is a difference between the wording used in new clause 15 and amendment No. 72 and that used in new clause 14, and that is why I urge the House to reject any attempt to move to a vote on new clause 14. I want to endorse the comments made by the right hon. Member for Suffolk, Coastal (Mr. Gummer), who pointed out that in environmental policy, above all, we need a Government who are open, outward-looking and prepared to engage with the international community. Of course, my right hon. Friend the Member for Scunthorpe (Mr. Morley) pointed out earlier that aviation’s inclusion in the EU emissions trading scheme was carried out under the UK presidency. Will the Minister say whether she thinks that that would have happened if the Government had had an irrational, obsessive Eurosceptic policy? As we move towards further negotiations on the precise methodology for including emissions from aviation and shipping, are we more or less likely to reach agreement with other nation states with a Government who are open, outward-looking, prepared to negotiate and positive about their membership of the EU or with a future Government less enthusiastic about the EU and determined to refuse to co-operate with the other member states? It is self-evident that the likelihood of any change of Government in the future is linked to that. The shadow spokesman, who is not in his place, worked himself up into a frenzy of excitement about the prospect of an incoming Conservative Government, but the likelihood of that happening is in inverse proportion to the continuation of the Opposition’s irrational, obsessive hostility towards the EU and international co-operation more generally.
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- Mr. LilleyConservative
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- I draw the House’s attention to my declaration in the Register of Members’ Interests. In the speeches of a number of hon. Members, it has been assumed that the whole House is unanimous on the measures before us, and on the Bill that they amend or add to. Historically, the House has made its worst mistakes not when it is divided, but when it is virtually unanimous; not when it is adversarial, but when MPs switch off their critical faculties in a spasm of moral self-congratulation. My concern is that, in considering these measures, we are displaying that tendency. It is vital that we bring the House back down to earth by considering the hard costs and benefits of, and alternatives to, what is proposed and what we are doing. We have not done that very much so far in the debates in the House. Only once in Committee was mention made of the costs and benefits of what we are proposing.
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- Mr. MorleyLabour
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- The right hon. Gentleman will find that, apart from the Stern report, which addressed the issue of costs and benefits, the report by Lord Turner specifically identified some of the projected costs for his recommendations, which are now being incorporated in the Bill. They were relatively modest.
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- Mr. LilleyConservative
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- I am not in any way disputing what the hon. Gentleman says, but no hon. Members, in either the House or Committee, have addressed the question of costs and benefits. They could have done so, as the Government have produced an impact assessment spelling out their estimate of the costs and benefits involved. Those figures are all we have when it comes to trying to assess the costs and benefits of the specific clauses and amendments before us. The Government’s impact assessment has three very important implications. The first is that the costs of the Bill as a whole are potentially huge, and they will be even more onerous if these proposals are accepted. The impact assessment puts the transitional costs at between 1.3 and 2 per cent. of gross domestic product up to 2020. In addition, there will be competitive costs to this country as a result of industry being driven overseas, even though that will not reduce the level of carbon emissions. Ignoring both those costs and making the heroic assumption that British industry can instantly and perfectly implement the latest and most cost-effective technology to meet the targets, means that the estimated cost of the Bill as a whole—even before the target for emission reductions is increased from 60 per cent. to 80 per cent.—comes to £205 billion. That is a lot of money. We have to ask whether we are prepared to increase it by including aviation and shipping, as the measures before us propose. I do not know whether hon. Members have consulted their constituents, but £205 billion would equal over £10,000 from every family in every constituency. People are used to hearing about the large sums of money being used to rescue the banks, but that has been in the form of loans that one hopes ultimately will be repaid. The costs that we are incurring through the amendments—and by the Bill even if it remains unamended—are real money. Our constituents will cough up that £10,000 in taxes and lost incomes, and never see it again. Before we add even more onerous burdens by including aviation and shipping in the Bill, we must be very sure that we are happy with the costs that we are already incurring. Secondly, we need to look at the benefits, which the impact assessment also considers. Although it shows that the maximum costs, even excluding all the things proposed in the measures before us, are potentially £205 billion, the striking thing is that it puts the maximum benefits of the actions proposed in the Bill at £110 billion, or just over half that total. Do the authors of the new proposals believe that their costs will eventually exceed their benefits, as is the case with the Bill as a whole, or can they reassure us that the benefits will be greater than the costs?
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Mr. Christopher Chope (Christchurch) (Con)Conservative- Quote
- Will my right hon. Friend give way?
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- Colin ChallenLabour
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- Will the right hon. Gentleman give way?
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- Mr. LilleyConservative
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- I will give way in a moment, and especially to the hon. Member for Morley and Rothwell (Colin Challen). I have reservations about the certainty with which some people adopt the scientific case behind global alarmism, but I am equally uncertain that it is necessarily wrong, so I am quite prepared to take out an insurance policy against the possibility that we will face global warming, just as I insure my house against the possibility of fire. However, I ask the House whether it is sensible to buy an insurance policy whose premiums could be twice the value of one’s house—
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- Mr. Deputy SpeakerConservative
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- Order. The right hon. Gentleman is an experienced and skilful debater in this House, but I think that he must realise himself that he is building a broad case on a narrow foundation. The remarks that he is making are, in terms of good order and debate, more strictly applicable to later parts of the Bill, and particularly to Third Reading. Therefore, I really must direct him to the specific matter covered in this group of new clauses and amendments.
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- Mr. LilleyConservative
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- Of course I take your remarks to heart, Mr. Deputy Speaker. We have to remember the normal laws of declining marginal benefit and increasing marginal cost. If we tighten the Bill by adding more rigorous burdens regarding aviation and shipping, we must expect the costs to be higher than the costs of meeting the 60 per cent. target, let alone the 80 per cent. target, and we must expect the benefits to be less than the marginal benefits that were to be accrued.
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- David HowarthLiberal Democrat
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- The right hon. Gentleman will of course be aware of the work that Professor Barker did with Pan, Köhler, Warren and Winne, published in 2006 in The Energy Journal, which showed that as the targets become stricter, the world growth rate increases because of induced technological change. Economics has moved on slightly since he was at Cambridge.
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- Mr. Deputy SpeakerConservative
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- Order. Oh, dear. The hon. Gentleman is enticing the right hon. Member for Hitchin and Harpenden (Mr. Lilley) towards the wider aspects of the Bill again. I must remind the House that we want to make progress on to other matters, and we should therefore stick strictly to the terms of the amendments before us.
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- Mr. LilleyConservative
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- I will do just that and avoid discussing with the hon. Member for Cambridge (David Howarth) my experience of Cambridge, which was splendid. I instead return to the measure before us, which asks the Committee on Climate Change to assess the cost of including aviation and shipping in the Bill. However, the new clause does not say how those assessments are to be made. We must assume that they are to be made on the basis that Lord Stern used to assess the costs and benefits in the report to which the right hon. Member for Scunthorpe (Mr. Morley) referred, or on the basis used in the impact assessment that the Government put before the House, although that assessment refuses to give us any costings specifically on aviation and shipping. It is interesting that the impact assessment totally contradicts Lord Stern, who said that the costs of the measure, including aviation, would be far short of the benefits. Of course, he reached that conclusion only by discounting the future at such a low rate that the benefits exceeded the costs. According to Nordhaus, the leading valuator of this sort of methodology, half the benefits that Sir Nicholas Stern takes into account will not accrue until after the year 2800, but so low is his discount rate that they outweigh the costs that we will incur in this century. More sensibly, the Government rejected that. I asked them what interest rate they think should be used, and presumably want to use, in the assessments that they require in new clause 15. They say that they are using the traditional, conventional discount rate required by the Treasury of 3.5 per cent. in real terms. That is why their calculations show that the costs are not necessarily much lower than the benefits, and could well be twice as great as the benefits. Presumably, if the Committee follows the Government’s methodology, it could reach the same conclusion for aviation and shipping.
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- Rob MarrisLabour
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- rose—
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- Mr. LilleyConservative
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- I give way to the hon. Gentleman, who made by far the best speech on Second Reading.
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- Rob MarrisLabour
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- I am grateful to the right hon. Gentleman. Like other industries, aviation and shipping are, of course, susceptible to technological change. On the £205 billion cost—that is the upper end; the lower end is £30 billion—may I point out that the impact assessment said: “Upper end of the range assumes no technological change”? There may well be technological change in aviation and shipping. Conversely, on the benefits, which are between £82 billion and £110 billion, the impact assessment says: “Benefits are therefore likely to be higher.” I suggest that the right hon. Gentleman is being a little pessimistic about aviation and shipping, and about the cost-benefit analysis.
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- Mr. LilleyConservative
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- I may be wrong, of course, but I am using the Government’s figures. Throughout the debate no one else has bothered even to mention the Government’s figures, and they were mentioned only once in Committee. It is only sensible that we should do so, and if we do, and if in particular we reach the conclusion that they should use the methodology implied in the impact assessment and not the absurd methods used by Sir Nicholas Stern, now Lord Stern—he received his reward—they would reach a conclusion very similar to that advocated by the hon. Gentleman on Second Reading: that we should put far more emphasis on adaptation to helping poor countries cope with climate change, rather than on crippling our industries—aviation, shipping and all the other industries—to little avail.
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- Mr. TyrieNon-affiliated
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- rose—
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- Mr. LilleyConservative
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- I give way to my hon. Friend, who made the equal best speech on Second Reading.
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- Mr. TyrieNon-affiliated
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- I hope that my right hon. Friend has not devalued the compliment that he threw across the Floor of the House; heaven knows what he will say when another Member seeks to intervene. The question at issue has been whether technology in aviation and shipping can proceed at a pace to enable the costs to be kept reasonably low and therefore to allow us to pick up the benefits of a low carbon technology without extra cost. Is my right hon. Friend aware that the leading estimates of the improvement needed in carbon productivity are that it needs to increase fourfold over the next 40 years—that is, that the average of the past 15 years, which is 1.5 per cent. per annum, needs to increase to about 6 per cent. per annum if we are to get anywhere near meeting the 80 per cent. target? Will he speculate on whether it is plausible that a fourfold increase can be achieved?
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- Mr. LilleyConservative
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- That would be extremely demanding, but the implications of the Government’s impact assessment both for aviation and shipping and for industries more generally is that we must find more effective ways of reducing costs and carbon utilisation than they themselves think are available or would result from the measures in the Bill. Either that, or we must adopt the route proposed by the hon. Member for Wolverhampton, South-West (Rob Marris) and devote more effort to adaptation to climate change rather than mitigation, which would remove the burden—the almost impossible task—of bringing aviation and shipping into the scheme. It would also mean that, if global warming continues but turns out not to be predominantly the result of human activity, we would still be able to help the people in poor countries who would suffer from it, whereas we would not help them if we relied only on mitigation efforts. The implications of the clauses before us are extremely serious. We are potentially asking our constituents to bear a burden of £10,000 for every household, should we increase it. We are potentially producing benefits that may be only half the costs that we are incurring. We have been using a method to assess future costs and benefits that has been surreptitiously abandoned by the Government, but they have told us nothing about it. These issues ought to be discussed more fully before the Bill becomes law, and it is a sad day when Parliament refuses to face up to these hard facts.
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Alan Simpson (Nottingham, South) (Lab)Labour- Quote
- There is a real danger of the House misleading itself into debates which, although important, are not the debates that should be taking place on the amendments. There are issues to be addressed concerning the methodology of impact assessments, but at this stage the House is being asked to address the principle of the inclusion of the Government’s assessment of carbon impacts in the way in which we set our carbon budgets. It is important to bring the debate back to that. It is also important not to allow ourselves to conduct a caricature debate about the choices that we face. The choices are not between unilateralism or multilateralism, or between mitigation or adaptation. We will have to do both. When the ship is sinking, the last thing we want to hear is someone running round the decks saying, “No action until there is a global refit.” If the ship is sinking, we want action taken on the threat that we face at that time. What we need to recognise from the scientific reports, which have been coming to us in their own tsunamis, is that the climate and the planet are the part of the equation that is in the process of taking the most enormous unilateral action. We will have to address huge upheavals in the whole framework of how we consider societies and economies capable of working viably throughout the whole of this century. I had hoped that the hon. Member for Birmingham, Yardley (John Hemming) would be here for his customary intervention on this issue. The answer to the question about oil is that by the time we come out of the current global financial crisis, two things will be queuing up. The first will be the climate crises already in the pipeline. Secondly, by that time we will probably have passed the peak oil level anyway, and we will have to move to a post-oil economy if we want a viable economy of any sort. The question before the House is whether it is right in principle to include aviation and shipping in how we assess carbon impact. The answer is that it has to be right. It would be absurd for the House to pretend that we can ignore the impact that aviation in particular, and shipping, have on our carbon emissions and the climate damage that we do. The right hon. Member for Suffolk, Coastal (Mr. Gummer) is right to say that there are domestic implications that need to feed back into our policy on airport expansion. It would be enormously sensible to draw airport expansion to a halt; that would give a hugely important signal to people in this country and internationally about the importance that we place on the environment being the centrepiece of any sustainable economy in the 21st century.
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- Mr. Graham StuartConservative
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- I agree with the hon. Gentleman; it makes no logical sense for shipping and aviation to be excluded. They should be included. Amendment No. 72 says that consideration should be given to “the emissions…that the Secretary of State expects to arise during the budget period.” However, the Minister seemed earlier to suggest—perhaps I misunderstood her—that the Government would refuse to produce any numbers on the emissions that they expected to arise from aviation and shipping.
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- Alan SimpsonLabour
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- I understood that the Minister said that she would produce the assessments for the period of the Parliament, but that there was no point in coming back with annual statements when those would be set out in the overall assessment. In so far as we can predict across the period of a whole Parliament, that is the sensible way for the issue to be incorporated. I want the Liberal Democrats to think carefully about whether we need to divide on new clause 14. When I consider amendment No. 72, the Government’s comments about its incorporation into the framework of the Bill and what the Bill says, I think that there is a real danger that we would be dividing about how many angels there are on the head of a pin. I find comfort not in clause 10, but in clause 9, which sets out a duty for the Secretary of State to “publish a statement setting out whether and how the order”, which has to be brought before Parliament, “takes account of any representations made by the other national authorities.” In so far as there is a direct transfer from aviation and shipping to other sectors of the economy, I cannot conceive of a situation in which those sectors do not make their own representations about the distorting effects of their being asked to carry the carbon consequences of existing policies on aviation and shipping. The cross-party agreement that seems to have emerged gives everything that the Liberal Democrat new clause seeks to deliver. There are issues on which it is important for the House to divide, but we owe ourselves the discipline of not pretending, for narrow advantage, that there is a real division among the different parties, and that a real gain can be made from a Division when it cannot. I hope that the Liberal Democrats will have another look at the amendments and the clauses that were initially in the Bill, because I doubt whether they could find any way in which new clause 14 would change anything.
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Dr. William McCrea (South Antrim) (DUP)Democratic Unionist Party- Quote
- My hon. Friends and I accept that climate change is a serious environmental threat that requires action. We have to tackle carbon emissions, and it is therefore important that there is an appropriate Bill to do that. Although I have a very sceptical colleague sitting beside me, our party’s policy is that the Bill is necessary. However, I do not accept that we can say with authority that man is the sole contributor to the situation. There are those who have over-egged the case and in many ways destroyed the argument, and that has made many people in the community cynical. There are also those who have underestimated the case, and they have not helped the debate either. I believe that global warming is a reality. Scientists have a certain view of the issue; in this House we need to take a balanced view. I should like to draw to the Minister’s attention some consequences of these proposals, particularly in the region of the United Kingdom that I come from, Northern Ireland. It is essential to deal with this issue internationally and even-handedly, in conjunction with our European Union partners. It is accepted in Northern Ireland that those who call themselves great Europeans have a wonderful way of taking European legislation and, if it suits them, driving a coach and horses through it and not carrying out what was intended. In the UK—although many see us as bad Europeans in many ways—the Government gold-plate legislation with great zeal and force it on the people. There needs to be equity in the provisions made across Europe. There is a case for commercial justice in relation to aviation—in my constituency, for example. I have in my constituency an international airport, Belfast International, which is in direct competition with another international airport that is not many miles away, but happens to be in another EU country. Unlike many other EU countries, we have a land border. I ask the Minister to consider carefully the danger that if we take action unilaterally, rather than right across Europe, we could be on the verge of driving local industry over that border. That would penalise my constituents and my local airport. It is not the business of this United Kingdom Government to penalise their British citizens in Northern Ireland or to direct business to our competitors. There is a genuine fear that there will be discrimination against a region of the UK as regards the aviation industry. I do not believe that the Government intend that to be the outcome of their actions, but it could be, if they do not ensure that there is a balanced and equitable approach across Europe. I know that an easy, throwaway statement can be made about transport alternatives and so on. In Northern Ireland, over many years, the trains were removed—most of Northern Ireland is not served by train—and the timing, frequency and availability of buses is not as in other regions of the United Kingdom. If we take people out of cars to deal with the issue, what will they use? A horse and trap? Bicycles? We have to deal with reality, rather than go back into history. We have to have a balanced view. I appeal to the Minister concerning aviation and how it relates to the competition faced by the international airport in my constituency, lest we destroy a vital part of our industry, and direct industry away from a region of the United Kingdom. That would not be good for the future of the UK or its industrial prosperity.
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- Mr. HurdConservative
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- I rise to give a cautious welcome to the movement by the Government on this important issue, but we must recognise the scale of the journey. We have moved from a situation, in summer 2007, when those of us on the Joint Committee on the draft Bill were listening to a Government who were saying, “We are filing the inclusion of aviation in the ‘too difficult’ box. We don’t need to do it because we aren’t required to by our international agreements.” The message from the Government in the Bill is now, “We’ll tell you if we’re going to include aviation and shipping in our international targets by the end of 2012, and if we do it, we’ll tell you then how we’re going to do it. On the way we’ll get some advice from the Committee on Climate Change and publish some projections.” The hon. Member for Northavon (Steve Webb) was right: there is no absolute obligation on the Government to include aviation and shipping in the carbon budgets or the targets, and we should be quite clear about that. It has been a modest journey, but a welcome one. That is why the Bill needs toughening, and I extend a cautious welcome to amendment No. 72, tabled by the right hon. Member for Scunthorpe (Mr. Morley), who, sadly, is no longer in his place. It adds value by requiring the Government and the Committee on Climate Change to take into account aviation and shipping in their public deliberations. I am concerned that the phrase “take into account” is too vague, because it can mean anything to any Government—but there has been an improvement. We recognise that there are tremendous difficulties in calculation—we have to respect that, and we must not get too far ahead of ourselves in the international process. But this Climate Change Bill is very important. It is a landmark Bill, which sets an international lead as a framework Bill. That is its value. It is a new method of setting targets and monitoring progress against targets. The key innovation in the Bill is not the long-term targets, but the carbon budgets. The rolling carbon budgets will allow us to get a grip on the problem of cumulative carbon emissions—a point forcefully made by my hon. Friend the Member for Beverley and Holderness (Mr. Stuart). It is the cumulative carbon emissions that count, not the absolute carbon emissions at the distant date of 2050. The carbon budgets are the key innovation, and we simply cannot undermine them by leaving completely to one side the fastest growing source of emissions, however difficult it is to calculate them. We should take the opportunity to place on record the fact that aviation emissions in the UK grew by 90 per cent. between 1990 and 2004. The Under-Secretary was unable to answer the question posed by my hon. Friend the Member for Beverley and Holderness about the proportion of future emissions in the carbon budget that the Government think will come from aviation, but she will be aware that there are various estimates from serious people such as the Tyndall Centre and WWF, and the range of projections is between 50 per cent. and 100 per cent. of our carbon budget in 2050. We have to address a serious engine of growth in carbon emissions, and we cannot afford the “out of sight, out of mind” message that we received from the Government 18 months ago. As the Under-Secretary well knows, transport, and aviation in particular, is the most difficult in policy terms, partly because there is no obvious short-term technology solution. It does not take much for us to imagine that our children or grandchildren will be driving around in cars that are different from the ones that we drive. We can almost feel the technology—it is out there. But in aviation that is not the case. The best-case scenarios for aviation are for technology products leading to improvements of about 1.5 per cent. a year, which is not enough, given the demand. We are left in very difficult political territory when making policy—having to decide whether we want to manage demand through price mechanisms, taxes or the management of airport capacity. The Government are placing all their bets on the European emissions trading scheme—the cap-and-trade scheme. That make me nervous, because in the Environmental Audit Committee we spend a lot of time looking at the emissions trading scheme. It works as a testing mechanism, but it has comprehensively failed to reduce emissions, because a cap-and-trade scheme is only as good as the cap, which is a function of political will. The great concern is whether there will be the political will in 2011, in the face of the mother of all lobbies from the aviation industry, to set a cap that bites. We know that such a cap will have significant implications for the price that consumers will pay for aviation. There will be significant consequences for the price of carbon credits in the system for other industries. This is an extremely difficult policy area.
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- Barry GardinerLabour
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- Does the hon. Gentleman agree that it would be possible to allow an expansion of the aviation industry, and shipping as well, as long as that was taken into account in the carbon budget, as he rightly stressed, with accommodations and increased cuts in those areas? That would, critically, demand that it be possible to quantify exactly what the amount of the contribution was—the central point made by the hon. Member for Beverley and Holderness (Mr. Stuart) earlier.
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- Mr. HurdConservative
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- Absolutely—we need to know what we are dealing with. The hon. Gentleman has painted a gentle and attractive scenario, but it places a lot of faith in the emissions trading system, which is attractive in theory but has not worked in practice, because too much political risk is tied up in it. I was making the point that we cannot afford an “out of sight, out of mind” attitude to aviation and shipping, because the policy challenge is too great. It requires the Government of the day to get a grip on it, and the harsh reality is that this Government have been extremely clumsy in the signals that they have sent through their policies on aviation. We had a clumsy increase in air passenger duty, which gave green taxes a bad name because it was closely associated with the concept of stealth taxes. We seem to be slow-marching towards the wrong decision on Heathrow. It was desperately disappointing that one of the first signals from a new Secretary of State in a new Department was simply to confirm that existing position on Heathrow. The Under-Secretary will be aware that it is hard to persuade those in this country, let alone any other, that we are serious about controlling emissions from aviation if we give the green light to the expansion of the fastest-growing source of emissions. The negative value of that decision far outweighs the relatively small value of the signals being sent in the Bill.
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- Mr. Graham StuartConservative
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- This is a question not only of aviation but of shipping. We are a major maritime nation, but little effort has been made here, or globally, into finding out what the emissions from shipping are, let alone into the investment and leadership that Ministers like to talk about that is needed to transform the efficiency of shipping in terms of emissions. That is a very challenging process in aviation, but probably a lot less so in shipping. However, precious little effort or political will has been applied to that area so far.
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- Mr. HurdConservative
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- I accept that point completely. It is coming through in all the evidence received by the Environmental Audit Committee at the moment. The value of the debates on the amendments is to ensure that such matters are included in the Bill, so that the Government cannot ignore the issue.
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- John HemmingLiberal Democrat
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- Will the hon. Gentleman give way?
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- Mr. HurdConservative
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- If it is about oil, the answer is no.
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- John HemmingLiberal Democrat
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- It is about shipping.
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- Mr. HurdConservative
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- All right.
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- John HemmingLiberal Democrat
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- Does the hon. Gentleman accept that shipping is one of the modes of transport that, historically, operated without any carbon emissions?
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- Mr. HurdConservative
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- I congratulate the Government on moving from an unsustainable position on the inclusion of aviation and shipping in our consideration of budgets and targets—but I say to the Under-Secretary that the most powerful signal they could send would be to review and reverse the decision on Heathrow.
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Mr. Charles Walker (Broxbourne) (Con)Conservative- Quote
- I am glad that we are debating the inclusion of aviation and shipping in the Bill; such matters need to be aired and discussed in Parliament. Setting a reduction target of 80 per cent. by 2050 is laudable and ambitious, but probably unachievable. In the next 42 years we will return to this place regularly to recalibrate the target—to reduce it to take into account global recession and the need to create jobs and wealth. The danger of setting a target of 80 per cent. is that it will become just another missed target. My word, we have had a lot of missed targets in the past 10 years. There is a danger that our constituents will perceive politicians perpetrating another con trick by setting a target that there is little—if any—hope of achieving. Let us be honest with the electorate and say that in an ideal world, we would like a carbon-neutral economy by 2050—zero carbon emissions—but it simply will not happen, because we do not live in an ideal world. What we should say is that in the next 42 years we will rightly reduce our reliance on fossil fuels, but do it sensibly, and that we will progress towards reducing carbon emissions, but not set artificial targets, which we realise—probably secretly—that we have little chance of achieving. We need to be honest with the electorate, and I do not believe that we are doing that.
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- Mr. ChopeConservative
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- In a sense, it is a pity that today’s business is not subject to any knives, because that means that we are unlikely to reach all the items on our agenda, and there are some important issues to debate later. I shall therefore keep my remarks brief. The issue that we are discussing needs to be put into context. A paper that PricewaterhouseCoopers produced, entitled “The world in 2050”, projects that the United Kingdom will produce only 1.2 per cent. of global emissions in 2050—without the increased targets in the Bill and without including emissions from shipping and aviation. We must take that into consideration. Even if we eliminated that 1.2 per cent., would it make any difference to the world? I do not think that it would—indeed, the burdens on our economy would be even more enormous than they are already likely to be, as my right hon. Friend the Member for Hitchin and Harpenden (Mr. Lilley) explained so well. My right hon. Friend was one of five who voted against Second Reading. When the history books are written in 2050, people will ask why only five people voted against Second Reading of a ludicrous measure. However, he failed to say that, as we export more of our manufacturing industry, we will depend all the more on international shipping and aviation for our imports. The new clauses therefore deal with matters that are highly relevant to our viability as a nation. The TaxPayers Alliance produced an important research note, which shows that, if we achieved an 80 per cent. reduction in emissions, UK gross domestic product in 2050 would have to be 3.8 per cent. lower than it was in 1990. We know of the public dismay and, indeed, even the Prime Minister’s concern, about the fact that we have now entered the first quarter of negative growth since 2007. What would 3.8 per cent. negative growth in 2050 compared with 1990 mean for the people of this country? It would be a disaster on a massive scale and unacceptable to the people. Not enough has been done to spell out the implications of the Bill. As one examines the measure, one realises that it contains all sorts of loopholes. It would therefore be possible for successor Governments—or even the current Government—to adjust the membership of the committee that is meant to be pushing all of this so that it was then able to use the word “appropriate” to decide that the provisions passed in the Bill were wholly inappropriate as our economy went down the global league table.
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Sammy Wilson (East Antrim) (DUP)Democratic Unionist Party- Quote
- I appreciate the hon. Gentleman’s point that targets set for a time when most of us will not be in the House—and perhaps not on the planet—are all very well. However, even if the Government reduced or amended the targets, the Bill contains costs now that would hit our constituents hard in fuel, food and travel bills. We should be worrying about that.
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- Mr. ChopeConservative
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- I agree, but I shall concentrate on aviation, aerospace manufacturing and shipping because they are key industries in our country. One could argue that the City of London is the centre of global shipping activity. We have some of the world’s largest hub airports, and also international shipping container terminals, albeit not so many as we had, which is a pity. Aviation is our heritage, but I have not heard a word to show that the promoters of the Bill and the supporters of the amendments support and laud British aviation and shipping.
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- Colin ChallenLabour
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- Would the hon. Gentleman therefore argue that people such as Richard Branson should not try to reinvest all Virgin Atlantic’s profits in exploring the possibilities of biofuels? If it were a bit more expensive to develop that new technology, would not some sort of statutory framework, which encouraged people, help those who wanted to do that?
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- Mr. ChopeConservative
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- I could not agree less. Richard Branson’s success is based on being a buccaneer and an entrepreneur and not taking any notice of regulations and Governments. He occasionally may cosy up to the current Government, but when he realises what is involved, he gets away pretty quickly. The hon. Gentleman has deployed an argument that supports my case. Let us have free trade, the market and competition. Global trade depends, above all, on aviation and shipping. It would not get far without them. I want global trade to grow, but it is not clear whether the Bill’s promoters and the amendments’ supporters share that objective. How do the Government propose to reduce emissions from aviation and shipping without damaging global trade? It is obviously common sense to say that fuel expenditure could be reduced for each unit of aviation and shipping activity, and that each unit could be more fuel efficient, but the market will achieve that objective—we do not need regulation to do it. I am worried that an agenda for imposing volume reductions in aviation and shipping underlies the Bill and the amendments. Imposing such volume reductions would be damaging to global trade. We are a global trading nation and it would therefore be highly damaging to the United Kingdom plc.
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- Rob MarrisLabour
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- The right hon. Member for Hitchin and Harpenden (Mr. Lilley) kindly praised me in his interesting remarks. He may have misinterpreted my position slightly because I believe that the United Kingdom and the world need to opt for adaptation, about which I have been banging on in the House for more than two years, initially as a lone voice. However, we also need to lessen emissions because I have no doubt that human activity contributes significantly to adverse climate change. I have been seized of that notion for the past 35 years, since I studied it at university, and I am not a scientist—the science has been around for a long time. Of course, just because it has been around for a long time does not mean that it is right.
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- Sammy WilsonDemocratic Unionist Party
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- The hon. Gentleman says that he has been seized of the idea for the past 35 years, but 35 years ago, some of the people who now talk about man-made global warming were talking about man-made global cooling and an ice age. If the hon. Gentleman was seized of the idea in the 1970s, he was well ahead of those who now advocate the notion of global warming.
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- Rob MarrisLabour
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- I am slightly saddened that the Minister of Environment in the Northern Ireland Assembly is apparently more than 35 years behind me. That troubles me, but I will go no further into that. I welcome Government new clause 15 and amendment No. 72, which will mean that the Bill includes emissions from aviation and shipping. That is right, but I want to counterpoise that with the 80 per cent. cut by 2050. The right hon. Member for Suffolk, Coastal (Mr. Gummer) was absolutely right when he cited T. S. Eliot, rather than George Eliot, on being two steps ahead. If we as politicians are one step ahead of the electorate, that is leadership. If we are two steps ahead, that is eccentricity. If we regard the inclusion of aviation and shipping as one step in that paradigm, the second step is the 80 per cent. cut. Trying to do both is unrealistic. Probably for the first and only time ever, I agreed with a great deal of what the hon. Member for Broxbourne (Mr. Walker) said. Government amendment No. 1, to which we shall come later, talks about the 80 per cent. cut. We are talking about aviation and shipping, but one has to counterpoise them, because we cannot achieve both. We cannot include aviation and shipping and have an 80 per cent. cut by 2050. That will just not be possible. The baseline year for the percentage calculations is 1990. My figures for the United Kingdom are from DEFRA’s website and are for the period 1990 to 2005, a 15-year period, which is one quarter of the period 1990 to 2050. One would not expect to make much progress in the first couple of years, but then the technological benefits should kick in, albeit before the law of diminishing returns starts to apply as we approach 2050, thereby lessening savings in CO2 emissions. However, my figures, which are for the first 25 per cent. of that period, show that CO2 emissions, which constitute 84 per cent. of the basket of greenhouse gas emissions in DEFRA’s calculations, went down by 6.4 per cent. Overall greenhouse gas emissions in the United Kingdom went down by 15.3 per cent. in that period. For all our debate so far and for all the importance of cutting emissions and including aviation and shipping, as highlighted by new clause 15 and amendment No. 72, we are deluding ourselves and the electorate if we think that we as a society can include aviation and shipping, which we should, and have an 80 per cent. target for 2050.
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- Mr. TyrieNon-affiliated
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- I strongly agree with the hon. Gentleman’s line of argument. He might also like to point out that almost all the 6 per cent. improvement that he mentioned was a result of gas privatisation and the consequent dash for gas, which was opposed by the Labour party throughout its passage in the House. Since that one-off change, which mainly happened before the end of the millennium, there has been virtually no improvement at all. In fact, that figure has gone into reverse in recent years.
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- Rob MarrisLabour
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- The figures that I received from the Library about nine to 12 months ago indicated that between 1999 and 2006, which were the latest figures that the Library could supply, per capita CO2 emissions in the United Kingdom increased—not by a lot, but they did increase. The trend was in the wrong direction. Therefore, to suggest that an 80 per cent. cut is feasible troubles me greatly. The youngest Member of the House is the hon. Member for East Dunbartonshire (Jo Swinson), who was here for the earlier part of the debate, but has had to slip out. She is 28. She will be 70 in 2050. It is unlikely that she will be an active Member of the House by then. [Interruption.] I hear chuntering, which will no doubt be recorded in Hansard as an interruption. I carefully used the adjective “unlikely”. I did not say that she would not be a Member. That is a measure of the problem, when our youngest Member will be one of the oldest Members, if she is still here, in 2050. It is an abdication of responsibility and comes close to misleading people to say that we can include aviation and shipping and have an 80 per cent. cut when, on tables of life expectancy and life patterns, no one who is currently in the Chamber will be an active politician in 42 years’ time.
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Lynne Jones (Birmingham, Selly Oak) (Lab)Labour- Quote
- I take my hon. Friend’s point about the seriousness with which we must approach the targets. Clearly we have woefully missed them so far. We have a target of achieving a 20 per cent. cut in CO2 emissions by 2010, which we are nowhere near. What informs the targets for 2050, however, is surely the need to limit the overall concentration of CO2 in the atmosphere. Therefore, it is up to us to find the mechanisms to help us to achieve those targets. By saying that we cannot achieve them, we are already being faint hearted. We could have achieved the earlier targets that we set ourselves had the will been there. We must have the will to achieve the new targets.
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- Rob MarrisLabour
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- Willing the means does not mean that we will get there and it can be counter-productive. If I challenged my hon. Friend to run 100 m in 14 seconds, for example, she might train and try to do it. If I challenged her to run 100 m in 10.5 seconds, I suspect that she would not even bother to start training. That will be the position of the electorate, particularly when they see us, rightly and as I hope that we will, including aviation and shipping in the approach to cutting emissions, which we must do, as well as addressing adaptation. However, the thought that will strike many of my constituents is this: “We can’t do both, so why should I bother doing anything?”
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- Mr. GummerConservative
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- But surely the alternative is even worse. If the hon. Gentleman is suggesting that we should have targets that are not sufficiently good to solve the problem, nobody would take any part at all. The targets are not invented; they are necessary if we are to counter climate change. We owe it to our constituents to say, “That’s what we’ve got to do and we’ve got to find a way of doing it,” not to pretend that we can go for an easier target because it is better electorally.
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- Rob MarrisLabour
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- I humbly suggest to the right hon. Gentleman that he is completely wrong. There is no question of “solving the problem”. The 80 per cent. target is proposed in order to limit climate change to an average of 2° C, not to keep at a certain level with no change. The figure of 2° C is somewhat arbitrary—indeed, anything that we do in that regard is arbitrary—but if we set ourselves up to fail, then fail we surely shall.
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- Mr. WeirScottish National Party
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- I will be relatively brief, as most of the issues have probably been covered by now. I welcome the amendments from the Government, who have moved a long way from where they started. I listened carefully to what the Minister said about the Government’s amendments and why they were not going slightly further than we would wish. I appreciate the difficulties with aviation and shipping. I heard what she said about the possibility of going for a sectoral system, along the lines of the EU emissions trading scheme. I can well see how that might be attractive for aviation, since we are talking about a relatively small number of international airlines flying into the UK. However, I am not sure that that would work so well for shipping, which is a very different industry and may, I suspect, need different treatment. As an aside, the point that the hon. Member for Birmingham, Yardley (John Hemming) made about ships not always using oil is an interesting one. If I remember my history correctly, the development of warships in the early 20th century led the movement towards the use of oil to power shipping rather than steam or sails, but that is by the by. It is important to include shipping, however, because apart from the quantity of emissions in general, there is a problem with shipping, particularly with older ships that use heavy oil, which is very polluting, thereby contributing greatly towards climate change. Aviation also contributes to climate change, but the other day I noticed a report saying that Boeing believed that it would be able to develop biofuels for aircraft within the next few years. Given the problems that have been experienced with biofuels in other areas, however, I am dubious about how much that will move matters forward. Listening to the Minister and appreciating the difficulties, I come close to agreeing with her. However, when she talked about the need to reach international agreement, I heard the call of the long grass, because, to a large extent, that has been the problem until now. The right hon. Member for Scunthorpe (Mr. Morley), who is no longer in his place, said that one reason that international shipping and aviation were not included in the Kyoto protocol was simply that international agreement on the issue could not be reached at that time. It seems unlikely that it will be any easier to reach an international agreement now than it was then. Indeed, given that the world is undoubtedly going into a recession—we have heard the views of some hon. Members on that today—some Governments are already trying to rein back from their green policies for fear of their impact on their national economies. The chance of reaching an international agreement is therefore receding rather than improving. The idea of being able to reach such an agreement before the Copenhagen conference is pie in the sky. I definitely got the impression from the Minister that there had not been a great deal of progress on this matter, yet I note that the section of the Library research paper on calculating emissions states: “Under the Kyoto Protocol, the United Kingdom has a legally binding obligation to reduce greenhouse gas emissions by 12.5 per cent. below 1990 levels by 2008-2012. Aviation is split into domestic and international for the purpose of calculating emission levels and for Kyoto. International carbon dioxide emissions from aviation do not come under the Kyoto agreement and so are not calculated in the UK’s emission…totals for this purpose”. It goes on to say that the Department for Transport “states that this is because ‘there is no international agreement yet on ways of allocating such emissions’”. That point was made by the Minister. It goes on: “Despite this, under Kyoto, signatory nations do report estimates of international aviation bunker fuel emissions as a ‘memo item’ in their national greenhouse gas inventories.” That point is also made by Friends of the Earth. So these emissions are calculated, and I believe that that gives the United Kingdom a basis for moving forward.
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- Joan RuddockLabour
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- It might be helpful if I clarify this point. There is a real difference between knowing what global emissions are—having a figure for global emissions that is calculated in a particular way for this reporting under Kyoto—and being able to account for a proportion of those emissions in any particular sovereign state. That is the issue.
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- Mr. WeirScottish National Party
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- But there is a basis for calculating the figures for sovereign states, as I understand it, and progress has been made. This is not a question of starting with a blank sheet. Much has been made of the point, which was raised by the right hon. Member for Scunthorpe, that we must take into account these emissions. That is also a concern of mine. In Committee, I raised concerns about the get-out clauses, the ambiguities relating to the setting of the 2050 target and the carbon budget, and the fact that economic differences and various changes should be taken into account. In my view, there are too many get-out clauses, if we are serious about attempting to reach the carbon targets that we are setting. I would be tempted to support the amendment tabled by the hon. Member for Northavon (Steve Webb) if he were to put it to a vote. It places a duty on the Secretary of State and removes some of the dubiety and some of the possibility of a get-out. That would be useful. What is needed is leadership. We have to show the way in which these emissions are to be included in international agreements. It is all very well to talk about reaching such agreements, but I have never seen one that was quickly negotiated, and I suspect that this one will drag on as well. The Scottish Government have pledged to include aviation and shipping in their Climate Change Bill. That shows leadership, and this House should also show leadership by moving down that route.
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- Sammy WilsonDemocratic Unionist Party
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- First, I have to say how pleased I am that, at least towards the end of the debate on this group of amendments, I heard some voices querying what is being done in this part of the Bill. That shows that there is another side to the argument. The tactic of those who have driven the Bill forward has been to give the impression that those who take a contrary view are cranks who do not care about the environment and are isolated. This is in spite of the fact that the most recent survey of climate scientists indicates that 46 per cent. of them disagree with the view that climate change is solely down to the activities of man. There is no scientific consensus on this, and there have been attempts to silence those who take a different view.
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- Rob MarrisLabour
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- Does the hon. Gentleman accept that human activity is a significant contributory factor to the change that many scientists say the climate has been undergoing in the past 50 years?
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- Sammy WilsonDemocratic Unionist Party
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- I think I have already made it clear that 46 per cent. of climate scientists believe that climate change is not solely down to the activity of man. That means, of course, that there are scientists who believe that it is. There is an array of environmentalists, scientists and economists who take a contrary view, however, and who believe that the impact of man is not significant. I want to make it clear that I happen to share that view.
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- Mr. ChaytorIndependent
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- I am curious about the 46 per cent. of climate scientists. Will the hon. Gentleman tell the House why none of them is represented on the United Nations Intergovernmental Panel on Climate Change, which is the authoritative body? Is this a global conspiracy?
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- Sammy WilsonDemocratic Unionist Party
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- If one looks at the second IPCC report, one can see that Sir John Houghton suggested that he had excluded the views of some of those scientists because they did not fit in with the general view. There is a wide range of views among scientists who were engaged on the panel, and other views were deliberately excluded.
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- Will the hon. Gentleman give the House the source of his assertion that 46 per cent. of scientists disagree with the view that climate change is caused by human activity?
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- Sammy WilsonDemocratic Unionist Party
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- I do not have the names of the two scientists involved, but they are associated with the Hamburg institute. The latest revision of the relevant survey took place in 2005, so this is a fairly up-to-date assertion. Indeed, let us look at some of the comments on the IPCC report. The Wall Street Journal talked about a “cover-up in the greenhouse” and pointed to some views having been suppressed.
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- Mr. TyrieNon-affiliated
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- Professor von Storch, who is probably Germany’s leading climate scientist, undertook that survey. Unfortunately, it has not been given a wide enough circulation. That same survey showed that one third of climate scientists did not believe that the lion’s share of recently observed warming was anthropogenic in nature. Is the hon. Gentleman aware that a significant proportion of IPCC scientists have resigned in disgust because their views have not been reflected in the reports? They include some of the world’s leading climate scientists, such as Professor Richard Lindzen, who has said that “only the most senior scientists today can stand up against this alarmist gale”.
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- Colin ChallenLabour
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- On a point of order, Mr. Deputy Speaker. Will we be able to return to the question of aviation and shipping shortly?
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- Sammy WilsonDemocratic Unionist Party
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- I accept that I was probably led astray by the Members who intervened; they diverted me from the point that I was briefly trying to establish. I was arguing that a wide range of people are still sceptical about the main causes of climate change, which brings me to my point about the inclusion of aviation and shipping in the Bill. If we have already gone down the road of including a wide range of our industries, our domestic fuel consumption and a number of climate-change regulations, the impact will be compounded when we include shipping and aviation. As others have pointed out, all this has been done without any indication of the cost to the relevant industries. I noted what the right hon. Member for Suffolk, Coastal (Mr. Gummer) said about industries paying for the cost of the carbon they use, but the truth of the matter is that it is not some anonymous “they”, as in a shipping or airline company as, eventually, this comes down to costs that are passed on to consumers, travellers and all of us in respect of transporting our food to the shops where we purchase it. Those are real costs that our constituents will have to pay.
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- Barry GardinerLabour
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- Is the hon. Gentleman aware of the research carried out by Lord Stern and others, showing that the costs of inaction are substantially higher than the costs of acting to mitigate climate change now?
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- Sammy WilsonDemocratic Unionist Party
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- I note that, but as was pointed out earlier, the discount rates in Lord Stern’s report grossly exaggerate the benefits of taking action and underestimate the cost of doing so. In artificially applying a 2 per cent. discount rate, he of course got the answer that he wanted. By any stretch of the imagination, costs amounting to 2 per cent. of gross domestic product will have a massive impact on our ability to finance public services. Again, those costs will be felt by individuals. Some of the costs identified by Lord Stern—the impact on flooding, on food production and so forth—were predictions based on models with hundreds of variables. Even scientists have accepted that they do not understand all the connections between those variables. The hon. Member for Brent, North (Barry Gardiner) will know something about economic modelling, but climate change modelling is even more complicated and even less certain. We already know the impact of some economic models and we know how true the connections have been. The inclusion of aviation and shipping in the Bill has been accomplished without spelling out the costs. We will all be held responsible and we will all be held to account for that. What are the costs for our constituents? They have not been spelled out. Secondly, as has emerged from a number of speeches, the degree of state and international planning involved in the whole exercise is considerable. Indeed, the hon. Member for Bexhill and Battle (Gregory Barker) pointed out that there are often unintended consequences in pursuing state and international planning. I heard the enthusiasm of some Conservative Members; they usually argue in favour of the working of the market and the market economy, yet some of them seemed to embrace a degree of state control and state planning that would make some of the left-wing Labour Members cheer and clap at the prospect. My second point, then, is that there will be a huge increase in Government regulation and Government interference in the economy, with all the consequences that will follow, yet we know how successful state planning has been in the past. Thirdly, all this pain will not have an impact on CO2 emissions in any case, because most of them are to be taken up by the use of the emissions trading scheme, whereby permits to pollute and produce emissions can be bought. We have already heard about caps, but Europe is awash with permits at the moment. To get Russia involved in the Kyoto protocol, it was given permits based on 1990 levels—when, of course, CO2 emissions from huge, inefficient and dirty state industries were massive. Many of those industries have closed down; their emissions are no longer. However, the ETS mechanism will enable aviation and shipping industries to purchase, from Russia and other countries awash with emissions, certificates to produce CO2 emissions that are not currently being produced. Rather than a reduction, we could actually see an increase in CO2 emissions. The impact will only add to the costs of industry, which will then be borne by consumers and people who wish to travel. The hon. Member for Northavon (Steve Webb), speaking for the Liberal Democrats, said that he thought this was more a nudge and a wink, and that nothing much would be done at the end of the day as the Government would find ways around meeting the targets. That might well be the best result. The problem is that in the interim we are going to face additional costs and additional disadvantages to our economy. My hon. Friend the Member for South Antrim (Dr. McCrea)—he totally disagrees with my views on this issue, incidentally, but I agree with him on this—pointed out that those costs will not be felt evenly. Some constituencies will suffer the costs much more heavily than others. If we are going to vote this Bill through, we should at least make people aware of the impact it is likely to have on them, their livelihoods and their economic activities.
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David Taylor (North-West Leicestershire) (Lab/Co-op)Labour- Quote
- rose—
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- Sammy WilsonDemocratic Unionist Party
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- I was about to close, but I will give way to the hon. Gentleman.
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- David TaylorLabour
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- I thank my hon. Friend—well, he is a friend outside the Chamber—for giving way. In articulating the case that outcomes are uncertain, costs substantial, modelling complex and time scales very lengthy, is he not putting forward a counsel of despair, a prediction of inertia or a “do nothing” approach in the face of global problems? Surely that is not the impression that he is trying to give to the House, or is it?
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- Sammy WilsonDemocratic Unionist Party
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- I shall not go into all that, as I have probably pushed your indulgence to the limit, Mr. Deputy Speaker, but there may be opportunities later in the debate to look at what can be done. If there is, as I accept, global warming, climate change and impacts stemming from them and if we are going to keep using our resources, let us look into what we can do now that will make an impact now—not some time in the future, when, as has already been pointed out, most of us will not even be in the House anyway!
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- Joan RuddockLabour
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- I note from the clock that we have spent three hours on the first group of amendments; we have five such groups and only five hours of debate. I propose not to respond to all the issues raised, but just to some of the most direct ones that were put to me. The hon. Member for Bexhill and Battle (Gregory Barker) asked about the definition of international aviation and shipping. We have not yet defined it, but there is a provision in the Bill whereby we will be able to provide it in due course. We will, of course, consider all possibilities. The hon. Gentleman also effectively criticised us in saying that this is a framework Bill whereas we really need to know what is going to be done to put it all in place. I remind him that as soon as is reasonably practicable after we have set our carbon budgets, we shall have to publish a report saying exactly that: what we will have to do in order to meet those carbon budgets. That is in clause 13, as currently drafted. The right hon. Member for Suffolk, Coastal (Mr. Gummer) raised many interesting points. He focused chiefly on shipping, which he suggested should be dealt with separately. The Bill does allow us to treat aviation and shipping separately, for precisely the reasons that he gave. The hon. Member for Angus (Mr. Weir) made a similar point. The right hon. Member for Suffolk, Coastal questioned our commitment to working with the International Maritime Organisation. I referred earlier to the amount of energy we had put into working with the IMO, and how we had pushed forward the work being done. As I said then, we have made a voluntary contribution of £50,000 to the funding of a study of the important subject of greenhouse gas emissions from ships. I assure the right hon. Gentleman that we are on the case and will continue to press it, because we understand how important it is. At times this evening, it seemed as though Members had never flown and did not intend ever to fly in the future. I must tell them that aviation currently accounts for 6 per cent. of our emissions, and that shipping accounts for just over 1 per cent. We must keep in proportion the contribution that each makes to our economy and the cost in terms of emissions at this time. We know that there will be huge increases in the future, but we must understand where we are now. Of course, it will take time for progress to be made.
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Sir Robert Smith (West Aberdeenshire and Kincardine) (LD)Liberal Democrat- Quote
- Will the Minister give way?
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- Joan RuddockLabour
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- I do not think I should. We are running badly behind time. The right hon. Member for Hitchin and Harpenden (Mr. Lilley) questioned the costs involved, as he has on previous occasions. The shadow Committee on Climate Change estimates the cost to the United Kingdom of meeting an 80 per cent. greenhouse gas reduction target to be between 1 and 2 per cent. of GDP in 2050. That was set out very clearly, and, as the right hon. Gentleman knows from the Stern report, most of us—although that may not include him—accept that the costs of inaction are much greater than the costs of action. We broadly agree with the range that the Committee has identified. In overall terms, costs of between 1 and 2 per cent. of GDP in 2050—
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- Mr. LilleyConservative
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- Will the Minister give way?
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- Joan RuddockLabour
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- Not at the moment. Let me tell the right hon. Gentleman that costs of between 1 and 2 per cent. of GDP in 2050 would mean that the United Kingdom economy would be 3.17 times larger in 2050, rather than 3.2 times larger. There is a cost; estimates exist. The fact is that we know that not acting would cost us dearly.
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- Mr. LilleyConservative
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- Will the Minister give way?
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- Joan RuddockLabour
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- The right hon. Gentleman has made his points many times before.
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- Mr. LilleyConservative
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- No, I have not.
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- Joan RuddockLabour
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- He made them on Second Reading and he has made them again today, at some length. Details of costs will be informed by the formal advice that the Government will receive from the committee for the first time in December. The right hon. Gentleman has only to wait until then. The hon. Member for South Antrim (Dr. McCrea) made a number of points about the potential disadvantage that would be suffered in Northern Ireland. Let me assure him that the Secretary of State must consult the devolved Administrations on amending targets, setting budgets, and any proposals and policies for meeting budgets. My hon. Friend the Member for Nottingham, South (Alan Simpson), my right hon. Friend the Member for Scunthorpe (Mr. Morley) and my hon. Friend the Member for Bury, North (Mr. Chaytor) produced strong and cogent arguments for why the House should not divide on the Liberal Democrat amendments. It is clear to us that, as has been acknowledged by Conservative Members in particular, we have moved considerably on the Bill. We now have a procedure that will enable us to receive advice that takes account of international shipping and aviation.
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- Steve WebbLiberal Democrat
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- It is just advice.
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- Joan RuddockLabour
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- The hon. Gentleman may say that, but we have included in this flagship Bill provision for an independent Committee on Climate Change, which already exists in shadow form. It is regarded as a committee of great stature, which will continue to be the case.
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- Steve WebbLiberal Democrat
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- It can be ignored.
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- Joan RuddockLabour
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- I think that when we consider the Bill’s passage—how we are moving towards, we hope, an Act of Parliament—the hon. Gentleman will understand that the world will be watching us, and the House will be watching us. There is total transparency in the way we intend to conduct ourselves, and I assure the hon. Gentleman that we will take the greatest note of, and have the greatest respect for, the advice of the Committee on Climate Change. As I have said, transparency is guaranteed. We wish to accept amendment No. 72, which adds to our new clause 5. Question put and agreed to. Clause read a Second time, and added to the Bill. New Clause 16 Carbon emissions reduction targets ‘Schedule [Carbon emissions reduction targets] contains amendments to the provisions of the Gas Act 1986 (c. 44), the Electricity Act 1989 (c. 29) and the Utilities Act 2000 (c. 27) relating to carbon emissions reduction targets.’.—[Joan Ruddock.] Brought up, and read the First time.
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- Joan RuddockLabour
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- I beg to move, That the clause be read a Second time.
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- Mr. Deputy SpeakerConservative
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- With this it will be convenient to discuss the following: New clause 10—Sectoral targets “2A Sectoral Targets (1) For the purpose of assisting with the achievement of the target specified in section 1, or any amendment thereto made pursuant to section 2, the Secretary of State must take all reasonable steps to ensure that the government sectoral targets for the time being specified in subsection (2) are achieved. (2) The sectoral targets referred to in subsection (1) are— (a) by 2020 the general level of energy efficiency of residential accommodation has increased by at least 20 per cent. compared with the general level of such energy efficiency in 2010; (b) by the end of 2010 the general level of energy usage in the commercial and public services sector has reduced by at least 10 per cent. compared with the general level of such energy usage in 2005 and by the end of 2020 by at least 10 per cent. compared with the general level of such energy usage in 2010; (c) as soon as is practicable the number of dwellings with one or more microgeneration installations shall be eight times the number of dwellings with one or more microgeneration installations in 2007. (3) In this section— “the commercial and public services sector” means— (a) commercial and business premises, excluding industry; (b) retail premises, including warehousing; (c) hotels and restaurants; (d) premises used for the provision of any service or function by or on behalf of a public body. “microgeneration” has the same meaning as in the Energy Act 2004.’. New clause 11—Greenhouse gas emissions performance standard (electricity generating stations) ‘(1) The Secretary of State may make provision by regulations for a greenhouse gas emissions performance standard to set the maximum level of carbon dioxide that may be emitted per unit of output by any generating station requiring consent for construction or extension under section 36 of the Electricity Act 1989 (c.29). (2) Regulations made under subsection (1) may include provision— (a) specifying how proposed generation stations are able to comply with any greenhouse gas emissions performance standard, and to demonstrate compliance with any regulations made under this section, including by the capture of carbon dioxide at the generating station and its transport to and injection into geological storage provided that such activities are licensed in accordance with applicable laws and regulations; (b) specifying the basis on which emissions of greenhouse gases from combined heat and power generating stations shall be calculated such that the unit of output includes useful heat produced in addition to electricity generated by any such generating station; (c) specifying any sources of electricity generation, including electricity generated from renewable sources, that are deemed to be compliant with any greenhouse gas emissions performance standard. (3) No consent shall be granted under section 36 of the Electricity Act 1989 for any generating station that does not comply with regulations made under subsection (1). (4) Before making regulations under subsection (1) (including setting the level of the greenhouse gas emissions performance standard), the Secretary of State must consult such persons as are likely to be affected by or have an interest in the regulations. (5) Regulations made under subsection (1) shall be made by statutory instrument, which may not be made unless a draft of the instrument has been laid before, and approved by resolution of, each House of Parliament. (6) In this section— “greenhouse gas emissions performance standard” means a standard prescribed by regulations setting the maximum level of carbon dioxide that may be emitted per unit of output from an individual generating station.’. Government amendment No. 45 Government new schedule 1—Carbon emissions reduction targets. Government amendment No. 51.
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- Joan RuddockLabour
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- The new clauses and amendments contain various proposals to tackle emissions from particular sectors of the economy. The Bill’s overarching objective is to ensure that each budget is met, along with the 2050 target. In environmental terms, it does not matter where in the economy the emissions reductions come from, and we consider it important to retain the flexibility to act wherever it is most cost-effective to do so. The Government new clauses and schedule give effect to our commitment to creating a new community energy savings programme, as announced by the Prime Minister on 11 September. The House will be familiar with the existing CERT scheme—the carbon emissions reduction target scheme—under which the major energy suppliers are obliged to promote carbon-saving measures to households in Great Britain. Each of the various measures has a score that is defined in terms of carbon reductions, and each supplier must meet a target level of carbon emissions reductions over the three years of the programme. As I think all Members will acknowledge, energy efficiency is never more important than at a time when rising energy prices have made it so difficult for large numbers of people to afford to heat their homes adequately. We need to ensure that vulnerable households obtain all the help that they can. It was with that in mind that the Prime Minister launched the home energy savings programme, a suite of measures designed to help households to save both money and energy. The package included two significant changes to CERT arrangements. First, the Prime Minister proposed a 20 per cent. increase in the existing CERT target, and additional amendments to strengthen the CERT scheme. Both can be achieved without changes in primary legislation. Secondly, he announced proposals for a new community energy savings programme. The new clauses and amendments make the necessary changes to enable the Secretary of State to introduce secondary legislation creating the new scheme, which will be based on the CERT model but will have a number of novel features. The precise arrangements will be subject to consultation, and we do not yet have fixed ideas, but one of the key features is that the scheme will be community-focused. It will be designed as far as possible to bring together the activity of the energy companies with that of local authorities and other key organisations in a particular area. We want action to be joined-up and comprehensive, and we want to see real community delivery on a house-by-house, street-by-street level. I know that a number of my hon. Friends, and indeed other hon. Members, have called for such an approach.
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Joan Walley (Stoke-on-Trent, North) (Lab)Labour- Quote
- I welcome the proposals that my hon. Friend is describing. Can she assure me that she will take account of areas such as Stoke-on-Trent, where we already have a warm zone scheme, so that we can ensure that all the partners dealing with energy efficiency work side by side, not just on fuel poverty but on energy efficiency?
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- Joan RuddockLabour
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- I can certainly give my hon. Friend that assurance. I pay tribute to her for the work that she has done, and for the way in which she continually brings to Ministers the views of her constituents on how well the programmes have worked on the ground.
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- Sir Robert SmithLiberal Democrat
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- As the Minister will know, people who are not on the gas main find it extremely difficult to heat their homes, especially as they have to rely on oil and other fuels. Will the new scheme allow CERT to be redirected, to recognise the benefits of heat pumps both in providing a cheaper means of heating the home and in reducing carbon emissions?
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- Joan RuddockLabour
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- I am a bit of an enthusiast for heat pumps, and I am very much alive to the issue that the hon. Gentleman raises. I want us to be able to look at these schemes to see whether more assistance can be provided to people who are off the gas main—but, as I have said, we have not yet worked out the details. However, there will be consultation and we will, of course, be pleased to hear from the hon. Gentleman. The new scheme will be funded and delivered by the energy suppliers and, for the first time, by the energy generators too. The generators are not at present covered by CERT, but we believe that all companies in the energy market now have a responsibility to help those in need of support. I am grateful for the constructive spirit in which the generators are already approaching the new proposals. We expect to set the carbon savings target for the community energy savings programme at 12.5 per cent. of the current overall CERT target, equating to collective expenditure by the energy companies estimated at about £350 million over three years. I look forward to receiving input from a large number of parties as we refine the proposals, but for the moment we need to establish the powers that will allow us to flesh out the details of the scheme more fully in a statutory instrument, and that is what our Government amendments achieve. New clause 10 would add to the Bill specific energy efficiency, energy usage and microgeneration targets. We recognise that we will need to deliver in each of those areas in order to meet the targets and budgets that the Committee on Climate Change will undoubtedly advise us of, but new clause 10 would remove the flexibility that we consider essential to the overall framework that maximises cost-effectiveness. We recognise the importance of providing increased certainty regarding which sectors of the economy will be required to act to ensure that we meet the targets and budgets, and that is why we amended the Bill on Report in the other place to provide greater sector-specific transparency. The Bill contains a number of provisions to ensure that sector-specific issues are covered. Clause 33 requires that the Committee on Climate Change’s advice on the level of carbon budgets must set out the sectors of the economy in which there are particular opportunities for contributions to be made to meeting that budget. That is supplemented by the requirement in clause 13 for the Government’s report on proposals and policies for meeting carbon budgets to explain how the proposals and policies affect different sectors of the economy. Together, those requirements will ensure that a forward-looking process is in place for both the Committee on Climate Change when it provides its advice, and the Government in setting out how the proposals and policies for meeting a budget may affect different sectors.
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- Mr. GummerConservative
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- Will the Minister explain why she has not taken this moment to ensure that the arrangements, particularly for the electricity and gas industries, include the introduction of smart metering, so that every one of us can play a part in making these decisions?
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- 18:45
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- Joan RuddockLabour
- Quote
- I understand that we all have our enthusiasms and that the right hon. Gentleman has an enthusiasm for smart meters. We are very alive to this issue as well, and we will continue to be so—and I understand that it has been a subject of debate in the other place’s discussions of the Energy Bill today. Let me briefly turn to microgeneration, which is one of the areas new clause 10 covers. As hon. Members will be aware, in considering the Energy Bill on Report in the other place on 22 October, my noble Friend Lord Hunt of Kings Heath committed us to introduce an amendment to the Energy Bill to support small-scale generation by means of a feed-in tariff. The details of the amendment, including the level of an upper limit for the feed-in tariff, are still being considered, but it will be tabled ahead of Third Reading in the other place on 5 November. It will be an enabling power, and we aim to consult on these issues next summer.
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- Gregory BarkerConservative
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- This very belated conversion to feed-in tariffs—which the Conservatives have been campaigning on for two years now—is very welcome, but we have yet to see the detail, and as the detail will be of critical importance, can the Minister now tell us who will pay for the feed-in tariff? [Interruption.]
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- Joan RuddockLabour
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- As my right hon. Friend the Secretary of State has just pointed out from a sedentary position, our Department has been in existence for only three weeks, so we think we are acting rather swiftly. I have already said that details are not yet available, so I am not in a position to give the hon. Gentleman any more information.
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- Lynne JonesLabour
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- My hon. Friend says that the new Department is acting swiftly, but I have just heard her say that the consultation will not take place until next summer. I take on board the point that the proposals need to be drawn together, but since there are established mechanisms in neighbouring EU countries, I should not have thought that it would take until next summer just to start the consultation.
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- Joan RuddockLabour
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- I hear what my hon. Friend says. I was advised on this, and there are procedures, but I am more than willing to look into the matter she raises, because I share her interest in making things happen faster. In summary, new clause 10 may restrict the Government’s ability to introduce policies to ensure the requirements of the Bill are met cost-effectively. For that reason and the others I have mentioned, I cannot agree to the amendment. New clause 11 would introduce a specific cap for emissions per unit of output from the power sector. We have three main difficulties with this amendment, which, as I understand it, is designed to prevent the construction of new coal-fired power stations without carbon capture technology. First, there is no guarantee that it would reduce UK emissions, and certainly not within the EU. Secondly, it may have the effect of slowing down or halting the development of carbon capture and storage technology, which would make it harder to reduce our carbon dioxide emissions in the long term. Thirdly, it would risk jeopardising the security of the UK’s energy supply. I am sure that I am required to give a little more detail, so I shall oblige. The EU emissions trading scheme caps emissions from all UK power stations over a 20 MW threshold, and is key to achieving emissions reductions while maintaining a secure and diverse supply of energy. Under EU proposals currently being discussed, the EU ETS cap is expected to continue to decrease up to 2020 on a scale calibrated to enable the EU to meet its 2020 climate and energy targets. As the cap tightens, power station operators will need either to reduce their own emissions or to buy carbon allowances, thus financing emission reductions elsewhere in the EU economy. That trading mechanism ensures that abatement occurs at the least-cost location, which is one of the scheme’s key principles. In this context, the proposed amendment might affect where the EU’s emissions come from, but not the overall level, which is determined by the level of the cap. That is an important point. The cap ensures that there can be no more emissions, even if new capacity is produced. By putting a price on carbon, the EU ETS encourages investment in new, more efficient power stations and technologies with lower emissions. The proposal may, on the other hand, have the perverse incentive of encouraging older, less efficient fossil fuel power stations to keep operating by cutting off the option of building new, more efficient fossil fuel power stations in the UK.
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- Gregory BarkerConservative
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- Is the Minister therefore saying that this Government would condone and want to see the building of new coal-fired power stations without carbon capture and storage?
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- Joan RuddockLabour
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- Clearly, we are not prejudging the issue, but I must make the following point to the hon. Gentleman. If, for example, a new coal-fired power station replaces an ageing coal-fired power station and the new station has a 20 per cent. increased efficiency over the old, even without carbon capture and storage there might still be a benefit.
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- Mr. Graham StuartConservative
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- Surely when the energy sector is the one sector through which, using today’s technology, we can deliver a roadway to zero emissions, to replace current capacity with a system that has only a 20 per cent. reduction in energy use and that will be in place for decades to come is to put up the white flag of surrender.
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- Joan RuddockLabour
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- I repeat that we are not prejudging the decision, but the new clause would prejudge any decision.
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- Mr. GummerConservative
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- May I help the Minister not to prejudge it by saying that if we build a new power station that is 20 per cent. more efficient, it will also have a much longer time in operation? If we are talking about 2050, what we do about carbon capture and storage really is an issue to consider. Conservative Members would like at least the provision for a real step forward to be put in place before we endanger the long-term arrangements.
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- Joan RuddockLabour
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- I share the right hon. Gentleman’s aspirations. We are one of the few countries in the world that will allow for a demonstration of carbon capture and storage, and the Government have been very active in pressing on that issue. Of course, there is always the possibility that we can get the technology working and make use of it in future.
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Paddy Tipping (Sherwood) (Lab)Labour- Quote
- Will my hon. Friend remind me of the Government’s policy on carbon capture and storage? Are we not one of the few countries in the world that are supporting it? Are we not one of the few countries that are in discussions with the EU about it, talking about some of the 12 demonstration plants that are coming to Great Britain? On a more critical point, I know that my hon. Friend will not want to comment on Kingsnorth power station, but it would make sense to make early decisions and announcements, whatever they are.
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- Joan RuddockLabour
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- I am always keen to go further and faster, so I understand my hon. Friend’s point, but I am not going to speak about that particular installation and its application tonight. I do wish to say, however, how grateful I am to him for reminding the House of the Government’s enthusiasm for carbon capture and storage. Not only do we wish to seek a project in this country, but we have been very active in the EU and supported its programme for a number of plants. In addition, critically, we are working with China, which will continue to have coal-fired power stations for decades and decades. If carbon capture and storage matters here, it matters much more in China.
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- Gregory BarkerConservative
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- If the Minister is right that the Government are leading the world in carbon capture and storage, will she tell the House what resources they are putting behind a CCS programme? Is it just the miserable tens of millions of pounds over a period of years to which a ministerial colleague of hers has referred? With how much is she prepared to back her words?
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- Joan RuddockLabour
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- I might invite the hon. Gentleman to consider how much he wants to back—[Interruption.] Oh, he says that he is committed and signed up.
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- Gregory BarkerConservative
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- ETS credits.
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- Joan RuddockLabour
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- Oh, it is coming from the ETS credits. Fine.
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- Martin HorwoodLiberal Democrat
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- rose—
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- Joan RuddockLabour
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- I give way to the hon. Gentleman.
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- Martin HorwoodLiberal Democrat
- Quote
- Given the Minister’s claim that we are in some kind of leadership position on carbon capture and storage, will she congratulate China on having a working demonstration project well ahead of us? Does she therefore regret her predecessor Department’s decision to have a carbon capture competition so narrowly drawn and poorly funded that it led to the cancellation of carbon capture projects in this country?
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- Joan RuddockLabour
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- I would take issue with the hon. Gentleman’s last remark. I do not think that it has ever been claimed that the decision not to go ahead at Peterhead, to which he refers, was the result of Government action. It was a private decision by a private company. I reiterate that we are enthusiastic about carbon capture and storage. Believe me, we raise it in every international forum, we are doing the work on the ground and we will have a project. I congratulate China on that and on many other aspects of its move to low-carbon technologies.
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- Mr. ChaytorIndependent
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- When does the Minister expect the results of the CCS competition to come through, and when will it be feasible for CCS to be retrofitted to existing power stations?
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- Joan RuddockLabour
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- I am sorry that my hon. Friend has posed that question, because I am not in a position to give him an answer. The process is being gone through, and I cannot give him that information today. I am sorry.
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- Lynne JonesLabour
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- I have supported new clause 11. Given the reservations of my hon. Friend the Member for Wolverhampton, South-West (Rob Marris) about the feasibility of achieving the 80 per cent. target by 2050, including in aviation, I am horrified that we should be supporting new power stations that are only 20 per cent. more efficient in carbon dioxide emissions. Surely if the new clause were accepted, it would be an incentive to people wanting to build new power stations to have to invest in carbon capture and storage technology. How can we contemplate giving permission for a coal-fired power station without carbon capture and storage?
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- Joan RuddockLabour
- Quote
- Perhaps my hon. Friend will listen to the rest of my remarks and then make up her mind about what she has just said and how she wants to react. Because I have taken interventions, I have not been able to get to some of the remarks that I want to make, which I think will cover some of her points. Ruling out new, more efficient coal stations now would be likely to hamper the development of carbon capture technology, as I have indicated. The efficiency penalty associated with the capture of carbon dioxide makes retrofitting the technology to older, less efficient power stations a much less attractive option than installing new build. The right hon. Member for Suffolk, Coastal (Mr. Gummer) said that such stations would be in use for a much longer time, but it remains the case that it would be more attractive to link carbon capture and storage to a new station than to retrofit an old one.
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- Dr. StrangLabour
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- This point is hugely important. As far as Peterhead is concerned, that was gas, and sadly we can now leave that matter parked. The fact is that we need both systems so that we can retrofit and build power stations with new CCS. That is the problem. There is real concern that we need to be putting in a lot more resources.
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- Joan RuddockLabour
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- I thank my right hon. Friend for his contribution. I am trying to say to the House that it will be easier to build a new power station, and the incentive will be there. New clause 11 would rule out a new power station. I am not speaking generally, I am speaking to the new clause and the fact that it would rule that out. As I understand it, the new clause specifies that no new coal station should be built unless it had carbon capture fitted, but at the moment it is not possible to fit that technology because it is not available on a commercial scale.
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- Gregory BarkerConservative
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- The hon. Lady is absolutely right. Let me be absolutely clear: the Conservatives are saying that no new generation of dirty coal will be built under a Conservative Administration.
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- Joan RuddockLabour
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- As I have already said, that prejudges the issue. As I wish to come on to say, there are other issues involved, not least security of supply. My right hon. Friend the Member for Edinburgh, East (Dr. Strang) said that we need to have both, and we not only want to have retrofitting if it is possible, but we certainly want linkage to new facilities. The technology applies to gas as well as coal, of course. CCS is not simply a coal technology.
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- Gregory BarkerConservative
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- The hon. Lady is speaking good sense. Unfortunately, she is not articulating Government policy, which is to have just one form of technology. She should therefore support the Conservatives’ much more ambitious CCS proposal, which is for post-combustion, pre-combustion and oxycombustion capture. If she would like to join us in our costed, ambitious programme, that would be great. Unfortunately, all that she has to defend is a rather piddling, unambitious, sometime never CCS programme.
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- Joan RuddockLabour
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- I do not think that I need to respond to those remarks.
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- Barry GardinerLabour
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- Will my hon. Friend be kind enough to confirm that if we were to accept new clause 11, as proposed by the Opposition, it could leave the country vulnerable? Old power stations would come to an end, so if CCS was not commercially viable, there would be no replacement facilities and, therefore, new clause 11 could put us in a position where the lights went out.
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- Joan RuddockLabour
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- I never want to anticipate the lights going out, but I can confirm that everything else my hon. Friend said is correct.
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Mr. David Heath (Somerton and Frome) (LD)Liberal Democrat- Quote
- I am puzzled, because the Minister has said on a large number of occasions that she does not want to prejudge these matters, yet is not the entire Bill based on prejudging the issues and on the fact that we do not want highly polluting technologies that will prevent us from reaching our climate change targets?
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- Joan RuddockLabour
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- I am sorry, but I cannot agree with the hon. Gentleman.
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- Joan RuddockLabour
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- I wish to make some progress now, not least because I want us to get to the other groups of amendments. We need new, efficient coal power stations if we are to encourage and support the crucial development of CCS technology. New clause 11 would adversely affect our energy security objectives. We are facing particular energy security challenges at the moment. Coal and oil-fired power stations producing 12 GW—equivalent to 20 per cent. of peak demand—are due to close by 2015, and that is in addition to the closure by the end of 2023 of nuclear power stations that produce about 5 GW. That will make us increasingly reliant on imports of gas, with all that that means.
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- Mr. Graham StuartConservative
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- I am trying to follow the hon. Lady’s argument about how brand new coal-fired power stations, which pump pollution into the atmosphere, will be easier to retrofit with yet-to-be-developed technology than old ones. Is it not possible that we will discover that brand new supercritical power stations turn out to be harder to retrofit when we eventually obtain the relevant technology? Does she have any evidence to back up her claim that new power stations will be easier to retrofit than old ones?
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- Joan RuddockLabour
- Quote
- What I know is that new clause 11 says that we should not have any new coal-fired power stations unless a particular technology—CCS—is available, but the fact is that it is not available at the moment. An issue is being prejudged, and I am making a case against new clause 11. Although we hope for a major expansion of renewables and nuclear power, those technologies alone will not meet all our electricity needs, especially given that we will need flexible power stations that are able to provide back-up support because of the intermittency of renewable generation. Without coal, the only option is gas, and that has all the implications for energy security that I have mentioned. We take seriously the need to reduce emissions from fossil fuel power stations. Significant improvements in design specifications already mean that new coal-fired plants would, as I have said, emit approximately 20 per cent. less carbon dioxide than older coal-fired power stations. Moreover, CCS offers the possibility of still further reductions; there is potential for a reduction of up to 90 per cent. in carbon dioxide emissions from fossil fuel-burning power generation. I hope that the combination of these arguments—the duplication of the effect of the EU ETS cap; the possible undesired impact on the development of CCS, and the energy security concerns it raises; and the actions we are taking to promote CCS technology—are sufficient to persuade the hon. Member for Bexhill and Battle (Gregory Barker) not to press new clause 11 to a Division.
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- Gregory BarkerConservative
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- Anyone who has heard me speak about climate change will know that my party has long recognised that the benefits of moving to a more efficient, low-carbon economy extend far beyond just stabilising our global climate. Shifting to a low-carbon economy will also mean saving ordinary people money by making their homes, and even their businesses, more energy-efficient. That is why I wish to speak in support of the Government’s amendments to the Electricity Act 1989 in order to enhance the role of the carbon emissions reduction target. New schedule 1, new clause 16 and amendments Nos. 45 and 51 will all receive the support of Conservative Members because we consider them the right thing to do. We wonder why these actions are so long overdue, but we welcome them nevertheless. As we debate this issue in late October, one wonders why serious action to stave off fuel poverty this winter was not taken earlier by this Government.
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- Mr. GummerConservative
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- Would it not be easier to do all this if home owners could see, at a glance, how much money they were spending on the energy that they were using? Why are we still waiting for smart metering to be rolled out, given that the relevant legislation is in place—if only the Government would activate it?
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- 19:15
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- Gregory BarkerConservative
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- Sadly, I cannot give my right hon. Friend a good answer to that. Conservative Members have been champions of proper, real, intelligent smart meters, and of an ambitious programme to roll out that modern technology. I do not know why the Government have dragged their feet and will not heed the opinion not only of Conservative Members, but of Members from across the House that there should be a far more ambitious roll-out of real smart meters. It is regrettable that the Government have not taken advantage of the Energy Bill to introduce a more ambitious programme.
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- Paddy TippingLabour
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- I support the hon. Gentleman on the introduction of smart metering. He will know that discussions are taking place on that subject in the other place today. He talked about an ambitious roll-out, so will he tell us how he proposes it should be done? What will the cost be? What will the cost to the consumer be? If he has answers to all those questions, the House would be keen to hear from him.
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- Gregory BarkerConservative
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- I am not going to be drawn any further, because I am mindful of the time. If the hon. Gentleman would like to listen to the energy debate in the other place or read the Hansard account of it, he will discover an extensive extrapolation of our policy, in which all his questions will be answered. New clause 11 is the provision on which I most wish to focus. It proposes the introduction of an emissions performance standard, which I consider vital if we are to meet the ambitious targets inherent in the Bill. Those ambitions are shared across the House, and support for new clause 11 extends well beyond the Conservative Benches. The Conservative policy enshrined in new clause 11 is modelled on the Californian example, which was introduced in January 2007. It requires all new base load generation serving the Californian market to have emissions no greater than those of a modern gas power plant: 500 kg of CO2 per megawatt-hour. By contrast, even advanced technologies, to which the Minister alluded, such as the new supercritical units proposed for use at Kingsnorth in Kent, will, in the absence of CCS technology, operate at the much higher level of approximately 700 kg of CO2 per megawatt-hour. Governor Schwarzenegger described the emissions performance standard as being similar to the standards set for appliances such as fridges, “where there are minimum performance standards and beyond that it is up to the market to compete, as long as they meet or exceed the minimum standard”.
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- Colin ChallenLabour
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- On new clause 11, what level of kilograms of CO2 per megawatt-hour does the hon. Gentleman have in mind? If I recall, Lord Turner said last week that the UK’s current performance level is about 450 kg of CO2 per megawatt-hour and by 2030 that should have reduced to 50 kg of CO2 per megawatt-hour.
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- Gregory BarkerConservative
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- Initially, 500g kg of CO2—
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- Colin ChallenLabour
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- That is an increase.
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- Gregory BarkerConservative
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- Clearly, we would look to push that down in the future, with the advent of technology. However, until we have the CCS technology on-stream, we would not wish to push it lower. That figure is a sensible middle course between the most ambitious target and the Government’s target, which is—unfortunately—the least ambitious. Our EPS policy is clearly defined, transparent, non-discriminatory and verifiable. It would guarantee equality of access for EU electricity companies to national consumers. In his 2006 review, Lord Stern said: “Carbon pricing alone will not be sufficient to reduce emissions on the scale and pace needed…Effective action on the scale required to tackle climate change requires a widespread shift to new or improved technology in key sectors such as power generation, transport and energy use”. It is the opinion of pro bono legal advocate Client Earth, in its submission to the Department for Business, Enterprise and Regulatory Reform carbon capture and storage consultation in 2008 that the Government’s description of CCS readiness is a “a vague and meaningless definition that does not create effective incentives or requirements for private sector energy companies to make the necessary investments that are required”.
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- Mr. GummerConservative
- Quote
- Could not a deal be done between the Opposition and the Government on this issue? Could we agree if the Government gave real sense to what they mean by “readiness for carbon capture” so that it was clear that any new power station would have that technology when it became available and the money was in place? The fundamental problem is that the vagueness of the Government’s position means that we have to stick to the argument that there should be no new generation without CCS. Can we press the Government to be more precise?
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- Gregory BarkerConservative
- Quote
- Regardless of what the Government say, the great benefit of our position is that it is clear: there will be no new generation of dirty coal without carbon capture and storage. The clarity of that position sends a clear signal to the market so that it can plan for investment. It is unfortunate that the Government competition has such a long timeline, is so vague and has no clear funding commitments. We are told that the funds available might be tens of millions of pounds, which is even less than would have been needed to ensure that the Peterhead CCS project stayed in the UK, instead of going to Abu Dhabi.
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- Barry GardinerLabour
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- The hon. Gentleman has been clear, and it is right that we have clarity on this issue. Will he be equally clear about the consequences of adopting such a position? If new generation capacity without CCS were ruled out, it is possible that, as old stations ceased generating, we would not have enough supply to meet domestic and industrial need. Does he accept that that is a clear possible consequence of his amendments?
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- Gregory BarkerConservative
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- No, I do not, and certainly that would not happen under a Conservative Government. The Government may have a one golf club policy on the energy economy, but we would look at a range of instruments to ensure a balanced and secure energy economy. We see CCS not as a way of ruling out coal in the future, but as driving forward an agenda that will ensure that we can use the UK’s coal reserves and reach our 2020 CO2 emission targets. We are more ambitious and more clear-sighted than the Government, and if we ruled out a new generation of dirty coal, we would have to have a range of policies across the energy economy. If the hon. Gentleman waits until the new year, we will unveil our climate change strategy papers and he will see the stark contrast between the Government’s one-club golfing and doom and gloom-mongering, and our wide-ranging energy horizon.
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Mr. David Heathcoat-Amory (Wells) (Con)Conservative- Quote
- Does my hon. Friend intend to accompany his proposals with a cost-benefit analysis to ensure that these mandated low-emission power stations are the best way of achieving a lower carbon emitting economy? Otherwise, we could be loading more expensive plant and higher electricity prices on British industry during a very deep recession. How confident is he that his proposals, which could be written into statute, would be the best way to achieve a lower emission economy?
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- Gregory BarkerConservative
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- I have to be frank with my right hon. Friend—without carbon capture and storage, we will not meet our targets. If we cannot decarbonise the electricity sector in the UK and elsewhere in the world, the chances of being able to meet our CO2 targets in the next couple of decades are very slim. It is by no means the only policy tool at our disposal, but it is one that we cannot afford to throw away. He is right to say that the costs will be considerable—hundreds of millions of pounds, and perhaps even billions of pounds—but this policy would be a good use of the auctioned ETS credits that will accrue in 2012, recycling them back into the energy sector to fund research and development and innovation for UK plc. Unfortunately, the Government are sitting on their hands and have no credible policy not only on implementing CCS, but for funding or developing it. I contrast the vagueness of the Government’s unambitious policy—we can hope that that might change with the new Department and there will be an announcement in due course—with the clear policies articulated in June by the Leader of the Opposition, when he announced that the Conservative party in government would introduce an EPS standard for all electricity generated in the UK.
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- Steve WebbLiberal Democrat
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- We support the hon. Gentleman’s proposal, but the Minister’s response was that if emissions are capped within a cap and trade scheme, the only effect would be to produce slack somewhere else. My answer is that we should also lower the cap at the same time: is that the hon. Gentleman’s position?
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- Gregory BarkerConservative
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- I cannot give the hon. Gentleman a definitive answer on what the cap should be in 2012, but his general point is correct. We see CCS not as an alternative to the ETS, but as a complementary policy. The whole point of an emissions trading scheme is that it drives technological change. I am sorry that Ministers do not accept the verdict of Lord Stern—in a report commissioned by the Government—that “Carbon pricing alone will not be sufficient to reduce emissions on the scale and pace needed”. Perhaps the Minister can say now whether she refutes those words. If not, I hope that she will join us in supporting an emissions performance standard that is the most market friendly approach to driving CCS.
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- Mr. ChaytorIndependent
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- Regardless of the hon. Gentleman’s comments about having no new coal-fired power stations without CCS, will he accept that new clause 11 would not, in itself, bring that about? It would set emission standards, but it would not say what those standards would be.
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- Gregory BarkerConservative
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- The hon. Gentleman is right. We have tried not to be overwhelmingly prescriptive, which is consistent with our approach to the Bill. We do not want to put specific figures into the Bill if possible, because technology moves on.
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- Mr. ChaytorIndependent
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- Does the hon. Gentleman accept that that admission blows a hole in his policy on CCS?
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- Gregory BarkerConservative
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- Not at all. I have told the hon. Gentleman what a Conservative Government would do. We would follow the Californian model. When he sees the climate change strategy that the Opposition will publish in the early new year, he will get a full flavour of the range of policy tools that we will be deploying.
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- Mr. GummerConservative
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- Will my hon. Friend come back to the point about carbon capture? Would it not be helpful if we could say to the Government that there ought to be a mechanism whereby, if they could be stronger in explaining how they were going to extend carbon capture and storage, it would be possible to have a phased introduction rather than this sharp distinction between the two sides? It seems to me that if the Government were prepared to be tougher about what such a measure would mean, the Opposition could, perhaps, come closer to the Government on the issue.
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- Gregory BarkerConservative
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- This is a very rare parliamentary occasion when I find myself in the slightest disagreement with my right hon. Friend. The beauty of our policy is that it is absolutely crystal clear. It sends certainty to the market and allows investors and the energy sector to understand that we will not countenance a new generation of dirty CO2-polluting coal-fired power stations. We want to engage constructively with the energy sector, which is up for this if long-term leadership is provided. Earlier in the year, in that leaked exchange of letters between DBERR and the energy companies, we saw just how the whip hand is with the energy companies. The absolute failure of Ministers and senior civil servants to provide any leadership means that we have to take back the initiative and show vision and leadership. That is what the EPS standard will do. A clear statement of our intent in this policy is vital in providing market certainty.
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- Mr. Graham StuartConservative
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- Does my hon. Friend agree that under this Labour Government we have had posturing on climate change while there has been an absolute and consistent failure to deliver the targets that have been set? To pick up on the comments made by the hon. Member for Brent, North (Barry Gardiner), who has just left his seat, there might already be a shortfall in generating capacity in about 2017. We have potential shortfalls in energy generation and a failure to commit to cleaning up new coal when it comes on stream.
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- Gregory BarkerConservative
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- My hon. Friend is spot on. Let me conclude on this element of the group of amendments. The ETS is a vital part of the drive to a low-carbon economy. However, unlike the Government, we do not believe that the ETS on its own will deliver enough. That is why we are on the same side as Lord Stern. As my hon. Friend the Member for Ruislip-Northwood (Mr. Hurd) said so clearly earlier, the signals being sent to the market from the ETS alone are too vague, too fickle and too weak just to rely on emissions trading. That is why we need to introduce an emissions performance standard to give real teeth to the Bill. I am grateful for the support that the EPS has had from those on other Benches. We must give the long-term clarity that the market needs to invest appropriately in order to deliver a decarbonised electricity supply to this country within the next 30 years, through which many of the policies for meeting our 80 per cent. reduction target by 2050 can be achieved. Although we cannot vote on new clause 11 now, we will wish to put it to a vote later on. We are broadly in favour of the measure to expand the carbon emissions reduction target, but are concerned that the Government have made fuel poverty a problem for the industry to solve rather than taking initiatives to tackle it effectively themselves. If they had done something about fuel poverty when there was still plenty of time ahead of this winter, such as when we were pointing to the sharp rise in forward gas prices earlier in the spring, they would not be expanding CERT out of necessity at a time when it is unlikely to help anybody this winter. A fairly small amount of money per household is likely to be passed on to the bill payer anyway. Do the Government now see CERT principally as a fuel poverty mechanism or as a carbon reduction mechanism?
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- Both.
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- Gregory BarkerConservative
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- When the Government first introduced the CERT order in January, we were critical of it on several counts. The order failed to explore how, in targeting vulnerable customers, the energy distributors might readily identify that group without contravening the Data Protection Act 1998. It was an unambitious response to the scale of the climate challenges that we face and, in trying to drive microgeneration, tackle fuel poverty and lower carbon emissions, it might easily have been driven at cross-purposes. However, we supported the measure then and we will support it now, as it takes much-needed action to help the fuel poor, a group that has suffered particular hardship under the Government. According to National Energy Action, the Government slashed the budget of the Warm Front scheme this year by more than 25 per cent. for the next three years, leading to 50,000 fewer vulnerable households receiving assistance next year. The value of cold weather payments, which were introduced by a Conservative Government, declined in real terms over the last four years, failing to keep pace even with the rate of inflation, let alone with soaring fuel costs. [Hon. Members: “We’ve just increased them.”] But over four years, they have failed to keep pace. Simple energy efficiency measures, such as cavity wall insulation and lagging boilers, will make the difference between life and death this coming winter. It is a sad testament to the Government’s record on fuel poverty that today’s measures, coming as they do at the end of October, will do little to tip the balance this winter.
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- Paddy TippingLabour
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- Will the hon. Gentleman at least acknowledge that the Government have significantly increased winter fuel payments, as has just been announced? More particularly, he recognised that the CERT scheme was paid for in the main by energy companies, and seemed to imply that that was not enough. What is his commitment? What is he saying? What money would he make available, were he in government, to retrofit existing households? How many millions of pounds is he prepared to commit now?
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- Gregory BarkerConservative
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- I shall come on to that question in just a moment, because I want to keep some structure. The hon. Gentleman is right that we welcome the expansion and improvement of the CERT scheme. We are pleased that the Government have chosen to take on board our concerns over the targeting of vulnerable customers and have provided for that support to be targeted at areas and groups as well as individuals. All fuel poverty charities tell of the difficulties in finding the fuel-poor and the further struggle in getting them to accept help. Street-by-street, postcode-by-postcode improvements mean that the most vulnerable will be lifted by the tide of change and lasting improvements to our housing stock that can be strategically mapped out to encompass those most in need. The new schedule includes the energy generators as well as the distributors in the scheme. That will significantly broaden the base from which the improvements can come and more fairly spread the burden of cost to the emitters of the carbon. By allowing the expansion of the scheme, presumably to facilitate the Prime Minister’s September announcement, the change will empower the Secretary of State to use the CERT approach in a broader, but also more targeted, way. If that is done wisely—I hope that it can be—that can only be a good thing. Considering that the new schedule has been brought forward as a result of action on fuel poverty, I have some concerns about its place in a Bill whose priority is greenhouse gas emission reductions. I do not for a minute discount the fact that we need to act on fuel poverty, but we also need to be clear about the principal purpose of the Climate Change Bill. However, as the problem is urgent and in almost every case the ends are congruent, I see no reason not to support the change here and now on those grounds. To clarify, will the Minister confirm whether the Government regard CERT as a fuel poverty measure or a carbon abatement measure?
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Edward MilibandLabour- Quote
- Both.
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- Gregory BarkerConservative
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- Some serious concerns have been raised that the costs of CERT will be passed straight on to the consumer, not least by the Association of Electricity Producers. That problem would be exacerbated by its expansion through the amendment, and it would be a cruel irony if this well-meaning step to tackle fuel poverty actually increased domestic fuel bills in the long term. Therefore, I hope that the Minister will reassure the House that the price increases will not be passed on to consumers and that, over the lifetime of the measures, she or her successors will continue, through the regulator, to be mindful of that danger. Finally, the Opposition are very sympathetic to new clause 10. Although the Government have done many good things during the Bill’s passage through the House, we greatly regret that they have not engaged more positively on this vital issue. We hope that they will take on board the ambitions of this new clause, and the serious concerns that exist in all parts of the House about the need for a serious delivery strategy for energy efficiency. The matter is so vital that we need such a strategy now. We simply we cannot wait any longer. We believe that energy efficiency is about more than reducing CO2 emissions. In the modern, 21st-century economy, it will be as important to UK plc as labour efficiency was in the 20th century. Energy efficiency will be a hallmark of a successful, internationally competitive economy going forward. That is why the Germans are placing much more emphasis on energy efficiency and have a much more ambitious 10-year target than we do. More to the point, they have a far more ambitious and thought through delivery programme to make sure that energy efficiency becomes a reality. If the Government cannot support new clause 10 this evening, I assure the House that the Conservative party will bring forward ambitious policies to that end in the spring.
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- Colin ChallenLabour
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- I, too, welcome this Bill. It is a major step forward, and certainly a world first, so it is a great privilege to take part in this debate this evening. I rise to speak in support of new clause 10, and I also want to say a few words about new clause 11. New clause 10 deals with what lies at the heart of a great part of our carbon emissions, 40 per cent. of which come from the building stock in this country. It provides an answer to those sceptics who talk about cost only as a burden and not as an opportunity or an investment. We have heard some of that talk this afternoon but, if we invest in homes to make them more energy efficient, people will save money and we will not have to subsidise them so much in future through the various schemes that exist. That would be an immediate gain for people today, and not just for future generations. New clause 10 addresses three targets, and I think that I can claim correctly that all of them are existing Government policy, except that they have never been set in statute. The first target is that the general level of energy efficiency in residential accommodation should be increased by at least 20 per cent. by 2020, compared with the general level of such energy efficiency in 2010. The 2003 energy White Paper identified that a carbon saving of 6 million tonnes from residential energy efficiency is achievable between 2010 and 2020. An answer to a parliamentary question appeared in Hansard on 10 March 2003, at column 11W, which identified that that saving would correspond to an energy efficiency improvement of between 18 and 22 per cent. New clause 10 therefore sets a target in the mid-range of that projection, and the Government answer makes it clear that the target is achievable. The second target is that the general level of energy usage in the commercial and public services sector should be reduced by at least 10 per cent. by the end of 2010 compared with the general level of usage in 2005, and reduced again by at least 10 per cent. at the end of 2020 compared with the general level in 2010. Again, a parliamentary answer appeared in Hansard on 19 October 2005, at column 1054W, that identified that a potential reduction of 10 per cent. in energy usage in that sector was achievable by 2010. Another parliamentary question received an answer on 30 November 2005 that stated that the cost-effective potential of energy savings would be around a further 10 per cent. from 2010 to 2020. My point is that the Government have already said that the targets set out in new clause 10 are achievable.
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- Mr. Graham StuartConservative
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- The hon. Gentleman is making a very powerful case, and showing that all the elements in new clause 10 are Government policy. How then does he explain the hypocrisy of those on the Government Front Bench, who refuse to adopt it?
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- Mr. StuartConservative
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- I would be delighted to withdraw that word, Mr. Deputy Speaker.
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- Colin ChallenLabour
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- Why is it important to set these achievable targets, and to put them into statutory form? We need to inform ourselves about what is happening today. The investment being made in insulation and other aspects of energy efficiency is struggling to cope with our stated objectives, and many manufacturers and suppliers of equipment and insulation materials are having problems. For example, Knauf Insulation makes plasterboard and insulation materials. It does not produce a poor product—the firm is actually at the cutting edge of the industry—but it is closing its factory in St. Helens because sales are not sufficient to keep the business going. I have also spoken to people in the microgeneration industry. They have complained about the to-ing and fro-ing—a sort of game of ping pong—that has occurred in the low-carbon buildings programme with the result that, from one month to the next, they cannot tell how much work they are going to get. When the terms of the programme were changed to reduce support for microgeneration projects, many people decided that the payback period was stretching out so far that they no longer had any interest in pursuing that course. It is therefore clear that we need to set statutory targets, and not just say that they are aims or objectives that have no force. In conclusion on new clause 10, I should tell the House that the Department for Business, Enterprise and Regulatory Reform commissioned independent research on microgeneration that was carried out by a company called Element Energy. The research found that “the underlying certainty and impact provided by a combination of legally binding targets and policies will drive the decisions by suppliers and their investors”, and that “there appears to be a sensible logic for establishing a microgeneration target in the UK”. That also extends to the other proposals that I have mentioned, and these are matters that the Government have to take on board. They may not do so in this Bill, but I think that we will have to return to the issue and strengthen our objectives with statutory backing. I want to comment briefly on new clause 11. The Opposition Front-Bench spokesman, the hon. Member for Bexhill and Battle (Gregory Barker), weakened his case tactically by allying it so much to the fantasyland of a future Conservative Government’s targets. The new clause already has cross-party support, but it would have got even more support if the hon. Gentleman had just presented it on its merits. It is perfectly sensible to set a CO2 emissions target for new power stations. I cannot see what the objection is to that. The opposite, of course, would be to permit anything. There are different ways in which such a target could be set. The Government could say, “We’ll have a target whereby new coal power stations must have such an efficient combined heat and power plant attached that even without carbon capture and storage, it would be possible for us to approve them.” It would all depend on the level set. I was speaking from memory when I intervened on the hon. Member for Bexhill and Battle, but I listened to Lord Turner last week.
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Dr. Desmond Turner (Brighton, Kemptown) (Lab)Labour- Quote
- Does my hon. Friend agree that new clause 11 would not prevent, say, the building of the Kingsnorth power station, as the provision is dependent on the level set? The level set could very easily be one that a modern, clean combustion plant could meet without CCS. The new clause is actually a gesture without great meaning.
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- Colin ChallenLabour
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- Yes, that is true to a great extent, except that new clause 11 provides a power for the Secretary of State to set what might be described as a kind of licensing condition. That is a suitable power for a Secretary of State to have. Of course, a future Secretary of State in a different Government could say, “We’ll help Poland out by buying some of their old coal-powered power stations and setting the limit so high that we can set them up here.” In that sense, my hon. Friend’s point is correct, but no sensible Secretary of State would do a thing like that. The provision is about reducing the emissions from generation. Lord Turner said that by 2030, we should be aiming for emissions of 50 kg per megawatt-hour, which seems an extremely ambitious programme. If that kind of aim appears in the Committee on Climate Change’s thinking when it sets its budgets, this Government—or any Government—will have a real problem on their hands. A power such as that in the new clause would help them to deal with that. Jim Hansen at the NASA Goddard Space Flight Centre, perhaps one of the world’s leading climate change scientists, has said that a complete ban on new coal-powered power stations that do not have CCS must be implemented immediately if we are to achieve our targets. Al Gore, who I think still advises the Prime Minister on climate change, is on record as encouraging young people to place themselves in front of bulldozers that are preparing to build new coal-powered plants. Of course, many such plants without CCS are to be built in the United States, unless new President Obama deals with the situation. We should think again on the subject, and not have a “We’ll do better than you” kind of debate. A lot of people outside the House are expecting clear guidance on CCS. Of course, we will have to use it to deal with the Polish and German problems in the EU; there is a great dependency on coal in Germany. I hope that the Front Benchers will reconsider their total opposition to such a proposal.
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- Martin HorwoodLiberal Democrat
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- I join others in congratulating the Government on getting the Bill this far, even though it has been a rather slow and painful process at times. I should also like to congratulate Friends of the Earth and its campaign for the Big Ask, and various rebellious Members on both sides of the House. If it were not for their rebellious instincts, I do not think that we would be debating this Bill at all tonight. In her opening remarks, the Minister highlighted the links between economic growth and carbon emissions. That might be thought a slightly unfortunate and perhaps tactless thing to highlight when we are going into recession, but it is quite an important point to make. In fact, Sir Nicholas Stern—now Lord Stern, but Sir Nicholas when he wrote his report—pointed out that the biggest carbon emissions reduction achieved by any economy over a sustained period was that of Russia in the 1990s, and it achieved that, broadly, by collapsing its economy. It is particularly important, as we enter a recession, that we keep all the signals, indicators and policy frameworks to decarbonise our economy in place, so that UK plc is best placed to take advantage when the upturn comes, and can have an economy that will take advantage of a new era in global economics and business. That is particularly important, and it underlines many of the amendments in the group that we are discussing, all of which we Liberal Democrats will support. Government new clause 16 and the consequent new schedule and other amendments are welcome. The Secretary of State for Energy and Climate Change said earlier, from a sedentary position, that there was no choice to be made between tackling fuel poverty and tackling carbon emissions. If we can find policy mechanisms that do both at once, we certainly should take advantage of them. I have to say that the proposals have faint echoes of the green mortgages that the Liberal Democrats advocated years ago; those mortgages sought to do exactly the same. They linked carbon reductions to tackling fuel poverty and very high fuel bills. Unfortunately, fuel bills have got even higher in the meantime, and it has taken an economic crisis to stir the Government into real action on that front. Nevertheless, the new clause is welcome, as is the Government’s acceptance that targets for 80 per cent. reductions in carbon emissions by 2050 should be in the Bill; again, the Liberal Democrats have called for that for years. It is important to recognise the progress that the Government are making, and to support it. I hesitate to say, “We told you so,” too many times—but we did, and we have been doing it for years. New clause 10 is also an important improvement to the Bill. As others pointed out, Sir Nicholas Stern said that the emissions trading scheme and carbon trading were necessary steps towards producing a decarbonised economy, but were probably not sufficient. It is important to grasp that point. The Minister talked about clause 33 in relation to sectoral opportunities, and clause 13 in relation to how policies affected various sectors, but the wordings are slightly wet. This is an area in which toughness and urgency are required, and new clause would 10 begin to deliver that. We need a host of additional incentives and policy measures, not least to give the clearest possible signals to the private sector. I have great faith in the private sector’s ability to respond to policy frameworks. In my experience, given everything that I am learning about the renewable energy sector, low-carbon transport technologies and other environmental measures, when the private sector is given sufficiently clear signals, it responds brilliantly. A good example is the car industry’s response to developing EU restrictions on carbon emissions, which are being flagged up decades in advance. I have to say that we Liberal Democrats would go much further, and would argue for zero-carbon new cars by 2050, but the emerging policy at European level is clearly sending the car industry strongly in the direction of lower-carbon technological innovation. My personal favourite is the Tesla Roadster, which is now on the road. It is rather expensive, but the emissions are only 25 g per kilometre. It looks quite like a Ferrari, and I would happily test-drive it, if anyone listening to the debate wants to offer me that opportunity. The white goods industry is another example of a sector that was given clear signals, not as part of some broad overarching general scheme, but on a specific basis, and in that case, too, the private sector responded well. Sectoral targets of the kind proposed in new clause 10 could play an important part in energising particular sectors. The hon. Member for Morley and Rothwell (Colin Challen) is right to want to give force of statute to targets that, as he said, were already Government policy in many respects. If we do not do that, there is of course a risk that they might go the way of other Government targets, such as the 2010 targets for CO2 emission reductions or the 2010 target for renewable energy; the Government have drifted away from those targets. We need the kind of pressure that is in the new clause to give a clear direction on issues such as microgeneration and the residential and commercial sectors. We need it to give businesses and industrial sectors the commercial drivers that will release investment, when those sectors can get it, and direct them clearly towards a lower-carbon future. There is an example in my constituency of which I am very proud. A very good but perfectly ordinary office supplies company called the Commercial Group has set itself the ambitious target of reducing its carbon footprint by 75 per cent. in just three years, and it is well on track to achieving that. That makes all the politicians’ targets look, frankly, rather sick. That example demonstrates how well the commercial sector responds when it gets the bit between its teeth. I am happy to support new clause 10.
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- Mr. WeirScottish National Party
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- Is not the situation even worse than that? There was a project at Peterhead that would have put the UK and Scotland at the forefront of carbon capture. The Government withdrew their support, and the project is now going ahead in Abu Dhabi.
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- Martin HorwoodLiberal Democrat
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- The hon. Gentleman is exactly right. The Peterhead project was a classic example of the Government sending precisely the wrong signals. Although the Minister seemed to disagree with this earlier, it is clear from talking to BP that the Peterhead project was stopped as a direct result of the announcements relating to the Government’s own competition. That meant that the opportunity to use some of those gasfields for carbon storage is lost for ever, because once capped, the gasfields are almost impossible to exploit. It was a terrible decision, and it meant that projects such as the one at Peterhead, which would probably have been on line and functioning by about 2011, were stopped and replaced by a competition that was unlikely to produce anything before 2014 at the earliest. The Government have produced a carbon capture strategy that is too narrowly focused on post-combustion technology, too miserly and too unambitious in its scale. That is a great shame. If the decisions relating to Kingsnorth are anything to go by, it is clear that the current framework of the emissions trading scheme is, almost by definition, insufficient to drive us towards a low carbon economy. The fact that Kingsnorth is to go ahead when its carbon emissions will be 70 per cent. higher than the nearest commercial equivalent is almost proof of the inadequacy of the ETS. The Minister seemed to suggest that we should not talk about technologies that had to be retro-fitted more expensively to old power stations, while ignoring the fact that if Kingsnorth is allowed to go ahead without locking in carbon capture and storage in some form, even if it is only in financial form rather than in technical form to start with, carbon capture and storage will have to be retro-fitted to an old coal-fired power station. That is what Kingsnorth will be—a dinosaur from a bygone age—by the time carbon capture and storage is ready. Perhaps all this is a legacy of the Secretary of State’s predecessor in the Department for Business, Enterprise and Regulatory Reform in its previous incarnation. The hon. Member for Croydon, North (Malcolm Wicks), as the Energy Minister was an amiable Minister to have on board in these debates, but he did not give much away and DBERR was clearly pointing in the wrong direction on such issues. Now that the new Secretary of State has responsibility for energy policy as well, I would urge him to add carbon capture and storage to the long list of welcome modifications—we would not dare to call them U-turns—that he is adding to Government policy. To say that the Conservative party had a slightly mixed record on some of these issues might be a little churlish in the circumstances, although I would point out to the hon. Member for Bexhill and Battle (Gregory Barker) the failure of his colleagues consistently to support the Californian model that was put forward in an amendment tabled by the Liberal Democrats to the Energy Bill in the summer. He probably ought to look carefully at the voting record of the Conservative group on Kent county council on the subject of Kingsnorth, as well. However, the hon. Gentleman made clear his position today, and we welcome him on the increasingly crowded road to Damascus. He said that the Conservatives would put the greenhouse gas limit at Kingsnorth at 500 g per kilowatt-hour. If that is the case, he was wise not to specify the exact limit in the new clause. We would have had some difficulty supporting it at such a high level. Our preference is for a lower limit—to judge from the nods from some on the Government Benches, I suspect that others might agree with me—of about 350 g per kilowatt-hour, which would direct investors towards alternative gas-fired power stations if no unabated coal-fired power stations were viable.
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- Gregory BarkerConservative
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- I appreciate what the hon. Gentleman is saying, but we hope that the Bill will stand the test of time and that any figure, be it 500 or 350, with the push that it puts behind the technology, will be amended sooner rather than later. It therefore makes sense to give the discretion to the Secretary of State. We hope that there will be an ambitious and progressive Secretary of State, rather than the present hopeless and unambitious lot.
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- Martin HorwoodLiberal Democrat
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- I welcome the hon. Gentleman’s comments in that respect. As he said, the new clause gives the Secretary of State the power to define the limits—[Interruption.] The Secretary of State says from a sedentary position that he has that power anyway. In that case, he should support the new clause and welcome it into the Bill. There should be no dispute across the Chamber. We should make sure that we are giving the clearest possible signals to the industry and to private investors that this is the direction of travel, and that if anyone wants to invest in a coal-fired power station, they should factor in the cost of carbon capture and carbon storage into the future, or they would be misreading the investment opportunity. I am afraid that that is not the signal being given to the energy industry. The signal that the Government are giving at present is that the industry can get away with it, and that, as the Minister described, by going ahead with very high emissions in some sectors and allowing ourselves headroom within the European emissions trading scheme, we will effectively buy our way out of a high-carbon economy.
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- Paddy TippingLabour
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- The hon. Gentleman spoke about the direction of travel. What is the direction of travel of his own energy policy? He and many of his colleagues in local government are against wind power, nuclear power and new, cleaner coal plant. Does he want us to be so heavily dependent on gas that our source of power and our security of supply are at risk?
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- Martin HorwoodLiberal Democrat
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- The hon. Gentleman has introduced an unfortunately partisan tone into the debate. However, I am happy to answer him. It is wrong to say that Liberal Democrat councils are against wind power. I have plenty of examples from Orkney and Shetland downwards where Liberal Democrats at local level have supported wind power in their localities, but I would never say that every application for a wind farm is always right. We have been committed to a democratic planning system, which always gives local people the right to refuse a wind farm. The direction of travel is more in the direction that Denmark has followed for a long time, putting great emphasis on community buy-in to wind projects and there has therefore been a very low level of opposition to wind farms in that country. That is a model that our energy companies might follow. The hon. Gentleman is right that we are against nuclear power, which we believe would leave a toxic legacy to future generations that runs the risk of leaving us with the kind of bill—the Secretary of State is smiling. I do not know whether he has done the sums, and I am not sure whether he has inherited the budget from DBERR for nuclear clean-up, which runs to some £1.4 billion a year. Fifty-six years after the first nuclear power started producing radioactive waste, we still have not found anywhere to put it. If the hon. Member for Sherwood (Paddy Tipping) is advocating that we make those same mistakes again, I would certainly reject the policy. We need transitional technologies to see us through any possible energy gap while we wait for renewables to come on stream on a scale sufficient to fill the needs of the whole UK economy. We should do that partly by investing in new renewables. The Carbon Trust recently produced some encouraging figures about how offshore wind is coming on stream faster and is likely to attract more investment than was previously envisaged. Another part of the answer is, of course, energy and demand reduction and energy efficiency, which must make a big contribution. The other key transitional technology will probably be carbon capture and storage. We need to lock in that technology, which is why it is so important to support amendments such as new clause 11 and give the clearest signal that we will not tolerate unabated coal power into the future. That would give precisely the wrong signal to the private sector and discourage investment in carbon capture and storage. As has been pointed out, that would mean that the projects would go ahead—but in Dubai, China, America and Germany, not in this country. I am happy to support new clauses 10 and 11 and the Government new clauses and amendments.
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- Mr. ChaytorIndependent
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- New clause 10 is extremely important, and I endorse everything that my hon. Friend the Member for Morley and Rothwell (Colin Challen) said about it. However, I want to add a dimension to this debate. Proposed new section 2A refers to the sectoral targets for 2020 in respect of residential accommodation and the commercial and public services sector. My argument is that those targets could be more ambitious. In the past 25 years, without much effort, we have been improving the general level of energy efficiency in the United Kingdom by about 1 per cent. a year. In one sense, to call for an improvement of only 2 per cent. a year is very modest. The extra dimension of energy efficiency policy that we have to consider is the impact of the recent events on the financial markets and the global slowdown in the economy. The Chancellor and Prime Minister have recently been forthright in saying that they will invest to avert the worst effects of the slowdown in the United Kingdom, and they are considering bringing forward capital projects already in the Government’s programme to alleviate the difficulties over the next year or so. However, ramping up the energy efficiency work that is already being done would not only be one of the cheapest and easiest ways of reducing our carbon emissions; it would also be powerful in countering the effects of rising unemployment resulting from the global slowdown. I hope that the Secretary of State will speak to the Chancellor about that because the Government have an opportunity to take an important initiative that other western European Governments could follow, just as they followed the Prime Minister’s initiative on taking ownership in the financial services sector. The United Kingdom has a unique opportunity to increase massively the energy efficiency of its residential and commercial accommodation and of its existing public sector institutions and to upgrade the skills of some fairly low-skilled people to create jobs when the trend in the market is for jobs to be shed. I am reluctant to use the words “green new deal”, because they have been a little overdone recently, but they are the best simple way of describing the opportunities on offer. That is why new clause 10 is so important.
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- Gregory BarkerConservative
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- The hon. Gentleman is talking a great deal of sense and there is a lot of shared thought across the Chamber about the importance of investment in green technology and energy efficiency as a response to the current economic crisis as well as for the long-term good of the economy. Has he had a chance to consider what the Germans are doing? He said that the 2 per cent. target was unambitious, and I mentioned earlier that the Germans are looking at 3 per cent. a year for the next 10 years. Has the German plan influenced his thinking at all?
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- Mr. ChaytorIndependent
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- I am aware of what Germany, Denmark, Norway, Sweden and Finland have done, so I do not think that it is new or revolutionary. Nor is it idealistic; in the past 10 or 20 years, other countries have made far greater progress than we have. What is happening in Germany at the moment, however, is particularly interesting.
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- Mr. Graham StuartConservative
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- I have followed the hon. Gentleman’s argument with interest. He has just said that in the past 10 years many other countries around us have made much greater progress in energy efficiency than we have. I wonder why that is.
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- Mr. ChaytorIndependent
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- What I have said is that a handful of northern European countries have made more progress than Britain in many recent years; this goes back 20, 30, 40 or 50 years. We have a lot to learn from what has happened in some other northern European countries, but our progress on energy efficiency in the past 10 years has been faster than in any other decade in our history. I move on to new clause 11. I was interested that the hon. Member for Bexhill and Battle (Gregory Barker) admitted that his policy that there should be no new coal-fired stations without carbon capture was not dependent on new clause 11. That was an important admission; it is important that every Member understands what new clause 11 says. It says not that there will be no new coal-fired power stations without carbon capture, but simply that “The Secretary of State may make…regulations…to set the maximum level of carbon dioxide that may be emitted per unit of output”. Such regulations would be sensible. I do not know whether it is necessary for the provision to be in the Bill, whether the Secretary of State could make the regulations anyway or whether the provision could be made through an amendment to the Electricity Act 1989, although I suspect that it is not necessary to include it in the Bill. The sentiment and statement of intent are admirable, but they are not absolutely related to the question of carbon capture and storage and new coal-fired power stations. The hon. Member for Bexhill and Battle has worked tirelessly to give a green veneer to his party, and in some senses he has been successful. I have had many dealings with him in recent months in his new capacity as the shadow Minister, and he was formerly on the Environmental Audit Committee with me. I know that his heart is in the right place. The problem is that the mind of his party is in completely the wrong place. The hon. Gentleman talks about spreading around so much money on new CCS projects, but that is not credible given that his party leadership are still obsessed with sharing the proceeds of growth—when it returns—and giving half of it away in inheritance tax cuts for multi-millionaires or tax cuts on gas-guzzling vehicles. The policy is not credible.
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- Gregory BarkerConservative
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- The hon. Gentleman’s Government have shot our fox on sharing the proceeds of growth; it is very unlikely that there will be any growth for the foreseeable future. In the light of that, we have had to amend our policy. However, if the hon. Gentleman had paid attention to what the Leader of the Opposition has said, he would know that my right hon. Friend has clearly spelt out that we anticipate significant funding for carbon capture and storage from the auctioning of emissions trading scheme credits in 2012 and that we have also spelt out where the savings would come for the funding of feed-in tariffs. The hon. Gentleman would also know of our clear commitment on the expansion of Heathrow. On all those issues, his party’s Government are vague and our party is absolutely clear.
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- Mr. ChaytorIndependent
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- The hon. Gentleman has just argued that at a time of economic slowdown, spraying away tax cuts is not the best way to pursue our climate change policy. The point also applies to the Liberal Democrats; just a few moments ago, the hon. Member for Cheltenham (Martin Horwood) said that the Government were too miserly and unambitious in the scale of their financial support for CCS. His party promises to cut £20 billion from public investment, so it is hardly credible for it to accuse my party’s Government of being miserly and unambitious.
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- Martin HorwoodLiberal Democrat
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- I just want to put the record straight: that £20 billion would come from savings, not cuts to public investment. A great deal of it would be redirected to what we believe are the important priorities for people in this country.
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- Mr. ChaytorIndependent
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- The hon. Gentleman means efficiency savings through sacking consultants—I understand that. I turn back to the serious point. New clause 11 is an admirable statement of intent. Few could disagree that what it proposes would be a good thing for the Secretary of State to do. However, I doubt whether it needs to be an amendment to this Bill at this time, and that is why I urge hon. Members to vote against it.
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- Mr. Graham StuartConservative
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- It is a pleasure to speak in this debate. Following the debate on the previous group of amendments, we know that the Bill will go forward aiming for an 80 per cent. cut in emissions in this country by 2050. However, we should bear in mind that aviation and shipping are growing at an enormous rate while growth in the broader economy other than in those two sectors will doubtless, according to the chairman of the Committee on Climate Change, have to be even greater. The Bill promises a lot, but it allows the Government to do what they have done so often. We have heard excellent speeches by genuinely environmentally committed Labour Members who feel frustrated by a Government who have so often failed to deliver on the ground the cuts in emissions and the change to a low-carbon economy that they have promised. The Bill is sending a false signal to the British people, because the Government are not capable of delivering on the targets within it. The hon. Member for Morley and Rothwell (Colin Challen) made an excellent speech in which he laid out with great care how all the components of new clause 10 are current Government policy. In fact, the Prime Minister himself has said that some aspects of it are Government policy. Yet when the hon. Gentleman puts it down in a new clause, we find that his Front Benchers refuse to accept it. I was not aware before this evening, Madam Deputy Speaker, that a ruling had been made that accusing Government Front Benchers of rank hypocrisy was unparliamentary and should not be done, so I will not do it.
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Madam Deputy Speaker (Sylvia Heal)Labour- Quote
- Order. The previous occupant of the Chair pointed that out to the hon. Gentleman, so there is no need to have it repeated.
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- Mr. StuartConservative
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- I stand corrected, Madam Deputy Speaker. I was searching for a form of words that my constituents down the Dog and Duck would think adequately expressed the Government’s behaviour, but I suppose it would be best to say that they say one thing and do another. I fear that this Bill is like a conjuring trick that people follow with their eyes. So many people, from Friends of the Earth to many others who genuinely care about this issue, have bought into the idea that the Government are going to take action on it and set down in law the 2050 target, but we need to look at what the Government have actually done. The hon. Member for Bury, North (Mr. Chaytor) referred to energy efficiency. That is an area where it is cost-beneficial to the economy to deliver energy efficiency because it serves the purpose of benefiting social justice, but where we have lagged—pardon the pun—behind our neighbours. Earlier this year, the Sustainable Development Commission, which has the job of monitoring Government, reported to the Environmental Audit Committee that nearly two thirds of central Government Departments are still not on track to meet the target of reducing carbon emissions from their own centrally held offices by 12.5 per cent. by 2010. The Department for Environment, Food and Rural Affairs was more than halfway down the list. The central Government agency that previously led on climate change has failed to deliver these changes in its own offices in buildings that we can see from here. Yet we are supposed to believe that this Government, who have so signally failed to turn rhetoric into action, can be trusted to deliver on some long-term target about 2050. I am afraid that I have little confidence that they will do so. Policies are not co-ordinated between the different Departments. Instead of leading by example, they push for environmentally unfriendly policies such as new and unabated coal-powered plants or the expansion of Heathrow airport. As the Environmental Audit Committee has noted, the Government will miss their own target of cutting national carbon dioxide emissions by 20 per cent. by 2010. That is the backdrop to the Bill. None the less, I welcome the Government’s late conversion to feed-in tariffs, for which the Conservatives have been pushing for some time. That will be welcome, albeit belated, if it helps to lead to change on the front line and we can copy some of the success of our north European neighbours. I support new clause 10, which was well argued for by the hon. Member for Morley and Rothwell, as it would give statutory backing to targets that are already supposed to be Government targets but which Front Benchers seem unprepared to accept despite the impassioned pleas of Members on the Benches behind them. I also support new clause 11. That is accompanied by a statement of Conservative party policy by my hon. Friend the Member for Bexhill and Battle (Gregory Barker)—the belief that we should not be allowing the creation and building of any more dirty coal power plants. Looking ahead, there is a real risk of an energy shortfall from 2017 onwards—[Interruption.] The Secretary of State is suggesting that that is not the case. If he looks on the national grid website, he will see that it itemises that potential shortfall. Moreover, there are imponderables such as how long existing power plants can be sustained for and what is their efficiency and effectiveness in producing energy. The Government’s inaction has put us in a position whereby we have failed not only to deliver energy efficiency, which would reduce demand, but to put in place the production capacity to ensure that we can be well served by it. The Conservatives, on the other hand, have said clearly that we would not allow any more dirty coal power plants to be built. When one looks at this country’s historical skills and strengths—the presence of major oil companies, our history of offshore platforms and involvement in coal mining—in what better way could we give a genuine lead to world efforts to reduce emissions than by leading on carbon capture and storage? The Minister completely failed to convince anyone that new dirty coal power stations would be more likely to be retro-fitted with CCS than existing power stations. If the Government were serious about this, instead of saying one thing and doing another, they would back CCS and ensure that it was delivered. It is not only north European countries that have done a better job than we have. The latest Chinese five-year plan for 2005-2010 looks for a 20 per cent. reduction in energy usage per unit of gross domestic product. In a developing country with hundreds of millions of people still living in poverty, the Chinese have a greater ambition than this Government, who claim to lead.
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- Alan SimpsonLabour
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- It took me quite a long time to decide to add my name to new clause 11. My reservations about it were exactly the opposite of those expressed by the Minister. I do not think for one moment that it would prevent the development of any sort of new power station working to any sort of standards. My reservations centre on the fact that the new clause is based around the word “may”, not “shall”. We can argue about what different parties may do if they are in government, but as there is no “shall” there is no obligation to act. I looked at the Bill, and I found that a couple of voices were permanently ringing in my ears. One was the voice of my hon. Friend the Member for Wolverhampton, South-West (Rob Marris), who has legitimately challenged this House to say at what point the 80 per cent. target becomes reality politics as opposed to fantasy politics. It is not enough to set a 2050 target if we have no idea of how we are going to achieve it. The second voice that permanently nags me is that of Aneurin Bevan, who, a long time ago, said that there is no point in willing the ends if we are not prepared to will the means. In our context, the means have to be measurable intervention measures that set minimum performance standards, and perhaps minimum requirements, about carbon reductions. I have awkward feelings about the introduction of thresholds in the Bill. If we want to amend the thresholds, we will need to come back with primary legislation. If there is a case for thresholds, they should be minimum thresholds that would allow us to set standards that have to be met, but perhaps exceeded. There is nothing in the new clause that does that, and there is not even a duty to require those regulations to be brought in. Those were my misgivings, but running through the Bill is a recognition that, as various hon. Members have said, we have to be willing to define the route map to take us from where we are to where we want to be in 2020 and 2050.
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- Mr. ChaytorIndependent
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- Would my hon. Friend accept that we have an opportunity to revisit the 2016 zero carbon target and bring it forward? That target was set when our ambition was to build 3 million homes by 2020—a quarter of a million homes, or more, a year—and given the state of the housing market and the housing industry, those homes will not be built in the next two, three or four years unless the Government intervene. Could the Government not intervene to boost the building of new homes, and bring forward the target date for new homes so that the energy efficiency is built in at an earlier stage?
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- Alan SimpsonLabour
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- I am sure that the Government could—and I hope that they will. For me, the most exciting point with which all the German political parties connect is that our future will probably be determined not by the building of the 100,000, 200,000 or 250,000 new houses a year that we may need, but by what we do with the 25 million houses that we have today. The scope for retrofitting holds the possibility of genuinely transformational energy and carbon saving economics. In Germany, that transformation currently delivers a domestic economic multiplier with a turnover of €30 billion a year and almost 300,000 new jobs a year. That is the sort of momentum for which I confidently expect the Secretary of State and the Prime Minister to provide in unveiling the new package of green economics that will drive our transformation in the UK. However, we cannot achieve that transformation without setting targets and standards as the benchmark against which we measure it. I therefore make a plea to the House: new clause 10, which covers sectoral targets, sets out some impressive ideas about Government responsibility for the public estate and from where leadership for that should come, but they will not be realised if we do not push them to a vote or a point of acceptance, so that targets are written into our commitments. The ideas become fantasy economics only if we will not take the transformational steps that define the route map. For all its weaknesses, I would rather the Secretary of State had a permissive power to introduce those regulations than no power. My preference was for a duty—for “shall” rather than “may”. Whatever performance standards are set, I would prefer serious debate in the House between the different parties about what they should be to the current debate about whether we should have performance standards for new power stations. If we are not prepared to say to ourselves that there must be performance standards, how can we say that to any other country on the planet that intends to build a power station with no standards? That is not so much hypocrisy as inconsistency, which is out of tune with the demands of not only the public but the planet and our time.
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- Gregory BarkerConservative
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- Does the hon. Gentleman realise that he has made an incredibly powerful case to many hon. Members, and especially people outside, who argue that we cannot afford to go green during a time of economic turbulence and downturn? He has put his finger on it—not only are such matters important for the climate, but, from the beginning of the industrial revolution, innovation and change have been the engine of new growth. The most exciting as well as the most necessary new growth in the 21st century is in energy technology. He is right to point out that it is the responsibility of any Government to put in place the standards that we need to drive that growth forward.
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- Alan SimpsonLabour
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- I believe that absolutely. I have made the case on many occasions that we have possibly a decade in which to transform ourselves into a post-fossil fuel economy. If we have the courage to do that, the great benefit of our time is that we have access to the technologies that allow for such transformation. The reality of the current crisis is not that we cannot afford to go green, but that we cannot afford not to go green. I genuinely believe that the new Secretary of State is one of the people who could drive that transformation.
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- John HemmingLiberal Democrat
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- I am pleased to follow the hon. Member for Nottingham, South (Alan Simpson) because, apart from the fact that I have no confidence in the Government, his speech contained little of substance with which I disagree. The Government’s attitude to new clauses 10 and 11 demonstrates their attitude to the Bill. They resolve to be good, but not yet. We must therefore consider the direction of travel on the consumption of fossil fuels, of which the three main ones are gas, coal and oil. The Government clearly want more oil burned every year. The Prime Minister said that—at column 33 of last Monday’s Hansard. Tonight, we had confirmation that the Government’s objective is to build some nice new coal power stations. The second law of thermodynamics constrains the energy efficiency, but the Government are saying that the power stations will not be carbon capture systems and that we will simply emit carbon dioxide into the atmosphere. Those power stations may be more efficient because the engines are better designed, but the Government do not intend to try to reduce the amount of carbon dioxide emitted. That leaves gas. If we are going to burn more oil, more coal and, one therefore presumes, more gas, we are not going in the direction of reducing carbon emissions. The reality is that we have to start somewhere. At some point, we have to say, “We’re going to reduce carbon emissions, so we don’t need more oil, more coal or more gas,” and we should have a strategy for that. It may take time to change direction, but we cannot have constant increases in oil supplies, which is what the Prime Minister says we require. All our constituents are crying out about the increasing costs of energy. I happen to take the view that the UK has gone far too far down the free market route and that the European model is far better, which is not necessarily something on which I am 100 per cent. aligned with my party. The green new deal is an option. We have managed to find £50 billion for the banks, but what about £50 billion to sort out the energy intensity of gross domestic product? That should not necessarily be the precise figure of course, but the principle that we should invest in energy efficiency to reduce the amount of energy used and, by reducing demand, thus reduce prices must be the way forward. New clause 10 basically says, “Let’s get on with it and do something,” but the Government do not want to know, while new clause 11 would introduce a permissive power. I accept that “may” in new clause 11 should be “shall”, but the Government do not even want that. They have therefore taken a very clear view: they are in favour of being good, but not yet.
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- Joan RuddockLabour
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- Let me first try to tackle some of the issues raised by the hon. Member for Bexhill and Battle (Gregory Barker) from the Conservative Front Bench, whose position, it became apparent during the debate, was that we would have no new coal-fired power stations unless carbon capture and storage were available, which it currently is not. That is completely unrealistic. The Government are of course committed, as he says his party is, to long-term renewable energy policies, energy efficiency and CCS. However, we continue to need a diverse energy supply and we must take energy security very seriously indeed. Coal currently accounts for one third of the electricity supply. I therefore suggest that his suggestion of prejudging and totally banning any new coal-fired power station is completely unrealistic.
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- Gregory BarkerConservative
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- The Minister said in her opening remarks that she was not going to prejudge the issue, but it sounds as though the Government are now doing exactly that—prejudging it and saying that they will allow dirty, carbon-emitting coal.
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- Joan RuddockLabour
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- Absolutely not. There is no prejudgment on our part, but the hon. Gentleman is indeed prejudging the issue, and obviously takes no account of issues of energy security. The hon. Gentleman made a number of other points about CCS, as did other hon. Members, particularly in relation to the BP Peterborough project. [Hon. Members: “Peterhead.”] I am so sorry—and I know Peterhead well enough. As I said, we are talking about a private company making its own decisions. Of course it would have liked to pocket Government money, but we need—and have agreed to have—an open competition, so that we can choose from among those companies that wish to put projects of that kind forward. Then we can choose what we regard as the most appropriate project to receive Government money. It is as simple as that. We did not force anyone to withdraw from what they were doing.
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- Mr. WeirScottish National Party
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- Will the Minister give way?
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- Joan RuddockLabour
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- No, I will not give way, because I have too much to deal with.
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- Mr. Graham StuartConservative
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- Will the Minister give way?
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- Joan RuddockLabour
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- No, I will not. I need to make some progress. I want briefly to refer to the debates on new clauses 10 and 11, and to the speeches of my hon. Friends the Members for Morley and Rothwell (Colin Challen) and for Bury, North (Mr. Chaytor), both of whom have made excellent contributions to the debate. I acknowledge that the Government already have sectoral targets, and that they have programmes that are proceeding as we would expect them to do. We do not in any sense reject the concept of targeting or of having a means by which we can measure progress. However, we do not think it is appropriate for those measures to be placed in the Bill. It has been suggested that it is important for the Government to get on with what they have pledged to do, and I give all my hon. Friends the assurance that we are doing just that. We want to look at the kind of sectoral targets we would need, and to determine whether we would need different targets for different types of business, for residential areas and for different kinds of microgeneration schemes, such as wind, photovoltaic and ground pumps. We have sympathy with everything that my hon. Friends have said, and for the concept of targets, provided that we can consult on the detail of how they would work alongside our feed-in tariffs. I am giving the House that reassurance. We have announced on feed-in tariffs, and this opens up a whole new dimension in the debate. If hon. Members reflect on that, they will see that this is a way forward for the Government that means that we do not need to add these particular measures to the Bill. I urge the House to support new clause 16. Question put and agreed to. Clause read a Second time, and added to the Bill. New Clause 17 Regulations about reporting by companies ‘(1) ‘The Secretary of State must, not later than 6th April 2012— (a) make regulations under section 416(4) of the Companies Act 2006 (c. 46) requiring the directors’ report of a company to contain such information as may be specified in the regulations about emissions of greenhouse gases from activities for which the company is responsible, or (b) lay before Parliament a report explaining why no such regulations have been made. (2) Subsection (1)(a) is complied with if regulations are made containing provision in relation to companies, and emissions, of a description specified in the regulations.’.—[Joan Ruddock.] Brought up, and read the First time.
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- Joan RuddockLabour
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- I beg to move, That the clause be read a Second time.
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- Madam Deputy SpeakerLabour
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- With this it will be convenient to discuss the following: New clause 5—Company reporting of greenhouse gas emissions— ‘(1) Any company that is required to produce a business review under section 417 of the Companies Act 2006 (c.46) must have regard to any guidance issued under section 80 of this Act when reporting on greenhouse gas emissions. (2) The Secretary of State may by order provide that any company that is required to produce a business review that includes information on environment matters (including the impact of the company’s business on the environment) under section 417(5) of the Companies Act (c.46) must include information on greenhouse gas emissions, and in doing so have regard to any guidance issued under section 80 of this Act. (3) The Secretary of State may by order provide that compliance with guidance issued under Section 80 of this Act will be presumed to constitute compliance with section 417 of the Companies Act 2006 (c.46). (4) The Secretary of State must make provision under either subsection (2) or subsection (3) before 1st April 2010. (5) The expiry of the period mentioned in subsection (4) does not affect the power of the Secretary of State to make further provision by order under subsections (2) and (3). (6) The Secretary of State shall, when setting carbon budget pursuant to section 4 of this Act, lay before Parliament a report on any changes to any guidance issued hereunder which the Secretary of State believes are necessary to promote the achievement of any carbon targets. (7) Any order under this section is subject to affirmative resolution procedure.’. New clause 18—Report on the civil estate— ‘(1) It is the duty of the Office of Government Commerce to lay before Parliament each year a report setting out the progress Her Majesty’s Government has made towards improving the efficiency and sustainability of its civil estate. (2) The report must include the progress made towards— (a) reducing the size of the civil estate; (b) improving the sustainability of the buildings that already form part of the civil estate; and (c) ensuring that any new buildings procured for the civil estate are in the upper quartile of energy performance. (3) Where any new building procured for the civil estate is not in the upper quartile of energy performance, the report must state the reasons why this is the case. (4) A report under this section must be laid before Parliament not later than 1st June in the year in which it is to be so laid.’. New clause 20—Company reporting of greenhouse gas emissions (No. 2)— ‘(1) The Secretary of State may by order provide that companies of particular classes or descriptions must produce as part of their business review under section 417 of the Companies Act 2006 (c. 46) such information on greenhouse gas emissions as may be specified in the order. (2) Any company that is required to produce information under subsection (1) must have regard to any guidance issued under section 80 of this Act when reporting on greenhouse gas emissions. (3) The Secretary of State may by order provide that compliance with guidance issued under section 80 of this Act will be presumed to constitute compliance with section 417 of the Companies Act 2006 (c. 46). (4) The Secretary of State must make provisions under either subsection (1) or subsection (3) before a date to be prescribed by order. (5) The expiry of the period mentioned in subsection (4) does not affect the power of the Secretary of State to make further provision by order under subsections (1) and (3). (6) The Secretary of State shall, when setting carbon budget pursuant to section 4 of this Act, lay before Parliament a report on any changes to any guidance issued hereunder which the Secretary of State believes are necessary to promote the achievement of any carbon targets.’. Amendment No. 16, in clause 13, page 7, line 26 , at end insert— ‘(3A) The Secretary of State must prepare an annual report to be laid before Parliament setting out the level of expenditure within the whole UK economy spent on efforts to achieve the targets fixed in the carbon budgets.’. Government amendment No. 44.
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- Joan RuddockLabour
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- The amending provisions in the group concern various reporting obligations on both Government and business. The key issue is the corporate reporting of emissions, which we have, of course, discussed before at various stages of the Bill’s passage. Levels of reporting on greenhouse gas emissions in the UK are already high. Many companies currently report their emissions under the EU emissions trading scheme or will be required to do so under the upcoming carbon reduction commitment. We also expect that many will report on environmental issues under the Companies Act 2006 narrative and involuntary schemes. The Government want to provide as much certainty as possible for the business community and to show leadership internationally. However, we also have a duty to ensure that we do not impose new requirements without a robust examination of whether regulation is the most effective intervention to drive corporate climate change improvements. Government new clause 17 and Government amendment No. 44 are designed to reinforce our commitment to the importance of corporate transparency and to taking forward the process as quickly as possible. We will consult publicly next year on the detail of how companies’ carbon emissions should be defined and measured. The outcome of that consultation, which will include close work with individual stakeholder groups, will be reflected in the guidance on measurement of emissions that the Government are required to publish by 1 October 2009.
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- Mr. MorleyLabour
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- I know that time is pressing, but I wanted to tell my hon. Friend that I greatly welcome the new clause. I know that the Aldersgate group, which represents many prominent companies, and non-governmental organisations welcome it, as does Christian Aid, which is also a big supporter of my new clause 5. I understand that the objective of new clause 17 is to provide for exactly the same commitment on companies as does my own new clause. I greatly welcome what the Government have done and I look forward to the consultation, a standardised method of reporting and clarity for companies on their carbon footprints.
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- Joan RuddockLabour
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- I am extremely grateful to my right hon. Friend for making those points and I assure him that we are very much trying to meet the spirit of so much of the good work that he has done on the provisions he mentioned. Government new clause 17 takes on board the strong views expressed in Committee that we should press for further action on corporate reporting. We therefore propose that by 6 April 2012, the Secretary of State must either use powers within the Companies Act 2006 to mandate reporting by companies on their greenhouse gas emissions or, if he decides not to use those powers, to explain to Parliament why not. This makes clear the Government’s intention to move in the direction of mandatory reporting of emissions, provided that we can demonstrate that it is environmentally beneficial and cost-effective. The use of these powers—or the report to Parliament outlining why they have not been used—in 2012 must be supported by evidence of the environmental benefit, accompanied by a robust impact assessment and extensive stakeholder consultation. I hope that Conservative Members will take note of that point. Setting a deadline of 2012 allows business and the Government to have established a standard, while also allowing time for businesses to prepare. In recognition of the urgency of the issue, amendment No. 44 brings forward to 2010 the deadline for examining, on a strategic basis, the contribution that mandatory reporting can make towards our climate change objectives. I move on to new clause 5 and new clause 20, making clear the two key reasons for not setting a requirement for mandatory reporting in the Bill now. First, there is not yet a reporting standard on which the Secretary of State could base such a requirement. More time is needed to develop such a standard, which means getting all the details right. Secondly, many companies already report some of their emissions—under the EU ETS, for example, or under voluntary initiatives such as the carbon disclosure project. More will be doing so under the carbon reduction commitment. Once we have undertaken public consultation on the definition of the reporting standard, we will be in a better position to see what the gaps are between what is currently reported and what we want to see reported. We will then be able to design that requirement. Let me summarise what I have said so far. I entirely agree with those who have drawn attention to the need to consider the question of corporate reporting as a matter of urgency, and to introduce a mandatory requirement if we can get it right. I therefore propose to accelerate the existing timetable, and to place a stronger onus on the Government to introduce reporting requirements. I consider that proposal to be both ambitious and proportionate. New clause 18 requires the Office of Government Commerce to produce an annual report on progress made towards improving the efficiency and sustainability of the Government estate. The report will cover steps taken to reduce the size of the civil estate, to improve the sustainability of existing buildings, and to ensure that new buildings that are procured are in the upper quartile of energy performance. We are committed to including all Government Departments in the carbon reduction commitment, which will provide incentives for the introduction of energy efficiency measures and the occupation of more energy-efficient office space. Government Departments are subject to the “sustainable operations on the Government estate” targets, which are reported through the chief executive of the Office of Government Commerce and the Cabinet Secretary. The new clause extends those mechanisms by requiring the Office of Government Commerce to produce a report. It follows an amendment tabled by my hon. Friend the Member for Gower (Mr. Caton), and a private Member’s Bill introduced by my hon. Friend the Member for South Swindon (Anne Snelgrove). I believe that the report will enable us to define the top quartile that was the subject of the private Member’s Bill, and to monitor the commitment that was made through the introduction of energy performance certificates and display energy certificates. I am therefore happy to support the new clause, although parliamentary counsel have pointed out that some drafting changes would be desirable for legal reasons. I hope that all parties will support it if it becomes necessary. I am afraid that I cannot be as accommodating when it comes to amendment No. 16, which would require the Secretary of State to produce an annual report setting out total expenditure in the United Kingdom economy on action to meet the carbon budgets. The Bill has already established a new, transparent framework for reporting Government action to meet carbon targets. We are required to produce reports once the targets have been set, explaining which policies and measures will be used. The annual reports by the Committee on Climate Change on progress towards meeting targets and budgets must set out the progress that has been made, and the further progress that is needed to meet the budgets. It is difficult to see how we could be precise about how much is spent by Government, or the United Kingdom economy as a whole, exclusively on meeting carbon budgets, compared with expenditure on other policies and objectives. I think that the discussion we have had about fuel poverty is a good example, as are our discussions about renewable energy. Moreover, Departments already provide publicly available details of their annual expenditure in their departmental reports. For a combination of reasons—including the practical difficulties of accurately defining expenditure to meet carbon budgets, the level of scrutiny to which each Department’s expenditure is already subject, and the Bill’s existing provisions for the publishing of information about Government action of meet carbon budgets—the new clause is not acceptable to the Government. I very much hope that my hon. Friend will understand our reasons, and that, while recognising our support for all the hard work that he has done on all aspects of climate change throughout the Bill’s passage, he will be willing not to press his amendment to a Division.
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- 20:45
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- Gregory BarkerConservative
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- We are disappointed that the Government have not shown greater leadership and urgency on the issue of mandatory corporate reporting. There is, however, much in the rest of this group of new clauses and amendments of which we are in favour. For instance, Government amendment No. 44 brings forward the Secretary of State’s reporting date by one year, which is extremely sensible. On the issue of mandatory reporting, we feel that the Government ought to take a real lead. Simply introducing a measure that allows at least four years—nearly as long as the entire duration of the second world war—before we can reach a point at which we will, or perhaps will not, introduce mandatory corporate reporting is not good enough. There was a good deal of merit in new clause 5, but we believe that there is a strong case for allowing the leading group of companies—perhaps a small group such as the FTSE 350, the majority of whose members already report their carbon emissions—to lead on a set of standards. We have to accept that internationally accepted accounting standards are already changed regularly. It seems that we are allowing the perfect to become the enemy of the good. We would like Britain to start to blaze a trail by allowing our leading companies to have a clear and defined role, but the Government are failing to give that leadership. It being Nine o’clock, Madam Deputy Speaker put forthwith the Question already proposed from the Chair, pursuant to Order [9 June]. Clause read the Second time, and added to the Bill. Madam Deputy Speaker then put the Questions necessary to dispose of the business to be concluded at that hour. New Clause 11 Greenhouse gas emissions performance standard (electricity generating stations) ‘(1) The Secretary of State may make provision by regulations for a greenhouse gas emissions performance standard to set the maximum level of carbon dioxide that may be emitted per unit of output by any generating station requiring consent for construction or extension under section 36 of the Electricity Act 1989 (c.29). (2) Regulations made under subsection (1) may include provision— (a) specifying how proposed generation stations are able to comply with any greenhouse gas emissions performance standard, and to demonstrate compliance with any regulations made under this section, including by the capture of carbon dioxide at the generating station and its transport to and injection into geological storage provided that such activities are licensed in accordance with applicable laws and regulations; (b) specifying the basis on which emissions of greenhouse gases from combined heat and power generating stations shall be calculated such that the unit of output includes useful heat produced in addition to electricity generated by any such generating station; (c) specifying any sources of electricity generation, including electricity generated from renewable sources, that are deemed to be compliant with any greenhouse gas emissions performance standard. (3) No consent shall be granted under section 36 of the Electricity Act 1989 for any generating station that does not comply with regulations made under subsection (1). (4) Before making regulations under subsection (1) (including setting the level of the greenhouse gas emissions performance standard), the Secretary of State must consult such persons as are likely to be affected by or have an interest in the regulations. (5) Regulations made under subsection (1) shall be made by statutory instrument, which may not be made unless a draft of the instrument has been laid before, and approved by resolution of, each House of Parliament. (6) In this section— “greenhouse gas emissions performance standard” means a standard prescribed by regulations setting the maximum level of carbon dioxide that may be emitted per unit of output from an individual generating station.’.—[Gregory Barker.] Brought up and read the First time. Question put, That the clause be added to the Bill.
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- 20:45
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- Speaker
- Edward MilibandLabour
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- I beg to move, That the Bill be now read the Third time. It is right for me to start this Third Reading debate by paying tribute to those who have done the hard work to get the Climate Change Bill to its final lap; I am thinking in particular of my right hon. Friend the Secretary of State for Environment, Food and Rural Affairs, who oversaw the Bill through almost all its stages. It is also right for me to pay tribute to his immediate predecessor, my right hon. Friend and brother the Foreign Secretary, who also had a hand in this. I asked him whether he could be here this evening; sadly, he could not. I commend the Minister of State, Home Department, my hon. Friend the Member for Oldham, East and Saddleworth (Mr. Woolas), my hon. Friend the Under-Secretary for her work today, and, in the other place, Lord Rooker. Let me also pay tribute to Members—
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- 21:43
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- Mr. LilleyConservative
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- I am grateful to the Secretary of State for giving way, but there is very little time to waste on these pleasantries. Could he explain why the business was so arranged that we had no opportunity to debate the increase by one third in the emissions reduction target from 60 per cent. to 80 per cent., even though by any calculation that must increase the cost by tens of billions of pounds, and why he refused to produce a revised impact assessment to give us any figures on what the costs and benefits are, which means that this House is voting on something that it has neither debated nor had any cost assessment on to aid its decision?
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- 21:43
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- Edward MilibandLabour
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- I would say to the right hon. Gentleman, who is much more experienced in this House than I am, that it was up to Members to ensure that we got through the business. Members spoke at great length; he made a contribution as well. The House has clearly spoken on this issue. With five Members and the overwhelming majority of Members voting as they did, the mood and sentiment of the House is pretty clear. Let me pay tribute to most Members across the House for their work on the Bill, including Opposition Front Benchers for their support, encouragement and mainly constructive ideas, and to all those who scrutinised the Bill in draft form. There are three important things about the Bill, the first of which is its ambition, to which the right hon. Member for Hitchin and Harpenden (Mr. Lilley) referred. It will make us the first country in the world to enshrine in law binding climate change targets that are stretching and ambitious, as they need to be—80 per cent. by 2050. They provide a scale of ambition that will enable us to play our part, with authority, in seeking a global agreement in Copenhagen at the end of next year. As Friends of the Earth has said, “the world’s first climate change law will also be a world class climate change law”. The second reason the Bill is unique is the central role played by the independent Committee on Climate Change, which ensures that Britain’s long-term framework will continue to be guided by the evidence, whatever the short-term pressures facing politicians of the day. We see that in its advice on the 80 per cent. target, as we no doubt will in its advice on carbon budgets, which will be published on 1 December. At a time when we face economic difficulties, it is important that we in this House not only continue to be ambitious about climate change but are guided by the science, and the Committee on Climate Change will ensure that that happens. The third reason the Bill is a landmark is its recognition—some Members do not like this—of the scale of the shift that will be required to meet our ambitions. That requires action from every section of our society. For our whole economy, the advent of carbon budgets will help to drive the necessary transition in the way we use resources. For the energy sector, the obligations on companies to meet carbon-reduction targets for households will help the shift towards energy saving. For business as a whole, the measures on corporate reporting recognise, as do many British businesses, that cutting carbon emissions is now a necessary part of doing business. For the public sector, we need to do better, and the proposals on reporting on energy efficiency and being part of a new carbon-reduction commitment represent a recognition of that. It is very welcome that these key features of the Bill—the ambitions, the mechanisms and the need for a shift in all parts of society—have commanded near-universal consensus in this House. As I said in my statement earlier this month—I think that we should freely acknowledge this—we know that the hard work to achieve our climate change objectives has, in a way, only just begun. We should be pleased about what we have achieved: a 16 per cent. cut in emissions since 1990 that means that we are one of only a few countries to be on track to meet our Kyoto targets; an increase in offshore wind that means that we have now overtaken Denmark; and a tripling of renewable energy in the past five years. However, we know that there is a lot more to do. That is why I announced the feed-in tariff last week, why we need to tackle renewable energy being connected to the grid, why we need investment in carbon capture and storage, and why we need diversity in our energy sources. We are determined to make progress not just through this Bill, but during this year, next year and into the next Parliament. We look forward to many years of support from the Opposition as we do so. I end by paying tribute not to those in the House, but to those outside it: those who saw the dangers of climate change and the actions that needed to be taken long before the politicians did. I pay tribute to the scientists who detected the problem, the campaigners who fought to bring it to public attention, the green movement that mobilised for change, and above all, the members of the public who wrote to us in record numbers, asking for a Bill that met the scale of the challenge. I believe that we have met that challenge. We owe them a debt of gratitude for making it happen, and I urge all Members to support the Third Reading.
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- 21:43
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- Speaker
Greg Clark (Tunbridge Wells) (Con)Conservative- Quote
- I regret that there is little time to thank individually all the people who have contributed to the Bill during its passage, both inside the House and out of it. I would like to pay tribute to my right hon. Friend the Member for West Dorset (Mr. Letwin), who first pressed for the Bill to be taken up by the Government, and my hon. Friend the Member for East Surrey (Mr. Ainsworth), who previously stood in my place. One of the things that he bequeathed to me was the expertise and enthusiasm of my hon. Friend the Member for Bexhill and Battle (Gregory Barker), my parliamentary neighbour. This Bill has attracted an unusual spirit of cross-party co-operation in both Houses. That is appropriate, because to succeed the Bill must lay foundations that endure from one Parliament to the other and indeed, eventually, from one generation to another. By 2050, we will all be gone from this House—some sooner than others—but those who come after us will remember our names because it is this generation that will be judged on what we did in response to the challenge of climate change. That point was well made by Margaret Thatcher. Speaking of our duty to nature, she said: “That duty is constant…It will weigh on our shoulders for as long as we wish to dwell on a living and thriving planet, and hand it on to our children and theirs.” As robustly as we support the Bill, I know that a few people in this House and in the country have concerns about it. Since we have not had much time to debate them tonight, let me make some mention of them. Some are suspicious that a purported scientific consensus reflects more group think than rigour. Others worry that the costs of action to our businesses and our economy may be too great. Others fear that the Bill indicates a unilateral, rather than a multilateral approach. Let me take those points briefly in turn. Churchill says that scientists should be on top—[Laughter.] Scientists should be on tap, not on top. I agree with that, the way he said it—correctly. That is why advice to Ministers should be given in public through the committee, not behind closed doors, and it should be subject to the scrutiny and ultimate approval of this House. On the question of affordability, the Bill provides the Secretary of State not just with the opportunity, but the obligation to set carbon budgets in the light of the science and the crucial economic and business issues of the day. In any case, what is affordable? Is it clinging to a high-carbon economy and everything that that implies for our energy security, price volatility and the costs of doing business, or is it switching to secure, stable and efficient energy systems that put British business, particularly British process industries, which have long been world-beating, into the forefront of world innovation? I am a multilateralist. I do not believe that Britain should act alone, but this Bill provides for the Secretary of State to give leadership in our international negotiations and, at all times, to have the flexibility to ensure that other countries come with us. That is the crucial approach to our climate change policy. We cannot stand alone; we have to take the rest of the world with us. During the past 10 years, the Government have often operated without a long-term energy policy; they have dithered and delayed over nuclear power, and emissions have risen in the most recent years. We are not even certain we can keep the lights on for the next 15 years. If we have learned anything from that experience, it is that we need serious long-term policies, not the short-termism of the past 10 years. This Bill helps to secure that.
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- 21:50
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- Steve WebbLiberal Democrat
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- The Bill is welcome and important, and the process of scrutiny has improved it. We welcome the fact that the new Secretary of State has made several concessions, or improvements, in the final stages of the measure’s passage— most notably his acceptance of our 80 per cent. amendment. It is the first time that I have seen a Secretary of State’s name added to an amendment that I tabled, but I hope that it sets a precedent, which will be followed many times. My worry about Third Reading was that it would become an occasion for slightly too much self-congratulation when, as the Secretary of State said, we are at the beginning of a difficult process. Many people asked whether the target of 80 per cent. was too tough and whether it was achievable. I believe that history will judge that it errs on the low side—new evidence and information suggests further, faster, deeper. I fear that we may have to revisit the targets to strengthen them to avoid the dangerous climate change that we are united in fearing. Although the 2050 targets have rightly been strengthened, the 2020 target has been left untouched. We have not been able to put that right this evening. I know that the Secretary of State accepts that the end point is all very well but that how we get there, and especially how fast, is important. I hope that the Government will revisit that. The other big concern that remains is the lack of clarity on the domestic effort required to achieve the goals. Although we have ambitious targets, many of them could be brought in without any decarbonisation of the British economy. Clearly, we should not follow that path and we would have welcomed some guarantees about that. I know that Ministers would have offered them, if we had had the opportunity, but it was not to be. Influences on the Bill have come from inside and outside the House. My hon. Friend the Member for Cheltenham (Martin Horwood) and I have benefited hugely from the expertise of Friends of the Earth and many other campaigning organisations. They may even have helped us draft the odd amendment. I am proud to have been part of the process of considering the Bill and I urge the House to give it a Third Reading.
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- 21:54
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- Speaker
- Colin ChallenLabour
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- I would like to add my welcome to the Bill. It will have an enormous impact on the way in which we order our economy and how the Government work. I am not sure that many people have assimilated that yet. In this place, we are often accused of short-termism; perhaps we are considering the first Bill about long-termism, and that is a good thing. However, if our constituents experience floods and water lapping around their living rooms and we say that perhaps a wind farm is the solution, we will be hit by the sort of short-term requirements that all politicians face when their constituents suffer a crisis. The battle has therefore only just begun, because our long-term vision has yet to be sold to the public, who currently face other difficulties. In that sense, it is the worst time to talk about a long-term vision. I hope that we will vigorously insist that the Bill is given the means to reach fruition and that we do not hold back on budgets. Nick Stern has doubled his assessment of how much we need to spend to tackle climate change to 2 per cent. We need to examine the figures and ask all Departments to reconsider the way in which they order their budgets when tackling climate change.
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- 21:56
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- Mr. GummerConservative
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- The crucial aspect of the Bill is that it sets up a Committee that has a genuine effect on not only the Government but the Opposition. It will no longer be possible for anyone to give a short-term answer to climate change issues. We should all recognise that, if we dislike what the Government propose, we must have an alternative that will deliver the same end. We have never previously had that in British politics because we have not been in a situation that binds our successors. The technique of creating the independent committee is crucial to the good governance of Britain in circumstances in which the traditional mechanisms do not fit the time scale of climate change. The Bill is therefore crucial and utterly different. I believe that the vote tonight will show that our system is capable of adapting even to the biggest threat to mankind that we have faced, in a knowledgeable sense, at any time. I therefore believe that we should be proud to be present and voting. Question put, That the Bill be now read the Third time:— The House proceeded to a Division.
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- 21:58
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- Mr. LilleyConservative
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- On a point of order, Mr. Speaker. Given that we are passing the Climate Change Bill, which is based on the supposition that the climate is getting warmer, let me point out that it is now snowing outside, in October.
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- 21:58
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- Mr. SpeakerCrossbench
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- That is not a matter for the Chair, but it may be because the Almighty wants to make a Scotsman like me feel at home down here in London.
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- 21:58
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