Lord Marland
That this House takes note of the future of energy policy in the light of the climate change challenge.
Lord Marland
My Lords, I should like to thank the House and all noble Lords in advance for joining this debate today. I should also like to thank the noble Lord, Lord Smith of Finsbury, for giving the debate its name.
The future of energy policy is a question absolutely at the heart of the coalition. Our central theme is twofold: energy security and the low-carbon economy, with value for money for the taxpayer. For years we have relied on the bounty of North Sea oil and not invested in the new energy sources that we will need in the future, or invested the proceeds of North Sea oil to meet our future demands. That must change, and we need to get on with it fast.
I have said in the House many times that the delivery of energy supply transcends many government periods. It is incumbent on us to be part of a broad coalition for the benefit of Britain. Later this year, we in this House will have it in our power to provide a clear pathway to the future, with legislation in the form of the next energy Bill to make that happen.
Since May, many noble Lords have asked recurring questions. Are we serious about nuclear? Will the first cut be CCS? Are we serious about the growth agenda? There are some who think that we should not be serious about the green agenda. Let me emphatically provide noble Lords with the coalition’s response. On Monday 18 October, we announced the key government deliverables that will help pave the way for the building of our new nuclear power. Following the spending review announcement of up to £1 billion for the first CCS demonstration project, last week I started the process of detailed negotiations with Scottish Power on its proposals for that project.
My Lords, whether you like it or not, we intend to be the greenest Government ever. This will require showing leadership and setting an example. Therefore, we will reduce the carbon footprint of central government by 10 per cent this year. Our green agenda will launch the green deal, implement the green investment bank and—through RHI and FITs—encourage renewable development. All of those equal moving to a secure energy supply, new jobs and vital investment.
However, we must do more, and we will. It has been said that we are not providing enough stability to the energy market, so we are pursuing an ambitious energy market reform programme that will support the delivery of a secure, low-carbon, affordable energy mix for the 2020s and beyond. A framework to give a solid carbon price is the first step in providing the incentives for the investment that we so urgently need. Last week, 144 licences were granted to extract oil and gas from UK waters in the 26th licensing round.
My Lords, I could go on, and I will. We have already extended the carbon emissions reduction target—CERT—whereby 3.5 million more homes will be lagged. We have also introduced proposals to accelerate smart meter rollout by comparison with previously published targets. Our wind, biomass, wave and tidal resources make us a natural world leader for renewable energy, but Britain has not realised its potential. We have the highest tidal reach, 40 per cent of Europe’s wind and 11,000 miles of coastline to take advantage of. That is why we committed £200 million in funding for low-carbon technologies, including offshore wind technology. We are providing up to £60 million to meet the needs of offshore wind infrastructure at our ports. We have boosted the UK’s gas storage capability by 15 per cent already, by giving consent for a new facility in Lincolnshire. The renewable heat incentive is the first scheme to provide long-term support for renewable heat technologies and will drive a more than tenfold increase in renewable heat in the UK over the coming decade.
Even with the most laborious of economic circumstances in which to start governing, we have shown that we are open for business and there is a clear pathway. Investors now have certainty about the environment in which they are investing. We must look to build a new kind of economy to ensure global competitiveness and protect ourselves from price shocks.
On our nuclear legacy, public safety is paramount. The funding of nuclear decommissioning will therefore increase by £2.5 billion in 2014-15, so that we really get to grips with our waste legacy issues. I have also commissioned a strategy on how we can further develop our expertise in waste management in the nuclear field.
This debate, though, is our opportunity as the Government to hear your Lordships’ views. We have in this House the greatest brains and experience on this subject covering all sides of the spectrum. All these views will be respected and I hope that I can count on your support to deliver a secure energy supply for generations to come.
Lord Grantchester
There is now general consent that climate change is happening and that human activity is contributing to the change. While there has been debate in the scientific community on this point, and some people continue hotly to contest it, the weight of scientific evidence now firmly supports the analysis. As a result, we as a country urgently need to develop an energy system for an affordable, secure and low-carbon future. This can mean only a clear focus on renewable energy, away from dependence on the finite resources of fossil fuels. I thank Leonie Greene of the Renewable Energy Association and Oliver Harwood of the Country Land & Business Association for their assistance in preparing for the debate today.
Europe currently produces more than 10 per cent of its energy from renewables. In the UK, the figure is just 3 per cent. This country must continue and intensify the progress initiated by the previous Administration. We must push forward to reach the accepted targets and press on with policies to get us there. The coalition Government have confirmed a commitment to 15 per cent renewables by 2020, but this is still behind the EU-wide target of 20 per cent, with several countries exceeding the target, most notably Sweden, which shortly will hit 50 per cent. The coalition Government will have to seriously consider raising their game if they are to earn the title of the greenest Government ever.
Everyone recognises the dynamic advances made in communications over the past few years. In the energy sector we need no less of a step change in our thinking. We need to move away from thinking that energy flow is one-way down pipes and wires from a big industrial complex somewhere over the hills and beyond our influence. The energy sector is regulated by government, and this Government need to make wise choices to ensure that we meet our climate change commitments. These must include public education so that everyone understands the contributions necessary in the home and in the workplace.
I declare my interest as a food producer when I say that the risks of unrestrained carbon emissions are significant for three key reasons. First, the country's food supply is at risk from rising sea levels. Eighty per cent of the best grade 1 agricultural land lies at or below current sea levels. Secondly, rural businesses rely on a secure and steady energy supply. Because of greater distances and vulnerability of supply, these businesses are at an increased risk of interruption from storm events. Thirdly, the agricultural industry is likely to suffer because of the increased risk of water shortage. Recently the University of Reading released a report entitled Water for Agriculture, commissioned by the Royal Agricultural Society of England. Scientists found that climate extremes such as droughts and flooding are likely to reduce the amount of water for agriculture and water culture, which will pose a major challenge to farmers, researchers, plant breeders and policy advisers. Given that agriculture and the food sector are recognisably responsible for a disproportionate amount of greenhouse gases when compared with the value of their production, they have challenged the conventional mindset of being seen as the problem. Instead, they can help to show the change that is necessary by being part of the solution. I am greatly interested in the Government's response to the findings of the University of Reading report, and in how they plan to interact with farmers and food producers to address their concerns, both immediate and long-term.
In the broader economy, energy historically has been a major driver of inflation. A major characteristic of renewables is a stable price, as much renewable energy is ambient and therefore free. The bigger implication of low-inflation energy for economic stability is a huge opportunity to be grasped, especially against the recent background of rises in energy prices of 125 per cent. The need to ensure national strategic objectives can be met by means of an effective planning system, particularly in relation to wind power.
The suspension of the coming into force of the planning infrastructure legislation puts the country back into delay and uncertainty. In addition, many of the renewable projects are under 50 megawatts and are therefore decided at local level. It is unclear how the local planning framework will work. Can the Minister say how this country will be able to meet its targets? The regional spatial strategies are vital for getting approvals granted but these have now gone.
Can the Minister confirm when he will bring into reality the extension of permitted development rights for small-scale renewables—a matter that I understand is on his desk? Will this also ensure planning presumption in favour of renewables outside nationally protected areas and for small-scale—up to 5 megawatt—schemes in national parks and the green belt? This will demonstrate increased ambition for PV, helping to provide clarity for the UK PV industry, where there is a need to address urgently what is meant by “higher than expected deployment” requiring an “early review”. When will this start? Will the Minister also confirm that the coalition Government will not act on the Conservative proposal to bring in a third-party right of appeal to planning consent, which will only increase delay and frustrate investment?
The introduction of feed-in tariffs from 1 April under the previous Administration has provided the opportunity to make a step change in renewable energy. The renewables obligation has supported only the cheapest, very large-scale projects. This feed-in tariff extends support to projects of any scale up to 5 megawatts where individual local co-operatives and developers can get on with their own investments at the small, local level. The benefit that this can bring to renewable supply is best demonstrated by Germany, which has operated in this way for 15 years. There, 80 per cent of renewable power is from small-scale sources and only 20 per cent from major infrastructure schemes. In contrast, in the UK 96 per cent of renewables is provided by the large power companies. This opportunity must not be frustrated by the planning regime of local authorities operating under the present severe financial restraint. The Minister can free up a huge surge in activity.
The feed-in tariff pays different rates to differing project scales and sources of supply, and, generally speaking, pays the correct amount to guarantee a return on investment of between 6 and 8 per cent. First, will the Minister ensure that this support is protected under any future review, that it extends well beyond 2013 and that it will not be subjected to meddling and cuts? Secondly, he is urgently required to review the regime regarding small-scale waste plants, particularly on farm anaerobic digestion schemes. Regrettably, although the price is correct for commercial operations, where plants receive income from waste from commercial sources such as restaurants, this rate is insufficient for on-farm waste plants, where no income is received from farm-generated waste. The industry does not want to wait until next spring. The potential for on-farm AD needs to be realised. Will the Minister say today that he will look immediately at the rate for on-farm AD and biomass, and introduce a higher 23.5p commercial rate?
The Government recently committed £1 billion for the green investment bank. This bank was a policy idea first raised by the previous Labour Administration and it is therefore one that we are happy, in principle, to see adopted. Is the Minister able to clarify the specifics of this policy? How does he see the functions of the green investment bank? Will it be able to raise money on the financial markets? Has the department made any forecasts of the total funding that will be available in each of the next five years, and what leverage will this have with the private sector? Our vision was to have the green bank supported by both public and private funding—a dynamic partnership to champion social and environmental change.
On the carbon reduction commitment, there is the bizarre situation where, if a company claims feed-in tariffs or renewable obligation certificates as a company for on-site renewables, it has to count these renewables as producing carbon in the same way as average grid-mix electricity. The shake-up to the CRC announced in the CSR means that the Treasury will keep all this revenue. If this rule is not changed, we will be in the position of the Treasury taking money from companies investing in renewables for carbon that they did not emit. The situation needs urgent attention as it is vital that the commercial sector also invests in renewables.
Under the Labour Administration, the department instigated a marine energy action plan to which industry contributed enthusiastically. Much valuable data and many useful suggestions were assembled within the four work streams of finance, infrastructure, planning and technology, but the impetus was lost during the general election. The department now faces the challenge of utilising that work with the new policies of the coalition Government, who state that they will introduce measures to encourage marine energy. In the July annual energy statement the department promised to consider how the development of marine energy parks around the British coast can help to support marine energy in the UK. Detailed proposals are expected by the end of the year. The UK cannot afford to lose its lead on marine. We need to see five renewable obligation certificates for wave and tide. Once again we need to catch up on lost momentum.
On the RTFO, we need the mandatory EU sustainability standards to be implemented as soon as possible for both renewable transport fuels and liquids for power generation. They should be implemented by the end of this year but the Government are waiting until 1 April. We would like to see good-quality biofuels, as the UK biofuel industry has risen superbly to the sustainability challenge and has, since the beginning of the scheme, been producing biofuels that perform acceptably well against the RTFO sustainability criteria. The reports from the Renewable Fuels Agency on the first two years of the RTFO 2008-10 show that UK biofuels have consistently delivered carbon savings of 70 per cent and more compared to fossil fuels, and have produced the highest sustainability scores of any biofuels sold in the UK.
Within my sub-region of Cheshire, there have been many projects that can be identified as examples of best practice. Envirolink Northwest is doing excellent work with smaller projects, both on farms and in businesses, supporting the installation of renewable energy technologies. This momentum is in serious danger of being lost with the abolition of the NWDA. It remains to be seen what resources and commitment will be given to the new area local enterprise partnerships. Once again, momentum is being lost. It is important not to take our foot off the accelerator. The department under the Labour Government made some real strides forward. It remains to be seen whether many of the projects and policies mentioned will come to fruition under the coalition Government. It is positive to see that the renewable heat incentive and plugged-in places funding survived the cuts, albeit in depleted form. I think that Envirolink would argue that grid connection and finance are the two real sticking points at the moment. For example, even with the arrival of feed-in tariffs for solar panels, for many people the up-front capital costs mean that they will remain prohibitively expensive. Our loss of the co-ordination role from the North West Development Agency is a real blow as there is no other organisation to take up effectively the mantle of sub-national climate change. The LEPs will struggle to really deliver a low-carbon agenda on the ground without any funding or co-ordination and support.
Developing renewable energies is an integral part of our fight against climate change. Notwithstanding the Government’s slogan of wanting to be the greenest Government ever, it remains behind Scotland’s challenge of 80 per cent renewables and behind the comparatively modest European target of 20 per cent renewables by 2020.
There is not enough urgency in the Government's policies compared with what was in train and proposed under the previous Labour Administration. They are missing a major injection of funding for infrastructure and research. One related planning policy that will undoubtedly impact the future of renewable energies in this country is the Government's plans for the Infrastructure Planning Commission. The commission is proposed to be replaced by the major infrastructure planning unit—a policy that we are anticipating to see in more detail when this House considers the decentralisation and localism Bill. Through this change the Government are promising to continue a fast-track approach to planning applications, for example for wind farms, while at the same time promising the public a greater opportunity for influencing these decisions. We look forward to seeing how they plan to reconcile these two competing parts of the process when the Bill reaches this House.
Lord Teverson
My Lords, I very much welcome this debate. This House has had great debates about climate change and energy and I am glad to see that we will focus on it in this Parliament as well. I would say that it is one of the most important subjects—even more important than the UK budget rebate in Europe, which we were discussing earlier, although I am sure that the noble Lord who follows me will probably disagree. Anyway, let us move on with energy and climate change.
One thing that I want to do in my introductory remarks is to say how much I appreciated the work of the noble Lord, Lord Hunt of Kings Heath, in the latter part of the Labour Government. I appreciate his commitment to these issues and what he worked hard to achieve. However, I remind the noble Lord, Lord Grantchester, that the previous Government’s successes in this area are perhaps rather more measured than he might think.
Let us take something as important as the Climate Change Act, a great milestone in addressing climate change for this Parliament and the UK. The previous Government were good at setting out targets and their aspirations for what they wanted to do, but it was rather more difficult to achieve those targets and aspirations. The Labour Party had its own manifesto targets on the carbon footprint, which it failed to meet. From 1997 to just prior to the last year of the previous Government, the United Kingdom’s carbon footprint very much flat-lined and we did not achieve the targets. We met them in the last year, but that was due more to international economic meltdown than to anything else. We had a lot of talk about renewables and some investment in the latter stages, but all we have done so far in relation to the 27 member states is to progress from overtaking Malta to moving ahead of Luxembourg as well. As for carbon capture and storage, we had tenders, we talked about it and we were enthusiastic about it, but we still do not have any commitments on it. Smart meters and feed-in tariffs were delivered in the last Energy Act, which was a great move forward, but it was rather beyond the 11th hour in terms of making the changes that are required for this agenda.
I want to spend my time today looking at the poor relation in energy and climate change—energy savings. I am not saying for a moment that the other areas are not important but I want to concentrate on this one. It is a Cinderella subject that is left out too regularly. Energy prices are currently higher than they have ever been. In fact, retail prices seem to be moving further than they have ever been from wholesale prices, perhaps due to a lack of reform in the way in which the industry was regulated over the past few years. I was speaking two weeks ago with some representatives of the industry, who told me that energy costs in most of industry are still a sufficiently small percentage of the overall costs that the management does not really concentrate on them. That is true of a number of households—though not all households—as well. I will come back to that issue.
The fact is that buildings account for some 40 per cent of our electricity and energy costs. It is one of the biggest challenges that we have. I absolutely agree with one thing that I read in the previous Government’s White Papers—that energy savings are the most efficient and economic way of tackling climate change. Investment in this area produces a bigger return than any other tool for meeting the strategy of decarbonising our economy.
I was in India last month and in China last year. Energy savings are the big headline in climate change there and what people are trying to do. It is an exciting subject. In the previous five-year plan, China had a 20 per cent reduction target from energy efficiency, which I believe it is just about to achieve. Under the Copenhagen accord, the decarbonisation of its economy is largely met through energy efficiency and there is a target of 40 per cent savings by 2020. In the global context, that is a big deal and a major way of moving forward. I think that in the UK and Europe we sometimes understate it. If we look at Europe, under the 2020 package, we had a target of 20 per cent renewables and a 20 per cent reduction in carbon footprint. Both are statutory European targets, but the third 20 per cent— 20 per cent energy reduction by 2020—is only an indicative target. Again, even within the European context, that shows that it is the poor relation.
Here in the UK, we had the important Warm Front scheme, which we debated briefly last week, and the carbon reduction commitment, which was a strange way of moving around what was originally an energy target. I congratulate the Government because over the summer they rather contentiously started to stop the free issue of units under the CRC scheme. That is an important move forward. We had the CERT scheme, under which several years ago we used to receive 10 energy-saving light bulbs in our post nearly every day. We put the energy companies in charge of saving energy, which was rather like putting Dracula in charge of the blood bank or perhaps the bishops in charge of Lords reform. It seemed quite inappropriate and something that would not work. I hope that there will be changes in that area.
To me, energy saving is not just a virtuous circle; it is a virtuous spiral. Let me explain why. We have estimates from Ofgem that we need £230 billion-worth of investment in our generating and electricity supply industry over the next few years to meet our energy gap. It is obvious that the more we meet our energy savings targets and go beyond them, the less we need of that investment. In terms of energy savings, we have the planning system, which was mentioned earlier. We do not have to ask for planning permission for energy saving. It can go ahead without delays. In fact, energy saving is one of the ways in which we can meet targets without the great changes that we need otherwise.
Let me take one or two other issues. One of the ironies about carbon leakage is that, although we are about to meet our Kyoto targets at the end of 2012, as measured by carbon production, we will increase our carbon consumption by some 19 per cent over that time in comparison with 1990 levels. By saving energy, we do not have that conflict; indeed, we reduce it. On renewables, I am in favour of them, but we have a problem with intermittence in wind power. Yet with energy saving, we have a completely non-intermittent way of meeting our energy requirements.
However, there are two other much more important areas. The first is fuel poverty. One of the great problems in the past two years was that, with energy prices rising, more people were entering fuel poverty. I know that these figures have been quoted before, but something like 4.5 million households are now in energy poverty. By energy saving, we can tackle that problem head on. Perhaps an even more important question than that in terms of a strategic view and energy security, which the Minister rightly emphasised, is this: what is more secure than not needing energy, or needing less of it and so having to import less of it?
I say to the Minister that the Government should not ignore this poor relation but make sure that they keep focused on it, as well as on the many other technological solutions. I look forward very much to the energy Bill that will be coming through this House, the green deal, which I know is targeted to meet a number of these issues, and the green investment bank, which could provide investment in the right sectors. Energy saving is not a very sexy subject, but it could really help us to meet our climate change targets. It is one area where perhaps we could follow the developing world rather than trying to lead it.
Lord Lawson of Blaby
My Lords, I congratulate the Government on one of the decisions that they have taken, one which was criticised by the noble Lord who spoke for the Labour Front Bench; that is, the decision to take the £1 billion taxation in effect from the carbon-reduction scheme and apply it to reducing the appalling deficit with which this Government are landed, rather than keep with the idea of the previous Government. The purpose of taxation is to give money to the Treasury for the needs that it has in order to finance necessary public expenditure and to maintain public finances in good order. I congratulate the Government on that.
There is little else on which I feel that I can congratulate the Government. But I begin by declaring an interest as the founder and chairman of the Global Warming Policy Foundation, which celebrates its first anniversary later this month. As its name implies, it is concerned above all with the policy aspects, which we are discussing in this debate, of this whole multidimensional climate change issue. I speak, incidentally, for myself and not for the foundation, which does not have a corporate view.
Because various remarks have been made, I should say that the foundation is financed by a range of generous donors. But one thing is absolute: in order to show that there is no possibility of our not being independent, we do not accept a penny of money from the energy industry or anyone who has a significant interest in it. I am glad to say that this is monitored by my excellent board of trustees, most of whom are Members of this House. All the Benches are represented. I am the only Tory. There are two from the Labour Benches, who I am glad to say are in their places. There is one from Liberal Democrat Benches. There are two from the Cross Benches and one from the Bench of Bishops. It is fully monitored that we do not raise any money from the energy industry.
In his admirably brief opening speech, the Minister mentioned two things which the Government generally—I do not want to single my noble friend out because he was just speaking the Government’s policy—are trying to make out. They say that there is a real energy security problem, which we have to meet by decarbonising our economy, and that there are great economic benefits in our decarbonising our economy. Both those things are absolute nonsense. I have some knowledge of the energy scene, having been Secretary of State for Energy in the distant past, but these things do not change completely.
Carbon-based energy has never been more abundant than now. It is commercially extractable because, not least, of the exciting recent technological development of the commercial extraction of gas from shale. This not only increases enormously the commercially winnable carbon energy resources of the world, but it is fortunate that shale is abundant throughout the world—in North America, Europe, South America and so on. We do not have to feel that we are dependent on the Middle East, which may be unstable, or on Mr Putin, who may be unreliable. The development of the liquid natural gas business has also increased security on the gas front very significantly. So there is no energy security problem. In so far as there is an energy security problem, it is because we may come to rely too much on intermittent wind power, when the lights might indeed go out, but that is the only problem we have.
I turn to the idea of raising substantially the price of carbon. It is the essence of the Government’s policy because it is only way you can shift to so-called green energy, which is much more expensive. Somehow, it is claimed that this will produce an economic benefit and create jobs. I am reminded of the distinguished 19th-century French economist, Frederic Bastiat. He pointed out that if you went around breaking windows everywhere, you could create an enormous number of jobs for glaziers, but that did not mean that it was a sensible thing to do. That is a parable of the Government’s policy. When we debated this issue just before the Summer Recess, the noble Lord, Lord Giddens, who I respect and am glad to see will be speaking later, pointed out that the creation of jobs argument is complete nonsense and rubbish.
On this front, I want to mention two of the economic consequences of the Climate Change Act 2008, to which this Government, like the previous Government, are wedded. Perhaps I may quote from an interesting article on energy in the current issue of the Economist. It begins:
“Many factors were responsible for the industrial revolution. But the use of fossil fuels was clearly vital in driving a step change in rates of economic and population growth. So the current rise in the cost of extracting such fuels should be the subject of considerable concern”.
The article concludes with:
“That is a headwind the global economy could do without”.
The increase in the cost of extraction will be nothing compared with the increase in the cost of energy if we go from carbon-based energy to non-carbon energy. We in the United Kingdom do not use carbon-based energy because we have a love affair with or addiction to carbon, and we do not use it because the oil companies are so powerful that they force us to do so. We and the rest of the world use it, quite simply, because it is by far and away the cheapest source of energy. Anything else is more expensive. It may not be so for ever, but for the foreseeable future that is the case.
Despite energy savings, there will be a huge increase in fuel poverty in this country, something I do not want to see, as well as in costs generally. The Minister mentioned the green investment bank. This is what the chairman of the green investment bank commission had to say in an interview published in the Daily Telegraph on 3 July:
“The total estimated cost of meeting our current climate change carbon reduction targets is between £800bn and £1 trillion … There’s really been nothing like this since the post-World War Two reconstruction programme”.
That is the appalling burden we are saddling ourselves with, and what for? The purpose is to decarbonise, as it were, the world economy. My noble friend referred to the objective, which is to reach a global agreement in Cancun in December at the United Nations climate change conference to decarbonise the world’s economies, faster for the developed world, of course, than for the developing world, but it is accepted that it makes sense only if every country—China and India as well as the developed countries—takes its share. This is not going to happen. The lessons of the Copenhagen conference last December should have been clear. Why is that? The reason why the Copenhagen conference was a fiasco and no global agreement could be secured was because of the position of the developing countries, with which I have considerable sympathy. There was, incidentally, a prior meeting between the so-called BASIC countries—Brazil, South Africa, India and China—in Beijing on the eve of the Copenhagen conference, and they agreed that none of them would agree to a binding global carbon-reduction agreement in which they were participants. They were very happy for the developed world to cut back its carbon but they were not going to take part.
Why? Because they have a real problem with poverty and its consequences. Hundreds of millions of their people still suffer from preventable disease, malnutrition and premature death and they know that to get these people out of poverty as quickly as possible they need the fastest rate of economic development. That requires among other things—it is not the only thing—using the cheapest available form of energy, and that is carbon-based energy. That is why they would not agree at Cancun either, and they are absolutely right. That is why China is building a new massive coal-fired power station every week, and why it is the new imperial power in sub-Saharan Africa and is getting its hands on all the raw material resources it can, including gas, oil and coal. It is not making this great diplomatic, financial, economic and political expenditure because it does not mean to use them—it will use them. That is how it sees the future and it is absolutely right. So the idea that there will be a global agreement on this is unwarranted. There may be a global agreement on adaptation aid to the poor countries should that be needed—I would be content with that—but there is not going to be a decarbonisation agreement. As to us going it alone, the total amount of emissions that we are responsible for is less than the growth in emissions from China in one year.
Another reason the global agreement will not happen is because after China the biggest emitter of carbon dioxides is the United States. Unlike George Bush Jr, President Obama came in saying that he was going to get to grips with this issue. What has happened? Nothing. There is a Bill in the House of Representatives which is like a beached whale. After the mid-term elections today, the beached whale will be a dead duck. It is quite clear that if President Obama cannot get legislation through Congress when the Democrats have a majority in both Houses, there is no earthly possibility of it being agreed when the Republicans control at least one of the Houses and, with their friends the coal-state Democrats, effectively control the Senate as well.
There is no way this is going happen. It is complete madness; it does not make sense. As their predecessors did, the Government trumpet that we are the only country in the world to have a Climate Change Act which binds us legally to an 80 per cent reduction by 2050, when some of your Lordships—not me—might even be alive. They say that no other country has this commitment. Of course no other country has this: no other country is so stupid. The policy simply does not add up.
What is it all in aid of anyway? It is a fear that global warming, which has paused for the past 10 years, may resume. I do not know if it will—no one knows—and I am certainly prepared to confess that I do not know. I am one of the few people in this business who does not know what the temperature of the globe is going to be in 100 years. It may be warmer than it is today, but so what? We can adapt, which is what people do in different parts of the world where temperature varies enormously. As economic development takes place, capacity to adapt is greater than ever; as technology develops, the capacity to adapt is greater than ever.
The Intergovernmental Panel on Climate Change, which makes the projections on which the Government ostensibly base their policies, gives certain warnings for the next 100 years. It thinks that the temperature will go up between 1.8 degrees Celsius and 4 degrees Celsius. It says that a rise at the upper end, of 4 degrees Celsius, would mean a loss of global GDP of somewhere between 1 per cent and 5 per cent. We in this country will benefit from global warming, as most of us instinctively and intuitively sense, but there will be parts of the developing world which will not. Let us assume for the developing world a loss not of 5 per cent but of 10 per cent. That would still mean on the panel’s growth projections that living standards in the developing world in 100 years would be only eight times rather than nine times as high as they are today.
Lord Haskel
I draw to the noble Lord’s attention the clause in the Companion which says that it is best to limit speeches to 15 minutes.
Lord Lawson of Blaby
I speak very seldom in this House and I hope that I will be allowed a little bit of a margin on this issue, but I am so grateful to the noble Lord opposite for the reminder. I have often wondered what he spends his time doing. It is obviously reading the Companion, which is a very sensible thing to do. I shall conclude soon.
Noble Lords may say, “Well, surely the panel is being a little bit optimistic in projecting that this century is going to be far and away the best century economically that the world has ever seen”. Perhaps the panel is being optimistic in assuming great rates of growth in China, India and so on. It is perfectly plausible, but it may not happen. If the growth being projected does not take place, you will not get the growth in emissions, and if you do not get the growth in emissions—on the panel’s model—you will not get the warming either. You cannot have one without the other. The huge rise in living standards is an integral part of the projections that the panel makes.
I could say more, but I shall not. The only conclusion that I can reach about the Government’s policy, which is no different from the Opposition’s policy, is that it is both intellectually incoherent and economically illiterate.