Draft Climate Change Act 2008 (Credit Limit) Order 2016
(Limited Text - Ministerial Extracts only)
Read Full debateThe Committee divided: - Ayes: 10 / Noes: 3 - Question accordingly agreed to.
The Chair
The Parliamentary Under-Secretary of State for Business, Energy and Industrial Strategy (Jesse Norman)
I beg to move,
That the Committee has considered the draft Climate Change Act 2008 (Credit Limit) Order 2016.
It is a great pleasure to serve under your chairmanship, Sir Roger. This order—I speak as someone who has gone from being a complete innocent on these topics to being a raddled veteran in the course of three hours—fulfils the requirement under the UK’s Climate Change Act 2008 to set a limit on the number of international carbon credits that the Government could count towards the third carbon budget, which runs from 2018 to 2022. The Act, which was passed with near-unanimous support, allows for the flexibility of using carbon credits to meet a carbon budget. That ensures that even if unforeseen circumstances cause our planned emission reduction measures to come off track, the UK can continue to ensure that we meet our emissions targets under the Act.
The order will set the credit limit for the third carbon budget at 55 million tonnes of carbon dioxide equivalent, which is only about 2% of the total carbon budget. That is the same amount of flexibility as the House agreed for the second carbon budget credit limit. In determining the appropriate third carbon budget credit limit—the subject of the present discussion—the Government have taken into account the advice of the independent advisers, the Committee on Climate Change, as well as the views of the devolved Administrations. We have also considered the range of factors required by the Act, including the economic, fiscal, social, scientific and international circumstances. Although the Committee on Climate Change recommended a zero credit limit, the Government have concluded that it is best to maintain a small amount of flexibility over the third carbon budget period. Although the Government’s policies are ensuring that we are on track for the third carbon budget, it is still prudent to allow ourselves flexibility in the future to manage the uncertainty in emissions projections. I therefore commend the order to the Committee.
Jesse Norman
I am very grateful to the shadow Minister for his comments. He and I are rapidly turning into the Mutt and Jeff of the climate change world, but it is a pleasure to address the concerns he raises.
Let me remind the Committee that this is not a matter of buying credits; it is a matter of setting a credit limit. The Government have never bought credits and do not contemplate doing so as part of either the second or third carbon budgets. It is also true to say that the Government have not ignored the Committee on Climate Change. On the contrary, we have engaged closely with it and adopted its main recommendations consistently. Here, however, there is some licence to deviate. The Government have done so in this case for the reasons I set out in my opening remarks. The first is following the precedent set by the previous budget. The Government understood that that was potentially problematic from the Committee on Climate Change’s standpoint, but we did that because we sought a degree of flexibility, and that degree of flexibility is again sought today.
That is not a way of getting ourselves off the hook. The progress made under both the second and third budgets is already manifest. In fact, that progress is sufficiently clear that it should not bring into question whether the Government are committed, because we clearly are making very good progress.
Barry Gardiner
The Minister and I are agreed that there is little likelihood of the credits being required. The key thing here is whether one follows the advice and whether one sets a precedent. He knows that the really difficult budget is the fourth carbon budget, not this one. Therefore, he has beseeched precedent by referring back to the previous carbon budget, saying, “Well, we allowed it there, so we should allow it here.” That is exactly the precedent that needs to be nipped in the bud because we need to send a strong signal to investors that the fourth carbon budget, which will be difficult to achieve, must be achieved through domestic action.
Jesse Norman
I think it is a point well made. I would go further and say that the Government do not disagree that the use of credit limits of this kind are not a way of getting off the domestic carbon policy reduction agenda. That remains central to the focus of the Government and the Department. It is, however, important to recognise that aspects of carbon reduction plans could be set back. For instance, although we have had some rather warm winters recently, it is not impossible that we could have a series of winters of unusual severity. It is not likely to happen and the Government do not believe that that will happen, but it is a possibility.
It is wise to have flexibility in general, provided that it is not open to abuse. Setting the limit at 2% over a five-year period—0.4% for each year—is not a total that can be regarded as abuse. The question is how one balances the direction and principle with an element of pragmatism that allows the Government a degree—but not too great a degree—of freedom of manoeuvre, and that is what the order provides.
I thank the hon. Gentleman for his contribution and reiterate that the Government remain committed to combating climate change. Climate change has not been downgraded as a threat, and is widely recognised across Government as one of the most serious long-term risks to our economic and national security. At the heart of the Government’s commitment is the Climate Change Act 2008 and its target to reduce emissions by 80% by 2050, as against 1990 levels. The interim carbon budgets have been set against that framework, and under the Act, we need to set a limit on the number of international carbon credits that the Government can count towards that budget.
Although we remain on track, it is prudent to recognise and accommodate a degree of potential uncertainty. That is why we have proposed a credit limit of 55 million tonnes of carbon dioxide equivalent—just 2% of the total third carbon budget. That represents an appropriate level of insurance, in case emissions turn out to be higher than projected. I therefore commend the order to the Committee.
Question put and agreed to.