Climate Change Act 2008 (2050 Target Amendment) Order 2019
(5 years, 5 months ago)
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18:40 - Division on the amendment to the Motion. - Ayes: 155 / Noes: 116 - Amendment to the Motion agreed.
Lord Henley
That the draft Order laid before the House on 12 June be approved.
Relevant document: 53rd Report from the Secondary Legislation Scrutiny Committee
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Henley) (Con)
My Lords, two weeks ago, in laying this order, my right honourable friend the Secretary of State for Business, Energy and Industrial Strategy made a Statement in another place, subsequently repeated here, setting out the Government’s ambitions to reduce greenhouse gas emissions from a target of at least 80% to 100%. This draft order does just that by seeking to amend the Climate Change Act. The target, otherwise known as net zero, will constitute a legally binding commitment to end the UK’s contribution to climate change.
I note the attention the Secondary Legislation Scrutiny Committee has drawn to this draft order, specifically on the economic and wider societal implications. I thank the committee for its review of the order and will address these points in my speech. However, first I will set out the case for action.
Last year the Intergovernmental Panel on Climate Change published its report on the impact of global warming at 1.5% above preindustrial levels. In that report it made it clear that a target set to limit global warming to 2% above preindustrial levels was no longer enough. It made it clear that by limiting warming to 1.5%, we may be able to mitigate some of the effects on health, livelihoods, food security, water supply, human security and economic growth—
Viscount Ridley (Con)
My noble friend mentions “2%” and “1.5%”. Surely, he means 2 degrees centigrade and 1.5 degrees centigrade above preindustrial levels?
Lord Henley
My noble friend is absolutely correct. I should have said 1.5 degrees centigrade and 2 degrees centigrade, and I am grateful for that correction.
The panel made it clear that countries across the world, including the UK, need to do more.
The House has heard of the great progress we have made in tackling climate change; of how we have cut emissions—on this occasion I will correctly give a percentage—by 42% since 1990, while growing the economy by 72%; of how we have cut coal from 40% of our electricity generation to less than 5% in just six years; and of our leadership role in sectors from offshore wind to green finance. That progress has been delivered by parties across this House and by communities across the UK. But we know that this is only the start and that we need to do more. That is why we commissioned our expert independent advisers, the Committee on Climate Change, to see if we should, and could, go further than our 80% target and set a target for achieving net zero greenhouse gas emissions. On 2 May the committee responded.
In its report, the committee has told us, quite clearly, that ending the UK’s contribution to global warming is now within reach. It has advised that a net zero emissions target is necessary, because climate change is the single most important issue facing us; feasible, because we can get there using existing technologies and approaches, enabling us to continue to grow our economy and to maintain and improve our quality of life; and affordable, because it can be achieved at a cost equivalent to 1% to 2% of GDP in 2050. Due to falling costs, this is the same cost envelope which Parliament accepted for an 80% target back in 2008. That is before the many benefits, from improved air quality to new green-collar jobs, are taken into account.
The Secondary Legislation Scrutiny Committee drew particular attention to the economic and societal impacts of this transition. While this statutory instrument does not in itself place a direct burden on any other body than central government, it is right that we understand how to meet the costs of this transition in a fair and balanced way. That is why the Treasury will be taking forward a review on how to achieve this transition in a way that works for households, businesses and public finances. The review will also consider the implications for UK competitiveness. We provide full impact assessments when we set carbon budgets and will continue to do so for the sixth carbon budget when that is set.
In its report, the Committee on Climate Change made it clear that 2050 is the right year for this target and is the appropriate UK contribution to the Paris agreement; it does not currently consider it credible for the UK to aim to reach net zero emissions earlier than 2050. I thank the Committee on Climate Change for the quality, breadth and analytical rigour of its advice.
Recent months and weeks have been a time of huge and growing interest in how we tackle the defining challenge of climate change. Calls for action have come from across society, and we all know that in doing this, it is important that we take people with us. My message today is that we have listened and we are taking action.
This country has long been a leader in tackling climate change. Thirty years ago, the then Prime Minister Mrs Thatcher was the first global leader to acknowledge at the UN,
“what may be early signs of man-induced climatic change”.
Eleven years ago, Parliament—under a different Government, of a different hue—passed the ground-breaking Climate Change Act, the first legislation in the world to set legally binding long-term targets for reducing emissions. That Act, passed with strong support from all sides of both Houses, created a vital precedent on climate: listen to the science; focus on the evidence; pursue deliverable solutions. Today I believe that we can make history again as the first major economy in the world to commit to ending our contribution to global warming. I ask the House to come together today in the same spirit to support this draft legislation.
Lord Howell of Guildford (Con)
Before my noble friend comes to an end, does the measure address carbon consumption, as opposed to carbon production? Carbon consumption is increasing fast and will increase further under this measure. Is that not considered important?
Lord Henley
My noble friend is of course correct: as he is aware, this is about carbon production. If we wanted to measure total consumption, we would need worldwide agreement with other countries and changes would have to be made. At this stage, that is not the case. We believe that this is an important moment to show the world what we are determined to do, and not to rest on our achievements.
I was not coming to an end, because now is the time to say a word or two, particularly as it came up in various interventions after Question Time, on the Motion—
Lord Rooker (Lab)
Before the Minister goes on to a different subject, as I understood him the noble Lord, Lord Howell, was asking about carbon production. I do not think the Minister addressed that. I think his noble friend was talking about issues such as afforestation, so that we do things other than cutting out boilers in houses. Does the order address those aspects of climate change?
Lord Henley
The order addresses setting a new target. Obviously, we will have to address the questions about how we achieve it. As I understood my noble friend’s question—I may have misunderstood him—he was concerned about our production of carbon as a country. He was addressing consumption and what one could therefore say was displaced production: consumption by means of importing things that might otherwise have been produced in this country. That is what I was trying to address, and I hope that the noble Lord will accept that. On his other point about the means by which we do that—whether we can also reduce levels of carbon by planting trees, carbon capture and storage, or whatever—I imagine that all these matters will come up, but that is another issue and not for the order.
I turn to the amendment in the name of the noble Lord, Lord Grantchester, because it might help if I say a few words now in advance of him, presumably, moving his amendment and then making a decision on what he wants to do with it. I believe that his amendment is unnecessary and that a bipartisan approach to the order is very important. As I put it earlier, this is something on which the bipartisan approach and the need to take people with us is important. Perhaps I can deal with the three points that he makes in his amendment.
On the first, I direct the noble Lord to the detailed and analytically rigorous report we have had from the Committee on Climate Change and assure him that it is just the start. We will build on the frameworks set out in our clean growth strategy and industrial strategy to deliver that target. As the climate change committee has acknowledged, those provide the right framework for action. In addition, our forthcoming White Paper will outline the Government’s vision for the energy system to 2050. On his second point, we are using the powers set out in the 2008 Act—an Act introduced by the Government of whom he was a supporter, and which again had cross-party support. The climate change committee’s report has also shown that that target is now feasible and deliverable, and can be met within the same cost envelope as the 80% target. I have also announced that the Treasury will publish a review on that point. On his final point, although emissions from international aviation and shipping are not formally included within the legislative target, we have made clear the need for action across the whole economy, including international aviation and shipping. As he knows, emissions from domestic flights and shipping are already covered by our existing domestic legislation—
Lord Henley
If I may finish this sentence, I will give way. They are already covered by our existing domestic legislation and the Committee on Climate Change accounts for international flights in its advice to us on setting interim carbon budgets. That will continue to be the case for our more ambitious target.
Lord Deben
Does my noble friend wish to emphasise the fact that, under the arrangements here, shipping and aircraft emissions are included in our estimates and budgets so that, although how we will do it internationally may still be a matter for argument, the Government have committed that the net zero will cover emissions from aeroplanes and shipping?
Lord Henley
My noble friend is correct. I was trying to distinguish between domestic and international in the legislation that we already have. As I and my noble friend have made clear, both of them will continue to be covered in our interim budgets.
Today is just the start. We have laid a strong foundation in the clean growth strategy and the industrial strategy—a point borne out in the independent advice from my noble friend Lord Deben as chairman of the Committee on Climate Change. As I think all noble Lords will accept, achieving net-zero emissions will require hard choices and leadership. It will require us to agree on the ends and strive for consensus on the means, which is why I stress how important it is to take people with us. It will require us to continue to transform our economy, our homes, our transport, our businesses and how we generate and use energy.
Our forthcoming energy White Paper, which noble Lords must wait for, will outline the Government’s vision for the energy system in 2050 and a series of actions to enable that system to evolve during the next decade to achieve our 2050 aims. We will lay out plans across other sectors in the months and years ahead. With continued cross-party support and collaboration across all sectors in society, we can deliver this. I commend the draft order to the House.
Amendment to the Motion
Lord Grantchester
At the end, insert: “and that this House supports the objective of achieving net-zero carbon emissions by 2050, and acknowledges the substantial implications of this Order for the United Kingdom; but regrets that Her Majesty’s Government have (1) given little detail of how the emissions target will be met; (2) made a substantial change in policy without the full and proper scrutiny that such a change deserves; and (3) not introduced regulations under section 30 of the Climate Change Act 2008 to include greenhouse gases from (a) international aviation, or (b) international shipping, as part of the emissions target”.
Lord Grantchester (Lab)
My Lords, I thank the Minister for his explanation of the order. I was always fearful that proposing my amendment before the House could give rise to misinterpretation. The amendment has been carefully drafted. As the House well understands, there are only two mechanisms by which the House can signify a response to the Government concerning statutory instruments: either a regret Motion or an annulment Motion. A careful reading of this amendment will confirm that Labour very much supports the order. Indeed, it forms the basis of Labour policy and was called for in the other place as far back as a year ago by our party leader, Jeremy Corbyn, and the shadow Secretary of State for Business, Rebecca Long Bailey.
The amendment does not seek to block the order or frustrate the process. The order will go forward today. It is another step in the right direction, as envisaged by the drafting of the Act in 2008. As scientific knowledge advances and experience is gained, today’s momentous move to a permanent net-zero carbon economy can be put into effect by the order, which substitutes the figure of 100% for 80%. However, the text of the amendment lays bare that the Government are not doing it properly. It reflects the summary conclusion reached by your Lordships’ Secondary Legislation Scrutiny Committee’s 53rd report, paragraph 12 of which states that,
“the Department should have acknowledged”,
in the Explanatory Memorandum this order’s far-reaching impact and summarised,
“the work that is underway to assess the significant costs and wider impacts of the transition, to inform Parliament’s scrutiny”.
The Minister in the other place, Chris Skidmore, did not take account of this in subsequent dialogue with the committee. Paragraph 10.3 of the Explanatory Memorandum to the order states:
“If the instrument makes provision different from that recommended by the Committee, the Secretary of State must publish a statement setting out the reasons for that decision, pursuant to s3(6)”.
It could certainly be concluded that this order does not follow that recommendation and that the Secretary of State has not made adequate statements about that decision.
The most important feature is included under the third point of the amendment: that, once again, the Government have,
“not introduced regulations under section 30 of the Climate Change Act 2008 to include greenhouse gases from … international aviation, or … international shipping—
IAS—
“as part of the emissions target”.
In 2012 the Committee on Climate Change recommended this only for Ed Davey, then Secretary of State for Energy and Climate Change, to reject it and say that it should be covered at international level. In 2015 the Committee on Climate Change again recommended the proposal for inclusion under the fifth carbon budget for the years 2028 to 2032. Once again it was rejected. Now again, in 2019, as part of the “net zero by 2050” target, IAS emissions are excluded.
In its recommendations, the Committee on Climate Change has proposed that emissions from international aviation should be added, based on the UK’s share of the EU Emissions Trading Scheme’s cap of flights departing the UK. In their interpretation of Brexit, the Conservative Government have signalled that they will remain party to the ETS. Can the Minister confirm this and state why this recommendation cannot go forward?
The committee recommended that emissions from international shipping be added based on projections of UK emissions in one of three options: bunker sales, trade share of the UK global trade percentage or activity based essentially by route. I will be happy if the Minister writes to me with a serious response to the recommendation. However, I point out to him the words of the Prime Minister’s office responding to questions on net-zero emissions by 2050:
“This is a whole economy target … and we intend for it to apply to international aviation and shipping”.
Paragraph 10.5 of the Explanatory Memorandum replies that the Government,
“will continue to leave headroom”,
—note the “continue”—for IAS emissions in carbon budgets while reduction strategies are,
“developed within International Maritime Organisation and International Civil Aviation Organisation frameworks”.
However, this is a hollow commitment, as the Government are already failing to abide with the fourth and fifth carbon budgets, which were drawn up within the pathway of reaching 80% carbon emissions reduction at 2 degrees of global warming. Let us state it again: this order is to reach 100% reductions to reach net zero at 1.5 degrees of warming. The latest, updated emissions projections from the department are that we are some 7% over the requirements for the fourth carbon budget and 13% over those for the fifth. What urgent steps are the Minister and the Government taking to get the UK back on track to meet the already-agreed carbon budgets?
The headline recommendations of the Committee on Climate Change report of May 2019 on net zero were clear: in order to deliver,
“a greater than 50% chance of limiting global temperature increase to 1.5°C”,
a net-zero greenhouse gas emissions target for 2050,
“would respond to the latest climate science and fully meet the UK’s obligations under the Paris Agreement”.
It stated:
“A net-zero GHG target is not credible unless policy is ramped up significantly”,
and recommended:
“Delivery must progress with far greater urgency”.
There needs to be widespread collaboration across government with all sectors of the economy to deliver benefits for the environment, the economy, customers and citizens. Net zero will only be possible if the UK meets the challenge of decarbonising transport and heat; 2040 is already too late for the phase-out of petrol and diesel-powered vehicles. Battery technology development is urgently required. There is still no serious plan for decarbonising the UK’s heating systems. Carbon capture usage and storage is yet to get started and afforestation targets are not being delivered.
It is important to recognise that the committee declared the costs as manageable. As the cost of renewables has fallen, the cost equivalent of 1% to 2% of GDP in 2050 is the same as its previous estimates of meeting the 80% reduction. It judged this cost affordable. The committee called for an early review by the Treasury to assess the plan for funding and a distribution of costs for business, households and the taxpayer. Can the Minister give an indication today in regard to the scope of this review, as the Chancellor of the Exchequer has already suggested opposition to the current 1% to 2% of GDP cost? This review should be comprehensive and include taxation, subsidies, incentives and customer costs, as well as the wider potential benefits and costs of inaction and climate events.
The Government also need to unblock the hurdles put before onshore wind’s participation and provide clarity to the nuclear sector. The importance of energy efficiency for homes and businesses needs repurposing, along with carbon-free housebuilding. That there is so much to propose and debate underlines the Government’s lack of policy proposals. The forthcoming energy White Paper gives the Minister the opportunity to answer these challenges and include the Government’s plans, with milestones, to achieve a minimum of net zero by 2050. Indeed, this target may need to be reassessed again. Having set this framework, the Government must introduce a comprehensive strategy of engagement across businesses, customers and the wider public. The Government deliver a wide range of services—through health and education, among others—and are well placed to lead the country’s response to achieving necessary targets. The Minister will remember that the House wished only to secure the achievements of a smart meter roll-out in debating that legislation last year.
It should also be recognised that the foundations are in place to enable the UK to reach net zero by 2050. Successive Governments have attained notable achievements and set up the necessary framework, within which measures can be brought forward at least cost. I refer here to the achievements secured through the capacity market and the contracts for difference framework.
The indicators for success are positive. Fifty per cent of electricity generation now comes from low-carbon sources. The country has just experienced an 18-day period of coal-free generation. I could not wish my amendment to be misunderstood any longer and we are making progress. We will continue to work with government and all stakeholders to meet the climate challenge, and we approve of the order. However, the Government need to recognise the urgency to make progress. Can the Minister assure the House that the energy White Paper will be published with enough time to review it and enable a debate to happen before the Summer Recess? Can he give the House confidence that goes beyond rhetoric that the Government will tackle the issue seriously and that our schoolchildren can now return to their studies with hope?
My amendment is clear. I approve of the order before the House but regret that the Government are not taking their responsibilities seriously. I beg to move.
Lord Deben
My Lords, the issue before us has been debated often before, but I think it would be helpful if I were to describe how the process works. First, I want to go back to the Climate Change Act and remind the House that it was entirely a cross-party decision. It was proposed by all the Opposition parties. It was prepared by the Conservatives with Friends of the Earth, and it was supported by the Liberal Democrats, the nationalist parties and the independents—yet it was not pushed in that way. It was pressed upon the Government that the Government should introduce it in order that it would be a totally cross-party decision. My predecessor, the first chairman of the climate change committee—I declare my interest as chairman—was manifestly independent and able to mirror that cross-party agreement. There were a few who voted against it. My noble friend Lord Lilley has been opposed to it ever since then. I venture to say that he was wrong then and he is wrong now, but that it not the point. He is in a minority now, as he was then.
The reason we passed that Act was that we saw that climate change was the biggest material threat to us that existed. Now fast forward to Paris. It is worth reminding the House that the agreement in Paris is, of course, not perfect, and many countries will not do what they promised to do. Indeed, if they all do what they promised to do, it is still not enough; they will have to do more. However, the fact is that it was a unique moment in the sense that every country in the world agreed to do something together. That has never happened before and is illustrative of the fact that the world understands just how serious the issue is. Those who seek to hold Britain back must remember that this is a decision which the world has made and is continuing to make a reality. I will come in a moment to the question of the distinction between production and consumption emissions, but it is worth starting by saying that we agreed on measuring production emissions because those are the emissions that we can control; they are the things that we can make sure we reduce and, if we concentrate on them, we will not double count.
We had to put Paris into operation. In the cross-party balance that I shall seek to have, I must start by congratulating the Government on being the first Government who asked for the means whereby we could meet our Paris obligations. It was that request which the climate change committee sought to answer in its recent report. I was unhappy to hear those who said that the report was uncosted and unprepared. It has been recognised universally as the most seriously presented, costed effort to show the answer to the three main questions we were asked. The first was: was it necessary to do this and, if it were necessary, should it cover carbon and greenhouse gases as a whole or just carbon? The second big question was: was it possible? The third big question was: by when was it possible? The committee approached these questions by using all the information that was available, by seeking to fill in gaps where there were gaps and by seeking the best information and the best scientific base in order to fill those gaps.
Those who do not accept what we are doing today have a responsibility to argue the case, the details and the facts, and to show the science which they claim argues a case different from this one. I put it to your Lordships that this is by far the best document that has been produced, making the best attempt to look at how to face this real international emergency, and that so far no one has made any basic statement, backed by facts and science, that gainsays the argument that we can do it, that we have to do it and that we can do it by 2050.
Therefore, I thank the Government for asking the question. I remind the House of what I said in another debate: if you ask the question and you get the answer, you cannot ignore it. The problem with knowing is that it brings with it responsibility. It is the story of Genesis: once you know, you cannot avoid responsibility. Mr Trump does not want to know because, if you know, you have to act.
I put it to the House that those who deny the way in which we propose to act, feeling that it is impossible, have to explain to the House why this issue is not as serious as we think it is. It is no good just saying, “Well, it’s going to be expensive and difficult, and really we don’t much like it”. They have to explain why they believe that climate change is not the threat that it is and that ignoring it will not risk what most of us believe we risk.
I remember a comment made by my noble friend Lord Garel-Jones. He said to a climate change sceptic, “If we do what the climate change committee says and it turns out not to be right, we will have cleaned up the world in a remarkable way. It might have cost us a lot of money but, on the other hand, if we do what the sceptics say and they turn out to be wrong, we will have buggered up the planet”. That is the fundamental choice that we are making. The Government have accepted that that means that we have to set this zero target, and it is of course a target for all greenhouse gases and not just carbon. Those of us on the committee came to the decision that that was so, and we have argued that case on some very—if I dare use the word—conservative lines.
First, we have assumed, and argued on the basis, that we have only the technology that we have; we have not taken a sort of Bush-ite attitude that something will turn up. Secondly, we have not taken into account the extra advantages that one could argue would come in other areas, such as health. We have not done that because we felt that we should put the most conservative —in other words, the most expensive—facts before the nation, as that was the right way to do it. We have also made sure that we have not included any major estimate of the reduction in costs, even though the costs of what we are doing have fallen dramatically in the past. We did all those things because we believed that that was the way to make the nation accept that this was possible, necessary and affordable, even if we put the highest price tag on it, as we should.
We are disappointed, I have to say, that those who appear not to have done the mathematics have produced new figures, some entirely out of the blue and some based on absolute nonsense. The Global Warming Policy Foundation talked about a figure reached by suggesting that to retrofit every house in Britain would cost £150,000 per house. Of course, you can produce any old figure you like if you start with rubbish figures in the first place.
I am sorry to see that a letter was sent to your Lordships by the president, I think, of the Global Warming Policy Foundation, which says, first, that we are presenting a new Bill. There is no new Bill here. We are saying that the amount of money, of between 0.5% and 2% of GNP—which Parliament had already voted for to cover the 60% reduction in emissions that we first thought we had to achieve, then voted for again to cover the 80% reduction—is the same amount that will be necessary to reach net zero. The reason for this is that we have been able to meet the 80% reduction at a much lower price than we expected, not least because of a reduction in the cost of offshore wind and the like. I remind the Government, to whom I have one or two things to say, that offshore wind became as cheap as it did because the Government intervened, providing the possibility of the money to create a market, which meant that offshore wind dropped in price. This is not just a matter of leaving the market to act, but of creating the circumstances in which the market can act.
I point out to the House that the figures in this document—this letter written to everyone—are just not true. The true figures are those that have been worked on for months by the best brains we could put together. Those are the figures on which we should base our future, not figures that have always been wrong. The Global Warming Policy Foundation has been wrong on every single figure it has put forward; there is no reason now to accept what it says. I say to my noble friend that when you agree to a net zero target, agree that it will be statutorily enforceable, and agree that you will commit to it, it is necessary to provide the means of doing so. The Government have not done that. As we said in our last annual report, the Government, although on course to meet the third carbon budget, are not on course to meet the fourth or fifth carbon budgets. Unless they do so, they cannot meet the net zero target we are today putting into law.
The whole idea of having budgets was that nobody would put off until tomorrow that which they should do today; that is why we have budgets. If we did not, as we perfectly well know, every Government—Labour, Liberal Democrat, Conservative or any party you like—would always find a good reason for not doing today what they ought. The targets in those budgets set a mechanism by which we have to do what is needed now. If we do not meet those targets, we are laying on the shoulders of future generations that which we should carry. We have to carry it. The words of these young children remind us that it is their future we have in our hands. Many of us in this House will not be here in 2050, but what happens in 2050 will affect all those we love most. The idea that we should betray them by not doing what we know we should is unacceptable.
The Government have to recognise that they are behindhand on their decisions about transport. The year 2040 is far too late; we cannot do it on that basis. It must be at least 2035 and, in my view, 2030 ought to be our target because I do not see how otherwise we give ourselves enough elbow room to reach it. The Government have not faced up to the problems of heating, which is a real issue.
The area where the Government are most to blame is of course their refusal to improve the regulations for housebuilding, which means that every year we are building more than 200,000 houses that do not meet the requirements and will have to be changed in future. I am afraid I have used an improper word about this before but we are building crap houses and putting the cost on the shoulders of the people who buy them. That is unacceptable and the Government could change it tomorrow. If they do, though, let us make sure that means that it starts immediately and we do not excuse people who have planning permission so the building goes on for five or six years.
Frankly, I am ashamed of the housebuilders who, given that nine of them make 80% of the houses built, could have done this together. Instead they have blamed the Government and said, “The Government have to do it: we’re not prepared to do it ourselves”. If you applied the amount of money given to the chief executive of Persimmon to the houses he built, he could have built them all to the sort of standards we necessarily have. I look to the Government to make significant changes as far as that is concerned.
The Countess of Mar (CB)
My Lords, I hate to interrupt the noble Lord, but is he aware that the Companion suggests that speeches should be limited to 15 minutes, otherwise they engender boredom?
Lord Deben
I beg the noble Countess’s pardon but this seems to me rather an unusual situation and, if she will let me, I should like to finish. I hope the House will accept that.
I must make a comment about measuring consumption. We will provide those figures regularly from the Committee on Climate Change, but you have to control the things that you can control and not deal with those that you cannot. In that sense, it seems right that we should keep to the internationally agreed production figures.
I end—I was going to end at this point in any case—with a simple fact. The Government have done the right thing. I have to say that I am sorry about the inevitable misunderstanding of an amendment expressing regret because cross-party agreement is vital to win this battle but, when we pass this historic, remarkable and wonderful statutory instrument, the Government must understand that three simple words go with it: “Now do it”. It is no good simply saying it, taking credit for it or saying, “We’re all in it together”. In the end you have to do it—not tomorrow but today.
Lord Donoughue (Lab)
My Lords, before the noble Lord sits down, he referred to the Global Warming Policy Foundation, of which I am chairman. The noble Lord—apparently wildly but, I am sure, sincerely—claimed that every figure printed by the foundation was wrong. I congratulate him on having read every one of the millions of figures we have published; I certainly have not done so. He said that all other forecasts of the costs of this programme were wrong, and perhaps implied various motivations. Is he suggesting that the BEIS forecast of the costs, quoted in the Chancellor’s letter to the Prime Minister and 40% above his, is wrong?
Lord Deben
I did not say what the noble Lord said; I said that on each occasion we have had a target—of 60%, 80% and now 100%—the estimates of the Global Warming Policy Foundation have been wrong. I have looked very carefully at the foundation’s website; we have checked everything it says, and in each case it is not right about the figures.
As for the BEIS figures or the Chancellor’s figures, I merely say that we have spent many months producing the best figure that can be produced. I have still to understand the basis, in science or economics, of any other figure produced. I have discovered that those Global Warming Policy Foundation figures that I have been able to discern are much less accurate than those we were asked for, spent months producing and have given to the Government. I suggest that we stick to the proven figures rather than those which fit other people’s views.
Lord Lilley (Con)
Before my noble friend sits down, has he read the document in my hand? It states that the cumulative cost of the Climate Change Act up to 2030 would be £3 billion. The document was produced and published by the Global Warming Policy Foundation, written by me and drawn entirely from the Government’s published figures, which my noble friend’s committee has never refuted, rebutted or criticised.
Lord Deben
I would hate to refute, rebut and criticise my friend at so late a point in my speech, but he has only just returned from asking a question that included all those points while admitting that he had not actually read the Committee on Climate Change report.
Lord Deben
He may have read it now, but he asked prejudiced questions about it when he had not even read the documents. As far as I can discover, no member of the Global Warming Policy Foundation has ever been to any of the presentations we have made of these documents. I really wish they would have an argument with us on the facts.
Baroness Jones of Moulsecoomb (GP)
I point out to those Members who wish to argue about this that it is freezing in here and I do not have a cardigan. Could we speed up a little?
Lord Fox (LD)
My Lords, I will take that as my cue. I fear that I am intruding on a domestic, and of course we do not like to comment on domestic disputes. I assure the noble Baroness that I will attempt and indeed succeed to be somewhat more economical in time.
We welcome this debate and the tabling of the amendment. We understand the point made by the noble Lord, Lord Grantchester, and, in a different way, the point the noble Lord, Lord Deben, made in his very powerful speech—that we ought to understand more about how the means of this delivery will be willed. In the end, that is the key to achieving this objective.
This SI is the equivalent of sitting around a kitchen table, unfolding a map, pointing at it and saying, “That’s where we want to go”. It does not in any way get us any further down the road unless we understand how we are going to get there. I will try to maintain a practical end to this speech.
Call it self-indulgent or self-referential behaviour to point this out, but in September 2017 the Lib Dems approved a policy called “A Vision for Britain: Clean, Green and Carbon Free”, one of those great slogans we come up with. Its mission was to push the Government further and to push them to ask the question of the CCC about zero carbon in 2050. It was a milestone, and the reason I mention it is that it was an achievement for my colleague who cannot be here today, the noble Baroness, Lady Featherstone. I wanted to acknowledge her role in some of this.
New Liberal Democrat policies will continue to press the Government harder and will be further refined. They will also seek to outline some of the challenges and issues that need to be addressed to meet this incredibly exacting target. It is not just about stopping doing things; we will have to take carbon, CO2 and greenhouse gases out of the system to achieve this. Although I respect the point the noble Lord made about using existing technologies, I challenge that it is the outer edge of existing technologies that will enable us to do some of those things. There is a lot of work for the Government to enable us to be in that position.
That is why we need the Government to explain how we are going to go forward. We should be approaching this problem multilaterally. We are talking about the United Kingdom, but we sit in the continent of Europe. It would be much more sensible if we were doing this as a bloc and a group in the European Union. Noble Lords would expect me to say that.
We need to be very clear on what we are trying to do and we need to be very honest about how we measure what we have achieved. That means basing it on our real footprint. There cannot be fudging of figures. We cannot disregard our imports, where we are simply exporting our footprint, and we need to be very careful about things such as offsets. The CCC sets out some big technologies, but I will pick on a few in no particular order, and not an exhaustive number. I will talk about low-carbon power, energy efficiency, electric vehicles, domestic heating, and air travel and shipping.
We of course need to accelerate the development of renewable and low-carbon power. As Liberal Democrats, we will be setting forward a much more ambitious target than we have even achieved now. It should be said, in the spirit of self-congratulation, that the level we have now was very much laid down through the work the coalition Government did, notwithstanding some dismantling around offshore wind, which occurred in the succeeding Government. The fact we have been able to have coal-free generation over the past few weeks is very much a credit to them. But creating the right investment environment for zero-carbon or low-carbon generation is a real challenge—I do not have to tell the Minister that—and we need to understand how the Government will work with industry to deliver the right investment vehicle with some idea of a framework. From a personal point of view, as I have said before, I think that included in that should be effective energy storage, because without that we will not have a flexible, low-carbon grid.
Everybody talks about energy efficiency; we have already heard about it twice. We have to introduce a major programme. We already have much of the legislation we need; we need to enforce the regulations.
On the subject of building, and not just conventional techniques, there is a revolution out there. I sat on the Science and Technology Select Committee. Off-site building can deliver much higher-specification buildings. The Government need to lead on that process with the buildings they commission.
Electric vehicles are interesting, because they are an important personal commitment for people. They are a big acquisition that people make in their commitment to the environment. Actually, it is quite hard. The waiting lists are long. One of the problems, as has already been mentioned, is battery technology. We have the Faraday challenge, but we are importing many of the batteries we need for current electric vehicles. We need a much stronger supply. Can the Minister tell us where we are on the Faraday Challenge gigaplant? When will the spades be wielded, because it will take years before it is working? How is the Road to Zero going? Where are we on it and will we firm up the targets? Things such as on-street charging remain behind the game. There needs to be consumer certainty around the plug-in car grant. Can the Government give a long-term view on that, rather than just to the end of the year?
Decarbonising heating is a very important point that has already been mentioned. There are options, such as hydrogen and heat exchange. How are the Government going to frame this? The last time we had a big domestic switchover, it was between coal gas and natural gas, and a single national monopoly delivered it. What is the means by which this process will be delivered? Will it be locally, through LEPs, by private enterprise? We know how well—or not well—the smart meters process has gone, so what is the thinking within the Government to deliver this?
Baroness Worthington (CB)
My Lords, I welcome the Government’s accepting the recommendation to change the target in the Climate Change Act to a 100% reduction by 2050. It feels very appropriate to be having this debate today, as we have marchers outside—tens of thousands of people who have come here to express their concern about the climate crisis and the loss of biodiversity that we are now living through—and others lobbying inside the building.
Climate impacts are being felt far faster than scientists and models predicted. The melting of the Greenland ice sheet this season is completely unprecedented for this time of year, at roughly three times the average. Heatwaves are blighting Europe throughout this month. Chennai, a city with a population of 10 million, is currently out of water. The everglades are on fire and coral reefs are continually being bleached. I could go on. We are living in an age in which the consequences of our actions are now becoming apparent. We have known about this problem for decades, but collectively, humanity has been too slow to respond.
In this context, the UK has shown great leadership and must continue to do so. We are now committing to a law that will take us to a net zero target by 2050, which is the right thing to do. We need to do this despite who is in the White House, despite China having 1,000 gigawatts of coal-fired power stations and despite Russia sitting on the largest fossil fuel reserves of any nation. To sit back and wait and expect some other country or institution to take this action would be a recipe for disaster. We cannot solve the problem ourselves, but we must lead by example.
We can work out how to deliver economic growth without contributing to the climate crisis. We have already made great progress. Thanks to decades of clever policy interventions, how we make electricity is now far cleaner. We are seeing large periods without any coal-fired power. This is incredible, given that we are the home of the Industrial Revolution and brought this technology to the world. We can use that clean electricity to make other parts of the economy cleaner too. Let us focus on transport, then on industry and heating. We now have the potential to get to net zero using existing technologies. The Government are therefore to be commended for agreeing to this change to the long-term target.
However, the Government have not fully accepted all the advice from the Committee on Climate Change and have said that they do not rule out using international offsets to get to our target. I do not object to this if they are well done and well regulated, and it will make no practical difference in law, because we do not set out limits and offsets until 18 months before the start of any budgetary period. However, having deviated from the very clear advice of the CCC, we can now go even further than the 100% reduction target because it will be far cheaper and easier should we allow international offsets into this system. In meeting this goal, if we want to stay at the costs we have accepted—1% to 2% of GDP—we can go further. It opens up the opportunity to go into minus figures—minus 120% or minus 150%. This is now possible, and it would be the right thing to do. This will not be the last debate we will have about the 2050 target. I think we will go further, beyond zero, because we will then be paying back the carbon debt we owe to the rest of the world. Historically, our per capita emissions far outweigh most countries’, and it is those countries that will see the impacts hit hardest. The pressure will be kept on us and I am sure that we will go to those much more ambitious targets in time.
Turning to the amendment in the name of the noble Lord, Lord Grantchester, I will make three points. First, the policy details of how we will get to our intended goal are obviously very important and emissions projections are not currently on track to meet our fourth and fifth carbon budgets. Better policies are needed to ensure that we harness the power of the private sector to deliver cost-effective reductions in the transport, heat and agricultural sectors. Part 3 of the climate change Act introduces a series of enabling powers that will allow the Government to introduce new incentives and penalties that would align business incentives with this goal. They would restrict or price emitting activities, and would reward and create incentives to invest in the solutions that get us towards our goal. These powers exist and all we need to do is conduct a public consultation on their introduction. That is what we should focus on now: broad, market-based approaches across the economy to align signals so that we can do what we have done in the power sector in all other sectors of the economy. We have to act urgently but proportionally, and aligning incentives is one of the most effective ways we can do that. That is the first step we must take and the CCA allows us to do it.
Secondly, Section 30 of the Act was accepted and introduced to allow us to omit international emissions from shipping and aviation using an SI. It is regrettable that the Government have not taken the opportunity to include that in the SI we are debating this afternoon. Rejecting once again the advice of the CCC is clearly a missed opportunity. Both international aviation and shipping sit outside the scope of the Paris Agreement and are governed by dedicated bodies. They are designing a rulebook that will help them to address climate change. The UK must lead in those negotiations to ensure we get an international solution to those two important sectors, but at the same time we must lead domestically; including them formally in the budgets would have given a clear signal that we intend to do that.
My third point concerns the statement that the Treasury will be encouraged to review the costs of meeting these targets. In this assessment, we must acknowledge that this issue cannot be reduced to a simple cost-benefit analysis. This is a moral question: the moral question of our time. No price can be put on the future of humanity; the planet will be fine, but most of humanity will not be. This is the critical issue: if we reduce this down to a nickel-and-diming of how much we will gain from one policy versus another—the net benefits or costs—failing to take into account that this is something we simply must now do, we will get the wrong answer. There are many examples of our doing things because they are morally correct, without carrying out a cost-benefit analysis, and this is clearly the defining example. When the Treasury is asked to look at this question, the one thing it must consider—it will be an essential part of making this politically acceptable—is the fairness with which we tackle this challenge and the distribution of the costs, to make sure that the people who are most able to pay do pay, and that those who cannot afford to take on extra burdens are protected. That is the question the Treasury should concern itself with, not a basic cost-benefit analysis of whether this is the right target. It is the right target; if it is not, then it is only because it is too weak and we can go further.
Finally, I return to the debate about measures and policies. I urge all those who are concerned about prioritising using our political capital to take action on policy that we refer to data and analysis. We can refer to the CCC’s own work. I fear that, too often, we are wasting our time talking about issues that do not currently involve large emission volumes. I am against the expansion of Heathrow, like everyone else, for local reasons, but it really has very little to do with the national issues of climate change. The same can be said of fracking. We must focus on the things that matter: transport, heat, industry and agriculture. I really hope we will focus on those in the months to come and introduce the policies we need to get to this target. I am very happy that we are having this debate today.
Baroness Young of Old Scone (Lab)
My Lords, I declare an interest as chair of the Woodland Trust and I welcome the Government’s commitment to net zero carbon as enshrined in this instrument. I will make two very brief points. First, to reach this target, we have to move away from fossil fuels—I commend in that regard the noble Baroness’s speech immediately prior to mine—but we also have to undo some of the damage already done. One way to do that on a large scale is to plant more trees. Trees eat atmospheric carbon for breakfast. The Committee on Climate Change has called for a 9% increase in tree cover in this country. If that is to be done in the next 12 and a half years, which is the deadline calculated by the IPCC for having any hope of keeping temperature rises to below 1.5 degrees, it means 74 million trees a year. The Government’s current target is 11 million trees in the five-year lifetime of this Parliament—although who knows what that is going to be? In reality, in the past six months the Government have not even met their own target. According to figures kindly provided by Defra, government action resulted in the planting of fewer than 500,000 trees in the past six months. That is a long way off the rate required.
I recognise that the Government have now put in place some £60 million of additional funding for tree planting in the interests of combating climate change, but that is still not enough. The amendment is therefore fully justified. We need rapid clarity on how the target will be delivered. Unless planting rates are increased 50-fold, the tree element of the CO2 reduction plan will simply fail. It can be done and it will have huge additional benefits, for biodiversity as well as a range of human health and resilience effects, reduction in heat, water resource protection, flood risk management and air quality improvement. So it is worth doing, it is effective, but it needs to be done faster. The Government’s commitment is admirable in principle, but it needs urgent practical action in the next 12 years, and not by 2050, if the impact of tree planting is to have results. So I commend the comment of the noble Lord, Lord Deben, about just doing it.
I make this comment to critics of the target. We are not doing ourselves a service by being mealy-mouthed about the costs of doing nothing. I understand entirely why the climate change committee has taken a conservative approach and does not want to try to estimate the costs of not hitting the target. But the reality is that we do not need to do that; we simply need to ask the insurance industry globally. It has recognised the impact of floods, of heat, of ecosystem destruction, and the impacts on agriculture. It is already paying out for those effects. Ask the insurance industry if you are in any doubt about whether the investment that we are envisaging is worth while.
Viscount Ridley
My Lords, I declare my interests in coal but also in renewable energy—wind and wood in particular. I am genuinely shocked by the casual way in which the other place nodded through this statutory instrument on Monday, committing future generations to vast expenditure to achieve a goal that we have no idea how to reach technologically without ruining the British economy and the British landscape. We are assured without any evidence that this measure will have,
“no significant … impact on business”—
but where is the cost-benefit analysis on which this claim is based? Where is the impact assessment? They do not exist. We are told that the Treasury will run exercises in costing the proposals after we have agreed them, but that is irrational. Who among us in our private life says, “Yes, we’ll sign a contract to buy a house, and only after the ink on the purchase is dry will we try to find out the price of the house”?
We are faced with a measure which is likely to cost at least £1 trillion on top of the £15 billion a year that we are now spending on subsidies to renewable energy. Let us remind ourselves just how big a sum £1 trillion is. If you spent a pound a second, it would take you 30,000 years to get through £1 trillion. You would have had to start before the peak of the last Ice Age, when woolly mammoths and Neanderthals roamed across the tundra where we now sit. Now we are talking about spending £1,000 a second for the next 30 years.
The Committee on Climate Change says that the cost will be even higher. It assumes that UK GDP will have almost doubled, from about £2 trillion to about £3.9 trillion a year by 2050, and that we will have been spending 1% to 2% of GDP every year between now and then. That means that we will have spent between £30 billion and £60 billion a year for 30 years: a total of £900 billion to £1.8 trillion. That number has been described in this debate as “manageable” and “affordable” by the noble Lord, Lord Grantchester. It has been described as “nickel and dime” by the noble Baroness, Lady Worthington. But hang on a minute—where does the Committee on Climate Change get the estimate of 1% to 2% of GDP?
Lord Turner of Ecchinswell (CB)
My Lords, I declare an interest in a renewable energy company primarily involved in the wind business, though not in Europe. It is primarily involved with China, India and developing world; contrary to the implication of earlier comments by the noble Viscount, Lord Ridley, there is quite a lot of action occurring in those countries as well as in our own.
I very much hope that we will support this order with enthusiasm and strong cross-party support, continuing that pattern of cross-party consensus about which the noble Lord, Lord Deben, spoke earlier. There has been a consensus; it has been opposed by a minority of sceptics, but the facts have continually proved those sceptics wrong. We have to take action because it is clear that global warming is occurring, and it is now occurring at an accelerating pace.
In 1998 we faced, because of an El Niño effect, a year in which temperatures soared well above the trend of rising temperature that scientists had predicted. As a result, there was for about eight years thereafter something of a pause in the average rise of temperatures. At that time, many sceptics—including, I suspect, some contributing to this debate today—leaped on that pause and said, “Well, that proves that global warming is not occurring”. However, the fact is that nine of the hottest years on record have occurred since 2005 and the five hottest have been the last five. On the current pattern of this year, it is looking almost certain that by its end we will be saying that the six hottest have been those up to 2019. We are facing very clear evidence that warming is occurring.
We also have to take action because there will be extremely harmful effects. What is going on in India has already been referred to; I have just come back from there, where I was engaging with many people in the Indian steel and cement industries who are putting in place plans for radical reductions in their carbon emissions. While I was there, the temperatures in northern India were over 50 degrees centigrade. With only a few degrees warming, the North Indian Plain will be essentially unliveable for human beings. We face major challenges from climate change, but there are other parts of the world where it is truly life-threatening.
We cannot now stop significant global warming—it is baked in already—but we have to limit it as much as possible. The guideline of how much we should limit it by is well described by the IPCC report from November of last year, which argued effectively that beyond about 1.5 degrees centigrade of warming, the effects are non-linear—they are multiplying. Every 0.5 degrees centigrade further does not just make it a bit worse but a lot worse, so that is a reasonable target. To achieve that, the whole world has to get to about net zero emissions sometime around 2050 or 2060. Some developing countries growing rapidly will find it difficult to get there by 2050 but can get there by 2060. That makes it a reasonable target for us, with our greater economic capacity, to get there by 2050.
The costs of our getting there by 2050 are clearly manageable. When estimates are produced of the costs of achieving emissions reductions, sceptics always come out with arguments that say, “These estimates are far too low”. However, experience suggests precisely the opposite. In 2003, the Government estimated that the cost of reducing emissions in the UK by 60% would be about 1% to 2% of GDP. In 2008, when I was the first chair of the climate change committee, we estimated—on the basis of a very detailed, sector-by-sector analysis of what the resource costs would be in power production in the transport sector, and so on—that to achieve an 80% reduction it would be 1% to 1.5% of GDP. The CCC, on the basis of equally detailed analysis, has now suggested that 100% would cost 1% to 1.5% of GDP.
Why have those costs come down, or at least why has what you can achieve for the same costs gone up? The answer is that the costs of key technologies have come down far faster than any of us dared believe would happen. The cost of solar photovoltaics has come down by about 85% in the last 10 years, the cost of wind power by about 75% in the last 10 years, and the cost of batteries by about 85%. That shows the extraordinary power of scale economies, learning-curve effects and induced technological change—once you have clear, quantitative targets, you drive cost reductions that would not otherwise occur.
It is almost certain that such technological change, learning-curve effects and economy-of-scale effects will occur in future and will probably prove the climate change committee to have been too conservative again. But it has been right to be conservative and say, “These are the maximum costs that we might face and which will occur if we do not have radical cost reduction, but it is highly likely that we will”. The most effective way to ensure that we get technological change and cost reductions from learning-curve and economy-of-scale effects is to set a stretching target so that industry knows that that is non-negotiable and that within that, it can invest to achieve those cost reductions, confident that that will be economic. That provides us with a strong basis for supporting this order—with, I hope, unanimity, and certainly with strong support.
Baroness Jones of Moulsecoomb
My Lords, in preparation for the debate this afternoon I looked up the Government’s climate change policy page and I got an error message: “Page not found”. That was at midday today—I do not know if it is up and running now—but it says something about the Government’s ability on the issue of climate change.
I wanted to disagree with the noble Viscount, Lord Ridley, but I felt it was not fair to keep interrupting him. He says that there will be “no significant impact on business” but of course this will have a significant impact on business. Climate change will be dreadful; we have to make sure that business understands that and that it moves on.
I am told that the reason the Chamber is so cold is because a valve is stuck open. That shows that we cannot always rely on technology, because even the simplest technology can go wrong. My teeth are chattering now, so I shall hurry through my comments.
I congratulate the noble Lord, Lord Deben, on his speech. I particularly liked his being prepared to point out that 2030 was perhaps a better target than 2050. I would go further and say 2025. We cannot afford that length of time.
I also congratulate the noble Lord, Lord Fox, who talked about what could be better and what the Government need to do. I have just challenges for the Government, because over the past weeks, months and years, and again today, I have listened to the Government telling us how great they are on climate change, how they are acting and how much they are spending. Quite honestly, it is a load of tosh, because they are not doing enough.
Viscount Ridley
The noble Baroness will be aware, because she will have read Charles Moore’s excellent biography of Margaret Thatcher, that she later resiled from those views—on climate change specifically, not on other environmental issues—and said that, yes, the problem was exaggerated.
Baroness Jones of Moulsecoomb
Yes, I am well aware that all politicians can get it wrong at various times, and she was wrong there.
What has happened to the Conservative Party in the meantime? We have a Government who resist onshore wind installations, which would supply cheap, clean energy, while supporting dirty, expensive fracking. Fracking is not the answer: it is a way to pump more fossil fuels into the atmosphere and, in the process, allow a rapacious private company, Cuadrilla, to stifle legitimate, peaceful protest. The Government push a steep VAT increase—from 5% to 20%—for new solar battery systems while coal remains at a discounted rate, and propose a third runway at Heathrow and more roadbuilding. We seem to be in a topsy-turvy world where the Government do not understand what is happening.
At the same time, three children—three climate protesters—from the Albany Academy, are being punished for attending the youth strike for climate protests. Children fighting for their future is not a crime. A brave planet protector, Angie Zelter, has been in court this week for protesting with Extinction Rebellion. She says:
“I cannot really understand why those in power have refused to act. After all, it is their world, too”.
It is noble Lords’ world, too. Many will have children and grandchildren who will be massively affected by this issue. I wish noble Lords over there would be a little quieter. Is that possible?
Fine words are not enough to fight erratic weather patterns that cause disasters in rich and poor countries. They are not enough to clean our rivers and seas of plastic pollution, to clean our polluted air, to save the curlew and the red squirrel up north, and certainly not enough to guarantee supplies of clean water, uncontaminated food and to resist global economic collapse. Can we please have some policies that will make a difference? As the protesters outside are saying, the time is now.
Baroness McIntosh of Pickering (Con)
My Lords, I congratulate my noble friend on introducing the order today, including what from our debate are proving challenging targets. I shall restrict my remarks to putting a specific question to my noble friend. Is it not the case that, in the short term, emissions will rise, particularly in the context of hydraulic fracturing for methane gas—an issue raised by other noble Lords? It is generally recognised that it is an inevitable result of fracking that methane will leak out of the natural gas wells at two stages: first, during the well being hydraulically fractured and the methane escaping; and, secondly, during the drill-out following the fracturing, when methane is released into the atmosphere. It is also generally understood that methane can be far more powerful than CO2 in its role in increasing greenhouse gas emissions, which leads to the inevitable warming of the Earth’s atmosphere.
Will my noble friend take the opportunity in summing up the debate on the statutory instrument this afternoon to explain how we are going to meet our targets to reduce greenhouse gas emissions and global warming by 2020 without inevitably increasing greenhouse gas emissions and global warming by continuing to pledge to fracture in the immediate future?
Baroness Brown of Cambridge (CB)
My Lords, I offer the Minister my strongest support for the order.
I remind the House that we are being asked to sign up to a new target, not a new cost. I want to dispel a few misconceptions. The Committee on Climate Change identified the range of costs needed to meet the net zero target as between 1% and 2% of GDP. Those costs are not costs to the Exchequer. Yes, there will be a role for public funding in some areas, such as to avoid a competitiveness impact on the UK manufacturing industry, but the vast majority of the changes will, and should, be delivered through private investment.
I declare an interest as vice-chair of the Committee on Climate Change. In our report, we compare resource cost estimates to GDP to give a sense of scale. It does not follow that the estimates have an impact on GDP. The impact on GDP could easily be positive, as we shift away from using imported fossil fuels, for example, or as we develop newer industries that will boost our productivity and growth as an early supplier of new, low-carbon technologies globally. We need to be very careful in how we think about the numbers.
However, as many noble Lords have indicated, and as the CCC said in its net zero report, changing the target is just the first step and, in many ways, is the easy part. The real challenge will be the swift ramp-up in policy that needs to follow. I have had the honour of being the sector champion for the offshore wind sector deal as part of the Government’s industrial strategy. As the Minister is aware, a major renewable energy conference is under way in London; I believe that he spoke at it today. The conference is exciting; for example, it shows the impact of our investment in offshore wind on UK jobs and companies.
Will the Minister consider a swift and simple indication of the Government’s policy intent to deliver this new net zero target? A simple indication of intent would be removing the six-gigawatt cap for the next round of CfD auctions while offering no additional funding. The offshore wind industry is ready to respond to such an indication. This would be a win-win. It would show the Government’s intention to act swiftly; it would help to create more jobs; and it would deliver more zero-carbon electricity at no additional cost to the Exchequer or the consumer.
Lord Lilley
My Lords, I declare a non-pecuniary interest as a director of the Global Warming Policy Foundation.
We are debating the consequences of a departing pledge by the outgoing Prime Minister; it is probably the most expensive leaving present in history. Harold Macmillan said that when both Front Benches are united, they are almost invariably wrong. It is in that context that I rise, with some trepidation, to show that at least some scrutiny is going on. Macmillan’s point was that, where both sides agree, you do not get proper scrutiny and the normal adversarial approach of our Houses of Parliament does not apply—that is, we do not look with enough rigour at what is going on. That is particularly true if, as was the case in the House of Commons, this House eschews any serious consideration of cost on the grounds that the higher the cost, the better—almost—because it shows how virtuous we will be. That was certainly the attitude during the passage of the original Act in 2008.
My principal plea is for a proper impact assessment of the order. I say that with some feeling: I came to this issue because in 2008, when the then Climate Change Bill was before the House, I went to get a copy of the impact assessment and was told by the Vote Office that I was the only person who did. I was the only person who read it and raised the issue of cost throughout the Bill’s proceedings. That is why impact assessments are important. I read the impact assessment and discovered that, at that stage—when the target in the draft Bill was a 60% reduction in emissions—it showed that the potential costs were twice the maximum benefits. If the costs of something exceed the benefits, you do not do it. That does not mean that the target was wrong; it means that you look for more cost-effective ways of achieving that target. But we did not; we ignored it. We ploughed ahead anyway—and went further: we raised the target from 60% to 80%. One would normally expect that to increase the cost disproportionately, because the things you have not done would be costlier than the things you would do to meet the lower target, and the benefits would rise less than proportionately, because you would get the greatest benefits from the early reductions in global warming and fewer benefits from any incremental reductions.
After we passed the Act, the Government did produce an impact assessment—under much goading from me. Sure enough, it showed that the cost of meeting the target was going to double, but it also found that the benefits were going to increase tenfold. They found £1 trillion of benefits previously overlooked and ignored by the people who had produced the original impact assessment. That must surely raise a feeling of unreality in the minds of people considering this. If you can conjure £1 trillion of benefits out of nowhere, we really are dealing in extraordinary detachment from reality and normal accounting.
I want to see a proper impact assessment this time, even if we did not get one originally and the one we eventually got lacked credibility.
Lord Rooker
In this rewriting of history we are listening to, we need to remember that when the noble Lord talks about receiving the Bill, he was in the Commons. The Bill had undergone four to five months of scrutiny in this place, where it started life. I moved the Second Reading in November 2007. Therefore, all the scrutiny that took place here and all the questions that I and other Ministers were subject to were continually worked on by our officials. We could not answer all the questions to start with, and it was inevitable that changes would be made after it reached the Commons and went on the statute book. I reject entirely the rewriting of history; it is as though the noble Lord suddenly discovered something when the Commons was scrutinising the Bill. It was this place that did the scrutiny on the Bill before it even got to the Commons. I think we spent twice as long on it as the House of Commons.
Lord Lilley
I am sorry; I obviously have not made my point clear. An impact assessment was produced before the Bill went through either House, and a second was produced after it had been enacted by both Houses. Those two things differed in the dramatic way I have described. I asked my research assistant to go through the entire proceedings of both Houses; he could find no serious scrutiny of the cost either way, but if the noble Lord recalls otherwise, naturally I will change my assessment and realise that he missed something.
My opposition has always been based on the economics of what we previously committed ourselves to, and my concerns today relate to the economics. I recall that when the Third Reading of the 2008 Act finally took place, I and the four others who had decided to vote against it—just as a matter of principle on the economics —retired to the Smoking Room to drown our sorrows and noticed as we did that it was then, in October, snowing outside. I went back to remind the House that we were passing a measure in the belief that the world was getting warmer when it was snowing in London in October for the first time in 74 years.
Lord Lilley
I was immediately interrupted by people saying, “But surely you realise that extreme cold is a symptom of global warming”. Is that what the noble Baroness was going to say?
Baroness Worthington
I have two points. There is a great difference between weather and climate change, which the noble Lord would, I hope, have understood if he has read any of the reports on this topic. Secondly, the Act commits us to no costs, because it merely has a target and enabling powers. Each individual policy then enacted to reach those targets will have an impact assessment that has a full cost-benefit analysis. The noble Lord was absolutely wrong to oppose this Act on the basis of cost, because it is a target-setting measure with enabling powers. Is the noble Lord aware of that? Could he also comment on the fact that people have repeatedly said that the Act commits us to following EU targets on renewable energy? This is another falsehood; the Act says nothing about the need to do anything through any particular technology. Does he acknowledge that?
Lord Lilley
Yes. That is not a point I have made, but I acknowledge that the noble Baroness is right to rebuke whoever did make it. I am not opposing this measure; I am demanding an impact assessment, one that covers the aggregate. The Minister’s response is that we will get a cost-benefit analysis of individual measures, as the noble Baroness referred to. I just think we ought to know what the rough total is, as assessed by the Treasury. I am not alone in this; I call in aid my noble friend Lord Deben. He rightly said that I should have read the CCC report in its entirety, rather than just the summary, before I asked my question. Now that I have read it in its entirety—I did so without losing the will to live at any point—I know that it calls for a full impact assessment by Her Majesty’s Treasury. I am endorsing that call.
Lord Deben
As it was me who was asked the question, I remind my noble friend that what we said was that the Treasury should look at the distribution of the cost to make sure it was fairly spread. That is a different thing from what my noble friend is asking for.
Lord Lilley
My recollection is the words, “look at the cost, and in particular the distribution”, which seems sensible. I endorse both aspects of my noble friend’s appeal to the Treasury.
Viscount Ridley
Does my noble friend agree that the Secondary Legislation Scrutiny Committee report on this order says:
“It would have been helpful for the Department to provide a summary of the work that is underway to assess the significant costs and wider impacts of the transition, to inform Parliament’s scrutiny of the instrument”?
Lord Lilley
Absolutely. That is what we ought to do in this House: look closely at these things. That does not mean to say we reject them. Unless we know the cost of this measure, which is potentially enormously costly, we are really buying a pig in a poke. I hope the House will focus on that point: should we go ahead and pass this without an impact assessment, or should we at least demand that the Treasury comes forward with such an impact assessment and a distributional assessment as soon as possible?
That distributional assessment is important, because these measures tend to fall disproportionately on low-income households. We have seen that in any country where the cost of climate change measures has come into political contention, those on modest incomes have tended to vote against them. We saw it in Australia and Canada; we have seen the gilets jaunes in France. We should beware and be aware that we are imposing large costs on ordinary households, and we should not go ahead and do that lightly and without knowledge of the figures.
Lord Ravensdale (CB)
My Lords, I declare my interests as an engineer working in the energy industry.
I welcome the Government’s commitment to net zero carbon emissions by 2050. However, as noble Lords have already said, this target will involve significant technical challenges. I want to introduce a different slant to the debate today by talking about some of the technical challenges that will be need to be met, the key areas of uncertainty and the options for mitigating them. A comprehensive review of how this target will be met is critical and I hope to see more detail of this in the forthcoming energy White Paper.
The key risk areas we need to consider within the scope of the amendment are on-demand power generation and hydrogen. It is widely accepted that a 100% renewables power generation system is impracticable barring any unforeseen technical advances. This is partly due to the technological limitations of energy storage and the implications of grid stability with a variable power supply. A large amount of on-demand power will be required to counter the variability of renewables and there are two options for that at a high level—gas turbines with carbon capture and storage, or nuclear.
Gas turbines with carbon capture and storage are an attractive option to meet our commitments, but there are several uncertainties with large-scale carbon capture and storage. One uncertainty is the capture rates that are feasible with the technology—whether it can capture the amount of carbon that we need it to—and another is that the economic viability of the technology is still unknown. If capture rates are lower or the technology is more expensive than anticipated, alternatives will have to be sought to large-scale use of carbon capture and storage. It is critical that there is a pilot project from the Government to consider scaling up this technology and the viability of it in more detail.
The concerns are well known about the economic viability of nuclear compared with renewables. It is worth noting that the costs of large nuclear are currently less than the existing offshore wind capacity that has been built. However, the future offshore wind capacity will be cheaper than current large nuclear. It is difficult to make the comparison between nuclear and renewables because of the different characteristics of these technologies in terms of costs.
It is critical that the industry responds to the cost challenge set out in the nuclear sector deal and brings down the costs of nuclear from the £90 per megawatt hour we have seen with Hinkley to around £60 per megawatt hour. Given the doubts over whether large nuclear can deliver, we need to focus on several things to meet that cost challenge: first, small modular reactors, as a fallback and to complement large nuclear, are critical; and, secondly, advanced nuclear technology.
How will these technologies solve the cost issue with nuclear? The first way is through modularisation, which is inherent in small modular reactor design and is already used in other high safety integrity industries such as shipping and air transport. We need to look at moving the production of reactor modules to factories off-site to reduce the cost of reactor technology and to bring down the capital costs of nuclear plants. Secondly, with advanced nuclear, there are several designs out there which are passively safe, simpler and of a much higher thermal efficiency than existing plants and will help in that regard.
Government investment is required to see these promising designs through to fruition and to get them off the ground. On the point made by the noble Lord, Lord Deben, on what happened with offshore wind, we can replicate that with nuclear and use it to bring down the cost of the technology and help us meet our 2050 targets.
Hydrogen also has a key role to play in a net zero economy, whether through heating buildings, energy storage or fuel for heavy vehicles. However, there are many uncertainties about the best means of producing, distributing and storing hydrogen. For example, as has been pointed out by other noble Lords, the preferred means of production—steam methane reforming—will involve large-scale carbon capture and storage and the issues with that that I have pointed out.
Can the Minister say how the Government intend to de-risk these key areas of uncertainty—hydrogen, carbon capture and storage and nuclear—to ensure that the UK can meet the 2050 target as planned? The timing for large investments could not be more fortuitous in many ways, with the Government able to borrow for 50 years at less than 1.5%.
Lord Donoughue
My Lords, I declare my interests as in the register. This massive proposal, which is imaginative and exciting in many ways, is being rushed through Parliament, partly because the departing Prime Minister has a desire for a legacy and partly because of the claimed emergency over climate change or global warming. I am in the minority as I was rather sympathetic to the Prime Minister on many things—but not on this issue.
On the latter issue, warming, we have certainly experienced a mild warming cycle for some 140 years, with carbon emissions playing a significant role in it. I have never questioned that. I listened carefully to the noble Lord, Lord Turner, but I cannot find any sudden acceleration. According to Met Office figures, the past 20 years show a rise of 0.3%, which is broadly in line with the whole cycle. It is slightly slower than the further warming in the last quarter of the 20th century, so it is of concern, but it is not a sudden emergency.
The excitement occurring now may arise from the forecasts by models of a boiling planet later this century. That may happen—anything may happen—and I understand people who want assurance, but so far there is no observational scientific evidence for it. Nearly all those models—there are more than 100 of them—have been deeply inaccurate so far and have been seriously biased towards overheating, sometimes by up to 300%. Interestingly, only the Russian model has been accurate for this syndrome, so these models should be treated with care.
There has quite rightly been much discussion of costs. The climate change committee’s prediction of a net benefit cost of £50 billion per annum by 2050 may be optimistic. Other outside estimates reject it; the Department for Business, Energy and Industrial Strategy puts the cost 40% higher, at £70 billion per annum. That was quoted by the Chancellor in his letter to the Prime Minister. All seem to agree that the total expenditure by 2050 will be more than £1 trillion. That seems testing. The committee’s figures seem to omit carbon taxes and renewable subsidies, amounting to around £1 trillion, and the decarbonising of heat by refurbishing all houses. I should point out that that figure was from a respectable sectoral energy institute, which is why it was quoted. I find the total financial liability falling on consumers and taxpayers very complex to account for, but it is likely to be huge and perhaps larger. Equally, it could perhaps be smaller. We do not know, as the climate committee admits.
As an infrastructure project, this revolutionary programme involves greater public expenditure than any done by this country since we committed to fighting the Second World War. It inevitably involves massive disruption to our existing economy. There will certainly be benefits—I accept that—but it will create a new and potentially more expensive energy base, and worsen our export competitiveness by raising costs. It would probably close, or export, our existing high-energy consuming industries—steel, engineering, cement et cetera—and if it does, it will hit jobs and living standards. The idea of a cleaner environment is commendable, and I have always supported it, but these are huge costs.
We have to ask, as the Chancellor did in his letter to the Prime Minister, which areas of public expenditure may have to suffer the costs to pay for it. Will health, social care, schools or defence be cut to shoulder that burden? My Labour colleagues, in particular, may wish to consider that. Will it be, as is the case with the £15 billion in current climate costs, that the working people of this country carry the main burden, relative to their incomes, through paying significantly higher energy costs and green taxes to subside renewables? I note that the committee seems to appreciate that problem and I will be interested in the Government’s response to it.
The climate change revolution is predominantly a professional-class religion where the main cost is paid by working people who often do not share the faith. The noble Lord, Lord Deben, claimed that most people are on his side. There is no evidence for that. Polls have long shown that working people do not massively support this project, and they have not yet heard of these proposed new burdens. Whatever noble Lords’ feelings about decarbonisation—I sense that most people probably like the general idea because they rightly, like me, dislike pollution and want a better environment—they must surely agree that it is irresponsible of the Government to push through this massive and not fully-considered project in a statutory instrument without serious assessment of the practicality of its proposed details or costs, and where those costs will fall. Surely with such a massive project we can wait until the Treasury—or perhaps, as I would like to see, an independent inquiry chaired by the Treasury followed by full parliamentary scrutiny—reports to us. This project must be properly handled by the Government, positively, with concern for our future environment but also with responsible concern for its technological and financial practicality, and the livelihoods of our working people.
My final, and even more worrying, point is about the cavalier way in which this costly adventure has been launched. It is being proposed on a single-nation basis—not that that is its ideal, but it is there. The UK is apparently to be prepared to do this with no guarantees of the global environmental benefits, thus offering virtue-signalling moral leadership to the whole world. That is dangerous. Our share of global emissions is just over 1%. If we alone decarbonise tomorrow, that is the amount by which global carbon emissions will diminish, yet in the next few years China and India alone—the great carbon emitters—will increase their carbon emissions by more than double that share. Our contribution will be swamped and carbon emissions will still rise, but at what economic cost to the working people of this country?
Pursuing zero carbon in Britain alone while the big emitters continue to pollute the atmosphere on a massive scale is a futile gesture of moral imperialism. No doubt the virtue signallers have good intentions—I have never questioned that—but, as an earlier politician wisely said, the road to hell is paved with good intentions. We should mobilise the present environmental energy to encourage the great economies of the world to look seriously at the scientific facts on climate change, not at the alarmist propaganda, and then, in a measured way in conjunction with the observational evidence, move towards a time when carbon emissions are more limited. However, that world discipline and its benefits must be guaranteed and not based on delusional hopes. There should be no false paper promises based on ill-supported forecasts, like the Paris agreement.
Until then, our Government must take their national duties responsibly, scrutinising any climate venture with care, checking the observational facts of the science and allowing into the process sensible sceptics asking questions—as was traditionally done under Enlightenment science—and not behaving, as the BBC now sadly does, like a Stalinist censor, excluding any informed sceptic who questions wilder climate fantasies. I say to the BBC that working people will not have much extra revenue to buy their licences if all these proposals go through. Above all, the Government must scrutinise properly. We may eventually wish to enter this revolution but must first agree on whether it will pragmatically achieve its shared purpose, what it will cost and who will pay for it.
Lord Henley
My Lords, I do not think that I will be behaving like a Stalinist censor if I kill off the debate at this stage; I suspect that the House will be with me if we bring this to a conclusion. I shall address a few of the points made in the debate, although I confess that I will not be able to address all of them by any means.
Perhaps I may start by making a brief comment to my noble friend Lord Lilley, whom I served with on various occasions many years ago and for whom I have the greatest respect. He worried that this was one of those measures where the two Front Benches being in agreement probably meant that it was wrong and that it would not get proper scrutiny and proper debate. Certainly I can say that the two Front Benches are not in total agreement on this because we have the amendment that we have been debating from the noble Lord, Lord Grantchester, and I said earlier that I did not think there was much point in it. He was worried that his amendment could be misinterpreted. I think that it was and still is misinterpreted and that it is unnecessary.
I also say to my noble friend that there has been considerable debate over a mere two hours. There have been contributions from a number of noble Lords, ranging from the noble Baroness, Lady Jones, who feels that we are not going nearly far enough, the Liberal Democrat Benches, who say that we are not going far enough, and others who say that we are going too far. We have covered a large range of subjects, including whether we are failing on our carbon budgets and the suggestion that we need to do more onshore. The noble Lord, Lord Grantchester, said we need greater clarity on nuclear. Even my noble friend Lord Deben, who generally supports what we do, feels that we are failing on domestic heating and cars, and wants us to go further on those issues.
The noble Lord, Lord Fox, wants me to lie down in front of a bulldozer at Heathrow, but that is not part of my plan. However, he also mentioned the importance of storage—a subject that he and I have discussed on other occasions. I agree that that is important and that there are matters such as storage, energy efficiency, batteries, hydrogen and heat exchange where more work and more research need to be done. The Government will be doing more and he will hear about that in due course.
Many noble Lords felt that there needed to be more on the costs and in the way of impact assessments and so on, and I will address those matters in due course. Others, including my noble friend Lord Ridley and the noble Lord, Lord Ravensdale, talked about carbon capture and storage. Again, that is vital for the future and we obviously need to look at it.
I could go on, but it is important that I address two particular points. The first is on costs. Secondly, I should say a little—I cannot say more—about “how”. The question of how deals with the next two carbon budgets and the claims that we will fail on those and in so doing will—as my noble friend said—fail later, putting off and making it difficult to reach the net zero target by 2050.
Viscount Ridley
I am most grateful to my noble friend the Minister and apologise for intervening. Can he address my point about why the Committee on Climate Change has not shown in sufficient detail its workings in arriving at this figure of 1% to 2% of GDP?
Lord Henley
My Lords, I have mentioned the Treasury review, which will be available when it comes out in due course, but that question is a matter for the Committee on Climate Change, which is independent. The committee will no doubt—I hope—consider my noble friend’s request and make that information available to him.
The second big topic I want to address in the limited time for which I feel the House will tolerate my speaking is the beginning of the question of how. I have made clear that the energy White Paper will come forward later in the summer. At this point, I have to say that, if noble Lords can be a little patient, there will be more to come before the House and more to hear. There have been accusations that, although we have met the first three carbon budgets, we are not on track to meet the fourth and fifth. We are over 90% of the way to the fourth and fifth carbon budgets, even before many of the policies and proposals in the clean growth strategy have had an opportunity to bite. But we recognise that there is a need to take further action and we are delivering that.
I shall give a few examples. I am thinking about complaints from my noble friend Lord Deben about housebuilding standards and a point made by the noble Lord, Lord Fox. The future homes standard provides that new-build homes will be future-proofed with low-carbon heating and world-leading levels of energy efficiency by 2025. We have published the carbon capture and utilisation action plan. We have announced £60 million for the next contracts for difference auction. But I note the point made by the noble Baroness, Lady Brown, about the offshore wind sector deal, which she has championed. She also very kindly mentioned the fact that I had spent lunchtime—and missed my lunch—addressing that conference, but I still had time to come here and deal with this important business. I am grateful for having had the opportunity to do so. We have also increased support for the transition to zero-emission vehicles to nearly £1.5 billion.
We are doing a lot; there is more to do. The order is about legislating to end our contribution to one of the most serious environmental challenges we face: climate change. We aim to be one of the first countries and one of the first major economies—if not the first G7 country—in the world to legislate for that net zero target. I believe we are doing, and achieving, a great deal. I do not believe that the amendment in the name of the noble Lord, Lord Grantchester, takes us any further. In fact, it is an unhelpful distraction. He said that it was likely to be misinterpreted; I have to say that it was, and is. I hope he will feel able to withdraw it.
Lord Grantchester
My Lords, I am grateful for all the contributions to today’s debate. We should not make the order contentious but we should point out where the Government are falling short. The debate should not disguise that this is a momentous occasion, and I am honoured to be able to approve the order today. The Government are right to adopt Labour’s policy by amending Section 1 of the Climate Change Act 2008 to create a more ambitious target. Indeed, it may be the only way to avoid a carbon catastrophe and the horrors that will be realised if the world does not come together to prevent a 1.5-degree temperature rise by 2050.
However, I regret that we are going about this in the wrong way. Net zero emissions by 2050 is an enormous aim, and it needs more than rhetoric to be realised. We need to develop alternative energy sources on a scale never seen before. The Government must urgently commit to a green industrial revolution and a transformation of energy in the UK, harnessing the resources of the state and the private sector to invest in the infrastructure. However, for an issue that will have such enormous ramifications, the Government have not outlined the route ahead. It is only right for Parliament to be given the information to consider such changes in full, and that Parliament must be able to appreciate the necessary implications of all actions.
The Government cannot simply lay this instrument and hope for the best. Challenging times are ahead and the lives of each of us will change. We now need a commitment that the absolute priority is overcoming this existential threat to our planet. Should circumstances change and it becomes apparent that the Government must bring the target forward, we need a guarantee that they will be prepared to do so.
According to the best scientific advice at the moment, the new target of net zero emissions by 2050 is the right path for the UK to avoid the greatest challenge the planet has ever faced. Because of the urgency of the climate challenge, I understand that, in these unusual and exceptional circumstances, no consultation is being undertaken and there is very little information at this stage. However, I wish through this amendment to put the Government on notice that they must come forward with full information on how the UK will fulfil the statutory commitment. I think the House is in unison on this, and I ask it to underline the challenge to the Government by voting for the amendment.