(4 years, 7 months ago)
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Baroness Parminter
To move that this House takes note of the case for investing in, and embracing, a green economy that promotes resource efficiency and zero carbon usage.
Baroness Parminter (LD)
My Lords, climate change is the greatest threat that humanity faces. Scientists have been warning us for years that disasters of all kinds—wildfires, floods, droughts and storms—will become increasingly common as the planet heats up. Alongside this climate emergency, we face a nature emergency. Last year’s State of Nature report found that one-quarter of UK mammals and nearly half the birds assessed are now at risk of extinction. On a global scale, the latest report from the UN’s Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services concluded that nature is being eroded at rates unprecedented in human history. This is not only a tragedy for the wildlife and wild areas that humanity is destroying, but another threat to the economic prosperity, health and well-being of human societies.
If we are to respond effectively to both these emergencies, our whole economy must be re-engineered to a green economy. UK low-carbon businesses already directly employ 400,000 people, but the green economy must move beyond being a subset of the economy at large. This does not mean shrinking the economy. As the Government themselves argue in their Clean Growth Strategy, we can grow the economy while improving environmental standards and meeting our international obligations to reduce carbon emissions. But it does mean accepting that the environment places limits on sustainable economic activity.
To embrace a green economy, we need targets. I am pleased the Government’s Environment Bill commits to setting targets for improving air, water, biodiversity, resource efficiency and waste reduction. Liberal Democrats have argued for more than 10 years for the UK to adopt a net-zero greenhouse gas emissions target; we therefore welcome the Government’s belated conversion to that cause last year.
So far, however, we have seen far too little action to meet the new target. The Government’s announcement of a review of the UK’s transition to a net-zero economy and how it will be funded is welcome, but I cannot understand why this review will not publish its findings until the autumn. The House is aware that the UK is hosting this year’s UN Climate Conference in November. The key task for that conference, and for the Secretary of State for Business, Energy and Industrial Strategy as its president, will be to raise countries’ ambitions as expressed through their nationally determined contributions, or NDCs. At present, the likely outcome of the NDCs put forward at the Paris conference in 2015 would be to see global temperatures rise by more than three degrees by the end of the century. This would be catastrophic.
The UK, as host of the conference, could best persuade other parties to the Paris Agreement to raise these ambitions by publishing its own NDC—a major economy not just setting an ambitious target, but explaining in detail how it intends to achieve it. How is the need for ambitious targets as soon as possible, to lay the foundations for a successful conference, compatible with the review that will not be published until the autumn? We need to send the signal as soon as possible to encourage other countries to raise their own levels of ambition and give them the time they need to formulate their plans.
Setting targets, however, is only the first step in moving to a green economy. Achieving it will require a massive and complex effort to accelerate the deployment of zero-carbon infrastructure, vehicles and product development, commercialise new technologies and change behaviour. This will require the Government to set a comprehensive framework for action, regulating, taxing and providing financial support to create incentives and send signals to decision-makers, industry, communities and, indeed, households.
So, I ask the Minister, when will all elements of this framework be in place? There have been some welcome recent announcements from the Government: the 2035 end date for the sale of fossil fuel cars and the ending of the self-defeating ban on onshore wind. In yesterday’s Budget, the tax on plastic products not containing at least 30% recycled plastic creates a direct financial incentive to use recycled content in new plastic packaging. This is a step towards doubling our resource productivity by 2050, given that it incentivises refill business model development and gives industry the confidence to invest in UK recycling infrastructure. Indeed, Veolia has announced on the back of this that it is investing in a new £50 million facility in the Midlands to ensure that any plastic bottles and trays used to protect food can be reprocessed and used again.
Other announcements in yesterday’s Budget, however, such as retaining the freeze on fuel duty and building 4,000 miles of new roads suggest that the Government have not grasped the urgency of the task if we are to reach net zero by 2050. When will we see ambitious measures to improve the energy performance of homes and buildings? Not only would this cut emissions, it would reduce household energy bills, tackle fuel poverty and generate employment right around the country. Bluntly, the Government’s performance in this area over the past five years—ending the Green Deal and scrapping the zero-carbon homes standard—has been little short of scandalous.
We need more government action, and quickly, but we also need all government policy, including trade policy, to embrace a green economy. As we rightly ratchet up standards here, it is critical that we apply the same standards to all imports. However, recent government pronouncements suggest that they see Brexit as the opportunity for us to become a buccaneering free trade nation ruthlessly exploiting any openings in the global marketplace and being disdainfully dismissive of the need for a level playing field in standards. That begs the question: why put in the enormous work it will take to create a net zero and environmentally friendly farming economy here if we then just import carbon and contribute to environmental degradation in other countries?
Vital though these and many other steps are, net zero and better environmental protection cannot be achieved by central government alone. Many of the solutions are best tackled by cities, towns and rural communities developing waste reduction strategies and programmes for housing, transport, local energy generation and land use. Innovation often takes place most successfully through constructive partnerships on a local scale, as Liberal Democrat-run local authorities such as Sutton, South Cambridgeshire and Eastleigh have demonstrated.
The Minister will be aware that last week, 10 city council leaders and metropolitan mayors, in an open letter to the Secretary of State for Housing, Communities and Local Government, argued against the Government’s proposals to restrict local planning authorities from setting higher energy efficiency standards for dwellings. Why are the Government preventing local councils making faster progress to net zero? What steps do they intend to take to liberate the ingenuity and innovative powers that local communities have to achieve this and the accompanying place-based green jobs?
It is not only government, central and local, that must act. Businesses of all sizes need to incorporate climate impacts in their decisions and eliminate greenhouse gas emissions from their supply chains. One topic currently under debate here in the UK and in the EU is the placing of a duty of care—a due diligence obligation—on businesses with regard to commodities whose production is associated with deforestation. I refer to products such as palm oil, soya, beef, cocoa and rubber. The UK is a major importer of these products and our consumption is helping to drive deforestation abroad, with catastrophic impacts for forests, their wildlife and the communities that depend on them, as well as on carbon emissions. All these commodities can be produced sustainably, but voluntary initiatives on the part of the more progressive companies have failed so far to have sufficient impact.
We are familiar with the idea of a due diligence obligation from legislation such as the EU timber regulation, which the Government sensibly transposed into UK law. This applies the concept to illegally sourced timber. Companies are required to have in place a system that enables them to adequately scrutinise their supply chains, including their suppliers and sub- contractors, and take action to ensure that they are not sourcing illegally logged timber. I ask the Minister: will the Government use the opportunity of the Environment Bill, now making its way through the Commons, to introduce a similar obligation with respect to agricultural commodities associated with deforestation?
This is a good example of the type of action that we need to see the Government adopting to tackle both the climate and the nature emergency. In this critical year for the environment, with key international conferences taking place both for climate and for biodiversity, we need the Government to take a lead by setting out their plans for a sustainable economy, sustainable businesses and sustainable communities, reducing greenhouse gas emissions to zero, protecting landscapes and wildlife, and living in harmony with nature. I can think of no better task for the global Britain that this Government claim to want to lead.
Lord Browne of Ladyton (Lab)
My Lords, I congratulate the noble Baroness, Lady Parminter, on securing this debate and commend her on her comprehensive opening speech. Opening a debate of this nature is a significant challenge; I have discovered that even speaking in one is. I congratulate her on managing to cover a significant part of the waterfront of it in an expert way. The noble Baroness also deserves thanks for convening a very successful meeting about plastic waste last Thursday. I apologise that I was unable to attend, but today I received a post-meeting briefing, which I commend to noble Lords, about how the Environment Bill could be amended to deal with it.
In many ways we have never had it so good, but equally we have never faced such world-changing challenges. Our way of life has generated unprecedented wealth and well-being, but at an unsustainable cost to the planet. As the noble Baroness said, the ecology that supports our very existence by absorbing the carbon and other emissions that we generate is under great stress, so much so that half the species alive today are threatened. Unless stopped, global warming will make large parts of the world uninhabitable and certainly unable to produce the food to sustain their present inhabitants—and they will move. We are on the brink of disaster. We must cut our greenhouse gas emissions to zero, or to net zero, as the Government prefer, by 2050. That is what the science tells us, it is what an increasing number of our citizens demand and, thanks to our own decisions, it is the law that we passed.
For the second time in a month we are debating issues relevant to this challenge in opposition time. When will the Government make time for us to debate this, the greatest of the world-changing challenges? On 6 February we debated a Motion designed to draw attention to the UK FIRES Absolute Zero report and its recommendations. This debate takes place two days after Energy Systems Catapult published a report entitled Innovating to Net Zero, which sets out what needs to happen in the development of products and services, and
“what needs to happen during this Parliament”
to deliver the appropriate levels of investment for innovation in a green economy. These two reports come from distinctly different perspectives. Their recommendations are in many senses complementary but have different emphases. Both make clear what we already know: we are not on track to achieve the target that is the law.
As I made clear on 6 February, I have a bone to pick with the Government about whether it is unhelpfully misleading to describe our achievement of cutting emissions by 42% without going on, every time, to explain that they omit from the equation a substantial amount of carbon emissions that are clearly our responsibility. That aside, it is clear that the great majority of what we have achieved on any measure has been achieved by us stopping doing things. The major contributor to the percentage cut—whether 42% or, more truly, only 17%—is that we stopped doing things. Mainly we stopped generating electricity from coal and, almost as importantly, we stopped manufacturing and exported the responsibility for our growing consumption to the sovereign territory of others, which, of course, allows us not to count it and to celebrate our own success while criticising them.
For about 20 years we have tried to solve the remainder with new or breakthrough technologies that will both supply energy and allow industry to keep growing—that is the fundamental challenge—so that we do not have to change our lifestyles, apparently. The climate change committee’s assessment makes it clear just how essential the rapid expansion of carbon capture and storage is to the success of that approach. In almost every line it has to count in carbon capture and storage rapidly contributing, but the time has come to be honest about this technology and whether it is rational to expect it to make a significant contribution before the legal target date of 2050.
For more than two decades, CCS has been put forward as the technology both to allow continued generation of electricity from hydrocarbons and to provide the negative emissions element of the net-zero target. In about 2007, as Secretary of State for Scotland, I visited the decommissioned plant at Longannet, a coal-fired power station in Fife, in support of a project that was then bidding for the £l billion CCS cluster challenge. Longannet won, but the Government cancelled the project in 2011 and the challenge in 2016. I believe that this happened because the private sector could not price the risk and the Government were not prepared to underwrite it.
Until that problem is solved, and despite a well-funded lobby for this technology, it is, in my view, in the outer reaches of optimism to include it in any meaningful mitigation plan. The Government still think that CCS can make a meaningful contribution to the green economy. Yesterday, in the Budget, the Chancellor announced £8 million for two CCS clusters. Frankly, it is difficult to see how that helps when £1 billion for one project failed, but I am sure the Minister can explain. How will the Government overcome the obstacle of pricing the risk of CCS, which caused the failure of the £1 billion challenge? If there is no answer, we must conclude that we have come well and truly to the end of the argument that we can meet the zero-carbon target with just technology and not changing lifestyles. Even the techno-optimist report from Energy Systems Catapult makes it clear that “serious societal engagement is” essential to our ability to meet the target
“given the nature and pace of the changes required.”
Societal engagement means more than just talking about how difficult it is. It is a derogation of responsibility for us parliamentarians not to engage with what this really means. It means changing the way we live.
We are debating this at a time when we are experiencing the manifestation of a pandemic threat. If anything, this experience proves that we can make significant changes to the way we live when we need to. Without wishing to trivialise coronavirus, recently my attention was drawn to a tweet:
“Climate change needs to hire coronavirus’s publicist.”
That accurately describes the nature of the challenge we face.
On any view, a green economy that promotes resource efficiency and zero-carbon usage requires solutions to many challenges. For example, in the energy sector we need to expand non-emitting energy generation by a factor of three. In the construction sector, all newbuilds need to be to zero-energy standards. All existing forms of blast furnace steel production and of cement production are incompatible with zero emissions. The transition to electric cars is under way. At least in that regard we have a road map, but we need a similar road map for targets on a whole number of things, such as flying, cement and blast furnace steel. If the Government lead and network all other stakeholders in a process designed to find a common way forward in the development of a credible road map to the 2050 target, then the public will be with us as they will be with coronavirus. That is what political sensitivity is. I welcome the Government’s commitment, but perhaps it would have been better to have provided a road map before announcing it, rather than just identifying the destination.
Baroness Jenkin of Kennington (Con)
My Lords, my Twitter profile reads,
“Hates waste of all kinds”,
and I have always done what I can to keep my carbon footprint low. I thank the noble Baroness, Lady Parminter, for this opportunity, and will address my remarks to individual action and behaviour change, and urge the Government to do more to nudge the public in a greener direction.
People motivated by Sir David Attenborough’s message that
“the moment of crisis has come”
are keen to improve their carbon footprint, but are confused by the message and the messaging. They want simple tips on what to do. For me, it is a virtuous circle. I take the stairs rather than the lift or the escalator, saving the electricity and keeping fit. I was brought up in a cold house and I think that it is better for my health and the environment to turn down radiators, as we did in the 1970s. The Committee on Climate Change recommends that we keep our thermostats set at 19 degrees. Many people today keep their homes far warmer than that, while wandering around in a T-shirt.
Talking of which, it takes 2,700 litres of water, often from drought-ridden countries, to grow cotton for just one T-shirt. The average European buys 24 new items every year, many of them fast fashion, at least 30% of which sit unworn in people’s wardrobes. This takes into account only the clothes that we buy and does not include the appalling waste from fashion brands of clothes, shoes and bags before the products are even sold. Who can forget that fashion brand Burberry burned £90 million-worth of its own clothes, shoes and bags between 2013 and 2018 in order to “protect its brand”?
It has become popular for people to say they will not buy any new clothing for a year, but what is a year? Other than underwear, I have pledged never to buy a new item of clothing again. When I do buy, it is from charity shops and eBay, or at swishing parties—that is swapping, for the uninitiated. For those not as extreme as me, the next time you buy an item, challenge yourself to commit to wearing the garment 30 times and do not then send it to landfill. By the way, this is not a new habit for me: I even rented my wedding dress, 31 years ago.
It is not just clothes and textiles where we are wasteful. If food waste were a country, the carbon footprint associated with the production, processing and landfill emissions would be the third-largest contributor to greenhouse gasses—methane in this case—behind China and the US. An estimated one-third of all the food produced in the world goes to waste. For those who are not motivated by the environmental impact, it is worth considering that each family throws away the equivalent of £60-worth of food each month, which is around £700-worth a year. As a former board member of WRAP, I commend its Love Food Hate Waste and Spoiled Rotten campaigns for giving ideas on how to use up leftovers or the scraps left in the fridge.
Talking of WRAP, may I put in a plea for clarity and consistency around recycling? Household recycling rates in England increased significantly from 11% in 2001 to 45.2% in 2017. However, in recent years, progress has slowed and rates have stuck at around 44%. While many local authorities continue to make improvements and introduce new services, some have seen a drop in recycling rates and do not collect the full range of materials that can be recycled, or do not collect food waste separately. Householders who want to recycle more are increasingly confused about what can be recycled. I myself study packaging, confused and annoyed, moving rubbish from one bin to another—here I congratulate Iceland on taking the lead in banning black plastic trays which cannot be recycled. I take stuff from our London flat to our Essex home, because I am more confident that it will be recycled there. I even take my food waste back home to compost. We should make it as easy as possible for people to do the right thing.
On plastic, in 1950, the world’s population of 2.5 billion people produced 1.5 million tonnes of plastic. In 2016, a global population of more than 7 billion people produced over 320 million tonnes of plastic. That is set to double by 2034. Increasing numbers of people are giving up plastic for Lent, but why just Lent? We should all be using as little plastic as we can all the time. What is the point in not being given plastic bags in supermarkets when each family apparently buys 54 bags for life each year? I use my mum’s string bags from the 1960s for unexpected purchases. Twice as much water is used to manufacture a plastic water bottle as the amount of water in the bottle. Do not buy bottled water; fill up with tap water.
Like many, watching “The Game Changers” on Netflix convinced me to stop eating meat. The focus of the programme was mainly improvements in health, rather than the environment, but for me it is a double tick. Meat, especially factory-farmed, damages our planet and, I believe, our bodies. If it is too hard to give up, try cutting down; I have found it remarkably easy to make the transition. One recent study said that if the UK cut its meat consumption in half, we would save 19 million tonnes of carbon emission. The enormous consumption of water in meat production is primarily due to the watering of the plants which livestock animals feed on. Formerly, cattle and sheep basically ate grass, which cannot be eaten by man. Now, they are mostly fattened with corn or soy, often produced by cutting down rainforests. Add the water which these animals need to drink, together with the amounts of water that are needed for cleaning the fattening units, and you reach the calculation that the production of one beef burger uses as much water as 100 days’ worth of showers.
While on the topic of water, here are some simple ways we can change our habits to help the planet. Every single day, more than 3 billion litres of perfectly good drinking water is wasted in the UK. That is enough to make 15 billion cups of tea or to hydrate the entire population of Africa—I accept that getting water from here to Africa is not easy. Only run your dishwasher or washing machine when they are full; an average washing machine uses 113 litres per wash, regardless of how full it is. Make sure that clothes are actually dirty, rather than washing them every time you wear them. Turn the tap off while you brush your teeth, shower instead of having a bath, and use your washing-up water to water the garden or your pot plants. I know that after such a wet winter it seems rather ridiculous to be focusing on water waste, but we are not good at collecting it and there is bound to be a drought on the horizon. I would have liked to talk more about housing, transport and other areas where individual change is possible, but time is too tight.
There are many ways that we can change our behaviour to have a positive effect on the planet, and there are better ways to make a political point than Extinction Rebellion, which apparently left 18 million individual pieces of rubbish during its last disruption, including two tin baths in Trafalgar Square. I do not believe that bringing our city to a standstill or digging up historic bits of Cambridge are going to make any difference, but I believe in the power of each and every one of us to make changes that will help our planet and mean that we embrace resource efficiency. For everyone, and especially Conservatives—the clue is in our name—all our actions should be about conserving resources, our oceans and our planet. Let us all commit to doing something to change our behaviours. We can all do more to waste less.
The Lord Bishop of Bristol
My Lords, I am grateful to the noble Baroness for bringing this debate before the House. As has been said already, and will no doubt be said again, our climate is at a crisis point. As your Lordships are well aware, we continue to see significant losses of biodiversity, increases in global temperatures, rising sea levels and extreme weather events. In the knowledge that these circumstances will disproportionately affect the poorest, and as a nation that has historically consumed large amounts of carbon, it is our moral imperative to act now.
I find myself in the privileged position of representing both a Church and a city to which this issue matters a great deal. Only two weeks ago, Bristol welcomed Greta Thunberg to its College Green, where she addressed more than 15,000 young people. She said that
“nothing is being done to halt this crisis despite all the beautiful words and promises from our elected officials.”
It is my hope that our work here today and in the future will amount to much more than just beautiful words.
As a person of Christian faith, it is my belief that humankind has been divinely mandated to care for the physical world, its creatures and one another, especially the weakest and the least. This mandate requires us to do all we can to minimise whatever is damaging to God’s creation. This is the theology that currently informs the decisions and actions of the Church of England. In February, the General Synod made a landmark decision: it voted to commit the Church to achieving net zero by 2030—a target that, while extremely challenging, we are confident that we must try to achieve.
Within the diocese of Bristol, we are already seeing an increasing number of churches embracing and investing in net-zero initiatives. They come in many forms, including the installation of solar panels on the roofs of five of our 200 churches—many more will follow—the utilisation of church lands to grow vegetables and create wild gardens, and the construction of two churchyard composting toilets. These are small steps, but they show a strong desire to care for God’s creation—a desire that is crucial if we are to raise the sights of others towards a net-zero economy. Even if the change starts small, as Greta Thunberg said:
“We must start today start today. We have no more excuses.”
In addition to work at the level of parish life, the Church of England has committed corporately and nationally to being at the forefront of responsible investment practice, given that one of the key drivers in supporting the move towards a global green economy will be how the investment community responds. Institutionally, the Church’s three national investing bodies manage a fund totalling £14 billion, comprising the funds of our historic endowment through the Church Commissioners, the Church of England Pensions Board and the funds of dioceses and churches through the CBF Church of England Funds. Your Lordships will know that these funds alone will shift the global economy but a little. I am acutely aware that it is how many trillions of pounds are leveraged to support the transition to a low-carbon economy that truly matters.
While in many ways the Church has not always been ahead of its time in terms of green investment, I am pleased to say that it is now considered world-leading. Through its investing bodies, the Church has developed a set of interventions and strategies. The first intervention was to create a tool for the wider market to understand this transition. The Church, together with the Environment Agency Pension Fund and the LSE, created the Transition Pathway Initiative. Today, this initiative is supported by 68 funds with more than £18 trillion in assets under management. It is a world-leading tool based at the London School of Economics Grantham Research Institute. The TPI tool is free, online and accessible to the public; it is an example of significant market intervention intended to support the understanding of both the investor and the wider market.
The national investing bodies made a further intervention when they announced a commitment to net zero by 2050. The Church of England Pensions Board has become a core part of a trans-European effort to provide a way for pension funds to deliver on their net-zero commitments. The Paris Aligned Investment Initiative, part of the European Institutional Investors Group on Climate Change, has the potential to be a significant intervention with real-world impact on how pension funds align their investments in the wider economy. Next week, the TPI will release a state of transition report, showing progress across 380 of the world’s largest companies. My understanding is that, while some companies are beginning to transition successfully to investment in green assets, there is a considerable gap and more needs to be done.
I want to highlight one last intervention, which was announced on 30 January when the Church of England Pensions Board opened the London Stock Exchange. The Church has invested £600 million in a new stock index that embeds the insights of the Transition Pathway Initiative in allocating investments. The FTSE-TPI Climate Transition Index has been worked on for 18 months by the Pensions Board with FTSE, the London School of Economics and TPI. It is the first index to embed forward-looking information about whether a company is setting and delivering real targets aligned to the Paris Agreement.
The comments made yesterday on the green economy by the Chancellor of the Exchequer in the other place are most welcome, but I want to hear also from the Minister. First, what further support are the Government giving to businesses to help them to transition to a green economy? Secondly, what encouragement are they giving to institutional investors to align their funds with the Paris Agreement?
One of the things we as a Church are discovering is that, as we commit to this work, our life has been enriched in unexpected ways. The diocese of Bristol, in particular, has witnessed a flourishing of relationships within and between communities committed to the green agenda. Caring for our earth teaches us about not only valuing the natural world but what it means to value and care for each other. As one parishioner stated, “As we gain momentum in our journey towards net zero, our connectedness only grows.” Embracing a green economy that promotes resource efficiency and zero-carbon usage is in one part obvious and, in another part, unexpectedly rich in its return on financial and human investment.
Baroness Sheehan (LD)
My Lords, I start by thanking my noble friend Lady Parminter for securing this important and timely debate. It is clear that the urgency of embracing a green economy that promotes zero-carbon usage is borne out by the increasing frequency and ferocity of recent global climate events, from out-of-control fires in Australia to sustained flooding in parts of the UK.
A report in National Geographic cites a misbehaving ocean circulation pattern as a trigger for the
“weird confluence of events”
that has caused the city-sized plague of locusts in east Africa. Worryingly, it says that the same weather disruption that is behind the locust plague has also been linked to the devastating bushfires in eastern Australia. It is evident that we humans are truly interconnected. All of us will suffer from the devastation of extreme climate events, but none more so than the poorest people in the poorest parts of the world. The NASA website paints a vivid picture of the flagging vital signs of the planet’s health; it points relentlessly to the fact that we are living life on the edge.
The climate change deniers have, for the most part, been silenced. At least, their unsubstantiated messages are no longer given equal credence by the BBC and other media. This is to be welcomed, because politicians can now move apace. Here in the UK, the Government declared a climate and environment emergency last year. In the dying days of her Administration, Theresa May added legislation committing the UK to net-zero carbon emissions by 2050.
However, what have we done since declaring a climate emergency? Have we acted with commensurate urgency? We have not. Let me quote parts of the letter sent by Claire O’Neill, the former Energy Minister who had been appointed to lead the COP climate talks in Glasgow later this year but was relieved of her duties last month. Here are some extracts from her letter to the Prime Minister:
“CO2 levels are over 415 ppm and climbing. The last time we saw numbers like this was three million years ago when sea levels were 20 metres higher than now and beech trees grew in Antarctica … emissions are 4 per cent higher than in 2015 when the Paris agreement was signed … The world’s attempts to get to grips with this epic Tragedy of the Commons are failing.”
Her letter is a sad indictment of this Government, which has much work to do to get COP26 back on track, whatever the challenges of the coronavirus.
If current developed reserves of fossil fuels are realised, we will easily pass the aspirant 1.5 degrees centigrade rise in temperature agreed in Paris. In fact, we will hit the 2 degrees rise in global temperatures that the IPCC has said will be catastrophic for our planet. To put things into perspective, currently global temperatures have risen by 1 degree centigrade. According to NASA, the last five years are, collectively, the hottest on record.
We need to act with urgency, and grasp the opportunity of our leadership and agenda-setting ability to re-energise the COP26 talks. We owe this to our citizens who, on almost a daily basis, tell us that they want urgent action to safeguard our planet’s future and their children’s futures. There is a palpable sense of urgency from the very youngest of our society to canny money men who can see which way the wind is blowing.
The inescapable fact is that virtually every sector of the global economy, from manufacturing to agriculture to transportation to power production, contributes greenhouse gases to the atmosphere. All of them must evolve away from fossil fuels if we are to avoid the worst effects of climate change.
The good news is that not only do we know what we have to do; we have the means to do it. The science is clear: we must stop burning fossil fuels and tackle emissions of methane and nitrous oxides from land use. In addition, we must use proven nature-based solutions to remove greenhouse gases from the atmosphere. For example, stopping methane emissions will make a measurable difference. Carbon capture and storage is not proven to work at scale; let us stick with what nature has shown us it can do.
We have alternative, increasingly cheap sources of renewable energy ready at hand to deploy. The challenge is to move Governments away from the comfort zone of reliance on fossil fuel extraction to feed our industries. Governments, including our own, must take heed of changing attitudes. For example, in 2017, the World Bank announced that it will phase out finance for oil and gas extraction. BlackRock, the world’s biggest asset manager, with more than $7 trillion under management, announced in January its intention to exit investments that
“present a high sustainability-related risk”.
Mark Carney, when he leaves the Bank of England in just a few days’ time, will take up a new role as UN Special Envoy for Climate Action and Finance. He has already penned articles warning that divesting in fossil fuels by large institutions is happening too slowly, and that up to $20 trillion of “stranded assets” could be wiped out by climate change.
There is growing acceptance that an economic transition is already under way; we ignore it at our peril. It is a fact that companies are under growing pressure from investors to disclose climate-related risks; 75% of investors are using disclosures to the Task Force on Climate-related Financial Disclosures to guide their investment decisions. To quote Simon Nixon’s column in the Times on 13 February,
“money is pouring into so-called ESG funds, which target Environmental, Sustainable and Governance criteria”,
and investment behaviour last year
“fuelled talk of an ESG bubble”.
Our Government must act on their commitment to the Paris Agreement and to achieving net zero by 2050. It is excellent news that they have reopened the Contracts for Difference subsidy scheme for onshore wind and solar energy. However, it would really speak to their commitment to net zero if they were to lay out a plan for how they will scale back oil and gas production in the North Sea, as well as their plans to retrain and reskill workers who currently depend on those industries for their livelihoods.
Therefore, I ask the Minister, have the Government given thought to how to transition away from fossil fuel dependency so that the least pain is inflicted on the regions of the north-east? Does he also agree that continuing generous tax allowances to oil and gas companies is unjustifiable? Can it be right that petroleum revenue tax is now charged at 0%?
Lord Giddens (Lab)
My Lords, I join the queue of those congratulating the noble Baroness, Lady Parminter, on introducing this debate so ably. Creating a green economy is an absolute exigency, and within a limited timescale too. The overwhelming reason is the trans- formation of global weather patterns, as other noble Lords have said. Put bluntly, human-induced climate change is an existential threat.
People like to talk about saving the planet—several noble Lords have done so today—and I understand why. However, it is not a question of saving the planet; the planet will survive whatever we might do. The question is instead one of saving our civilisation of 8 billion people, which is currently heading up towards 10 billion. I remind noble Lords that, until 1850, there were never more than 1 billion people in the whole of human history. We live in a world which you could say has moved off the edge of history. We face problems that no other civilisation has had to deal with. Fortunately, we also have some unusual and different solutions.
For this reason, I suggest that now is a time at which we should discard dogmas on all sides. There is a long-standing and sometimes bitter debate between some in the green movement and those who call themselves—forgive me for being academic—eco-modernists. One thinks for example of the Renaissance Foundation in the US and the controversies swirling around it. If the Minister has time in his winding up, it would be interesting to hear his views on the impact of the Renaissance Foundation, because it is in some ways very interesting. The eco-modernists place a strong emphasis on technology and innovation in nuclear power, hydro-electricity and other areas. These ideological divisions must simply be cast aside at this point. It is good that the Government have committed to the construction of new nuclear capacity. The Prime Minister has expressed his passionate support for nuclear energy and added:
“It is time for a nuclear renaissance”.
Yet is it not the progress on Hinkley Point and other projects painfully slow? What is the state of play with the promised investment into small modular reactors?
We are largely or wholly dependent on overseas companies to do the build. Is that not because we simply have not invested nearly enough in skills training in the past? Should we not urgently and actively redress that deficiency now, through direct government involvement? Far more forward planning is needed in a whole range of other domains too. Academic research and expertise are crucial to most cutting-edge advances in technology. What plans do the Government have to foster research into areas such as energy efficiency, hydrogen for heating, transportation and the circular economy and geoengineering? Geoengineering is especially controversial and fraught with problems, but the fate of, again, not the earth but human civilisation may come to depend on it. What is the Government’s position on this?
The huge oil and gas corporations have traditionally been regarded by ecologists as the villains of the piece, and such a view is by no means wrong. The same is true of international capital more broadly. Yet the scientific evidence about the imminence of possible climate catastrophe is now so strong that these views are changing quite dramatically. There are huge changes going on in the strategic thinking of many such companies, as well as in corporate finance. On 19 January this year the CEO of BlackRock, a company with assets of more than £5 trillion, declared climate change to be a structural “crisis” and backed this with a series of investment pledges. What kind of dialogue are the Government carrying out with corporate capital in such respects? Can the Minister comment on the importance of impact investment? This is a sort of novel trajectory in investment more generally, which comprises in some part a reorientation towards green objectives.
This is global Britain, so are the Government looking around the world for avant-garde strategies? The EU recently set out its version of that now fabled enterprise, a green new deal. It was immediately pounced on by Greta Thunberg who, with some justification, called it “empty words”, since its targets refer to 2050. Politicians quite like this date because it is comfortably far off. Could Finland be a useful model to learn from? It has quite an avant-garde programme. The Government there have pledged to end their dependence on fossil fuels and reach carbon neutrality by 2035. They have a pretty impressive plan to do this, which enjoys wide public support.
California has recently overtaken the UK in terms of GDP to become the fifth largest economy in the world. It is also a place of dramatic innovation. Some 14 years ago, the then governor set out an ambitious programme to generate a third of all its energy from solar, wind and other forms of renewable energy by 2020. What was the result? It has already been accomplished—two years ago. Are we tracking such examples and learning from them? If not, as other noble Lords have hinted, the phrase “global Britain” will just be another empty catchphrase.
Lord Howell of Guildford (Con)
My Lords, I declare my energy interests in the register as chairman of the Windsor Energy Group and as adviser to Japanese climate and energy companies, and as a former Secretary of State for Energy.
It is always a great pleasure to follow the noble Lord, Lord Giddens, in his wise words. I am still trying to work out how his third way will enable us to escape from the paralysing ideologies of the present and past age. I expect I have a lot more thinking to do on that subject.
I have two considerations to add to this complex and major debate. They may sound rather technical, but I really believe that their omission is hampering our policy over the climate and our net-zero goals and the more serious contribution that we ought to be making to the global climate battle.
First, we hear amazingly little about the handling and potential of carbon dioxide in official plans and statements. What I think is missing is the understanding that CO2 is not waste and a pollutant; it is in fact a resource. Far from being a substance that has to be stored in holes in the sea or suppressed at any cost, it is resource of enormous value. I have even heard it described by very well-primed authorities—particularly from the University of Swansea and a number of American universities—as “the new oil”. The reality is that CO2 can replace the entire basis of the petrochemical industry. It can be converted into a vast range of inorganic materials, and can act as a feedstock for methanol and, if desired, ethanol—they of course are the basis of a vast part of the chemical and materials industries—and a variety of other catalytic processes. We have just been reminded that Asia is racing ahead in many ways in technology and indeed in living standards: Korean scientists have now found ways of converting CO2 into hydrogen.
A major reset in policy thinking is demanded here, and I would like to hear from the Minister whether this is beginning. Carbon capture, and bringing down the cost of capture, from all industrial processes—the heat loss from industrial processes is enormous—is something we can all agree on; that is fine. There was little notice, but yesterday’s Budget funding of new carbon capture clusters is extremely welcome and a revival of an important area where we are falling miles behind our competitors. But storage is much more controversial, and it is I think probably the wrong and negative emphasis. If we want to stop carbon adding to the thermal blanket round the earth, it can be put profitably to a thousand uses, all of which we should be aiming at. That is the first point I want to make that seems to have been missing from the debate.
Secondly, when it comes to hydrogen itself, there still seems to be deep confusion. Hydrogen is not so much an energy source as a vector in energy transformation. It is enormously plentiful and can be added into our entire gas grid at up to 40% dilution without any change either to the piping of our national gas grid, which is very extensive, or to actual gas boilers or cookers, with huge savings in conventional hydrocarbon burning. It can also be used directly as a longer-range transport fuel, and is probably superior to dragging around heavy batteries in electric vehicles. I am very doubtful whether the battery technology required to make the EV revolution happen is not going to come to a dead end. For one thing, hydrogen can be loaded like petrol and just as fast. It is no wonder that some police forces—South Wales Police among them—have decided to go over to hydrogen when they have to respond in seconds to emergencies instead of using battery-powered vehicles for which they might have to wait half an hour to be filled up and ready to go on the job. Besides which, the lithium, cobalt, copper and rare earths required in batteries all come from monopoly sources, such as China, Argentina, Bolivia, Chile, Congo, Indonesia and Serbia—potentially a new sort of OPEC that could be a good deal more threatening and less friendly than the present one that we have had to work with for the past 40 years.
It is true that hydrogen needs electrolysis and that needs lots of electricity, but that is the one thing of which we have a vast, unused surplus in this country, surrounded as we are by massive and excellent investment in offshore wind farms. We now often have to pay those wind farms to stop generating for long periods to prevent major destabilisation of the whole grid, which has already occurred once or twice. The mismatch in timing between our now enormous wind electricity output and normal daily power demands provides the perfect extra electricity source for massive hydrogen electrolysis.
I read the recent report mentioned by the noble Lord, Lord Browne, from the so-called Energy Systems Catapult—a government-sponsored organisation, I understand. It was spouting nonsense about the need to double or treble electric power output, with 20-plus new nuclear stations by 2050—actually, the Times said 32 new stations, with classic exaggeration—along with drastic reductions in the eating of meat and dairy and other scary and difficult disruptions. Indeed, the report actually talked of the elimination of aviation and livestock products to get to the 2050 goal, all in my view adding up to the worst kind of fright, disincentive and discouragement to sensible and acceptable climate policies that will actually get us to the goals we want.
Of course, there is no silver bullet or single pathway to net zero or to really checking the growth of carbon particles in the atmosphere, but if the investment priorities go to carbon resource usage, and if plentiful hydrogen and major advances in efficient energy use are deployed—if those are the investment priorities—that is far the most promising way to actually get to net zero.
In the end, one has to ask what impact all our national efforts are actually having on worldwide climate change. Britain may be leading by example; I think it probably is, but who exactly is following? China is building coal-fired stations as never before—I am told there are 200 in central Asia and Africa along the belt and road routes—so there is not much example-following there. Not to focus on the real priorities, just to remain inward-looking, ignoring the really big emitters and the best investment priorities to prevent greenhouse gas accumulation—that really would betray the younger generation. Greta Thunberg is right about that, but if we continue to be led by the experts on present paths, then all I can say is that the real betrayers will not be the ones she thinks.
Baroness Suttie (LD)
My Lords, it is always a pleasure to follow the noble Lord, Lord Howell, with his wealth of experience. I also thank my noble friend Lady Parminter for securing this extremely important and timely debate and for her extremely eloquent speech in opening it this afternoon. As the many excellent contributions have illustrated, the green economy is a very wide-ranging subject, but I will address my remarks to the issue of plastic, in particular the bottled water industry and its impact on our environment in the UK and internationally.
As a regular sea swimmer since moving to Broadstairs on the Kent coast six years ago, I regularly see at first hand the impact of plastic waste in our seas. The Broadstairs Town Team organises beach cleans. During one clean last year, we filled more than 15 bags of rubbish, predominantly plastic, including plastic fishing ropes and netting. The big pieces of plastic rubbish and waste are worrying enough, but if you look more closely at the seaweed on our beaches you will see tiny sections of disintegrating plastics and these have now entered the marine ecosystem. According to a study by Oxford University, it takes an average of 450 years for plastic bottles to decompose.
As other noble Lords have said, David Attenborough and TV programmes such as “Blue Planet” have done much to raise public awareness, and there are good local community as well as government initiatives. Indeed, the Government’s initiatives on single-use plastics should be welcomed, as should yesterday’s Budget announcements about the introduction of a plastic tax and the extended producer responsibility scheme, but, as ever, the devil will be in the detail once these initiatives are introduced.
Globally, approximately 42%—146 million tonnes—of plastic produced is used as packaging. The UK alone produces 2.26 million tonnes of plastic packaging every year. In 2017, only 46% of this packaging was recycled. It is a horrifying statistic that only 10% of the plastics ever produced in the world have been recycled. The current Environment Bill is a genuine opportunity to change how we think about plastic and its disposal. All sectors of the economy should be encouraged to think differently and to use recyclable materials.
Like many people, though perhaps not as successfully as the noble Baroness, Lady Jenkin, I have tried to change my own behaviour and I am doing my very best no longer to buy water in plastic bottles. A survey by OnePoll in 2016, however, found that the average Londoner uses 175 single-use plastic bottles every year.
Changing habits requires a cultural shift. I remember clearly that when the ban on smoking in public places was introduced, many people were highly sceptical and thought it would be unenforceable. Today, the very idea of smoking in a cinema or on an aeroplane is virtually unimaginable. A similar cultural shift is now required on plastic packaging—a shift towards recycling and reusing whenever possible. This will require political leadership as well as the development of strong public policy.
The provision of clean drinking water fountains, particularly in railway stations and airports, would make a rapid difference and much more could be done to encourage their provision. At the moment, retail outlets often encourage the purchase of plastic bottles at their cash desks, but I feel strongly that they should be encouraged to provide accessible public drinking fountains instead, particularly in our railway stations and airports. What further incentives can the Government give to encourage the availability of clean water fountains throughout our towns and cities, as well as in our airports and stations?
In the UK and countries within the EU we at least have a choice: we can fill up our reusable water bottles with clean water from our taps. In many developing or fragile states, this is not a choice that ordinary people have; in many countries, bottled water is their only option. This is particularly true in the Middle East and north Africa, the world’s most water-scarce region. It has been projected that the global market for bottled water will reach over $307 billion by 2025.
For the last 18 months, I have been working on a project in the Iraqi Parliament in Baghdad. We are currently working with the health and environment committee there on an inquiry into the provision of clean drinking water. Iraq faces great challenges to the provision of clean drinking water, problems compounded by a combination of climate change, conflict, population growth and limited environmental awareness. Nearly half of Iraqi households still lack adequate access to safe and stable water supply, and in some governorates this figure is as high as 60%. Twenty-five per cent of all deaths of children relate to preventable water-related diseases. In the summer of 2018, more than 100,000 people fell sick in Basra from polluted water. Throughout Iraq, many cities dump waste, including millions of plastic water bottles, which then leak into the Euphrates and Tigris rivers, producing greater pollution further downstream in these great rivers before they reach the sea. Similar stories can be told across all continents, with so many rivers being desperately polluted by the time they reach the sea.
As we know, environmental crises do not recognise international boundaries and waste produced by fragile or developing states can become our problem too. It is extremely welcome that there is now cross-party recognition of and consensus on the scale of the problems caused by single-use plastics for our seas and our global environment.
It is welcome, too, that we are beginning to question the very concept of exporting our plastic waste to other countries—in other words, making our problem someone else’s. It is surely preferable to concentrate on reducing our own waste plastics in the first place.
This is a complicated global issue that requires a global response as well as greater support and encouragement for effective local initiatives. It requires much greater public investment in research and development for sustainable alternatives. Just as we have done on development assistance, this is a sector where this country could and should take a global lead.
Lord Gadhia (Non-Afl)
My Lords, in speaking in today’s debate on the green economy I draw attention to my register of interests as a board member and investor in Calisen plc, which owns and manages critical energy infrastructure, including smart meters. This experience has provided me with not only direct insight into the Government-mandated smart meter rollout programme, but perspectives on how the right policy framework, together with appropriate regulatory certainty, can galvanise substantial infrastructure investment from the private sector for transition to a net-zero carbon economy.
Before turning to the wider theme of green finance, I will recap the public policy benefits of the smart meter rollout, which have sometimes been lost in the technical challenges of implementation. The new generation of smart home devices sits in the middle of the triangle of decarbonisation, digitalisation and decentralisation, which is transforming the energy landscape. As well as the valuable consumer and supplier benefits of real-time consumption data, removing inefficiency of manual readings and increased billing accuracy, the potential benefits go much wider and deeper.
These encompass ease of switching, now running at almost one in five customers changing supplier each year, and incentivising households to change their energy consumption patterns away from peak hours by offering variable time-of-use tariffs. Beyond demand-side management and helping to reduce peak supply capacity, smart meters can also support localised generation and storage through the likes of home solar installations and electric vehicle batteries. In a nutshell, this £13 billion investment programme to replace 51 million gas and electricity meters by 2024 will be a key enabler of a smarter, greener and more dynamic energy ecosystem and an area where we will lead the world.
But this is just one component of a much wider transformation required for the economy to achieve net zero. To attract the estimated $3.5 trillion of investment required every year for several decades and to incentivise the optimum allocation of capital, three essential features are required to inform and guide decision-making: first, a more consistent approach to carbon taxes so that we do not misallocate resources; secondly, investment metrics and reporting that accurately capture carbon-adjusted returns; and thirdly, a comprehensive risk management framework that can help navigate the inevitable transitional challenges of achieving net zero. I will take each in turn.
We saw in yesterday’s Budget both an acknowledgement of how carbon taxes are an important signal for allocating resources and how difficult it is for Governments to introduce consistency in the face of special interest groups. For example, independent research shows that cars face an effective carbon tax of £109 per tonne, whereas home devices pay £41 for using electricity and gas-fired heating comes with an effective subsidy of £14 per tonne of carbon. The Chancellor has recognised these anomalies with the proposal to equalise the climate change levy paid by companies between electricity and gas.
However, widespread exemptions have been maintained on the subsidy for red diesel, especially for agriculture and fishing. Unless we take a braver approach to reflecting the true price of carbon and converging carbon taxes, we will miss the opportunity to incentivise behavioural change and continue to misallocate resources. I therefore hope that the Treasury’s net-zero review, scheduled for later this year in advance of COP 26, will address this fundamental issue of consistency.
Secondly, the whole field of climate metrics has gained critical mass through the work of the Task Force on Climate-related Financial Disclosures, known as TCFD, with its widespread adoption by major banks, insurance companies, pension funds, asset managers, credit rating agencies and accounting firms. The provision of consistent and comparable market standards for disclosure should enable providers and users of capital to capture their current carbon footprints and set out their future trajectory and strategy in a way that can be continuously measured and monitored. For example, the ability to attach a degree of warming to an individual security or index can not only encapsulate in very stark terms the scale of the challenge, but facilitate measurement of progress. Currently, the FTSE 100 is heading towards 3.9 degrees of warming, according to the analytics firm Carbon Delta, and similar analysis carried out by Aviva showed its equities portfolio on track for a 3.4 degree rise. The next logical step will be to make TCFD mandatory rather than voluntary.
Thirdly, I turn to risk management—not just specific risks for individual entities, but system-wide risks from adopting different paths to net zero, both on timescales and pace of change and incorporating any feedback loops. This is an area where the Bank of England is leading the way and will become the first regulator to stress test its major banks and insurers against different climate pathways, ranging from business as usual to meeting net zero by 2050 and everything in between. One of the risks that has been highlighted is a belated policy response, leading to a Minsky moment with a collapse in the value of carbon-positive assets, which become stranded, leading to a disorderly transition. For the UK, as a pioneer in climate stress tests, a positive outcome for COP 26 would be for every central bank to adopt a similar approach.
In conclusion, in recent weeks we have seen how important it is to mobilise the entire country in an emergency response, in the present case to a major pandemic unfolding before our eyes. Notwithstanding the concerns expressed today by Sir David Attenborough, I hope we can also deploy a similarly co-ordinated and timely response to the climate emergency in the coming years, showing the same respect towards expert scientific advice and having the confidence to take bold measures when required to protect the public interest. To extend the analogy further, we are already beyond containment and delay on climate response; we need to move directly to mitigation and adaption. Green finance has a pivotal role to play in what Mark Carney has termed the three Rs: reporting, risk management and return. In fact, we are fortunate to have the outgoing Governor of the Bank of England take up the role of financial adviser to the Prime Minister in the lead-up to COP 26. We should take full advantage of our status as the world’s leading international financial centre to ensure that green finance plays the fullest possible role in delivering a green economy.
Baroness Jones of Moulsecoomb (GP)
I too thank the noble Baroness, Lady Parminter, for tabling this debate and for the contributions that it sparked across the House. I particularly like the way it has focused on zero-carbon usage, because that is clearly the way that we have to go if we are to be a truly green economy with truly green lifestyles. Consumerism has promoted infinite growth and environmental destruction. Quite honestly, for humanity to survive in any way, in any degree of comfort, we have to recognise the realities of living on a finite planet. That means changing the technologies we use, the materials we employ and the sources of power, but it also means changing what we do and, in many cases, whether we do anything at all.
It is now settled law that we must achieve net-zero carbon emissions within 30 years, so the argument that this is a climate emergency has finally been won, but the path to net zero, the speed with which we get there and the questions of how costs and benefits are distributed across society are all yet to be settled. The noble Baroness, Lady Jenkin, listed a lot of individual actions that can and must be taken, but that actually lets the Government off the hook. The Government have a role in this and I am afraid they are not stepping up and performing that role.
I would like to correct the slur against the Extinction Rebellion campaigners. A lot of the materials removed from Trafalgar Square were things that they would have liked to have taken away with them: tents, possessions, sleeping bags, clothes and food. If we are going to blame anyone, we need to blame the person in charge of the police who enforced Section 14 so quickly and drove the protesters away before they could pack their things together.
It is hard, the day after the Chancellor’s Budget, to avoid this debate becoming a proxy Budget debate. So far, this has been a very polite debate and I really do not want to bring down the tone, but at the same time I am absolutely furious at the Budget that we have just had: it is gross negligence on the part of this Government. It actually makes the climate emergency worse instead of better. It is all about profits for the few being more important than the lives of many. Quite honestly, the Budget has not delivered anything near the scale and speed of ambition necessary to invest in a green economy that will reach net zero by 2050.
The journey to net zero is easier the sooner that we get started. We could have embraced a massive green stimulus package following the 2008 financial crisis, instead of bailing out the banks. We could have been a much more prosperous nation today with the benefits of economic recovery much better distributed across society, rather than concentrating on the investments of the wealthy, and the costs of our future climate action would be much lower.
I am sure that the Benches opposite will know about Margaret Thatcher’s speech to the UN General Assembly in 1989. What a pity that they did not pick up those issues then and act on the sort of things that she said. Not putting the policy in place is policy denial, which is almost as bad as climate denial. Failing to adopt the necessary policies is no better than saying that there is no problem in the first place. That is the hole that we and the rest of the world find ourselves in today: a failure of ambition and a failure to accept the levels of investment that will be necessary to tackle the climate emergency.
I hope that the Government’s change in approach to their fiscal rules, especially around capital expenditure, can open the door to the scale of action that we need. Austerity was a stupid policy and it failed entirely. We now have to usher in a new economic era where fiscal and monetary policy come together to transform our economy and society to one where we can all live well within the constraints of our one planet Earth. We need huge government investment alongside firm policy commitments. The Government’s record of abandoning environmental policies such as zero-carbon homes has created a massive policy risk for businesses that are leading from the front. What happens is that the people in advance of climate action who lead on this suffer, and it is the laggards who are rewarded for their dithering. Because so much uncertainty is created, we cannot trust the Government to promise something and then deliver on it, as with zero-carbon homes. For those reasons, the Government should reduce the policy risk as much as possible by entrenching their policies and strategies in law so that they cannot simply be chopped and changed at the whim of Ministers.
At the moment the Government are investing another £27 billion in a new set of roads. They have been making motoring progressively cheaper by continuing to freeze the fuel duty escalator while raising fares above inflation for trains and buses. Surely they can see that this discourages people from using public transport, which is cleaner and could, of course, be more effective if there were fewer cars on the road.
The issue of fairness drives my politics. A green economy can work well for everyone. Extreme and growing wealth and income inequality is not conducive to good environmental outcomes, and it perpetuates the belief that we cannot afford the necessary changes. The rich can buy themselves out of many consequences of the climate and ecological emergencies, so the questions of who funds and how we fund green investment are crucial.
Too many environmental policies are funded in regressive ways that disproportionately hurt those less well off while being barely noticed by the rich. One example out of many is the funding of energy efficiency measures using a levy on energy bills, instead of funding the policies through general taxation. These types of funding arrangements have little purpose other than allowing the Government to finance policies off the books. The Government need to assess all these off balance sheet funding arrangements and bring them into general taxation. That is the fair way of paying for things and it is how we will bring everyone on board for the environmental transition.
I am very upset about the Budget. It is a huge missed opportunity. The Government are not taking us towards any sort of solution to the problems we face in Britain. Your Lordships’ House has a crucial role in ensuring that policies, funding and legislation are in place. We must continually challenge the Government to go harder and faster. During the passage of the Fisheries Bill we have even had to discuss what sustainability means. The Government choose to use it to talk about economic and social sustainability, which it is, but if you do not have environmental sustainability, you do not have sustainability anywhere else. I beg the Government to understand the scale of the problem we are facing. It is bigger than Covid-19 and having a maniac in the White House. It is absolutely crucial that the Government understand the size of the problem.
Lord Marland (Con)
My Lords, as a former Minister for Energy and Climate Change in the coalition Government, I have a degree of nostalgia for these debates.
I see that the noble Lord, Lord Giddens—who has heard me many times and who I have had to listen to many times—is now leaving the Chamber. He has had to listen to me so many times that he knows what I am going to say. He can leave, because I know that he needs to go to the loo, or something like that.
The only thing that has changed is that the noble Baroness, Lady Jenkins—someone else who is not in her place—has replaced her admirable father-in-law, and talked so openly about the subject. Having heard her brilliant speech, I wonder what she is doing. The noble Baroness, Lady Parminter, who entertained us so well, and whom we thank for this debate, was very much part of the debate we had in those wonderful coalition years. I am glad to see that the noble Lord, Lord Grantchester, is winding up for the Opposition; he was, along with the noble Baroness, Lady Smith, my then opposite number. We were all happily enjoined in this one endeavour. This one endeavour is, of course, cross-party. I believe that party politics should be cast aside here, except for when I decide to criticise my own Government, which I will do in a few minutes.
I worked in happy coalition with Chris Huhne, who deserves a great deal of credit. He alone kept COP going when it was falling apart in South America. We developed quite a few wonderful things, including the Green Investment Bank; we put in enhanced subsidies on a number of things, and disappointingly we had to stop them for solar panels, largely because—I do not know whether many of you have been outside recently—the sun does not shine as much as it could do in this country, and there were more efficient forms of energy.
I can respond to the noble Lord, Lord Browne, because I was the Minister responsible for CCS. I can help the Minister by saying this. The reason it collapsed—despite huge efforts and despite the Government, with no money, committing £1 billion in investment to it—was that Iberdrola, one of the three partners involved, was caught up in the financial crisis in Spain and was unable to fulfil its commitments, so the talks collapsed. But I do believe that it was incredibly important, and I spent a huge amount of time trying to do it.
Since that point in 2012, when I was tasked with another ministerial job, I have to say that although the talk has continued, there has been little action, and we now find ourselves globally in a worse place than perhaps we were then. That is despite the fact that, domestically, we are in a far stronger position and we are moving in the right direction. It is to the credit of everyone in the room that we are.
Perhaps I may talk about the global need and my frustrations about it. There is demand worth £328 billion for sustainable investments between now and 2030, with $13 billion in the Caribbean alone, which I shall come on to later. We have set up agencies around the world. The biggest of them, the Green Climate Fund, has £2 billion of funds invested in it. On average, it takes two years to get the fund to make a commitment to an investment, and it does not really look at investments at under $100 million. The Global Environment Facility supports national policy priority projects, but the unreliability of some of the Governments involved has prevented it really welling into the need. The clean tech fund has $5.4 billion but has hardly committed that money to any great extent. We find ourselves hearing lots of announcements for huge amounts of money but with very little being done.
One of the most needful things is that of supporting small and medium-sized companies with no access to finance. In the Caribbean, for example, there is no correspondent banking; if you are in the Maldives, interest rates are at 18%, as they are in Sri Lanka. The businesses themselves cannot green their organisations. There are manifold reasons for this gap, and I shall quote from a report by the Commonwealth Enterprise and Investment Council, in which I declare an interest as chairman. They include, “shallow domestic capital markets and low private investment coupled with high perceived and/or real risk are the main impediments to private financing of climate change mitigation and adaptation for projects that involve small and medium-sized enterprises.”
Not to be deterred, and wanting to find real solutions, my organisation persuaded the Commonwealth Heads of Government to announce that they would commit to a fund for the small island states. Some 52 heads of state signed up to it. They empowered my organisation and the Prince of Wales’s International Sustainability Unit, led by Justin Mundy, who has provided remarkable support, to deliver a fund that would support the small island states. This support for 52 countries was a positive step by the pan-Commonwealth for the Commonwealth. We set out to prove the need for support for the small island states. Exhaustive research was carried out, and we had endless calls with government representatives in all of the 52 states. However, I point the finger at our own Government, and very strongly at the civil servants in DfID, because they put a stop to it, despite the Prime Minister insisting that it should be a project. That is a woeful thing and an indictment of that department’s global outlook.
Not to be deterred, I have gone to the commercial markets to set up this fund. We have proved it again, using the largest and most important advisory firm in Washington. We have chosen to take the Caribbean as a test case for delivering the fund. We have produced a terms sheet, we are in the process of selecting a manager, and we have seed funding to start the fund. It is our hope that we will start the Commonwealth Caribbean clean investment fund in July of this year.
My point for the Government is that the time has come for them to start taking these investments more seriously. It is the topic of the moment. There is a huge groundswell of support to find commitment. The Government are the Chair-in-Office of the Commonwealth of Nations, so they can show real leadership here, but time is running out because in July that will come to an end. For many years, the Prince of Wales has been a lone voice on this particular subject. He has led from the front for this fund, and he deserves the support of the Government in creating a pan-Commonwealth programme of greening these economies in order to teach them about the benefits so that, in answer to the noble Baroness, we can import from those countries.
The Earl of Selborne (Non-Afl)
My Lords, I join others who have participated in the debate in thanking the noble Baroness, Lady Parminter, for giving us this opportunity. A sustainable green economy can be achieved only with a well-focused programme of funding for new technologies. We will not achieve net-zero carbon emissions without innovation. All political parties recognise this; it is not controversial but a matter of cross-party agreement.
The noble Baroness, Lady Jones, will not be surprised to hear that I see yesterday’s Budget in a rather different light. I welcome the increases in publicly funded research and development, with funding now going to total £22 billion a year—that is a 15% increase next year. This huge investment over a short period has been widely welcomed by the science community. Welcoming this public funding increase, the Royal Society president is reported as saying:
“We must also continue to build on our great strengths in the basic research that feeds the innovation of the future”.
This touches on the underlying national problem. Of course, we have always said we need more money and compared ourselves with other OECD countries. Yesterday’s Budget addresses that issue. We rightly congratulate ourselves on the quality of our basic research, yet we consistently fail to exploit this to the point where we deliver the new technologies, whether to promote the green economy or anything else.
The Budget yesterday reminded us that John Logie Baird invented the television, yet most of our televisions are now made by foreign-owned companies. Where we go wrong is that our world-class scientists and engineers in universities and research institutes are not close enough to the small and medium-sized businesses that represent a significant proportion of our entrepreneurial potential. Even our large manufacturing businesses, with a few exceptions, do not have the close links with basic and strategic research that you find in countries such as Germany.
A comparison of Germany’s green economy with the United Kingdom’s is instructive. Our outstanding record of scientific findings of international significance is way ahead of Germany’s, yet when it comes to transferring the science and engineering to new businesses and jobs, the Germans have a greatly superior record. Perhaps the most significant difference between the two countries is the level of commercial, as opposed to public, research funding. German manufacturing companies not only spend more on funding their own research but have much closer linkages with academic, publicly funded researchers. It is common to find researchers in Germany who move seamlessly between publicly and privately funded research.
To be more specific about how to promote the United Kingdom green economy, we need a road map —something mentioned by the noble Lord, Lord Browne. How will we deliver enough low-carbon electricity by 2050? The target the United Kingdom Government have set of zero carbon by 2050 is clearly ambitious, yet some countries have set even more aggressive targets. It can be achieved but, as I say, we will need new technology and a much clearer vision of how we are to meet the increased demand for electrification and low-carbon heating.
While we initially made good progress in increasing our renewable energy capacity, in recent years progress has stalled—partly due to the lack of support for onshore wind power. Last year only one onshore wind farm was completed, and solar development has slowed down. We will need more onshore and offshore wind and solar projects, whatever local opposition there might be to each planning application.
Because of the intermittent nature of much renewable energy, we must balance the energy portfolio with adequate nuclear capacity, which of course is also low carbon but provides a reliable baseload. At present, nuclear provides 21% of our electricity requirements from eight operating nuclear sites. Some of this capacity will be due for decommissioning, and we are projected to lose around 9 gigawatts of nuclear capacity by 2035. We have heard that the expensive nuclear installation under construction at Hinkley Point could provide 7% of our electricity requirements. There is then the possibility of Sizewell C in Suffolk providing a further 7%, hopefully at a lower price.
The present contribution of energy generated by wind, solar and hydro is 23%, and nuclear is 21%, so in favourable conditions, we can generate some 40% of present requirements from low carbon, but we must extrapolate. As transport becomes ever more dependent on electricity, this demand will increase, and as it is not unusual for renewable power to fall to a fifth of its maximum capacity, there must be surplus renewable capacity, and at least 30% of estimated demand by 2050 must be provided by nuclear capacity or some other baseload. I agree that we need to develop carbon capture and storage. I do not take the pessimistic line of the noble Baroness, Lady Sheehan. It was unfortunate that the initiative promoted by my noble friend Lord Marland lost momentum, but I was delighted to see carbon capture and storage mentioned in the Budget. We must develop hydrogen as an economic source of fuel, particularly for transport.
I was most interested to hear the proposals from my noble friend Lord Howell. We must look carefully at reduced-cost nuclear capacity via the development of small modular nuclear reactors, which could have cost and land-use requirement advantages over solar and wind farms. Rolls-Royce and other companies hope to provide small nuclear power stations that will generate up to 40 megawatts each and take about four years to build. That is a reasonably sensible proposition to look at more carefully.
Lastly, as the title of today’s debate refers to resource efficiency, may I make a plea that, when looking at waste treatment, the technology of incineration—which, like onshore wind, generates a lot of opposition from local interests—be given further consideration? After all, it ultimately recycles everything.
Lord Oates (LD)
My Lords, I am grateful to my noble friend Lady Parminter for initiating this important debate, and for her excellent and informative speech. This has been a fascinating debate from which I have learned a great deal, not least from my noble friend Lady Suttie in her powerful speech on the domestic and international impact of plastic waste, and also from the noble Baroness, Lady Jenkin, on the importance of conserving resources—something my mother certainly instilled in me from a very early age, although I confess that I bought a new suit for my wedding.
The noble Lord, Lord Marland, remembers the coalition Government fondly. I am sure that he was hugely committed to tackling climate change as a Minister in it, but my recollection, as the then Deputy Prime Minister’s chief of staff, is of a constant and debilitating battle with the staggering myopia of George Osborne as he tried to undermine almost every significant effort to tackle climate change, squandering the economic opportunities we could have seized and wasting time that we could not afford to waste.
Having said that, I welcome the Government’s commitment to a net-zero economy by 2050, but I hope that the Minister recognises that this ambition will be meaningless unless it is backed up by concrete plans to reshape our economy in a way that promotes resource efficiency and can deliver net-zero carbon usage. There is no point willing ambitious ends unless we are prepared to will equally ambitious means.
To do that, we must shift our thinking so that, instead of being overwhelmed by the challenges of reaching a net-zero economy, we are able to inspire people by its opportunities. The noble Lord, Lord Browne of Ladyton, made the important point that we have to be honest with people that the changes required will mean us having to change the way we live our lives. Part of our job is to make sure that that is a positive prospect rather than purely seen in negative terms. As the special report of the LSE Growth Commission, Delivering Strong and Sustainable Growth in the UK, notes:
“The pathway to net-zero must be perceived across the UK as a whole-economy opportunity to deliver material benefits to communities, as opposed to creating costs and inconveniences for households … Done right, in 2030 the UK could have higher living standards and improved health and wellbeing, with UK businesses innovating and adopting cutting-edge zero-carbon technologies and practices fit for the mid-21st century.”
That is the prize on offer, but we will seize it only if the Government have the courage to lead by example, not just in setting world-leading ambitions, welcome though they are, but much more critically in showing that they are willing to take the complex and urgent decisions needed to realise them. Britain has a particular obligation to show this leadership as host of the 26th UN Climate Change Conference taking place later this year. That is why, as the noble Baroness, Lady Jones, highlighted, yesterday’s Budget was deeply dispiriting. The noble Baroness also made the critical point about the importance of a just transition to a green economy—something noticeably absent from the Budget.
While there were some welcome measures, they were offset by a complete absence of action in critical areas such as home energy and other building efficiencies and highly counterproductive actions in areas such as the £27 billion road-building programme and the ongoing fuel duty freeze while public transport fares continue to soar. I hope in his summing up that the Minister will be able to explain why the Government missed the opportunity in the Budget to take action on energy efficiency. It is such a critical area, contributing a significant proportion of carbon emissions, and it must be tackled. As he knows, the Domestic Premises (Energy Performance) Bill, introduced by my noble friend Lord Foster of Bath with cross-party support, is a modest but important measure in this regard. I hope that he will tell us that he will press the Government to support it.
At the moment, the chasm between the measures required to meet the Government’s 2050 net-zero target and the measures set out in the Budget is jaw-dropping. It is as if someone told Rishi Sunak, “Don’t worry about the net-zero target. We don’t really mean it.” That is not just a disaster for the climate but a massive missed opportunity for our economy. It has the twin impact of introducing uncertainty while failing to inspire innovation or investment. We should be taking advantage of the 2050 target to support and galvanise business with a vision of Britain as a world-leading green economy able to boost our competitiveness internationally and deliver comparative advantage to our economy. We need to set out a comprehensive road map to that new economy so that businesses and entrepreneurs have sufficient confidence in the direction of travel to assume the leading role they will need to play in this transition.
So much needs to be done and we cannot afford to wait. We should be investing now in the modern energy and transport infrastructure that we will need to underpin this new green economy. We should be reshaping regulation of the financial system now so that it is incentivised to support cutting-edge green industries, is transparent over the climate risks of its investments and is required to hold appropriate capital reserves against loans to fossil fuel industries that may well become non-performing. My noble friend Lady Sheehan and the noble Lord, Lord Gadhia, also raised the important issue of the dangers to the financial system of stranded assets.
The Paris conference committed the world to limiting the rise in global average temperatures to well below 2 degrees centigrade above pre-industrial levels and to pursue efforts to limit the increases to 1.5 degrees centigrade, yet it is estimated by the research and campaigning organisation Positive Money that the financial system is currently financing warming of more than 4 degrees centigrade. Its executive director, Fran Boait, said that that
“represents an existential threat not only to finance and the economy, but to life on earth”,
so we have to take action today, not at some distant point in the future, to ensure that we have a regulatory system that can bring these financial institutions into line with our net-zero objective. I hope that the Minister will be able to indicate how the Government plan to start going about doing that. We must not allow a situation to occur where the taxpayer ends up having to bail out financial institutions once again for reckless investments that end up damaging the global environment and the integrity of the financial system.
A number of authoritative bodies, such as the climate change committee, have set out the sort of measures that will be required to transform our economy if we are to meet our 2050 objective, but very little of it is happening, and every effort to propose practical steps is rebuffed with the assurance that a new strategy or review will be published shortly. The Chancellor was at it yesterday, shunting off urgently needed decisions until the net-zero Treasury review that we were promised ahead of COP 26. We do not need more distant strategies or reviews. We need action plans. We need progress reports. We need accountability. What we chose to do or not to do now will determine what our children and grandchildren are able to do in the future.
The coronavirus has taught us the severe dangers of getting into a feedback loop where delay is all we are left with. We are, we hope, still in the containment stage of catastrophic climate change, but if we do not act soon, if we do not give global leadership now, if we do not move on from the talk and start rising to meet the challenges and to exploit the opportunities, we will miss the containment window and all we will have left are delay and mitigation. That would be a gross betrayal of the obligations to the generations who follow us. Despite the disappointments of the Budget, I have to have faith that the Government will shift their approach and match their actions to their ambitions. I have to have faith because we cannot wait five years. We do not have the time to waste on despair. If faith can move mountains, then surely it can move the noble Lord, Lord Callanan, the Prime Minister and his Cabinet colleagues. Perhaps it can even move Dominic Cummings, but perhaps that is asking too much.
I shall finish on a positive note. I welcome the fact that the 2050 target has established Britain as a global leader, at least in its ambitions. I believe that the Government can also make us a global leader in our actions, but if they are to do so, they will have to show that they have the moral courage to lead, the vision to inspire and, most importantly, the determination and commitment to deliver concrete action. Global Britain leading the world in tackling humanity’s gravest threat is a global Britain I would sign up to. I hope that the Government will rise to the challenge.
Lord Grantchester (Lab)
My Lords, I thank the noble Baroness, Lady Parminter, for bringing the subject of climate change to your Lordships’ House once more by emphasising the green economy as a new economic model, the only truly sustainable model, necessitating the wholesale transformation of our economy and way of life. I thank all noble Lords who have spoken for their contributions to the debate.
As the noble Baroness, Lady Parminter, stated, the effects of climate change must take centre stage across all aspects and areas of economic activity and permeate all government policies. I am happy to repeat the oft-quoted words of the Government that between 1990 and 2018 the UK reduced emissions by 40% while our GDP increased by 70%. It is certainly possible and vital to grow the economy, improve environmental standards and decarbonise to meet the green targets in international obligations to halt climate change.
The Covid-19 experience reveals the realities of the new global economy of fast communications, supply chains and international movements of people. Faster, decisive action becomes ever more important and must be co-ordinated across the globe. The Government are not being ambitious enough with their net-zero target. The House discussed this on 6 February as part of a debate on a report by UK Fires entitled Absolute Zero, which was brought to our attention by my noble friend Lord Browne of Ladyton, who underlined the potential disasters again today.
Yet it is fair to recognise that the Government have come forward with many recent announcements, such as the green finance strategy, the creation last year of the Green Finance Institute, a review of net zero set up by the Treasury and due to report this autumn, and the creation of a Cabinet committee on climate change. Indeed, the Environment Bill has just been introduced in the other place. While all this is beneficial, without a comprehensive statement of objectives and strategy to connect all these initiatives, it resembles a scattergun approach. Again, I ask the Minister: are the Government any nearer to publishing the now long-overdue energy White Paper to set out, for all these initiatives on key aspects of the economy, the pathway towards achieving net zero in an effective manner?
The Government need to stop the mixed messages they continue to give out when, for example, they finance fossil fuel projects overseas through UK Export Finance with credit guarantees. They need to stop their policy reversals on renewable technologies—as, I am glad to say, they now have with respect to onshore wind and solar, with the announcement that these can now bid into the contracts for difference auctions from 2021. However, these reversals have led to a decline in green jobs—by more than 1,000 since 2014.
The debate has highlighted the huge challenges for all levels of government. The response must start now with the immediate publication of the energy White Paper. The Institute for Public Policy Research has assessed the size of the challenge: the Government need to spend an additional £33 billion per year to tackle the climate emergency, £11 billion of which is needed just to catch up with the previous targets in the fourth and fifth carbon budgets that the Government are not even on track to meet. In her contribution, the noble Baroness, Lady Jones of Moulsecoomb, expressed her disappointment at the lack of government recognition in the Budget yesterday. The noble Baroness, Lady Jenkin, concentrated her remarks on personal responsibility and the actions that individuals can take, especially in the use of plastics—a huge problem, also raised by the noble Baroness, Lady Suttie.
The right reverend Prelate the Bishop of Bristol echoed the theological aspects of our responsibilities and the Church’s investment governance arrangements. My noble friend Lord Giddens moved the debate into reflections on civilisation and, of course, academic research. The noble Lord, Lord Gadhia, drew attention to behavioural transformation through smart meters and the investment environment behind them in green finance.
In the crucial energy sector, the Committee on Climate Change calculated that the UK’s production of low-carbon electricity needs to quadruple for net zero to be possible by 2050. It considers that the increase should be met by a mix of renewables and nuclear generation, with Hinkley Point C due to meet 7% of UK needs. I congratulate the ESB and EDF on all they are doing to invest in UK assets. Can the Minister tell us when the Government will publish their response to the consultation on the regulated asset base model for nuclear power?
Emissions reductions have been slow to come forward in the transport sector. Can the Minister confirm that a transport decarbonisation plan is also due to be published this year alongside the energy White Paper? Difficulties in this area were highlighted by the noble Lord, Lord Howell, in his remarks on battery technology.
If the Government’s plans are to have credibility, they need to address emissions from international shipping and aviation, and include them in the net-zero target. As the UK is chairing COP 26 in November, it would be a wonderful achievement for the Government to include sign-up to these emissions in the 2050 target at the conference.
Confidence in the UK’s handling of this strategically important agenda has been severely shaken. International diplomacy needs time and needs to start now. Following the Oral Question earlier today, have the Government thought how they will seek to mitigate the impact of Covid-19 on the preparatory work and strategy for the conference? Are the COP delivery unit staff properly resourced? Departmental battles will have hindered preparations. Can the Minister update the House on the outcome of the first meeting of the Cabinet Committee on Climate Change?
Another major challenge in the Committee on Climate Change’s report is to decarbonise heat. This gives rise to huge infrastructure challenges to gas, and brings into play the return cycle of carbon capture, usage and storage. The CCC is counting on a significant deployment of CCS technology to meet net zero, and for this to be available from 2030. Speakers today have expressed scepticism about this. Can the Minister give the Government’s view? The noble Lord, Lord Howell, sees CO2 as a resource. The development and installation of heat pump technology would be helpful. Would the Minister confirm that the heat pump road map and the CCS will be published in the energy White Paper?
The heating of homes and businesses raises the subject of energy efficiency, which many successive Governments have tried to bring forward in successive energy company obligation—ECO—schemes. None of these has been truly successful without further measures to tackle the scourge of fuel poverty. The noble Lord, Lord Marland, remembers the Green Deal affectionately. He rightly reminds us of the long-term nature of the challenge across many Governments. Still today more than 12 million homes fall below grade C in energy performance certificates. National Energy Action argues that energy efficiency should be given the same infra- structure priority as HS2.
I cannot do justice to all the excellent speeches made by all those contributing. I would, however, like to pay regard to the noble Earl, Lord Selborne. I have noticed he is set to retire at the end of March. This may therefore be my last opportunity to thank him. I have taken part in several agricultural debates with him over many years, when he has always emphasised the importance of the role of science and research. Outside this House, he has served on the Agricultural and Food Research Council, chairing the Joint Nature Conservation Committee and the Foundation for Science and Technology, which holds many important seminars on current policy issues. In this House, he has served on many committees, including the Science and Technology Committee. He has served with distinction, and I hope he will continue to contribute outside the House, most notably as chair of the trustees at Kew Gardens.
Imperial College London in conjunction with the Mayor of London is to establish a centre for climate change innovation, driving the development of new technologies, businesses and jobs, which will support a zero-carbon, climate-resilient future. Science is inherently an increasingly international collaboration. So will the Government confirm their full participation in Horizon Europe, the EU research and innovation programme from 2021? Also, will they prioritise access to the European Research Council as an important part of negotiating the future relationship with the EU?
The Parliamentary Under-Secretary of State, Department for Business, Energy and Industrial Strategy (Lord Callanan) (Con)
My Lords, I am very grateful to the noble Baroness, Lady Parminter, for securing this important debate and for the excellent, well-informed contributions from many other Members. It is clear that your Lordships’ House has great expertise in these matters; that was very well reflected in the debate today.
There is no doubt that climate change is one of the greatest global challenges that we face and that action is urgently needed in the UK and across the world. It is worth repeating that the UK was the first major economy to legislate for a net-zero target, which will end our contribution to climate change. I am pleased to welcome the support for the net-zero target from the Church, as outlined by the right reverend Prelate the Bishop of Bristol.
We are looking to position the UK as a world leader in low-carbon technologies, services and systems. The UK will capitalise on established strengths to provide new jobs and business growth opportunities from the many future export markets. We have a strong base to grow from. There are already over 460,000 jobs in low- carbon businesses—the noble Baroness, Lady Parminter, said 400,000, so I hope my figures are more accurate than hers—and their supply chains across the country. Low-carbon exports are already worth billions of pounds each year to our economy. We have world-leading strengths in key sectors such as green finance, offshore wind, nuclear energy, smart energy systems and electric vehicles.
We are also seeking to capitalise on the UK’s world-leading expertise in fields such as industrial biotechnology and synthetic biology, the platform technologies that underpin the bioeconomy. This represents the economic potential of harnessing the power of bioscience, producing innovative products, processes and services that rely on renewable biological resources instead of fossil-based alternatives.
As well as the economic benefits we can achieve through a green economy, we must also ensure that we maximise resource efficiency, to protect our environment and minimise biodiversity loss. The resources and waste strategy is an ambitious document that sets out how we will preserve our stock of material resources by minimising waste, promoting resource efficiency and moving towards a more circular economy. It combines actions we will take now with firm commitments for the coming years and gives a clear long-term policy direction in line with our 25-year environment plan.
Setting this in context, our clean growth strategy sets out our proposals for decarbonising all sectors of the UK economy through the decade. The UK is determined to continue to lead the world in tackling the scourge of climate change by cutting our emissions while supporting strong international action to help meet the goals of the Paris Agreement. During this year, ahead of COP 26, we will be setting out further details of our plans to decarbonise key sectors of our economy including transport, energy, buildings and our natural environment.
Many excellent points were made during the debate and a number of questions were posed. I will try to go through as many as possible and apologise to individual noble Lords if I do not get around to their point. In her excellent contribution, the noble Baroness, Lady Parminter, asked about the just transition—this point was also made by the noble Baroness, Lady Sheehan. Clean growth offers the UK real opportunities and she is right to point out that the Treasury will be conducting a review into the costs of decarbonisation, including how to achieve this transition in a way that works for households, businesses and the public finances. Industrial clusters are one of our industrial strategy missions, reflecting the importance of strengthening our industrial base as we move to a net-zero economy.
The noble Baroness also asked about our nationally determined contribution. Increasing global ambition is key to closing the gap on meeting the temperature goals of the Paris Agreement. At the UN Climate Action Summit in September, the Prime Minister called on all countries to come forward with increased 2030 emissions reduction commitments. The UK will play its part and come forward with an increased NDC ahead of COP 26, in line with the global ambition cycle.
The noble Lord, Lord Oates, and the noble Baroness, Lady Parminter, both raised the important subject of energy efficiency in buildings. We plan to publish a heat and buildings strategy later this year which will set out our immediate actions for reducing emissions from buildings. These include the deployment of energy-efficiency measures and low-carbon heating as part of an ambitious programme of work required to enable key strategic decisions on how we can achieve the mass transition to low-carbon heating. The future homes standard will require new-build homes to be future-proofed, with low-carbon heating and world-leading levels of energy efficiency by 2025.
We have also committed to consulting on phasing out the installation of fossil fuel heating systems in off-gas grid properties, accelerating the decarbonisation of our gas supplies by increasing the proportion of green gas in the grid. We will publish these consultations in due course.
The noble Baroness, Lady Parminter, asked about the plan required to deliver the net zero target. In the run up to COP 26, we will bring forward ambitious plans across key sectors of the economy to meet our carbon budgets and net zero target, including an energy White Paper—I am afraid that I cannot give the noble Lord, Lord Grantchester, a date for that, but it will be published as soon as possible—a transport decarbonisation plan and a heat and buildings strategy. These plans will build on the strong frameworks we have established through our clean growth strategy.
The noble Baroness, Lady Parminter, raised an important point on the contributions that local councils can make to net zero targets. The local energy programme supports local enterprise partnerships, local authorities and communities in England to play an important leading role in decarbonisation and clean growth. The programme was announced in 2017 as part of the clean growth strategy. Almost £20 million has been invested in the local energy programme to date and the programme has funded a range of measures designed to build local capacity and capability and encourage joined-up working between local areas, investors and central government. In addition, funding was provided to local enterprise partnerships in England to develop an energy strategy for their area.
The noble Baroness, Lady Parminter, asked me a lot of questions, including on deforestation. We are committed to helping those countries and communities that will be most affected by climate change. The UK is doubling its international climate finance to £11.6 billion between 2021 and 2025 to help developing countries cut emissions, improve resilience and reduce deforestation.
The noble Lord, Lord Browne, and my noble friends Lord Howell, Lord Marland and Lord Selborne all raised the important subject of carbon capture and storage. It will be essential to meeting the UK’s net zero target. It can provide flexible, low-carbon power and decarbonise many of our polluting industrial processes, while also offering the option of negative emissions at scale. We are investing over £40 million in CCS innovation between 2016 and 2021, and I am delighted that the Chancellor yesterday announced our new CCS infrastructure fund, providing £800 million to establish CCS jobs in at least two industrial clusters, creating up to 6,000 jobs in the process.
The noble Lord, Lord Browne, also raised the point about offshoring the UK’s emissions, which is an important subject. We are following the agreed international approach for estimating and reporting greenhouse gas emissions under the UN framework and the Kyoto Protocol. Nevertheless, emissions on a consumption basis—what we import—fell by 21% between 2007 and 2016.
My noble friend Lady Jenkin made a very well-received speech. There was, perhaps, a bit too much information on her underwear strategy, but apart from that, it was an excellent speech about how individuals can act to change their own behaviour. She raised an important point about food waste, and we are taking action to help consumers reduce theirs. Ben Elliot—our Food Surplus and Waste Champion—recently announced the first ever Food Waste Action Week. It will run from Monday 11 May, calling on households and businesses across the country to join forces to reduce food waste. I am sure she will want to make her contribution to that.
My noble friend also asked about clarity on recycling consistency. The Government are committed to making recycling easier for everyone. We know that many people want to recycle but are confused by the many symbols and policies in this area. The Environment Bill introduces legislation so that, from 2023, all collectors of waste will collect a core set of materials from all households, businesses and other organisations. That core set will be metal, plastics, paper and card, glass, food and garden waste.
On the subject of fast fashion, also raised by my noble friend Lady Jenkin, the Government recognise the huge environmental impact of clothing as well as the importance of affordable and quality clothing. The Government have supported a collaborative industry-led approach through the sustainable clothing action plan, which has more than 80 signatories and supporters from across the clothing supply chain, representing nearly 60% of all clothes sold in the UK by volume.
My noble friend, along with the noble Lord, Lord Browne, also raised the subject of behavioural change. We entirely recognise that delivering net zero will need action across the whole of society. It does not necessarily mean net zero across everything that we do, because we can offset many of our emissions through tree-planting, carbon capture and storage, but we recognise the importance of engaging people across the whole of the UK in what will be a year of climate action.
The noble Baroness, Lady Sheehan, asked whether our plans for continued oil and gas exploration are compatible with the net-zero goals. It is important to recognise that, as we transition to a low-carbon economy, there will continue to be a need for oil and gas, which are projected to still provide around two-thirds of our total primary energy demand in 2035. All scenarios proposed by the Committee on Climate Change setting out how we could meet our 2050 target include continuing demand for natural gas.
The subject of green finance was raised by a number of noble Lords, including the right reverend Prelate the Bishop of Bristol, the noble Baroness, Lady Sheehan, my noble friends Lord Gadhia and Lord Marland—the best of luck to him with his clean investment fund. We welcome the strong leadership that is provided in this field by the Church and the role of many institutional investors, which will be key as we build up to COP 26. In fact, only today, an industry-led group called the Pensions Climate Risk Industry Group, convened by the Department for Work and Pensions, produced regulations and published guidance on how pension scheme trustees can disclose their approach to climate risk in their portfolios. Delivering on that is a key promise in the green finance strategy.
My noble friend Lord Howell, with his immense experience in the energy industry, raised the important subject of hydrogen. This will be a key commitment of ours going forward; we are committed to exploring the development of hydrogen as a decarbonised energy carrier alongside electricity and many other decarbonised gases. We are already investing up to £121 million in hydrogen innovation, supporting a range of projects to explore the potential of low-carbon hydrogen for use in heating and transport, and the production of low-carbon hydrogen with CCUS and electrolysis technologies. We are considering our strategic approach to hydrogen and are conducting further stakeholder engagement, notably around building sustainable policy frameworks to support investment in low-carbon hydrogen production.
Lord Howell of Guildford
Does my noble friend agree that, if we can make greener our entire domestic gas supply, it would be a far better approach than attempting to tear out 15 million gas boilers from people’s homes?
Lord Callanan
Yes, I agree with my noble friend; hydrogen can of course provide a potential solution to that. I heard only the other day about investments that we are making with companies such as Worcester Bosch and Baxi to develop new boilers that are able to work on natural gas and can be easily converted with only one hour of service engineering to work on hydrogen in the future. Nevertheless, hydrogen is, at the moment, given existing technology, expensive and difficult to produce.
The noble Baronesses, Lady Suttie and Lady Jenkin, asked what we are doing about plastic waste. I am pleased to tell them that the UK is a world leader in tackling plastics and that we have committed to work towards all plastic packaging placed on the market being recyclable, reusable or compostable by 2025, and to eliminate avoidable plastic waste by 2042. The Government’s landmark resources and waste strategy sets out our plans to eliminate avoidable plastic waste over the lifetime of the 25-year plan.
I hesitate to referee the debate between the noble Baronesses, Lady Jenkin and Lady Jones, on Extinction Rebellion. I am sorry to tell the noble Baroness, Lady Jones, that I am very much on the side of noble Baroness, Lady Jenkin, on this. I witnessed at first hand the huge piles of disposable plastic waste that Extinction Rebellion left behind after its demonstrations. Before lecturing the rest of us on what we should be doing, it should act to put its own house in order first.
Baroness Jones of Moulsecoomb
Does the Minister accept that had they had time to clear away, they would have done so? I visited the site and they had recycling systems set up and they were extremely careful about rubbish. If they had had time, they would have removed it.
Lord Callanan
I thought that might prompt an intervention. No, I do not accept that. Even on the sites they vacated voluntarily, they still left behind piles of rubbish, which cost the local authority tens of thousands of pounds to remove. They are, of course, quite entitled, as everybody is, to demonstrate and make their point, but they are not entitled to bring the whole of London to a standstill while they are doing it.
Baroness Jones of Moulsecoomb
Does the Minister understand that we are in a climate emergency? This is bigger than Covid-19, bigger than any other emergency we have ever faced. Those people have actually put climate change on to the agenda here in the House in debates I have been part of. I have not even mentioned climate change: everybody else has mentioned it, so they have actually performed an incredibly important role within our society.
Lord Callanan
I am sorry, but I just do not agree with the noble Baroness. Climate change was on the agenda well before Extinction Rebellion decided to get involved in the subject. It has been a subject of cross-party agreement. It is not just something for this Government; Governments of the party opposite and the coalition Government were also on the ball with this, and legislation was put in place with cross-party agreement. Nobody doubts the scale of the problem; they do not need to tell us it is a problem; what we need are practical solutions that are deliverable in the normal political landscape. That is what we are working towards and what we are interested in giving contributions for, and, frankly, camping out in London for weeks on end does not change the fact that we need practical, deliverable solutions.
Lord Callanan
I am happy to continue this debate with the noble Baroness, but time is getting on. We will return to the subject. I should not have raised it in the first place.
Baroness Scott of Bybrook (Con)
I am sorry, but the Minister cannot finish his speech in time if he keeps getting interrupted.
Lord Callanan
It is fine: it is my fault for raising it. I should not have got involved in the debate, but I am happy to talk to the noble Baroness, for whom I have the greatest admiration, as she knows. I am sure that we will discuss it on plenty of other occasions.
The noble Lord, Lord Giddens, talked about the 2050 target and asked why Finland has a net-zero target of 2035 when ours is 2050. Our independent advisers, the Committee on Climate Change, made it clear in its report that it does not currently consider that it is credible for the UK to reach net-zero emissions earlier than 2050, and we have legislated in line with that advice.
The noble Baroness, Lady Suttie, asked about plastic waste exports. We are committed to banning plastic waste exports to non-OECD countries and the Environment Bill includes a power to enable us to deliver this commitment. We will consult this year on the date by which this will achieved.
The noble Baroness, Lady Jones, raised the energy company obligation—we have discussed this subject with her before. I know that we have a different opinion on it, but we believe that energy efficiency will be key to reach net zero and we agree that the transition has to be fair. The energy company obligation is a key policy that, since 2013, has delivered more than 2.5 million measures in more than 2 million homes. This scheme is now entirely focused on low-income, vulnerable and fuel-poor households and funded to the tune of something like £640 million a year until 2022. I know that we have a different view about how it should be funded, but it is, in my view, a successful scheme.
The noble Lord, Lord Marland, talked about international climate finance. Since 2011, our international climate finance has helped 57 million people to cope with the effects of climate change, while reducing or avoiding 16 million tonnes of emissions.
I am sorry that I am out of time; I had a number of other points to refer to. If noble Lords will permit me, I will respond to them in writing—apart from an intervention from the noble Lord, Lord Browne.
Lord Browne of Ladyton
I am very grateful to the noble Lord for giving way. Before he sits down, will he either address the question of pricing the risk of carbon capture and storage or agree to write to me about it?
Lord Callanan
It is an important subject, as I have said, and there is a lot of development in this area. I will write to the noble Lord with the details of pricing the risk, because it is a complicated subject.
It just remains for me to say that tackling climate change continues to be one of the Government’s highest priorities. We will continue to work with others, both domestically and internationally, to build on the excellent progress that we have already made to reach net zero. I thank noble Lords once again for some excellent contributions to this debate.
Baroness Parminter
I thank the Minister for his response and all noble Lords who have contributed so ably. Like the noble Lord, Lord Grantchester, I particularly thank the noble Earl, Lord Selbourne, for contributing, given his imminent retirement from this House. He exemplifies to me everything that is best about this place: he speaks with expertise and has a true zest for life. In a previous debate, he told us about when he was in a Forestry Commission venue near us, in Alice Holt—of course, why would he not be? He then said that he was abseiling down the facilities there; I thought that at his relative age that was just the sort of thing that one should be encouraging. So, many thanks in particular to him.
As the noble Lord, Lord Browne of Ladyton, said, this is a topic with a very wide waterfront. I am not going to try to sum up all the issues that noble Lords have contributed, but it seems to me that there has been a real agreement about the way ahead; the only area where there are differences seems to be around CCS. I have to share the more pessimistic views of some of my colleagues in the House. People know the way ahead; the question is, are the Government getting there quickly enough?
I want to make two points. We have had a number of contributions from noble Lords about not just what the Government need to do but how we can encourage individual behavioural change. Whether we go down the route of nudging—I am not sure that all members of the public will have the self-restraint of the noble Baroness, Lady Jenkin—or take a more directive approach, as we are seeing in response to the Covid-19 emergency, where we are rightly listening to experts and then the Government are taking bold measures, I know which route I would prefer as we tackle this climate emergency.
The Government are going to have to face this pretty soon, because Henry Dimbleby’s report on his food strategy is coming soon. This will address the issue of food waste and what to do about the nation’s diet. The Government need to start thinking seriously about how they want to lead our country as we tackle these great climate and nature emergencies, and how they want to lead from the front.
I also want to highlight an issue raised by many noble Lords: what we do in this country relates to the global context, and what we do here in the UK is important in shaping progress for the whole world. Again, this reinforces the need for urgent action, not only before COP 26 but before the Commonwealth Heads of Government Meeting in June. If we are really going to be a global leader on this, the Government have to start acting quickly to show global leadership; only that way can we tackle both the climate emergency and the nature emergency that we face.