Electric Vehicle Battery Production
Lord Bishop of Durham Excerpts(1 year, 10 months ago)
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Lord Callanan (Con)
I note the noble Lord’s nostalgia for the great, successful British industries of the 1970s under public ownership, but I do not think that is a viable suggestion. Government has proved that it is not good at running businesses and industry—we should leave that to the private sector, with appropriate government support where required.
The Lord Bishop of Durham
My Lords, the Minister loves the north-east, just like I do, and has noted that this is an extremely suitable site. Is not part of the problem that the return on investment is a very long way forward, so will the Government consider upping the amount they are willing to commit upfront to enable production on this site?
Lord Callanan (Con)
The amount of money on offer here was very considerable. I am not going to get into details of commercial negotiations but as I said, we stand ready to talk to any potential investor in that site or any others. The right reverend Prelate is right that this is one of the best sites in Europe for such a facility: it has the right shape, connections and location. We are optimistic it will be taken forward, but as the right reverend Prelate will understand, I am not going to get into commercial negotiations at this point.
Shale Gas Production
Lord Bishop of Durham Excerpts(2 years, 9 months ago)
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Lord Callanan (Con)
The noble Lord makes a good point; I think he has put his finger on the nub of the problem. Whenever there is a crisis in politics—and there is definitely a crisis at the moment—there is always a search for quick and easy solutions. Unfortunately, on energy infrastructure, there are no quick and easy solutions: these things take years, if not decades, to put into operation. We are progressing nuclear power, as indeed we should, but nothing is going to happen for a number of years—possibly not until the start of the next decade. We already have in motion the expansion that I mentioned earlier of offshore wind. We have the targets in place for 2030 and those developments are already proceeding.
The same problem occurs with the search for new licensing fields in the North Sea, if we push ahead with it: it will be a number of years before new fields can be developed. Even if we did progress shale, it would be a number of years—possibly a decade—before we would get meaningful quantities of gas out of the ground, even if we overcame all the environmental objections. I am afraid that there are no easy silver bullets to this problem. It is probably a silver buckshot: there are lots of different smaller-scale solutions that we will need to develop over a number of years.
The Lord Bishop of Durham
Will the Minister expand on the investment of microgeneration at local level? At Bishop Auckland, one of the local estates is having a massive transformation through solar being installed on all the rooms on that estate. Could not more money be put into that? Let us forget fracking, to be honest, because it is not going to deliver us anything at any time.
Lord Callanan (Con)
Yes, is the short answer to the right reverend Prelate’s question. We are supporting microgeneration with feed-in tariffs et cetera, but we need to be cognisant of the scale of the problem. Microgeneration—solar panels, small wind turbines, small-scale running-water power, et cetera—will make a contribution, but it is unlikely to solve the problem in the meantime. We are talking about a few megawatts as opposed to the gigawatts we need in total. It would, however, make a contribution, and it is already making a contribution. Government policy is to support small-scale microgeneration, but it is unlikely to be a long-term solution to our problem.
Economic Crime: Planned Government Bill
Lord Bishop of Durham Excerpts(2 years, 10 months ago)
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The Lord Bishop of Durham
My Lords, those who decide to perpetrate economic crime are apparently targeted, swift and very bright about how they do it. I read the Statement and it mentions the Home Office, the Treasury and BEIS. Is it not time for more targeted, thought-through, quick action by government, rather than action that is divided across too many departments?
Lord Callanan (Con)
All departments are working together to try to combat this menace, and there are a number of different elements to that. Obviously, BEIS’s responsibilities, in terms of Companies House and the register of beneficial owners, are one aspect—but of course there are also tax elements, which are the responsibility of the Treasury, and there are Home Office enforcement matters as well, in terms of criminal liability. So it is not a question of which department looks after this: an enormous amount of cross-departmental co-operation goes on to try to combat it.
Shortages: Protection for the Vulnerable
Lord Bishop of Durham Excerpts(3 years, 2 months ago)
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Lord Callanan (Con)
My Lords, I can tell the noble Lord that the poorest and most vulnerable are always at the heart of our policies in this area—we always seek to protect them. It is, however, important to emphasise that there is no shortage of essential items, and we have taken action to ensure that supply chains remain robust.
The Lord Bishop of Durham
My Lords, one of the other necessities mentioned by the noble Lord, Lord Brooke of Alverthorpe, is food. Nationally and globally, we waste a third of all food. When 1.7 million children, between September 2020 and February 2021, were living in food poverty along with their families, surely there must be a better way. This week, the Earthshot Prize celebrated Milan’s citywide food-waste policy, which saves 260,000 meals-worth a year. What steps are Her Majesty’s Government taking to encourage and support the better local collection and distribution of food waste in the UK more effectively?
Lord Callanan (Con)
The right reverend Prelate makes a good point. Everybody across all levels of government—national and local—want to do all they can to minimise food waste. Of course, we are always looking for additional ways to protect the most vulnerable.
Net Zero Strategy and Heat and Buildings Strategy
Lord Bishop of Durham Excerpts(3 years, 2 months ago)
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Lord Callanan (Con)
The noble Lord will be pleased to know that I do believe in market mechanisms. His question is impossible to answer, and let me explain why. Heat pumps are three to four times more thermodynamically efficient than existing gas boilers. At the moment, because of the costs of various policies on the production of electricity to successfully decarbonised the electricity sector, there is an imbalance in pricing. The Treasury and the Government have accepted that we need to do something about rebalancing gas and electricity prices. Now is clearly not the time to do this, when we are experiencing record gas prices. In the longer term, and bearing in mind that this is a 15-year strategy, we need to change the balance of these costs. We are committed to do so. There are other market mechanisms of which I could speak in favour. We will consult on a market mechanism for gas boiler manufacturers to have a certain proportion of their sales be in heat pumps. I repeat what I have said before: the boiler upgrade scheme is not the only support mechanism we offer for installing heat pumps.
The Lord Bishop of Durham
The Minister and I live in the same region, where masses of new building is going up. I have had only a quick read of the document —we have not had time for anything other than that—and there is a lot about retrofitting in it. Given that we have all the technology and knowledge now, can the Minister explain why new builds are not being built to a net-zero target from this year or perhaps next? Everything is in place to be able to do this. We are delaying too long.
Lord Callanan (Con)
The decision was made by what was then the Ministry of Housing, Communities and Local Government that the future homes standard would kick in in 2025. There is a long process of consultation to go through with industry to ensure that the standard is applicable, that the supply chain is there, and so on. The right reverend Prelate will be pleased to know that we are changing what is called Part L of the building regulations next year. This will also produce substantial carbon savings in advance of the future homes standard coming in in 2025.
The Lord Bishop of Durham
It is obviously the evening to get a second go. Yesterday, the Transition Pathway Initiative launched the Global Climate Transition Centre, which will be a key part of the COP 26 financial infrastructure, to assess 10,000 companies on their alignment with the net-zero pathway and support accountability and action on this very important issue. Understandably, that is not in the paperwork, because it was announced yesterday. Is the Minister aware of the Transition Pathway Initiative—which has been around for a while now—and the Global Climate Transition Centre, and what actions will the Government take to support these initiatives?
Lord Callanan (Con)
Yes is the answer to the right reverend Prelate’s question. They are excellent initiatives, and they are indicative of some of the leadership of many of our leading companies and how they are committing to net zero. Many of them are going to be displaying at COP, and it is great to see some of the biggest businesses in our land also helping us on the pathway to net zero.
Green Finance
Lord Bishop of Durham Excerpts(6 years, 11 months ago)
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The Lord Bishop of Durham
My Lords, I add my thanks to the noble Lord, Lord Teverson, for securing this debate. This year’s COP 24 UN climate change conference will be a crucial opportunity for the world to accelerate its climate ambitions in order to try to meet the 1.5 degree Paris commitment. This country faces a choice: do we want to lead the charge on this or drag our heels somewhere near the back? I welcome the UK Government’s recent focus on environmental issues. Initiatives such as the green finance task force, the endorsement of the Financial Stability Board’s task force on climate-related financial disclosure and the UK’s setting up of the Powering Past Coal Alliance at COP 23 all show how we are influencing discussions at global climate change meetings.
Good progress is being made, but there is more that the UK can do to be a global leader in green finance. This is an effort that requires the leadership and hard work of the Government—and, crucially, as other noble Lords have noted, the co-operation, collaboration and initiative of private business. Vital to this is recognising that sustainable business is good business. The idea that a business model that incorporates environmental and social responsibility is in conflict with financial results and the bottom line is simply a fallacy. A business that manages environmental and social issues well is a more sustainable one, even if the results take a little longer to bear fruit. Businesses and banks have much to gain from the growth in the market for renewables and from reducing their exposure to the risks associated with lending for fossil fuels.
Sustainability starts with transparency. There must be a culture change in financial reporting methods so that companies disclose to shareholders and investors the full extent of their carbon footprint and how they are working to reduce it. This was the recommendation of the Financial Stability Board of the G20 last year. I am proud to say that the Church Commissioners were recently successful in passing a shareholders’ resolution asking the oil giant Exxon to report on how its business model will be affected by global efforts to limit the average rise in temperatures to below 2 degrees centigrade. As Christians, we in the Church recognise that humanity has a God-given responsibility for the stewardship and care of the earth and its creatures, and this is just one part of embracing that responsibility. Several of Exxon’s peers, including BP and Shell, have already followed suit, sending out a very strong signal that investors expect businesses to integrate climate change considerations into their business strategies and disclosures. Crucially, however, these disclosures are not mandatory for all companies. Will the United Kingdom Government consider introducing mandatory carbon emissions reporting for companies to ensure that investors have all the information they need?
While transparency is necessary at a basic level, we need to be much bolder than this, investing in green energy in creative, new and dynamic ways. It is an uncomfortable reality that, even if the Paris pledges are implemented in full, we will probably not keep warming below the 2 degree goal. Far more investment is needed in low carbon and other sustainable infrastructure and technologies. Once again the UK must lead the way on this and work to make the capital markets greener through good policy. There is a real need here for vision, policy stability and clarity in long-term policy objectives. Up to now, UK renewables policy has been riven by inconsistencies and some stops and starts. The Government’s recent sale of the Green Investment Bank, which might have overseen much of this innovative investment, leaves Britain without a key vehicle for supporting green projects. I find this a disappointing decision for a Government who are supposedly committed to green finance and combating climate change.
While much progress has been made in decarbonising current UK power supply, long-term decarbonisation policy for areas such as transport and housing, in particular, is far less clear. The Institutional Investors Group on Climate Change in a report in 2017, for example, recommends implementing binding regulations to ensure that all new homes and commercial buildings are near zero emissions. An encouraging step in the right direction in respect of transport was the announced intention to ban the sale of new petrol and diesel cars and vans from 2040. I will ask the Minister two questions. First, when can we expect to see clear policies for both homes and commercial properties to have zero emissions? Secondly, might the Government consider that the 2040 date for banning the sale of new petrol and diesel cars is not bold enough? Should they bring this forward to 2030?
While we must consider our investments in energy at home in the UK, we know that climate change is a global phenomenon. Therefore, we must think ambitiously and thoughtfully about our energy investments overseas, particularly in poorer and developing nations. Indeed, as we know, climate change is disproportionately impacting on the poorest and most marginalised people in the world. Not only our environmental responsibility but our social responsibility and commitment to justice call for urgent global action to ensure equitable access to enriching and sustainable development.
DfID is doing excellent work in helping people to access clean energy overseas—for example in its Energy Africa campaign, which focuses on off-grid solar energy. However, recent figures from CAFOD show that the UK Government overall are still spending more on fossil fuels than on renewable energy in developing countries. Will the Minister commit to investigating how more support can be given overseas for renewable energy and less for fossil fuels, particularly in developing nations?
As I said in my opening remarks, for our financial sector to be resilient to climate change, the impetus cannot come exclusively from a government-only initiative. It requires the collaboration and full commitment of the entire financial sector. As yet no UK bank has produced a clear transition plan for energy financing. Banks have a vital role to play in the shift to clean energy—in investments both at home and overseas—since renewable energy companies are typically more dependent than fossil fuel companies on bank financing. This is particularly true in developing countries. Yet many are complicit in using customers’ money to finance projects that are literally fuelling climate change. HSBC, for example, has provided $45 million of bank guarantees to Adaro Energy, which is one of Indonesia’s largest coal producers.
Having said this, there is reason to be hopeful, and there are some excellent examples of good practice. In 2015, Barclays participated in loan syndicates that provided more than $1.3 billion in direct project financing to six large-scale renewable projects in South Africa, including three wind farms and three solar plants. I commend Christian Aid’s Big Shift campaign, which calls on the UK’s largest high street banks to ensure that their lending practices are in line with global climate ambitions, setting ambitious and measurable targets to increase lending to renewable energy projects while decreasing loans to fossil fuel companies. Here is another excellent example of how civil society can engage with making a real difference on this issue.
Though there are clearly many opportunities to invest in large-scale renewable energy, small-scale and off-grid energy systems often make the greatest difference to poor people in rural and isolated communities by providing clean and safe energy for household cooking and lighting. In Burundi, for example—a country with which I have close links and which I regularly visit—Christian Aid, in partnership with COPED, is working on a renewable energy pilot where the by-product from processed palm oil is converted into a fertiliser from which thousands of families are benefiting. There is a pressing need to scale up financing for such small, local projects. Indeed, it will be essential that developing countries are helped at every stage to ensure that they use energy far more wisely than we, as developed nations, have done. We dare not suggest that they hold back from development as they seek to build better lives for their people—but they can be helped to avoid the major environmental mistakes that we have made on our development pathway.
While the shift in financial investment is ultimately down to the banks themselves, I would argue that the Government have a considerable role to play in encouraging this. In addition to putting in place frameworks for mandatory disclosure of carbon footprints and other climate-related information at both individual company and portfolio level, a phasing out of fossil fuel subsidies, and ensuring that the fossil fuel industry has a limited influence in determining the price and mechanism when implementing carbon pricing, would all go a long way towards making the British financial banking sector a global leader in green finance, and resilient to climate change.
We must remember that part of being a global leader in green finance means thoughtfully using the global influence that we already have. So finally I ask the Minister: how is the UK using its influence with the World Bank and other multilateral development banks to persuade them to invest less in fossil fuels and more in renewable energy? Green finance matters for the whole world. Let us not drag our feet in any way in developing it well.