Climate Change: COP 26

Lord Bridges of Headley Excerpts

Thursday 18th November 2021 Lords Chamber

[Lord Bridges of Headley (Con)]

My Lords, I congratulate the noble Baroness on securing this debate. I attended COP in my capacity as an adviser to Banco Santander, as recorded in the register. Banco Santander is a member of the Glasgow Financial Alliance for Net Zero, which the noble Baroness mentioned. GFANZ is a horrible acronym; a 1990s pop band comes to mind.

I left as a slightly worried optimist. I pay tribute, of course, to the extraordinary work that Alok Sharma and my noble friend did. I left optimistic because Glasgow was fizzing with ideas of new ways to harness the power of the market and of the private sector to get to 1.5 degrees. I am optimistic because, as the noble Baroness and others have said, further commitments were made on coal, forests—where my noble friend made a massive contribution—shipping, methane, carbon markets and of course finance. I am optimistic because, although much more needs to be done at pace, there is now, I sense, real momentum to turn words into action. Clearly, the task over the next 12 months, as others have rightly said, is to keep that momentum up.

However, I am worried not just about the lack of commitment from certain countries, but even more, if noble Lords will forgive me for saying it, about the need to keep this debate in context. As we turn our commitment into action, we cannot afford to ignore the other challenges we face, the most immediate of which is growth. We need economic growth to fund the transition. We cannot, as others have mentioned, have a green strategy unveiled one day and a separate growth strategy or budget unveiled the next. We need a clear strategy for green growth. I ask a question—a hypothetical one, as I do not expect my noble friend to answer it. How does allowing the tax burden to hit its highest level for 70 years, its highest level in peacetime, doubling the number of higher rate taxpayers and increasing corporation tax rates encourage investment and enterprise? Is that the path to growth?

Related to that—it is the point that the noble Lord, Lord Browne, has just been talking about—is energy: we need, as he so eloquently put it, reliable, affordable, renewable energy to power growth. All across the world, we see energy prices rising. Meanwhile, however, investment in oil and gas exploration has fallen. That second point is good news for hitting net zero, but demand is going to rise, especially in developing countries. It is clear that we are walking a tightrope between the fossil fuel past and the renewable, carbon-free future. Real care is needed as we consider new taxes and green regulations. Prolonged higher energy prices could stoke inflation and push up interest rates. I would be grateful for my noble friend’s thoughts on how the Government plan to walk this tightrope in their domestic policies and their international approach.

In passing, I want to flag another challenge that we sometimes ignore and forget when we talk about climate change, which is that, as we go green, we are also going to have to pay for an ageing population. The IFS forecasts that by 2030-31 the additional pressures on that alone will total £18.5 billion on top of the level of 2025-26. We will have to pay that bill as well as the cost of going green.

My final point is one that the noble Baroness, Lady Parminter, made: we have made these pledges and we now need real progress to mobilise not just Governments and companies but people, to help them go green and to make it easier and cheaper for them to do so. My final point is on retrofitting homes and clean energy. Planning, skills, finance, energy supply: these separate challenges need a co-ordinated approach across government to provide a clear framework, so companies and people can invest with confidence. I look forward to reading the new road maps that the Prime Minister has said will be published soon, to see how he will join the dots and ensure that government departments, local authorities and business work together.

I am optimistic, yes. The necessity of the green transition offers untold opportunities, but it does not sit in a silo; it touches on everything we do and everything has an impact on it. Without a coherent strategy that tackles all these challenges in a clear way, we may land up without the economic growth that we need to fund the green transition.