UN Framework Convention on Climate Change

Lord Bruce of Bennachie Excerpts

Thursday 18th April 2013 Westminster Hall

[Mr Yeo]

I am sorry; the Minister was paying such close attention that I thought some gem—some pearl—must be about to drop from his lips, but that will come later.

Let me deal with some of the key recommendations and the responses to and outcomes of the report—first, on monitoring, reporting and verification. We recommended that the Department of Energy and Climate Change push for a single accounting regime to ensure effective MRV. DECC agreed that a common accounting framework was necessary and hoped to see progress on that at Doha. The outcome was a number of changes to the MRV framework to improve transparency and accountability.

Energy efficiency is a subject close to the heart of my Committee in a number of contexts, and we recommended that the Government prioritise it as a mitigation strategy, using EU cohesion funds and EU emissions trading scheme credits to drive energy efficiency policies. The Government agreed with those recommendations, although they noted the need for a stricter cap or for structural reforms to achieve that with the EU ETS. I shall return to emissions trading in a moment.

On the role of the UNFCCC, the Committee considers it the leading multilateral forum through which to combat climate change. The Government share that view. We should not allow the rather tortuous progress to be a reason to despair. Alongside the international process, the bottom-up process should give every possible encouragement. We increasingly see individual countries making national commitments.

[Sir Malcolm Bruce (Gordon) (LD)]

The hon. Gentleman has already mentioned GLOBE, but does he not agree that if GLOBE had not existed, the progress that has been made in countries such as Mexico and China might not have been achieved and that it is vital that we continue to work at that level? He makes exactly this point: international co-ordination is important as a driver, but without national input we simply would not get international agreement.

[Mr Yeo]

I entirely agree with the right hon. Gentleman. I am pleased that the Foreign and Commonwealth Office is supporting GLOBE; it should continue to do so, because of the beneficial impact it has had. Interestingly, there is also some correlation between the location of the conference of the parties meetings and progress by individual countries. The progress made in Mexico and South Africa was encouraged by the fact that they hosted COP meetings, and the selection of venues for future COPs will have a bearing on further progress. When South Korea was in the frame to host the COP last year, I was disappointed that it was not chosen. South Korea is another high energy user with a rapidly growing economy, and it has shown a lot of interest in wanting to address the need for low-carbon technology.

We received evidence on emissions trading and the desirability of a global cap-and-trade system, and I think that the Government broadly share our view, but we are all aware of the enormous practical obstacles. Nevertheless, I hope that we face something of a critical moment in emissions trading, particularly after this week’s vote in the European Parliament. It is much to be regretted that the enormous impact of the recession on emissions in the EU—reducing them to well below the pathway that would have been realistically forecast five years ago—is not in any way recognised through tightening of the limits in phase 3. We have seen the effect of that on the carbon price. Alongside that, however, we can take encouragement from the commencement of emissions trading in California at the start of this year, where there seems to be real commitment from the state, and the governor in particular, to making it work, and from the emissions trading pilots under way in China, which we will focus on in the second of the afternoon’s debates.

It is the view of the Committee, and my very strong view, that what happened this week in the European Parliament underlines the damage that the UK Treasury’s unilateral imposition of a floor price for carbon could do to some sections of British industry. That should now be seen and acknowledged for what it is: a straightforward tax, introduced by the Treasury for revenue-raising purposes. It will do nothing to reduce carbon emissions; it might divert some emissions from this country to the rest of the EU, and it might put British business at a competitive disadvantage compared with the EU, just for the Treasury to collect another few billion pounds a year. If the Treasury says, “We’re going to have a tax,” that is fine, but do not dress it up as an environmental measure which, I am afraid, tends simply to discredit the concept of carbon pricing.

--- Later in debate ---

[Mr Yeo]

rose—

[Sir Malcolm Bruce]

Will the right hon. Gentleman give way?

[Mr Lilley]

I will do so in a moment. I do not believe that this country, or Europe as a whole, can afford simultaneously to bear the costs of cutting its own emissions by 80% and the cost of the developing world’s developing at the speed and pace they want to while we absorb the additional costs we would force them to incur if they did so using renewables instead of fossil fuels. It just will not happen. It cannot happen, and the Government would not get re-elected if they proposed to the British electorate that we should incur that burden.

[Sir Malcolm Bruce]

May I suggest that the right hon. Gentleman is advancing a false prospectus? No one is suggesting that developing countries should not use fossil fuels. We are saying that they should use a sensible mix, and be encouraged to have access to renewables. That is why, for example, Ethiopia is building dams to generate hydroelectric power and China has a huge investment programme in renewable energy. They know that they have a mix. The right hon. Gentleman seems to be arguing that there should be no mix.

[Mr Lilley]

The Chinese, whom we will come on to in the next debate, are planning to produce, by 2030, 11% of their energy from renewables. The bulk of it will be hydroelectric, which is a conventional source of electricity; no one would argue against that. Where countries have hydro power and they can harness it, they should go ahead and do so. That has always been happening and it will happen anyway. It is happening regardless of whether CO₂ is a serious problem for them. Hon. Members must recognise that the world is developing using fossil fuels. We can wish that that was not the case. We can finance great jamborees every year or two. We can all get together and pretend to ignore it, but as long as those in the developing world are free to exploit fossil fuels and any renewables they find economic or choose to inflict on themselves, America will not sign up either. If America, China, India, Canada, Russia and Japan will not sign up, it seems slightly perverse of us to assume that by gathering together we are somehow going to overcome that resistance; we will not.