Climate Change Act 2008 (2050 Target Amendment) Order 2019

Debate between Lord Lilley and Baroness Brown of Cambridge

Wednesday 26th June 2019 Lords Chamber

[Baroness Brown of Cambridge (CB)]

My Lords, I offer the Minister my strongest support for the order.

I remind the House that we are being asked to sign up to a new target, not a new cost. I want to dispel a few misconceptions. The Committee on Climate Change identified the range of costs needed to meet the net zero target as between 1% and 2% of GDP. Those costs are not costs to the Exchequer. Yes, there will be a role for public funding in some areas, such as to avoid a competitiveness impact on the UK manufacturing industry, but the vast majority of the changes will, and should, be delivered through private investment.

I declare an interest as vice-chair of the Committee on Climate Change. In our report, we compare resource cost estimates to GDP to give a sense of scale. It does not follow that the estimates have an impact on GDP. The impact on GDP could easily be positive, as we shift away from using imported fossil fuels, for example, or as we develop newer industries that will boost our productivity and growth as an early supplier of new, low-carbon technologies globally. We need to be very careful in how we think about the numbers.

However, as many noble Lords have indicated, and as the CCC said in its net zero report, changing the target is just the first step and, in many ways, is the easy part. The real challenge will be the swift ramp-up in policy that needs to follow. I have had the honour of being the sector champion for the offshore wind sector deal as part of the Government’s industrial strategy. As the Minister is aware, a major renewable energy conference is under way in London; I believe that he spoke at it today. The conference is exciting; for example, it shows the impact of our investment in offshore wind on UK jobs and companies.

Will the Minister consider a swift and simple indication of the Government’s policy intent to deliver this new net zero target? A simple indication of intent would be removing the six-gigawatt cap for the next round of CfD auctions while offering no additional funding. The offshore wind industry is ready to respond to such an indication. This would be a win-win. It would show the Government’s intention to act swiftly; it would help to create more jobs; and it would deliver more zero-carbon electricity at no additional cost to the Exchequer or the consumer.

[Lord Lilley]

My Lords, I declare a non-pecuniary interest as a director of the Global Warming Policy Foundation.

We are debating the consequences of a departing pledge by the outgoing Prime Minister; it is probably the most expensive leaving present in history. Harold Macmillan said that when both Front Benches are united, they are almost invariably wrong. It is in that context that I rise, with some trepidation, to show that at least some scrutiny is going on. Macmillan’s point was that, where both sides agree, you do not get proper scrutiny and the normal adversarial approach of our Houses of Parliament does not apply—that is, we do not look with enough rigour at what is going on. That is particularly true if, as was the case in the House of Commons, this House eschews any serious consideration of cost on the grounds that the higher the cost, the better—almost—because it shows how virtuous we will be. That was certainly the attitude during the passage of the original Act in 2008.

My principal plea is for a proper impact assessment of the order. I say that with some feeling: I came to this issue because in 2008, when the then Climate Change Bill was before the House, I went to get a copy of the impact assessment and was told by the Vote Office that I was the only person who did. I was the only person who read it and raised the issue of cost throughout the Bill’s proceedings. That is why impact assessments are important. I read the impact assessment and discovered that, at that stage—when the target in the draft Bill was a 60% reduction in emissions—it showed that the potential costs were twice the maximum benefits. If the costs of something exceed the benefits, you do not do it. That does not mean that the target was wrong; it means that you look for more cost-effective ways of achieving that target. But we did not; we ignored it. We ploughed ahead anyway—and went further: we raised the target from 60% to 80%. One would normally expect that to increase the cost disproportionately, because the things you have not done would be costlier than the things you would do to meet the lower target, and the benefits would rise less than proportionately, because you would get the greatest benefits from the early reductions in global warming and fewer benefits from any incremental reductions.

After we passed the Act, the Government did produce an impact assessment—under much goading from me. Sure enough, it showed that the cost of meeting the target was going to double, but it also found that the benefits were going to increase tenfold. They found £1 trillion of benefits previously overlooked and ignored by the people who had produced the original impact assessment. That must surely raise a feeling of unreality in the minds of people considering this. If you can conjure £1 trillion of benefits out of nowhere, we really are dealing in extraordinary detachment from reality and normal accounting.

I want to see a proper impact assessment this time, even if we did not get one originally and the one we eventually got lacked credibility.