Paris Agreement on Climate Change
Debate between Angus Brendan MacNeil and Callum McCaig(8 years, 3 months ago)
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Callum McCaig (Aberdeen South) (SNP)
That was a long conclusion. I have been sat like a taut spring for the last 10 minutes, since the Minister said he was getting ready to conclude—I will clearly take some time to get used to the new ministerial team. However, I welcome the chance to debate this issue as, I think, the House’s longest-serving Front-Bench climate change spokesperson —the irony is not lost on me.
We are here in our quarterly debate on climate change, and it would seem that we regularly discuss these matters. That is important—it is just a shame that it is, largely speaking, the same faces that we see every time. I think there is a wider body of folk in all parties who could do with hearing some of this, and it is, to a degree, regrettable that we see the same faces and largely hear the same arguments. We can push things on somewhat, and I think the shadow Secretary of State is attempting to do that today. I welcome the fact that we are having the debate.
I listened carefully to what the Minister was suggesting, and I am still slightly at a loss as to why we cannot press on with this issue. He said that the Government see the ratification process as a start and that they will start as soon as possible, but, as we say in north-east Scotland, it might be time to nip on a wee bit, because this is genuinely important. The symbolism the Minister talked about is key. The UK has been a leader on this issue, but with ratification by the US, China, France and others, we risk passing the baton to others. That would be regrettable for the UK’s global voice on this issue, but it is also regrettable in terms of the lack of opportunity and in terms of losing our impetus and our technological lead—the industrial lead we potentially have in deploying the technologies that will make the Paris agreement possible.
A year ago—this is something to be celebrated—we were sat discussing the possibilities of the pre-conference of the parties. I do not think anyone thought that the deal that we have would be quite as strong as it is. There is a lot to be done, but a global deal—a global consensus—to keep global warming well below 2°, with an ambition to keep it to 1.5°, is to be welcomed. They are incredibly challenging targets that have been set, and delay in ratification will not help. We need to get on with this. The terms of the debate are shifting. This is not just a subject for NGOs and those who care; it is becoming mainstream in political debate. The world’s biggest asset manager, BlackRock, in a warning to investors, said that we can no longer ignore climate change, and that
“climate risk factors have been under-appreciated and underpriced because they are perceived to be distant”.
We are already 1° warmer than the long-term trends, and the past three years have been the hottest on record. If that is not a wake-up call to what we need to do, then what is? If we are to keep things below 1.5°, we had better get started quickly. We need to deploy the full range of our technological know-how, here and abroad, or we will miss the one chance that we get to make sure that we do not see catastrophic climate change.
The impacts of climate change here in the UK have been set out by the Committee on Climate Change in its risk assessment: increased flooding, and, conversely, drought; food shortages; and potential damage to critical infrastructure. This is a big country and a rich country. We can probably weather a lot of that—no pun intended—but others are not so fortunate. We need to be planning ahead. We need to get the mitigation and the adaption in place early—otherwise it will be more expensive—but we also need to help others.
The most precious thing that came out of the COP21 agreement is the international consensus, but there is a suggestion that it is already beginning to fray. President Duterte of the Philippines is not someone I would regularly seek to quote, but he said something that is symbolic of the attitude change that we risk causing if we are not serious about getting on with this. He said of the ratification and the INDC—intended nationally determined contribution—for the Philippines:
“You are trying to stymie us…That’s stupid. I will not honour that.”
He did change his tune a bit a little later in addressing the Philippine Parliament, when he said:
“Addressing climate change shall be a top priority but upon a fair and equitable equation. It should not stymie our industrialisation.”
That is a fair point. The greatest irony of climate change is that the countries that have contributed least to it are those that stand to lose the most. Above all, the poorest members of those communities, who have contributed even less, will be the first to see their livelihoods and way of life destroyed by it. We have to address the problem of climate change, but we have to do so with justice at its heart.
The £100 billion of climate change finance that was part of the Paris agreement is absolutely fundamental. That money can be used for adaption and new technologies. However, it has to be new money, and it has to be built on an international consensus that recognises that the rich parts of this world have contributed more than their fair share to creating the problem—to causing the mess—and that we are certain that we are going to pay more of the price in cleaning up that mess.
We cannot have a system where global development is stymied because countries cannot industrialise in line with the model that we agreed. We need to have new models of industrialisation. We need to skip the dirty phase and move on to the clean phases. These countries need to see the investment in solar and wind, and the new technologies that will come. They will need support. Some of that support will come through aid, no doubt, but it also comes in the form of opportunities. We have the technologies and the businesses to do this. We can help. This can be a mutually beneficial partnership with the poorer countries of this planet to help them develop. That is a moral responsibility on us, but it is also an economic opportunity. If someone does not feel particularly compelled to act based on the moral imperative, then trying to make some money out of it, at least, would be a way to go forward. The two things can go hand in hand, but they need the correct support both at home and abroad.
The Minister said that it is really important that, to use his term, there is industrial strategy on the “tin” of Government. That is welcome, but we have to reflect the converse—we cannot have it both ways—and off the tin has come climate change. It has come out of the lexicon of Government. That, to a degree, is regrettable. It may have been an oversight or it may have been deliberate. I do not know about the motivations for it, nor do I particularly care. However, it can easily be rectified by putting addressing climate change right at the very heart not just of this Government Department but of Government as a whole. With all due respect to the Minister, he is not going to solve this problem alone; it will take cross-Government, cross-sectoral engagement with the devolved Administrations and with the business community. That is fundamental to everything we will have to do as a country if we are going to get this right. So let us put it at the heart of what we do, and, as the Minister said, let us make a start.
Let us start with a big, symbolic gesture and ratify the Paris agreement as soon as possible. We can talk about the fact that we have led the world in the Climate Change Act 2008, and I can talk about the fact that Scotland has led the UK in that by exceeding our 2020 targets. We are already seeing a reduction on the 1990 baselines of 45.8%, against a target of 42%. The First Minister has committed to extending that target, because it has already been reached.
That is the sort of high ambition that we need, and we need it across all sectors. We are getting on fairly well with electricity, but we are doing more poorly in terms of heat and transport—the next big challenges. Tackling them will require money, support, innovation and skills, so there has to be the ambition to deliver on that right across the remit of Government.
The shadow Secretary of State talked about the damage that has been caused to investor confidence, and he listed a whole host of things. I gently suggest that just because there is not 100% agreement on this, does not mean that we should risk losing cross-party consensus. If ever there was an issue on which we could benefit from political parties seeking to outbid each other, it is climate change. We should welcome the fact that the Labour party is trying to outdo the Conservative party and trying to outdo us. We should all be trying to outdo each other, because that ambition and desire to see things happen will make them happen.
I have commended, in the past, a number of things that the Government have done. The former Secretary of State for Energy and Climate Change played a great role in leading the high-ambition coalition at the negotiations in Paris, and that is welcome. In a few months’ time, the conference of parties will meet again in Marrakesh. If we are to have these discussions, I would rather that the UK went to the table and was able to demonstrate the progress that has been made in one year. I want the UK to be able to say, “We have ratified our commitment. We are pushing ahead. We have taken x, y and z steps,” and I will come on to what those steps should be. If we turn up without having delivered on our promise, and without having been through the ratification process, it will undermine our position. That would be distinctly regrettable, because our voice, the soft power and the pressure that have been applied in this area are among the high points of British diplomacy over many years—potentially in my lifetime. That is too precious to put to waste.
In terms of the x, y and z of deliverability, I do not think that the Government’s renewable energy policies, U-turns and so on—in fairness, I am talking about the previous Government—have been welcome. There are unresolved issues and questions about investor confidence brought on by the Brexit vote.
Mr MacNeil
One of the first reports that the Select Committee on Energy and Climate Change undertook was on investor confidence. If there is a plea that I can make to the new team, it is not to lurch and suddenly make announcements, as happened just over a year ago, last July.
Mr MacNeil
I am seeing some nodding, so I feel reassured that that will not happen. I am grateful for that.
Callum McCaig
I thank my hon. Friend for his intervention, and I commend his Committee’s report. We had a welcome debate about it before the recess, and it teased out an awful lot of the issues. I do not think that that jumping around and that policy change were helpful.
We need to set clear guidelines. We need to set out how the decarbonisation process will look. There needs to be a degree of flexibility to allow for new technologies to emerge, but there must not be a cliff edge. We do not need to march people up to the top of the hill and off a cliff face, as has happened with solar and onshore wind and may happen in future with other technologies. That upsets investor confidence in a way that we cannot afford. It will make doing what we need to do more expensive, as the banks factor additional risk into their financing agreements. We all lose from the ad hoc nature of policy in that regard.
Mr MacNeil
We are talking about climate change, and we have had some positive reaction from the ministerial team, but I hope there will be some revision of locational charging so that for wind resources—they are particularly strong in constituencies in the Scottish islands—it will cost less to bring energy to the market. In continental Europe it costs less to bring it to the south of England. There is a penalty to produce energy in the UK that is not faced by our European competitors.
Callum McCaig
I again agree wholeheartedly with my hon. Friend. To take things forward we need a proper decarbonisation plan. For electricity in particular—he touched on island connections, which we need—a tremendous resource is waiting to be unlocked. Likewise, there is a tremendous potential resource in wave and tidal energy, of which Swansea bay is another example. These big programmes may be costly in the first instance, but we missed the boat with onshore wind in terms of owning and developing the technology, which is where the real money is. With offshore wind, we are part of the way towards making sure we have some of that, although the main basis of the technology is outwith these islands.
With tidal energy in particular, we have the chance to be the world leader. In the past fortnight, fantastic announcements on tidal energy programmes have been made in the north of Scotland by Nova and Atlantis. Such announcements need to be the first of a kind, not one of a kind, but that requires continued access to the market. If I were to make plea above all else to the new ministerial team it would be for them to support and commit to 100 MW of tidal energy, at a CfD of £305. That will be fundamental to delivering the future of tidal energy.
Tidal energy has huge benefits. It is clearly far more predictable than other forms of renewables. It ticks an awful lot of boxes. It may be costly in its initial phases, but it is a new technology. Let us look to the future and not see at as a cost. If I have one criticism of the previous Department of Energy and Climate Change it is that everything was seen as a cost; nothing was seen as an investment. This is a form of investment. If we get the technology right and become the world leader in tidal energy—and potentially in the wave energy to come—such a deployment will provide us with a reliable renewable source of energy, and it will also open up a market. There is a lot of sea and there are a lot of tides in the world. There is astronomical potential for the deployment of tidal technology, so let us not kill it before it has got off the ground. Let us have a pathway and allow it to develop. Let us allow it to bring down its cost, and then allow it to go global.
To conclude, we can have consensus on this subject. We will probably not get it today, but that does not mean it should not be the aim for the future. We can do this, but we need to make a start. Paris is such a start—I agree with the Minister on that—so let us get on and do it. Let us get it ratified, and then get it delivered.
Energy Spending Priorities: Investors and Consumers
Debate between Angus Brendan MacNeil and Callum McCaig
Mr MacNeil
I refer the hon. Gentleman to the report. We have had only one response on carbon capture and storage. As for the other reports, I think a response came early today, but we are waiting for the response on the main report on investor confidence.
I will move on to the report on home energy efficiency. All the policies mentioned affect consumers, as they are subsidised through the levy control framework. My Committee also looked at Government changes to spending that affect consumers more directly, namely changes to spending on energy efficiency measures that are levied on consumer bills but sit outside the LCF. As with the report on investor confidence, our energy efficiency inquiry was another piece of work that stakeholders urged us to take on at the roundtable meetings we held early in my time as Chair of the Committee. At this point, I would like to thank Josh Rhodes, the Committee specialist, for his work and help on the report.
We know that improving energy efficiency is a win-win for households and the UK as a whole. It enhances energy security, cuts carbon emissions from housing and reduces costs. For consumers, the benefits include lower energy bills, and, critically, warmer, more comfortable homes—more arguments should be made on that point—and improved health and wellbeing. When we work on the technical energy side, we sometimes forget that these things are for human beings, who have very nuanced and different reasons for wanting to insulate their homes and have warmer homes.
Callum McCaig (Aberdeen South) (SNP)
This comes to the nub of the issue with investment in this area. The Government are completely unwilling to accept that it is investment. Investment in making homes energy efficient is an investment in our society. There are savings to be made. We need to look at things in the round, rather than looking at one part in isolation.
Mr MacNeil
My hon. Friend is absolutely correct—I have to get used to saying “my hon. Friend”, because for the previous 10 years I have been here I have not had many hon. Friends to say it to. It is a pleasure to say it. He is absolutely correct, however, because the Government have got into a way of thinking that any money spent today is a cost rather than an investment for the future. I hope that they will get away from their austerity cult idea. I often criticise them for being a penny wise and a pound foolish Government, because I think it is a mistake.
Callum McCaig (Aberdeen South) (SNP)
I welcome the fact that we are debating these important Energy and Climate Change Committee reports, but as my hon. Friend the Member for Glasgow North (Patrick Grady) has ably demonstrated, it is a pity that we are doing so tonight when we should be discussing how we spend all the money that the Government spend—it is a whopping figure. There is a tinge of irony in the fact that less than three weeks ago, this country apparently voted to take back control to make this Parliament sovereign once again, and yet we cannot even properly debate how we spend our money.
Of the three reports, the investor confidence report is the critical one. It explodes the myth of the so-called long-term economic plan. The point about rhetoric versus reality is very much borne out. To quote the report, in reference to contracts for difference,
“merely stating that there may be three auctions this Parliament does not constitute a ‘plan’”;
In fairness, the absence of a plan around Brexit makes that look like a detailed, well worked out masterplan, but in reality it is not. All joking aside, the report goes on to say:
“We heard that policy uncertainty was weakening the case for investment in energy in the UK. This could mean that projects become more expensive to deliver—as investors demand a greater return on their investment to compensate for increased risk—or that projects simply do not go ahead. Moreover, any hiatus in energy investment could undermine the UK’s ability to meet climate, energy security and affordability objectives.”
In essence, all three sides of the energy trilemma have been undermined by the Government’s incoherent and ad hoc policy decisions. Throw in a dose of Brexit uncertainty, and there is a real requirement for the Government to provide some certainty if we are to meet the challenges of not just affordability of electricity and reducing carbon, but security of supply. All three of those are questionable. They were questionable before the Brexit vote, and the resulting increase in uncertainty has magnified that substantially. It is clear from the report that that has significantly undermined investor confidence, particularly in Scotland.
The undermining of our renewables industry in Scotland has been damaging. The discussions about carbon capture and storage are hugely undermining the Scottish industry. We had the potential in Peterhead to have both the world’s first floating wind farm commercially deployed, and carbon capture and storage in Peterhead power station. That would have given a relatively small part of Scotland a chance to be right at the global cutting edge of the carbon reduction and climate change technological advances. Unfortunately, one part of that is not going ahead, and that is substantially regrettable.
We have heard discussions about the regrettable fixation on one side of the levy control framework and the fact that there is an opaqueness around the levy control framework. I add to the Select Committee’s call for us to be shown the detailed working behind that. We need an understanding from the Government that if investment in low-carbon technology drives down price, thereby increasing the notional overspend on the levy control framework, it does not necessarily lead to greater cost for the consumer. If we are undermining investment in the low-carbon industries based on a desire to protect the consumer—that would be a reasonable position to start from, although not necessarily one that I agree with wholeheartedly—we need to look at what we are doing in the round. The report says that the increase in the cost of the levy control framework from the fall in the wholesale price of conventional electricity will be half a billion pounds, but that is not an additional cost to the consumer. It is certainly not a reason to cut the support—the long-term investment in the future—that investment in renewable energy will bring.
There is huge uncertainty over how we will deal with our European neighbours following the vote two weeks ago. In her reset speech, the Secretary of State for Energy and Climate Change discussed at length the benefits of energy union and how it needs to be worked upon. We have no idea whether that will carry on or whether it will be part of the emissions trading scheme.
Mr MacNeil
My hon. Friend raises a good point. It would be useful if DECC laid out what the three most likely scenarios would mean for energy policy: European economic area membership, European Free Trade Association membership and the third-country option. Given the words of Commissioner Malmström, it seems that if the UK goes for the third-country option, we will have to leave the EU and then negotiate for however many years before we have a deal. It would not happen concurrently with exit, so we need to know what that might mean for energy policy.
Callum McCaig
I would go further than saying that that would be useful; it is absolutely essential. It behoves a responsible Government to do that. These are not contingency plans any more; they are just the plans. There must be some sense of certainty about what is going on.
The reports from my hon. Friend’s Committee have ably demonstrated that uncertainty builds in additional cost. We have to replace a significant proportion of our electricity capacity in the next decade or so. Perhaps the cost will be greater because the pound will be weaker when we are outwith the EU. These things need to be addressed. It would be unfair to expect the Secretary of State to come out with a detailed plan now, but we need an undertaking that her Department will do the necessary work, and in short order, to deliver some form of certainty, otherwise we will be in a real pickle very soon.
The hon. Member for Beverley and Holderness (Graham Stuart) said that he was delighted and that the only signal we needed to give to the markets was the welcome announcement that the Government accepted the targets of the fifth carbon budget. I share his enthusiasm that the Government have done that, albeit somewhat later than was expected by many, but as the Committee on Climate Change has suggested, we need a little more of the “how”, as well as the “what”. Again, I hope that the Government will soon deliver a bit more on how we will do it. These are fundamental questions and they cannot go unanswered.
To conclude, the Government have created uncertainty in this field and that uncertainty has since been magnified. That stresses the fundamental importance of having a long-term plan that has cross-party buy-in, and that is not subject to the whims and changes of Government. The climate change legislation provides a model for how we can work collaboratively across parties and across Parliaments and Assemblies. Another model is the National Infrastructure Commission. Following the uncertainty that the Government have created themselves and the uncertainty caused by the Brexit vote, we need a plan that we stick to and deliver.