Climate Change: Targets

Baroness Sheehan Excerpts

Thursday 27th May 2021 Grand Committee

Asked by

[Baroness Sheehan]

To ask Her Majesty’s Government what plans they have to ensure that legislation aligns with their ambition for the United Kingdom to be a global leader in achieving its climate change targets.

[Baroness Sheehan (LD)]

My Lords, I start by thanking all noble Lords who will be speaking in this debate. I look forward to their contributions, which will fill in some of the gaps left by mine.

This year presents a unique opportunity for the UK to really grasp the nettle of collaborative global action on climate change. It is an existential issue for our planet and we owe it to our children and future generations to get this right. For us to lead the world we must, when all eyes are on us, present a clean domestic scene, which means some good housekeeping. My husband will testify that I am no domestic goddess but I can dust—maybe not behind fridges—and I can hoover a bit. So let me tell noble Lords why I think a bit of housekeeping is in order.

During my time as Lib Dem spokesperson for international development I came across various anomalies, the most egregious of which was the fact that at the same time as we were spending ODA to combat dreadful climate-related disasters overseas, such as the effect of famine in the Sahel due to increasing desertification, we were also investing in new fossil fuel infrastructure in Africa and elsewhere in the world, including in the North Sea. What really struck home was the injustice of those least responsible for climate chaos being the ones who suffer most.

According to Global Justice Now, since the 2015 Paris Agreement was signed, approximately £568 million of UK aid has been invested in fossil fuel projects overseas. If we include export credits provided by UK Export Finance for fossil fuels, that figure rises to £3.9 billion. This makes a nonsense of our commitments to tackling climate change—not just the Paris Agreement but the sustainable development goals and our own Climate Change Act. We cannot be serious about keeping global temperature rises to between 1.5 and 2 degrees centigrade, or about domestic net-zero targets, if we continue to export fossil fuel infrastructure, the ultimate source of the problems we face today.

The situation is worse than that. Our domestic legislation has incoherencies that reverberate here at home. In 2019 I tabled my Private Member’s Bill, the Petroleum (Amendment) Bill, the essential aim of which was to stop the issuance of new licences for oil and gas exploration, to put in place plans to safeguard jobs and livelihoods of communities as we start to phase out existing fossil fuel infrastructure, and to stop UK support for new fossil fuel projects abroad.

For now, I will focus on what is happening here at home. Existing legislation currently pulls government Ministers in different, incompatible directions. For example, the Petroleum Act 1998, as amended by the Infrastructure Act 2015, confers a duty on the Oil and Gas Authority to maximise revenues from petroleum, while the Climate Change Act commits Governments to aim for a target of net-zero carbon by 2050. To tidy up this anomaly, my Private Member’s Bill proposes that the Petroleum Act 1998 be amended so that its principal objective is no longer maximising economic recovery of UK petroleum, but instead is aligned to the otherwise competing statutory aim for a target of net-zero carbon by 2050 in the Climate Change Act 2008, as amended in 2019.

Since the Bill was tabled, the OGA, in July 2020, carried out a consultation to revise its MER UK strategy. It published its response to the review in December. Can the Minister confirm that the principal objective of the OGA is still to maximise economic recovery? If so, how can the Government continue to justify the OGA’s remit to, in effect, extract every last drop of petroleum from the North Sea, given that our existing fields alone will take us over our nationally determined Paris commitment?

On 24 March, the Government announced a new deal with the oil and gas sector, very much in line with the OGA response to its own review. In essence, the sector should reduce its own carbon footprint, deliver carbon capture and storage, and support the development of blue hydrogen. This came as a bitter disappointment to many climate campaigners, because it does not address the fundamental issue that the sector’s raison d’être—the extraction of fossil fuels—is the fundamental root of the problem of greenhouse gases that we face today. Nor does it recognise that carbon capture and storage is not a proven technology at scale. It remains decades away and is technology for the future. The Government’s deal with the sector shows little appreciation of the urgent need to act now. At the very least, we must draw a line under the issuing of new licences, as the International Energy Agency has done in its very recent landmark report, Net Zero by 2050: A Roadmap for the Global Energy System. What will be our response to the report? Does the Treasury intend to publish its own road map to net-zero emissions by 2050? Such an exercise is sorely needed and would concentrate minds on how we will go about this issue.

While I am on the subject of the oil and gas sector, I should mention tax breaks, and some other supports and subsidies that the sector enjoys. It was good to read in the media that the UK wants to lead discussions at the G7 to end fossil fuel subsidies. Sadly, the fossil fuel industries still get huge government subsidies. Annual fossil fuel subsidies were valued at £5.2 trillion dollars in 2017, equal to 6.5% of the global economy, according to the IMF, which also found that more efficient fossil fuel pricing in 2015 would have cut carbon emissions by a whacking 28%. The impact of success at the G7 and, one hopes, the G20 that follows, will be huge.

However, in this regard, the UK has, up to now, been a bit of a laggard, with a major sticking point on how subsidies are defined. What definition will we be asking our G7 partners to sign up to—the IMF’s, the OECD’s, the WTO’s, or will it be custom made? Also, is cutting the tax on North Sea profits, a policy introduced by George Osborne in 2015-16, a fossil fuel subsidy? Today’s tax rates in the UK are so low that in some years, the tax take is less than the subsidies, making UK oil revenues negative. As a result, UK oil and gas extraction is more profitable than most other UK sectors, is more profitable than oil and gas are in most other countries and enjoys benefits not extended to companies producing renewable energies. Rather than requiring companies to clean up after themselves, the UK taxpayer pays roughly half the cost of decommissioning oil platforms and cleaning pollution. Will these anomalies be addressed at the G7 leaders’ summit? These serious issues must be addressed if we are to match fine words with commensurate action.

In the short time I have left, I shall say a few words about planning, because it is so important to get this right. The Government have indicated they wish to reform the planning system and have plans to introduce a new planning law within this Parliament. However, what is needed more urgently is to bring existing planning rules into line with net-zero legislation. The national planning policy statements, which cover large projects, are a gaping hole and urgently need to be updated. The fiasco surrounding the Cumbrian coal mine decision is a salutary reminder of how badly things can go awry when legislation at all levels of government is not tightly aligned to the net-zero targets.

In conclusion, what does the Minister think of the Swedish Government’s climate action plan, published in December 2019, in particular their commitment to review all relevant past legislation and objectives for their compatibility with the plan, as well as to align future legislation? Our children deserve no less.