Decarbonisation

Baroness Sheehan Excerpts

Thursday 13th July 2023 Lords Chamber

[Lord Callanan (Con)]

I totally understand the point that the noble Lord is making. He highlights the dilemma of carbon-reduction policies in these areas, where we impose carbon taxes and emissions trading systems and schemes, and of course that has an effect on domestic industries that emit a lot of carbon—the so-called carbon leakage problem. We are working closely with the steel industry to try to help it adjust to greener manufacturing methods, and of course it receives free emissions permits.

[Baroness Sheehan (LD)]

My Lords, recent reports that the Government are considering rowing back on their flagship climate finance commitment of £11.6 billion to assist lower-income countries to reduce their emissions, adapt to climate change and protect the natural environment are to be deplored. Those global benefits affect us all and would be lost to us all. Does the Minister agree that using a proportion of the funds raised through CBAM, the carbon border adjustment mechanism, to support low-carbon transition in least-developed and climate-vulnerable countries would be enlightened self-interest?

[Lord Callanan (Con)]

The noble Baroness is asking me to comment on tax policies and hypothecation of taxes, which are matters in the purview of the Chancellor of the Exchequer. I shall make sure her views are communicated to him.