Climate Change Conference

Charles Hendry Excerpts

Thursday 18th November 2010 Westminster Hall

[The Minister of State, Department of Energy and Climate Change (Charles Hendry)]

It is a pleasure to serve under your chairmanship this afternoon, Mr Chope. We have had a good, productive debate; it has been thoughtful, considerate, passionate and wide ranging. Although the numbers have not been as great as we might have wished, the quality of the debate could not have been better. People looking at it from outside will have perceived the genuine commitment of everybody who spoke to get the best possible deal out of Cancun and to make real progress. One of the most important roles of the Backbench Business Committee is constantly to raise ambition; to push and encourage the Government to do more; and to encourage the Government to be realistic, but ensure that we know we have the support of parties in all parts of the House in raising the ambition for what is possible.

I commend the hon. Member for Chippenham (Duncan Hames) on the way he introduced the debate. He made an extremely effective contribution in which he raised many important issues. I hope to deal with those points and everything else in my response. He rightly paid tribute to the work of the last Government. One of the most important aspects of the progress that we can make in this country is the degree of cross-party agreement on what needs to be done. The commitment to an 80% reduction in carbon emissions by 2050 had the support of a broad coalition. Members of the Opposition in the last Parliament pushed the Government to go further, and the Government responded positively. It was therefore possible for this country to give a global lead towards achieving our aims. The hon. Gentleman was also right to say that we need to bring as many people on board as possible. He talked about China and other parts of the world, because this is not something we can do on our own or purely with Europe. This is a global challenge requiring a global response.

I was also impressed by contributions from hon. Friends and hon. Members, including the hon. Member for Liverpool, Wavertree (Luciana Berger), speaking for the Opposition. My hon. Friend the Member for Richmond Park (Zac Goldsmith) is completely right in saying that we have to win hearts and minds. That is where his measured tones are so much more effective than a hectoring style. That type of tone, reasonableness and thoughtfulness, help to win people round and to understand the extent of the challenges we are facing. As the hon. Member for Brighton, Pavilion (Caroline Lucas) says, climate change is happening now—a point supported by the hon. Member for Liverpool, Wavertree. We only need to look at what has happened this year to realise that time is not on our side. We have to act now and constantly up the pace at which we tackle these issues.

My hon. Friend the Member for Stroud (Neil Carmichael) talked about the need to encourage progress, not just to penalise bad behaviour. That is at the heart of the tone that we should be adopting. If we want to encourage people to change, we should be showing how much better things can be, rather than constantly telling people how bad they are at the moment.

My hon. Friend the Member for Bristol North West (Charlotte Leslie) picked up that theme. I liked her analogy of moving from judging to enabling—that is an effective comparison. She mentioned, as others did, the importance of China. I know that when the Prime Minister and others were in China last week, they were constantly impressed that China is not a laggard. China is determined to lead the world in clean technologies. It is rolling out onshore and offshore wind and other low-carbon technologies, and seeking to take a lead in carbon capture and storage. China sees an extraordinary business opportunity and wants to ensure that it takes a global lead.

As has been constantly emphasised, the scale of the challenge shows that we must have international action; it is not something that the UK can do on its own. Our proportion of global emissions is just 2%, so even if we managed to obliterate those over the next few years, without action being taken across the world we cannot begin to make the necessary progress to limit global temperature increases to no more than 2%. We all know that beyond 2% the risks of dangerous climate change are greater and the costs associated with managing the impacts rise sharply. That is why we are committed to working towards a global deal to limit emissions, and to provide support for developing countries to adapt to the inevitable consequences of climate change.

[Barry Gardiner]

So as not to mislead people, would the Minister care to correct the record? I think he meant 2°C, rather than 2%.

[Charles Hendry]

I did mean 2°C, and I am grateful to the hon. Gentleman for clarifying that for me. I am not sure what 2% would work out at, but 2°C is the figure we should be working to. I am grateful for that clarification and correction.

A legally binding global deal is the best way to secure a stable, transparent framework for action, build confidence for investors and reassurance for the developing world that developed countries will deliver their commitments, but as Copenhagen showed us, we must be realistic about when such a deal can be achieved. We all now recognise that expectations at last year’s Copenhagen conference became over-inflated. That is a point brought home by the hon. Member for Southampton, Test (Dr Whitehead), who speaks with such expertise on many of these matters. In reality, there was a lack of political will on the part of too many countries to reach a comprehensive deal. We need to win the argument that it is in countries’ political, economic and security interests to move towards low-carbon economies.

Although we will not agree a full legally binding treaty in Cancun, we can and must make solid progress. Cancun can set the stage for future negotiations and provide an essential stepping stone towards a legally binding agreement in the future. Our preferred outcome at Cancun would be to make solid progress on a package of issues that would benefit both developed and developing countries. That package could include bringing the emissions reductions offers countries have made since Copenhagen into the UNFCCC process; strengthening the measurement, reporting and verification arrangements, which will ensure progress on emissions is transparent; and establishing the structures for climate finance beyond 2012, including an international green fund for climate change.

Achieving even that will be challenging. All countries must be prepared to show flexibility in their positions to maximise the chances of success and progress. That is why the EU has signalled its willingness to sign up to a second commitment period of the Kyoto protocol, subject to certain conditions being met. But success does not depend solely what happens at the negotiating table. Given the challenges in securing a global deal, we must increase our support for practical action on the ground, in parallel with negotiations if we are to persuade other countries that taking ambitious action is in their economic and security interests. We must demonstrate the benefits of moving to a low-carbon economy domestically, and support others who are willing to do the same; encouraging them to deliver on their existing commitments to reduce emissions and go even further.

In that respect, I believe we have a strong record as a new Government in trying to achieve progress. We do believe in showing global leadership in the measures we are putting place to mitigate climate change. We have allocated £1 billion to the green investment bank, even in these difficult times, and made a commitment to come forward with additional funding. We are encouraging the most ambitious programme of energy efficiency improvements through the green deal, which will be the centrepiece of the energy Bill this winter.

We are providing £1 billion of investment to support the demonstration of carbon capture and storage technology—the most any Government anywhere in the world have allocated to a single project—thereby ensuring that the UK will continue to lead in that critical technology. The internationally renowned “2050 Pathways Analysis” helps us to consider some of the choices and trade-offs that we will face over the next 40 years if we are to move to a secure, low-carbon economy, and it allows us to explore the combinations of effort that will be needed to meet our emissions targets while matching energy supply and demand. We are taking action to switch from fossil fuels to cleaner and more sustainable green sources of energy by taking forward the renewable heat incentive, a world-leading scheme that provides long-term support for renewable heat technologies. There are also the feed-in tariffs to encourage microgeneration.

My hon. Friend the Member for Bristol North West mentioned the biomass facility that I was delighted to visit with her in her constituency. Another change that we have made will enable councils to generate their own electricity and sell it to the grid, freeing up a fantastic potential that has not been delivered in the past. My hon. Friend the Member for Stroud spoke about the critical use for technology in that area. British universities have global leading potential in the area. The genius of invention and innovation that is found in so many of our universities can provide fantastic opportunities to deal with the challenges we face. I am delighted that my hon. Friend, and many colleagues from all parties, are engaging with the Institute of Mechanical Engineers, because of the contribution that it can bring to the debate.

I shall now respond to some specific issues that have been raised. The hon. Member for Chippenham, and many others, raised the question of long-term financing. The United Kingdom is making a significant commitment to support action on the ground. The spending review provided £2.9 billion of international climate finance through the international climate fund. That will allow the UK to help developing countries to adapt to the impacts of climate change and move on to a low-carbon growth path. That fully funds the UK’s pledge to deliver £1.5 billion in fast-start finance between 2010 and 2012, including £300 million for reducing deforestation.

[Barry Gardiner]

Will the Minister clarify whether those funds included any element of the previously announced £750 million for the environmental transformation fund?

[Charles Hendry]

The £2.9 billion is new in that it is drawn from the rising aid budget. Part of the £1.5 billion to which I have referred relates to the fiscal years 2011-12 and 2012-13. That is included in the figure of £2.9 billion. Funding for years three and four of the spending review period represents a further commitment of resources for climate finance. The hon. Gentleman may like more detail on that, and I would be more than happy to correspond with him if any further clarification is necessary.

Such figures demonstrate the UK’s commitment to scaling-up climate finance to meet its fair share of the $100 billion of public and private international finance per year from 2020. We welcome the recent report from the UN Secretary-General’s advisory group on climate finance, which makes a number of recommendations on how to meet the $100 billion goal. We look to make good progress in implementing its recommendations.

We need things to happen now, and that is why we call for international bodies such as the United Nations framework convention on climate change, international financial institutions, the International Civil Aviation Organisation, the G20, and others, to take action in their areas on the back of the report, so that we can deliver progress at Cancun with a view to producing concrete proposals by the time of the climate change negotiations in South Africa next year. It is clear that public finance alone is not enough; we also need to mobilise private investment. That is why we have launched the capital markets climate initiative to help create the right commercial conditions to drive economic investment in emerging economies.

The fast-start programme has been mentioned. As I have said, the United Kingdom will provide £2.9 billion through the new international climate fund and the spending review to help developing countries to adapt to the impact of climate change and move to a low-carbon growth path. That fully funds the UK’s commitment to deliver £1.5 billion in fast-start finance between 2010 and 2012. My hon. Friend the Member for Richmond Park asked about the importance of bilateral agreement. We are absolutely clear that any action must be taken through bilateral and multilateral discussions. It will be a priority to deploy some of the finance to tackle deforestation.

The hon. Member for Brent North (Barry Gardiner) asked whether developed countries need to be clear about the finance they will provide to developing countries. We could not agree more about that, which is why we are pushing other countries to be transparent about how and where they are spending their fast-start finance. We support a Dutch-led website that allows countries to make information about their fast-start spends publicly available.

In his opening comments, the hon. Member for Chippenham asked about which AGF sources are a priority. He asked about the levy on aviation and shipping and the financial transaction tax. The report identifies a range of proposals on how to achieve the goal of £100 billion, and we now need to work with others to make that happen. The United Kingdom continues to work with the International Civil Aviation Organisation and the International Maritime Organisation to develop co-ordinated global solutions to tackle emissions from those sectors. Many questions need to be explored about whether proposals for a financial transaction tax offer a stable and efficient mechanism to raise revenue. Those are issues that the Government will take forward.

My hon. Friend the Member for Richmond Park asked about aviation, and we want to ensure that action to limit emissions from aviation is discussed at Cancun and in further negotiations next year. However, we must look at the potential perverse consequences that can sometimes emerge. It is clear that some freight is being brought by air into mainland Europe and then by lorry into the United Kingdom because of different levels of aviation tax in different countries. If we act unilaterally, we must be aware that the ingenuity of the business community will find ways around that, and it could be British consumers who end up paying without the important carbon savings being delivered.

My hon. Friend also asked whether the United Kingdom would support an end to World Bank lending to fossil fuel projects. As my right hon. Friend the Secretary of State for International Development said this morning, we will press the multilateral development banks to support a shift towards climate-smart lending across their portfolios. As part of that, the Government are reviewing the role of the multilateral development banks in energy lending. My hon. Friend the Member for Richmond Park has publicly asked the Department for International Development questions about that, and I am sure that the Secretary of State will be aware of the comments that he has made during this debate. He also asked whether we will press for reform on fossil fuel subsidies. We strongly support the G20 commitment to phase out inefficient fossil fuel subsidies. That commitment was restated at last week’s G20 summit, and I assure my hon. Friend that we will continue to raise the issue in our bilateral contact with counterparts in other countries.

We have covered many issues during the debate, but I will conclude with the extent to which there should be international agreement. We would all like to see the EU take an international leadership role in these debates, but we must also recognise that we have our own national perspectives to push forward. As a country with a strong Commonwealth link, we perhaps have a different perspective from that of other countries in the EU. Although we would all welcome greater EU co-ordination and a greater ability to speak with one voice on such matters, we also greatly value the ability of independent nations and Governments to speak on behalf of their own populations and the expertise that they bring to the debate.

The situation is not about us and China against the United States. This is a global issue and we must bring the United States with us. I am not sure that trying to bully the American business community will work. We must build bridges with the American people and the American Government to persuade them of the urgency of doing what needs to be done. We know that they are facing particularly difficult times, as are we. The work of international organisations such as GLOBE International plays an extremely important part, and in that respect I pay tribute to the work carried out by many hon. Members of this House. If we are to make progress, we must do so in a co-ordinated way.

My final point relates to forestry, and a couple of contributions have mentioned the programme on reducing emissions from deforestation and forest degradation in developing countries—REDD-plus. Our overarching goal is to maximise the contribution to global mitigation from forest and land management action in developing countries. We seek to achieve that by agreeing to strengthen the UNFCCC rules on counting emissions from forest management action towards the targets of developed countries. Those rules should incentivise action beyond business as usual and ensure environmental integrity, but avoid unfairly penalising countries that are practising sustainable forest management. We are also seeking an ambitious deal on reducing emissions from deforestation and forest degradation.

The Minister of State, Department of Energy and Climate Change, my hon. Friend the Member for Bexhill and Battle (Gregory Barker), who leads on these matters in the Department, is talking to some of his international counterparts at this moment, which is why I have been standing in for him and responding to the debate. I hope that I have been able to reassure my hon. Friends and the Opposition Members who spoke that this is a matter of profound importance to the Government and we are determined to continue to make progress.