David T C Davies
Main Page: David T C Davies (Conservative - Monmouth)
Barry Gardiner
Of course. The hon. Gentleman must be forgiven for not having a memory retention of more than 10 seconds. I did, in fact, say that the lower-end figures were £25 billion to £45 billion, and that the higher end of the spectrum led to the estimate of £100 billion. There we have it. If we compare the £7.6 billion that the Secretary of State has negotiated with the lower-end range of £25 billion to £45 billion, we see what the Climate Change Committee has said the gas strategy might cost us in comparison with a low-carbon investment strategy.
Critically, the Climate Change Committee says:
“Only if the world abandons attempts to limit risks of dangerous climate change would a strategy of investment in gas-fired generation through the 2020s offer significant savings.”
David T. C. Davies (Monmouth) (Con)
Is it not the case that the climate has been changing for the last 4.5 billion years, while surprisingly there has been no increase in temperatures for the last 15 years, so growing numbers of people think the whole thing is hogwash, and they are going to support quite reluctantly what the Government are doing as the least worst option?
Barry Gardiner
Yes, the hon. Gentleman is right to say that the climate has been changing over billions of years. If, however, he cared to read the report from the Met Office and from meteorologists around the world, he would find that the fluctuation over the past 10 years, to which he referred, relates to the context and background diminishing rather than the effect of emissions reducing. Again, if he bothered to read the report, he would find that it says that once the background comes back to normal or back to the average, the effect of the increased emissions would then produce a correspondingly sharp rise in climate change. The hon. Gentleman is right to say that there have always been changes in the climate and there are risks that we must factor in, but when we do so, we must take full account of the scientific data. Failing to do so is the mistake he made in his intervention.
So here we have the United Kingdom Government, who proclaim themselves to be a leader in the international climate negotiations in the run-up to the United Nations framework convention on climate change agreement in 2015, adopting a national strategy that their own independent expert advisers have told them will make economic sense only if the world abandons its attempt to avoid dangerous climate change. If it were on “Mock the Week”, we should all be in hysterics.
This is not the advice of some partisan body funded by industry. It is the advice of the independent committee that we established and expressly charged with the task of advising Parliament on the most cost-effective measures that can be taken in order to deliver on the UK’s legally binding commitment to reduce greenhouse gas emissions by at least 80% by 2050. What that committee is telling the Secretary of State is that the £7.6 billion that he has negotiated needs to be set against at least £25 billion to £45 billion of increased costs to the UK public. The House should not wilfully choose to disregard the advice of the Committee on Climate Change unless it hears very specific evidence from Ministers that refutes its conclusions. To disagree with the Committee without such evidence would be wilfully to embrace higher energy prices than are necessary to our emissions objectives, and to accept lower economic growth and the likelihood that this policy will fail.
Amendments 11 to 20, which we will press to a vote this afternoon, require the Secretary of State to set a 2030 decarbonisation target for the electricity sector by 1 April 2014, at a level that
“must not exceed the level deemed consistent with a low-carbon trajectory as advised by the Committee on Climate Change”.
I am most grateful to the 43 Members on both sides of the House who have chosen to add their names to the amendments. They, like the hon. Member for South Suffolk and me, believe that a 2030 decarbonisation target is essential to the success of the Bill. Let me repeat those words: “the success of the Bill”. We are not trying to wreck the Bill, for it is too important to play politics with. Ministers should distinguish between those who bring a spade to bury their endeavours and those who, like the hon. Member for South Suffolk and me, bring a spade to shore them up. I am conscious that the Government Whips have been given a good deal of extra work by the amendments, and I will happily buy a refreshment for any of them who feel aggrieved by having to argue with their colleagues against both common sense and principle.
So far, we have identified a number of arguments that have been adduced in the Government’s defence. Front Benchers have been keen to tell their troops not to worry, because they have introduced a provision to set a decarbonisation target in 2016. Well, that is not strictly accurate. The Secretary of State did not need to give himself the power to set a decarbonisation target in the Bill, because he already had that power under the Climate Change Act 2008. What the Government actually do in the Bill is make it illegal for him to set a 2030 decarbonisation target before 2016. There is no compulsion for him to set it even after that date; there is only a permission and an acknowledgement that he may do so.
The Government specifically claim that the enforced delay makes sense, because by that time the Committee on Climate Change will have published its fifth carbon budget, which covers the year 2030. They say that it is best to consider the committee’s budget recommendation along with any decarbonisation target. Interestingly, the committee itself does not agree with that view. In fact, it has repeatedly disagreed with it. In its recent report on electricity market reform, it is quite explicit in saying:
“We recommended to the Government in summer 2012 that a carbon-intensity target aimed at reducing 2030 emissions to around 50 gCO2 /kWh should be set under the Energy Bill, which is currently progressing through Parliament.
In response, the Government has taken a power in the draft Bill which would allow it to do this in 2016. It has argued that setting a target any earlier would be premature, given that the fifth carbon budget covering the period 2028-2032—and setting the economy-wide emissions limit for 2030—will not be legislated until 2016.
However, it is not necessary to wait for the setting of the fifth carbon budget to take a decision on the 2030 carbon intensity target, given clear evidence to show that investment in a portfolio of low-carbon technologies is a robust strategy with low regrets and significant potential benefits across a wide range of scenarios.
Neither is it necessary to wait for the fourth carbon budget review in 2014 to set a carbon-intensity target. Although the Government has linked its approach to EMR implementation with the review of the fourth carbon budget, it will remain economically desirable to invest in a portfolio of low-carbon technologies whatever the outcome of the review, given the 2050 target in the Climate Change Act.
Moreover, delay in setting the target will allow current uncertainties to be perpetuated, with adverse consequences for supply chain investment and project development”.
The committee concludes:
“We therefore continue to recommend to the Government and to Parliament that a carbon-intensity target aimed at reducing emissions to around 50 gCO2/kWh should be set as a matter of urgency.”
Caroline Lucas (Brighton, Pavilion) (Green)
There are many reasons to support the decarbonisation amendments, and many hon. Members—most recently the hon. Member for Brent North (Barry Gardiner), who is just leaving the Chamber—have set them out with great expertise and eloquence. From a security perspective, I want to underline that the stakes could hardly be higher. It is clear that those who will suffer the most harm and hardship from the impacts of climate change are often the poorest and most vulnerable, here in the UK and globally—those who have contributed the least to the problem. In that respect, this crisis is not unlike the banking crisis.
As many business leaders and experts such as Lord Stern have said, there is no business as usual at all in a 3° or 4° warmer world. A couple of years ago, at the launch of the UK’s climate adaptation plan, the big idea was managing the unavoidable and avoiding the unmanageable. “Avoiding the unmanageable” means keeping global temperature rises below 2°. For years, that line in the sand has been recognised by the UK and most other Governments, and enshrined in legal documents under the auspices of the United Nations framework convention on climate change and the G8. That is the basis for the UK’s Climate Change Act 2008, and our carbon budgets, which the policies in the Bill will, or perhaps will not, deliver. Internationally, citizens and Governments of low-lying island states risk their entire nation being literally wiped off the face of the map, even with a 2° rise.
David T. C. Davies
I read recently that Tuvalu would be wiped off the face of the earth within 10 years if we did not do something about global warming. The only problem is that the article was 10 years old, and all those islands are still there. Is this not just more exaggeration from those who want higher electricity prices as a result of decarbonisation?
Caroline Lucas
I do not really know where to start to respond to such an ignorant intervention. I will not even bother wasting my time with it.
As I say, a couple of years ago, we were talking about the fact that entire nation states face being wiped off the map. If the hon. Gentleman cared to look at the situation in Tuvalu, he would realise that it is getting more and more serious. If such a real and present threat were facing the UK, would we not join their calls for much more dramatic emission reductions, to keep the global temperature rise to less than 2°—perhaps to 1.5°? Would we not go, as many nations are, for 100% renewable energy over the next few decades?
I cite those statistics because I want to remind the House what we are talking about. Much of the debate so far has rightly been about the cost of decarbonisation, and about the targets and so on, but the bottom line is that what we are discussing is literally life and death. People’s life or death is at stake today. That is why we need to use this opportunity to make sure that the Bill is as ambitious as it can be.
I have talked about what I would regard as the moral case for swift action. We have heard a lot about the economic case. There is no shortage of companies telling us that a decarbonisation target is essential. The joint letter of more than 50 Aldersgate Group members, for example, said:
“the Government’s perceived commitment to the low carbon transition is being undermined by…the absence of a specific carbon intensity target.”
Many other companies would say the same.
I would like to focus on the impact internationally of what we do at home. A domestic decarbonisation target is crucial if the UK is serious about securing a global deal on climate. We hear a lot from the Government about the need for international action, and it often sounds as though they are saying, “Let’s wait until there is international action before taking action here at home,” but as someone who would know about this, John Ashton, would say, action at home first is absolutely critical if we are serious about getting global agreement.
John Ashton, as many hon. Members will know, was the Government’s special representative on climate change, a Foreign Office diplomat who has spent many decades working on the subject. Last month, he talked about the need for global agreement, explaining:
“British diplomacy can influence this, perhaps critically; the argument that we are just too small to count is nonsense. But our diplomacy starts at home.
I have been personally involved in British climate diplomacy for most of the last 15 years, at the heart of it for much of that time. Nothing that we accomplished could have been accomplished if we had been faltering at home as we are now. You cannot expect others to act as you ask, or even listen to what you say, if you are not doing yourself what you want them to do. If we in Britain appear to be giving up…we will be out of the game. That is why I spent so much of my time as a diplomat, close to half of it, on domestic policy.”
Let us not think that domestic policy and global policy are not linked. They are essentially linked. If Britain is to maintain its position as a real leader on climate change, we absolutely have to act at home. The decarbonisation target is a crucial part of that.
Indeed, I would say that the target does not go far enough, although of course I will support it this afternoon. Let us remember the context: a target of 50 grams of carbon per kWh by 2030, which is what the amendments that we are considering are essentially proposing, is absolutely the minimum that we should seek to achieve. The Climate Change Act 2008 and the carbon budgets that flow from it reflect the overwhelming consensus, stated many times by the Government, that we have to keep below 2° warming, but current carbon targets give us only a 37% chance of doing that. I want to emphasise that, because I sometimes think that when we discuss targets in the House, we assume that if we meet a certain target, that gives 100% certainty of a given outcome. Clearly it does not; it is about a balance of risks. How many of us would get on an aeroplane if we were told that it had only a 37% chance of reaching its destination in a safe way? A 37% chance is pretty low, yet those are the odds that we are arguing about even now.
I wish the argument was about not whether we should decarbonise straight away or by 2016, but the extent, far-reachingness, speed and ambition with which we should do it. That is the debate that we should be having, instead of arguing about whether we should be going in this direction at all. An honest reappraisal of our targets is needed, with science, and the implications for young people, vulnerable communities and future generations, at the forefront of our minds.
The hon. Member for Brent North, who is a leading advocate for action on climate change globally, raised the challenge of the need for tighter targets in his Westminster Hall debate. I would like to know his view of John Ashton’s stark conclusion that the UK could never have achieved anything close to its previous international influence against the backdrop of current policies. Credible domestic targets and action are crucial.
As well as science-based targets, we need an honest reappraisal of the role of fossil fuels and the fossil fuel lobby’s enormous influence over policy making. To say, “Gas is lower-carbon than coal, so let’s get fracking” is disingenuous at best. Gas is still a high-carbon fuel, and gas prices are projected to rise in future, irrespective of shale gas. That is according to most of the expert analysis that I have seen, certainly from independent sources without direct or indirect financial or family ties with Cuadrilla and the wider fracking fraternity.
Through the Bill, Ministers are putting in place mechanisms that offer vastly greater support to nuclear power than to renewables. The Bill is about gas and nuclear; it is not sufficiently about a low-carbon future. Through it, Ministers are offering long-term guarantees for high-carbon gas generation until 2045, and a way for the same gas companies that are putting up bills and raking in profits to take even more money from taxpayers and bill payers through the capacity mechanism. The Secretary of State is offering long-term guarantees and assurances for high-carbon gas generation, and tax breaks for fracking. Ministers have not chosen to give anything like a similar degree of certainty for wind, wave, tidal, solar, biomass, hydro or geothermal power—nothing beyond 2020. That is made even worse by the Government’s opposition to proposals, backed by industry, for 2030 targets for either renewables or efficiency.
The Government had the opportunity, in the Bill, to drive a radical transformation in ownership and control of energy away from the big six to communities, localities, individuals, private companies, public authorities, joint enterprises and co-operatives. Instead, they have chosen a support mechanism that only really works for the likes of EDF, npower, Centrica and E.ON, which will tighten their death-grip on us.
In the light of these actions, it looks extremely unlikely that the UK stands much of a chance of achieving the carbon reductions necessary, or even of remaining on track to meet the 2050 target without a 2050 decarbonisation target. I end with another quote from John Ashton. When asked for his view on the decarbonisation target, he stated:
“I can’t myself see how any MP who votes against the target will thereafter be able credibly to claim that they support an effective response to climate change.”
I know that will not bother some in the House, but I hope that for many other Members it will concentrate their minds on the vote.
David T. C. Davies
I am normally a loyal Back Bencher. I sometimes skip merrily through the Division Lobbies behind my leaders, and at other times go through those Lobbies with a slightly heavier heart. I am afraid that this will be one of the occasions on which I back the Government, but do so with a certain amount of trepidation.
I listened with great interest to the Minister’s explanation of how he would reduce electricity demand, but one of the most important questions that can be asked from these Benches is not “how”, but “why”. Why is it necessary to do this in the first place? The Minister gave us a bit of an explanation by referring to climate change, which he described as a clear and present danger. Of course it is a clear and present danger. No one whom I know of has denied the reality of climate change, and I have certainly never done so. The point is that the climate has always been changing. That has been a clear and present danger for the last 4.5 billion years. The new clause, and indeed the entire Bill, was tabled on the basis that the 0.8° rise that we have seen over the last 300 years is somehow more of a danger than any of the other rises and falls that we have seen over the last 4.5 billion years.
I did a bit of scribbling as I was sitting here and listening with interest, and I worked something out. I have seen many graphs in the documents backing up these claims, and if we had a graph that showed every 100 years as 1 cm, in order to show how long the earth had been in existence, the graph would have to be 280 miles long, which is twice the length of the High Speed 2 rail route. If we really did have a graph that was that long and we were going to look at just 3 cm of it, would it be wise to put forward such far-reaching amendments and Bills based on changes that are not that far out of the ordinary over the course of the 280 miles that my imaginary graph stretches?
Gregory Barker
Despite my hon. Friend’s eloquence, I fear that he and I are never going to agree on his interpretation of the science of climate change or on the need to act. I will just say to him about energy efficiency measures, however, that even if there were not man-made climate change, there would still be a compelling reason to act, because saving money is always a good thing to do, and that is what these energy efficiency measures will deliver for hard-pressed consumers.
David T. C. Davies
The Minister is right. He did not, however, mention the other reason that is sometimes put forward—that we are about to run out of carbon-based fuels and uranium—and as he did not mention it, I will not knock that argument back. Instead, let us address the point he made: that this may well lead in the longer term to cheaper energy.
I have no objection at all to many of the things the Government are doing: the smart meters, the decentralisation—which the Minister talked about—and the insulation, which was not mentioned, but which I assume is part of the same package. I get slightly more nervous when I hear him talking about negawatts rather than megawatts, however, as that suggests people will be paid for not producing things.
We have already had that situation in farming, where people have been paid not to produce food. I sometimes wonder whether the Minister—or, indeed, the hon. Member for Brighton, Pavilion (Caroline Lucas)—would like to pay me for not making speeches. I see much nodding of heads. I ask myself, however, whether this proposal is economically sensible. I am a keen student of economics, and it is my understanding that there are only two ways to reduce demand for anything. One way is to ration the goods that are in demand, and to some extent the Government are making provision for that, as they know there is a danger that we could run out of electricity over the next 10 to 15 years. My understanding is that there have been discussions as to how, if that were to happen, demand might be rationed in respect of certain high users of energy. The second way to reduce demand for any commodity is to increase prices.
Whatever the Minister says about negawatts and insulation and smart meters, the reality is that prices are going up partly in response to the policies this Government are putting forward. We have a system that now subsidises production of electricity that would otherwise be economic, in order to make it harder for people to get hold of it.
At the moment, the clear and present danger to all of us is the economy. The one thing the coalition was elected to do was sort the economy out.
Dan Byles
I am still digesting what was said about the supply and demand curve. It is, of course, also possible to shift the demand curve, and my understanding is that, in terms of energy efficiency, we are seeking not to reduce demand down the curve through pricing or rationing, but to shift the entire demand curve so there is less need in the first place.
David T. C. Davies
Well, I am going to have to think about that one for a few minutes before coming back with a substantive response. I will say, however, that it is not wise to talk about reducing people’s access to electricity at a time when we want to be saying to businesses across the world, “Come to the United Kingdom and invest.” We are not going to be able to compete with anyone on the basis of labour costs; indeed, we do not want to compete on that basis. We do, however, want to be able to say to business, “If you come here, you’re going to get a large and reliable source of electricity.”
Gregory Barker
Let us just be clear that we are not talking about reducing businesses’ access to electricity; we are talking about seeing energy as part of being in a resource-efficient, competitive, global economy, where businesses that can use less energy in creating their products or delivering their services will have a competitive edge.
David T. C. Davies
I fear that within 20 or 30 years those who are now talking about the temperature changes we are seeing will find that they are not that out of the ordinary in the context of the past 8,000 years or 4.5 billion years. We may look back and ask, “Why did we suddenly decide to make it more expensive to generate electricity in this country? Why did we suddenly decide to decarbonise at a time when other nations, such as China and other places in south-east Asia, were doing quite the opposite?” We may look back from a point in the future when not only the GDPs of those countries, but their GDPs per head are much larger. Carbon emissions will not have stopped, temperatures will not have risen that much and those rises that do take place will be as much to do with things such as the Pacific decade, oscillation and the natural changes that go on in the Earth, and we will wonder whether we were right to go down this path.
David T. C. Davies
I will not give way any further. I have made my point. I will be supporting the Government, as much as anything else because I look at some of the people who are not supporting them and I realise that being in coalition, even being in the same party as people whom one can respect and admire but not always agree with, is all about a bit of give as well as a bit of take. So I will support the Government tonight, but I hope that the Minister will think about what we say and consider whether these policies might need amending in the light of further evidence about the relevance of temperature rises in the future.
Dr Whitehead
I think the hon. Member for Monmouth (David T. C. Davies) will be going home tonight and throwing all the contents of his fridge out, because he knows that he can go down to the shop to buy some more food tomorrow. Perhaps he might think about the wider externalities of saving energy and saving demand, because, among other things, having a good demand-side reduction policy means that we do not have to produce the new capacity that otherwise we might have in stream to meet our energy demand, as we would be using energy across the board much more efficiently. Whether or not one believes—he plainly does not—that anthropogenic climate change is a real and pressing issue, using our energy far more efficiently and making sure that those possibly unfundable, difficult-to-organise increases in capacity can be averted by doing so is a prize in its own right. That is the case whether or not one thinks this is intimately bound up with climate change, and I wish to dwell briefly on that precise point.
The Minister showered me with kind words, so he would not expect me to say anything unkind in return. It would be churlish of me, and I was not intending to do so. [Interruption.] There is no “but”. Instead of advocating, at great length, the amendment that I was pursuing on demand-side reduction, I wish to see whether we can unpack a little of some of the consequences of the Government proposals that have now been introduced. I warmly welcome those, and I know that the Minister had quite a hard time getting them to the table in their current form. Therefore, I very much welcome both the effort that has gone into introducing these provisions and their content. Essentially, the amendments would produce, through the right mechanism of capacity payments rather than contracts for difference, a serious method of addressing the question of demand-side reduction over a long period, but I would place a little question mark against that demand-side reduction capacity or anti-capacity being auctioned through the general capacity auction system. As my hon. Friend the Member for Liverpool, Wavertree (Luciana Berger) has mentioned, we know from experience elsewhere in the world that demand-side auction participants tend to be squeezed out of wider auctions on capacity when they participate.