Environment: Low-carbon Technologies

Lord Giddens Excerpts

Wednesday 14th July 2010 Lords Chamber

[Lord Giddens]

My Lords, I congratulate my noble friend Lord Haskel on initiating this debate. I especially congratulate my noble friend Lord Prescott on his marvellous maiden speech, delivered with his characteristic verve, passion and good humour. The noble Lord has been an inspirational force in left-of-centre politics for many years, but he has also been a doughty environmental campaigner. As he has mentioned, he was key negotiator for the UK in Kyoto. As he did not mention, he made a massive impact on the consequences of those negotiations. He has been a rapporteur for the Council of Europe on climate change, as he said—but he did not say that he had represented the Council of Europe at Copenhagen at meetings although, as he did say, they did not lead to great success. Nevertheless, we are on track to reach an outcome of the sort that he described.

My noble friend Lord Prescott, rightly emphasised strongly the importance of China in climate change negotiations and the importance of being sympathetic to China’s position and the difference between China and the industrial countries. That is a very appropriate emphasis. Noble Lords will agree that by any reckoning the noble Lord is a notable addition to your Lordships’ House, and I hope that all other noble Lords will join me in giving him a hearty welcome.

“Deeds not words” was the motto of the suffragettes and it is an appropriate slogan for Governments in dealing with climate change and energy security. Unfortunately, for many Governments across the world, it is the other way around, with lots of promises and plans but very little action on the ground. As the Minister will know from our several meetings, I am very pleased that the Government are sustaining the cross-party consensus on climate change and energy policy initiated by the preceding Government. However, as my noble friend Lord Haskel has said, now is the time for action. The business leaders who will help to drive change are waiting for much clearer signals than they have received so far. Many, as I know from speaking to them, are already feeling frustrated.

Will the Minister respond to three sets of issues? First, the Government have stated unequivocally that they will introduce a floor price for carbon. It is perhaps the single most important measure to help to stimulate an investment in low-carbon technologies. But how far has government thinking advanced? Will the floor be established by a carbon tax on energy producers? What will be the implication for EU regulations? I do not think that it is good enough any more simply to say that we should wait until autumn, because that excuse is wearing thin. What is the Government’s initial orientation towards the issue? Is it possible to produce a consultation paper during the summer which would give businesses, in particular, the chance to be involved in an open discussion leading up to whatever decisions are taken in October?

Secondly, the Committee on Climate Change has proposed that CCS should be extended to gas-fired power stations, not just to coal. Will the Government accept that one of the four planned CCS trials with coal should be with gas, as the committee proposed? That is a very important question, given that there is a lot more natural gas in the world than we thought even seven or eight years ago because of the possibility of extracting natural gas from shale. Therefore, natural gas could continue to be an important transitional technology towards a low-carbon economy but, as the committee shows, it will need CCS if such a plan is adopted. Again, I do not think that saying that they will let us know in due course is a substantial enough position. Do the Government accept the idea in principle that we should put money into investigating CCS for natural gas production of electricity?

Thirdly, speaking as a social scientist and economist, I think that a lot more work needs to be done on what a low-carbon economy actually is or will be. It cannot be just an economy like the existing one, with a lot more low-carbon technologies in it. It is a transformative thing and we have to look at it holistically. To my mind, there is still a good deal of loose thinking about what a low-carbon economy will be like. For example, in respect of jobs, the implications of a low-carbon economy for job creation are a crucial phenomenon. Even in official documents I have seen it stated that low-carbon technologies will create thousands, perhaps hundreds of thousands, of new jobs. But this is a meaningless statement unless these are net new jobs, and I do not see where the analysis is—at least, I have not traced it in official documents—of what the net implications are of a transfer to low-carbon technologies. A lot of jobs are likely to be lost in the older technology industries.

We need a different entrepreneurial model to look at job creation in an emerging low-carbon economy. I would label this the Starbucks model. No doubt like other noble Lords, I lived in America for many years. There is a lot of coffee in America, but most of it was pretty horrible; the only good thing about it was that your cup was endlessly refilled. Who knew that Americans—and, indeed, people in many other countries too—were harbouring a desire for a much better kind of coffee and the sociability that went along with it? That is what the initiators of the Starbucks chain spotted. It would be the same for entrepreneurial opportunities in the emerging low-carbon economy, because job creation will come largely from the structural changes in habits which such a transition will bring about and express. In spite of the talk about a return to manufacturing, we will still live in a predominantly service economy. It is the entrepreneurs who will spot the opportunities that the transformation of a society to a more sustainable economy will bring about, as well as who will make money and create jobs. It is not just up to the Committee on Climate Change to think about this. The Government must think about it, the Treasury must think about it, and it must be linked to actual practice. I repeat the theorem with which I started: “Deeds not words”.