Carbon Budget Order 2016

Lord Lawson of Blaby Excerpts

Tuesday 19th July 2016 Lords Chamber

[Lord Teverson (LD)]

My Lords, I, too, congratulate the Minister, who is very diligent in all her work, particularly in areas such as this. I welcome very much her appointment and look forward to working with her in this area, not least as chair of the House’s EU Energy and Environment Sub-Committee. In fact, the country was so pleased about me being appointed as chair of that committee that it voted for Brexit a month afterward—but never mind. I think we are still working out where those committees are going to go.

More seriously, I reflect the sentiment of my noble friend in saying that I, too, am concerned that DECC has just been wiped off the face of government. Climate change, whichever way we look at it—either because it is totally misguided, as the noble Viscount might say, or because we think it is incredibly important and precious—is an important part of government. That it is not there on the brass plate is of concern.

As the noble Viscount would expect, I celebrate the fact that we are moving forward and accepting the recommendation of the Energy and Climate Change Committee on the fifth carbon budget. In fact, the green sector of business and industry, not least the energy part of it, was one of the few areas to show economic growth post-2008, despite the financial crisis at that time. Rather than taking the scenario and explanation given by the noble Viscount—rather than making the equivalent step back from iPads to the typewriter—let us move forward into clean energy, create jobs and make that work. I agree that the externality cost to consumers needs to be taken into account, but we could always do it through taxation if we wished, rather than through energy prices. Perhaps that is the way forward.

I have just looked at the Sandbag app, and coal generation is still below 10%, on which I congratulate the Government, who I am sure have been instrumental in that. We are doing very well.

The Brexit point is important. Part of these orders relate to the EU emissions trading scheme, which is where the credits come from. I would be very interested to hear from the Minister whether the Government have begun to think about our future role—in, out or whatever—in the emissions trading system, and how that might be dealt with. However long it might take to implement Article 50, I presume that the situation will be resolved by 2028, and we need to think forward. The Minister may have news for me there, too.

I regret the fact that we still have the third carbon budget and the allowances as a comfort blanket. I do not get excited or annoyed about it, but it would be good to have enough confidence in ourselves not to need that. However, that is not a fundamental point in any way. What is fundamental—the noble Baroness, Lady Worthington, may bring this up if she speaks this evening—is that carbon budgets account for only some 50% of carbon emissions that are dealt with from the non-EU ETS sector. That means that we do not take full responsibility for our carbon emissions in the United Kingdom. It would be much better if we were able to tweak the Climate Change Act so that the carbon budgets and accounting meant the actual emissions from UK business, industry, households, transport and commerce, rather than a mix of actuals and the trade of the major emitters in the European Emissions Trading Scheme.

I welcome both these orders, although not so much the second one. We are moving forward positively. I have a question about where we go with the EUTS. It is great to create targets—we know this from business and other areas—but we must meet them. An updated carbon plan showing how we will achieve them would give all of us who wish this project well a lot more confidence than we have had over the past couple of years.

[Lord Lawson of Blaby (Con)]

My Lords, as a former Secretary of State for Energy, I, too, congratulate my noble friend on her appointment as Minister for Energy. I realise that she is so early in her job that she is not a great authority on the issue, but bearing in mind how well she has performed in her previous role, I am sure that it will not be long before she is very well-versed. She will come to realise that the speech she made introducing this debate, which was obviously written for her by her officials, contained numerous blatant, glaring errors of fact. I shall refer to only one.

She mentioned, in particular, flooding. I draw her attention and the attention of the House to the latest issue of Science in Parliament. It includes an article from Professor Paul Bates of the School of Geographical Sciences at the University of Bristol, entitled “Flooding: What is Normal?”. He finishes:

“In conclusion, in terms of national scale annual losses we can see that, contrary to the standard media narrative, flooding during winter 2015/6 was, by recent experience, entirely normal”.

All the myths that are trotted out have been demonstrated to be false by experts such as Professor Roger Pielke of the United States, who is not a climate sceptic but has shown clearly that there has been no increase in extreme weather events.

I am not going to take too much of the House’s time because, as my noble friend Lord Ridley pointed out, the Climate Change Act, of which these orders are a derivative, is an Act of manifest, acute self-harm, very particularly for the poorest among us and for much of British industry. It does no good to anybody. I do not want to repeat his points, but I hope that when she winds up my noble friend will refer to all the points that he made because they are very important. There is no case for this. It is bizarre that we are doing this.

At this point, I warmly welcome my right honourable friend Theresa May, the new Prime Minister. At the start of her time as Prime Minister, she has made an excellent beginning with the abolition of the Department of Energy and Climate Change. That will not transform everything overnight, but it is clearly an important step in the right direction and signals her recognition that what matters is getting affordable and reliable energy, which is what the people of this country want—the people she said she cares about most in her opening statement of her position. That is what they are calling for: affordable and reliable energy.

The Minister also said something about the reduction we have achieved in carbon emissions in this country. What I think she may not yet be aware of is that the main reason we have achieved it is that energy-intensive industry has gone abroad. This has become particularly topical in the case of the steel industry. There has been no reduction in global emissions; it is just that the emissions are coming from China, India or wherever, and not from the United Kingdom. This boasting about the United Kingdom’s reduction in global emissions is completely meaningless.

I encourage my noble friend, for whom I have a very high regard, not to be caught up in any of this nonsense and to look at the thing afresh in a rational way, as she is well able to do, looking at the effect of this legislation on the poor and on British business and industry; and I encourage her department to do a lot of things in a lot of policy areas which need to be reviewed in the light of Brexit. My noble friend Lord Ridley drew attention to energy policy, and I hope the Minister will instruct her department to have a complete review of the United Kingdom’s energy policy in the light of Brexit. It is perfectly true that European Union legislation, although harmful, is not nearly as harmful as our indigenous Climate Change Act; nevertheless, an overall review is clearly called for, and I hope she will undertake one as soon as possible and realise that the signal she should be responding to is the abolition of DECC. That should be the end of a miserable chapter.

[The Lord Bishop of Salisbury]

My Lords, I welcome both orders and welcome the Minister in her new role with its important responsibilities to further our progress in the care of our common home. I particularly welcome her as somebody who lives in the diocese of Salisbury, and I look forward to working with her in this new context.

The Committee on Climate Change’s Meeting Carbon Budgets—2016 Progress Report to Parliament says that it,

“comes at a critical point in the development of climate policy in the UK … against the backdrop of the Paris Agreement in December last year”.

The political circumstances could not be more significant. I was grateful to the noble Viscount, Lord Ridley, for his eloquent speech in favour of international agreements, which gave me a sense of urgency in relation to the implementation of the Paris agreement. I have taken on a preaching engagement in the autumn, about which I have been feeling some trepidation. It is to preach at the annual service for the Worshipful Company of Fuellers. I am now looking forward to that event and to trying to engage with that group of people on these issues.

In 2015, carbon emissions in the UK fell by 3%, mostly in the power sector, where the development of renewable energy has been a big success. It is now much reduced by changes in the regulatory framework. It will therefore be even more necessary to make progress in other sectors, and I hope the Minister’s business background will help innovate in relation to the major areas of buildings, industry, transport, agriculture and land use, and in waste management, where there is much as yet unrealised potential.

I draw the attention of the House to point 7.4 in the Explanatory Memorandum to the Carbon Budget Order that:

“Emissions from international aviation and shipping are not included in the targets and budgets set out in the Act. In December 2012 the UK Government met its obligation”,

by stating that,

‘“we are deferring a firm decision on whether to include international aviation and shipping emissions within the net carbon account at this time”’.

I can see why, particularly after the speeches from the noble Viscount, Lord Ridley, and the noble Lord, Lord Lawson. It is a very difficult problem needing international agreement if we are not to disadvantage UK industry but, given the significance of aviation fuel to our total carbon emissions, it is odd that it is exempt from fuel duty and is zero-rated for VAT, alongside children’s clothing and disability aids. The lack of tax amounts to an effective subsidy of £11.4 billion per year. The Committee on Climate Change noted that total domestic and international aviation emissions remained broadly the same in 2014 as in 2013. Domestic emissions decreased by 7%. International emissions increased by 0.7%, but international aviation represents 95% of total aviation emissions. There are some energy efficiencies that have resulted in a 4.4% increase in passengers. The report represents greater efficiency, but it ought to be possible to get greater reductions without compromising business efficiency.