Carbon Budget Order 2021

Lord Lilley Excerpts

Thursday 10th June 2021 Grand Committee

[Lord Lilley (Con) [V]]

My Lords, it is an extraordinary indication of the priorities of this place that we are considering, briefly, for one hour, with just half a dozen of us taking part, one of the biggest budgets that this Parliament has ever imposed on the British people. The nonchalance with which we embark on breathtakingly complex technological projects and impose those burdens on our fellow citizens I find extraordinary.

The impact assessment states that the cost of this budget will be £651 billion. Can the Minister confirm that that is on top of the costs of the previous five carbon budgets? I will not question the reliability of those figures. They are clearly as uncertain as they are huge and depend on as yet non-existent technologies coming on-stream, and I do not recall any large projects, from Channel Tunnel to HS2—you name it—that has ever come in on time and within budget. Why we should assume the huge array of projects comprising this sixth carbon budget will come in within the sort of cost estimates we have here, I do not know.

Ultimately, all those costs will fall on households—£41.1 billion a year, we are told. That is £1,500 per household per year. Most of those households earn a good deal less than we in this place do. It means that they will have to replace their cars with more expensive cars and dispose of their existing fossil fuel cars for a fraction of what they would otherwise get. It means they have to replace their fossil fuel boilers with heat pumps, at great cost and before they have even had to insulate their homes to ensure that they get a reasonable level of heat, though probably nothing like what they were getting when they relied on gas. It involves us doubling the electricity-generating capacity in this country so that fossil fuel power can be replaced by electric power.

What about the benefits? They are put in this document as even greater—more than £900 billion, as I recall—but none of those benefits will be enjoyed by the people who are paying the costs. The Minister quoted the noble Lord, Lord Stern, as saying that the cost of doing nothing was, I think he said, “equal” to 5% of GDP; actually, he said that it was “equivalent to” 5%.

However, that is taking costs over centuries ahead and smoothing them over the years, regardless of the fact that most of those costs will not accrue for centuries. Even in the most pessimistic forecast by the noble Lord, Lord Stern—the 95th percentile worst forecast—the cumulative costs of doing nothing are less than the cumulative benefits of the early stages of the warming of the climate until beyond 2200. So nobody in this century will benefit from postponing global warming. People in future centuries will but, again, according to the figures from the noble Lord, Lord Stern, those people will be many times better off than us; even the inhabitants of Africa will be better off then than we are now, and that is taking into account the impact of climate change on biodiversity and the environment as well as the market costs of its impact on the economy.

The cost-benefit analysis rightly says that there is a consensus among scientists that we are experiencing global climate change and that this is predominantly due to carbon dioxide and other warming greenhouse gases. That is true; no one disputes that. It then goes on to refer to “catastrophic consequences”. There is very little in the IPCC reports that suggests that there will be catastrophic consequences. If I thought that doing little or nothing or taking a more moderate approach would put at risk the existence of the human race—as Extinction Rebellion implies by its very title—or even cause its immiseration, almost no cost would be too great to avoid that.

However, the IPCC does not say that. In fact, in its economic chapter, it states:

“For most economic sectors, the impact of climate change”—


that is, if we do nothing—

“will be small relative to the impacts of other drivers … Changes in population, age, income, technology, relative prices, lifestyle, regulation, governance, and many other aspects of socioeconomic development will have an impact on the supply and demand of economic goods and services that is large relative to the impact of climate change.”

So, we talk ourselves into fear, claiming that it is based on science, and ignore the main body that we set up to provide us with evidence and forecasts.

Will it be economically and politically possible to put these things through? Initially, the answer is of course yes because the costs will be in the future, but that future is rapidly approaching. I remind noble Lords that every time the cost of trying to mitigate climate change becomes a political issue—be it the gilets jaunes in France, when Macron wanted to put a few extra pence on the cost of diesel, the impact in Holland, where a party that did not even exist became the largest in the municipal elections because it opposed the costs of climate change, or Australia, Canada—Ontario and so on—the public have reacted against the burdens that we so nonchalantly impose on them. I hope that we think twice, thrice, even four times, before we go ahead.