Lord Marland
Main Page: Lord Marland (Conservative - Life peer)Carbon Budget Order 2011
Lord Marland Excerpts
Lord Marland
That the draft order laid before the House on 24 May be approved.
Relevant document: 33rd Report from the Merits Committee
The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Lord Marland)
My Lords, I beg to move that the Carbon Budget Order 2011, for the fourth carbon budget level, laid before the House on 24 May, and the Climate Change Act 2008 (Credit Limit) Order 2011, for the second budget period credit limit, laid before the House on 7 June, be approved.
I suggest that the two statutory instruments on the Order Paper in my name be considered together. Both instruments have been laid in accordance with the Climate Change Act which puts the UK at the forefront of the challenge to reduce emissions and the move to a low-carbon economy. The first order relates to the requirement to set the level of the fourth carbon budget. The five-yearly carbon budgets provide an effective framework for monitoring and delivering emissions reductions required to achieve our 2020 and 2050 targets. The second order sets the limit on the net amount of international carbon offset units that may be credited to the net UK carbon account for the second budget covering the period 2013 to 2017. I thank both the Joint Committee on Statutory Instruments and the Merits Committee for carefully considering the two orders before us. The Joint Committee on Statutory Instruments cleared these instruments without comment. The Merits Committee drew the special attention of the House to the draft order setting the fourth carbon budget on the grounds that it gives rise to issues of public policy likely to be of interest to the House.
I begin by introducing the first order, relating to the fourth carbon budget. This is the total permissible level of the net UK carbon account for the period 2023-27. The Act requires that this is set by 30 June 2011. The level in the Carbon Budget Order 2011 is expressed in units of million tonnes of carbon dioxide equivalent, the standard for measuring greenhouse gas quantities. It amounts to a 50 per cent reduction on 1990 emissions in the 2023-27 period. The proposed level of the fourth carbon budget, of 1,950 million tonnes of carbon dioxide equivalent over the period, ensures that the UK is on an optimum pathway to comply with the 2050 target of at least an 80 per cent reduction in greenhouse gas emissions. In proposing the level, the Government have taken into account, and agreed with, the advice of the Committee on Climate Change, published in December 2010. The Government aim to meet the proposed fourth carbon budget figure of 1,950 million through reducing emissions domestically as far as practical and affordable. But given the high number of factors that can affect emissions we also intend to keep open the option of carbon trading to retain flexibility. This is a pragmatic approach when considering the uncertainty involved in looking so far ahead.
I draw your attention to the Government’s policy statement that I announced on the Floor of this House on 17 May, where I referred to a review of this carbon budget in 2014. Let me explain our reasoning behind this. The level of emissions reductions we achieve in the power and heavy industry sectors is dependent on the level of ambition in the EU ETS, which sets a cap on emissions for these sectors. Meeting the proposed fourth carbon budget would require a tightening of the EU ETS cap from its current trajectory. It is therefore right that we come back to this issue in a few years’ time to assess progress at the EU level in moving to more ambitious targets. If at that point our domestic commitments place us on a different emissions trajectory than that of the Emissions Trading System agreed by the EU, we will, as appropriate, revise our budget to align it with the actual EU trajectory, pending advice from the Committee on Climate Change and taking into account the views of the devolved Administrations. In the mean time we will continue to push as strongly as possible for greater ambition at the EU level. This brings me on to the second instrument we are debating today, the Climate Change Act 2008 (Credit Limit) Order 2011.
The Act requires there to be a limit set on the net amount of carbon credits that can be used for each budget period. This order sets the limit for the second budget period, covering the period 2013 to 2017, at 55 million tonnes of carbon dioxide equivalent in total. This must be set by 30 June 2011. Use of these credits would only apply to the non-traded sector; in other words, those sectors not covered by the EU Emissions Trading System. This proposed limit is consistent with the flexibility mechanism under the EU legislation covering the non-traded sector from 2013, which allows for limited use of international credits to help meet annual reduction targets set under the EU Effort Sharing Decision. There are already limits on the use of credits by participants in the EU Emissions Trading System through the EU ETS, which guarantees that at least 50 per cent of the emissions reductions between 2008 and 2020 will take place in Europe. Let me make it clear that we already have a robust policy framework in place to meet the first three legislated carbon budgets, and emissions projections show that we expect to meet these domestically without recourse to the purchasing of credits. In proposing the 55 million tonnes limit, the Government are just choosing not to rule it out at this stage; this is simply a contingency. I commend these orders to the House.
Lord Reay
My Lords, these orders are required under what I view as the Climate Change Act 2008. The Carbon Budget Order sets the limit for our permissible CO2 emissions for the fourth carbon budget as much as 12 to 16 years away, and the credit limit order states the proportion of our second carbon budget, from two to seven years away, that may be met by the use of so-called carbon credits, whereby we pay people in developing countries to do the emission reduction while we carry on doing the emitting.
The Explanatory Memorandum for the fourth carbon budget order has its usual quota of manifestly untrue assertions, including that on page 1:
“there is an overwhelming scientific consensus that it”—
that is, climate change—
“is being caused by human activity”.
There is certainly no consensus. On page 19 there is the statement:
“The scientific evidence for recent global warming continues to strengthen year on year”.
In fact there has been no global warming for the last 10 years, so even with an elastic definition of the word “recent”, that sentence makes no sense.
The order prescribes what the United Kingdom’s CO2 emissions for the five years from 2013 to 2018 are to be on the way to achieving an 80 per cent reduction by 2050, over 1990 levels. The report of the Merits of Statutory Instruments Committee draws attention to the fact that the chances of the United Kingdom staying within that budget will depend on the degree of take-up of the Green Deal, and on early investment in carbon capture and storage. In fact it is quite likely that the public will find the Green Deal unattractively expensive, and where take-up does occur, it may well result not in CO2 emissions savings, but in people choosing to live in warmer homes. CCS is a rash punt by the Government on a scientific breakthrough that will enable it to be rolled out to scale economically. Meanwhile, of course, China rolls out a new coal-fired power station every week, quite uninhibited by any need to wait for carbon capture and storage to be oven-ready. The Merits Committee adds that,
“a key development will be the package of measures to help the energy-intensive industries adjust to the low carbon industrial transformation while remaining competitive”.
This refers to the further contortions that the Government have to make in response to protests from the industry concerned in order to try to offset the effects on them of the carbon tax which the Government propose to introduce. So complicated is that process that the Government want to have until the end of the year to try to work out what to do.
The greatest chance of the Government being able to meet their distant carbon emission targets, including the 80 per cent target in 2050, ironically depends on the failure of the economy to revive. The Climate Change Act, and the policies adopted as a consequence, are doing their very best to bring that about. The Government must sometimes wonder, when by themselves, whether this outcome will please the general public when it becomes apparent and whether this pleasure might ever express itself in the ballot box.
The credit limit order relates to the second carbon budget starting in two years’ time. The Government state in the Explanatory Memorandum that they expect the budget to be met comfortably by territorial emission reduction; that is to say, by emissions calculated to have been reduced on United Kingdom soil and that, therefore, there is likely to be no need to purchase ICUs—international carbon units. The provision in the order is therefore, as my noble friend the Minister said, purely a contingency.
The Government seem almost wistful about this, regretting this missed opportunity to give support to another foreign aid scheme. On page 6 of the Explanatory Memorandum, they state: “This option”—referring to one of the policy options, policy option 1, which is not the one in effect adopted—
“could signal an increased commitment by the UK government to purchase emissions reductions from developing countries, which would form part of the overall demand signal to the private sector to help drive investment in new projects overseas”.
In fact, the system just introduces new scams and corruption opportunities to developing countries, as if enough were not provided already by our aid budget.
It is not that the opportunities seem confined to developing countries. It was reported in the press that the legislature in Australia was giving consideration to awarding carbon credits for the funding of the extermination of Australia's 1 million-odd feral camels on the grounds that they were substantial emitters of methane gas and no doubt were a noxious pest in many a constituency in the Outback.
Our Government state, sadly, that they are strongly supportive of the international carbon credit system, notwithstanding the similarity that it seems to bear to the pre-Reformation church, when indulgencies could be bought from Rome to permit sinning at home with a clear conscience. Kyoto is the new Vatican.
The Climate Change Act should be repealed, its panoply of carbon budgets abandoned, all the agencies such as the climate change committee which drips its advice into the Government's ear sent packing, and a chance given to our economy to resurrect itself. Otherwise we have a grim and, very likely, a dim future.
Lord Marland
My Lords, I offer my appreciation for the contributions of those who have spoken on these orders, even though I do not necessarily agree with all of them. At one point my noble friend Lord Reay was a soothsayer but at another point a prophet of doom. He was very emphatic that there is no global warming, that the Green Deal is unattractive to the consumer and that the CCS is a rash punt. We shall see what happens. I do not agree with him and I am very happy that in the cities I have visited recently there is serious intent to take up the Green Deal. It will be of great value. I do not agree that it is unattractive to the consumer.
I pick up on a very good point made by the noble Lord, Lord Teverson. He always makes good points on these matters, although I was disappointed that he did not agree with everything I said, which does not go down too well. He said that it is all about demand management. The Green Deal will produce more effective demand management and will, we hope, be a way of reducing the amount of energy we use.
I congratulate the noble Baroness, Lady Worthington, on her first contribution on this subject. I am extremely wary of engaging with someone of such great knowledge but I welcome her to the debate. She made the point that we are the world leaders in this legislation due to her efforts and those of the noble Lord, Lord Prescott. I was about to call him my noble friend, given some of the nice things that he said. The noble Baroness made the point that at times we have ignored the advice of the Committee on Climate Change. Believe it or not, the Government do not always do what everyone tells them. We get advice and then determine whether it is applicable to the world that we live in. We must be seen as a pragmatic Government, and pragmatic is what we fully intend to be. That does not mean that we will not show leadership on this subject. Putting down the marker of a 30 per cent reduction in carbon to Europe shows genuine leadership and that we are moving forward while other countries in Europe are moving backwards. However, as the noble Lord, Lord Turnbull, said, we cannot walk out of tune with Europe. We have to exist within Europe and we are bound by European legislation, as the noble Lord, Lord Prescott, knows because he was very much part of it at the time.
We are on target for our credits. Having those credits is only a contingency. The noble Duke, the Duke of Montrose, was close; it is a 3 per cent, rather than a 5 per cent, contingency. There are great brains behind me, calculating every word I say. It is only a 3 per cent contingency, so it is not very large. We are committed to reviewing it in 2014. It is right that we should review these things. It is not right for us to commit this country to long-term things when we live in a fast-changing world.
The noble Lord, Lord Turnbull, was, I suggest, slightly sceptical about what we are embarking on. He looks at these things wearing a Treasury hat. My goodness, in government we quake at the thought of the Treasury hat. It is based on pragmatic and often cynical views on some of our inspirational plans. However, we recognise that the noble Lord comes from a pragmatic position and welcome his views. However, he would not deny that in government one has to show leadership. That is the way the previous Government and the current Government have determined the course and we intend to show leadership. I would take issue with him on the subject of green jobs or investment. We have to invest, as the noble Lord, Lord Teverson said, £10 billion in the infrastructure of this economy—not just low-carbon economy, but the economy. With investment—and even the Treasury and great officials from the Treasury would admit this—generally comes jobs.
I was surprised that the noble Lord, Lord Prescott, who has more experience in this field than I have in my little finger, asked about consideration. As he well knows, the Climate Change Act allows us to reconsider our position. It was actually set in stone by the previous Government. We are saying only what was laid down in the Act—that we do intend to reconsider our position.
The noble Lord, Lord Grantchester, quite rightly invited us to comment on whether the EU ETS trading platform is fit for purpose. We know that in certain parts of Europe the platforms were not right. We have shown leadership in this area because we have a robust platform—that does not mean we are being complacent—which must be tightened up but can show leadership to Europe of how this platform should operate. The noble Lord asked me a number of questions about ROCs and other things which, with all due respect, I will not debate now because I do not think them relevant to these orders. I also know that noble Lords are looking forward to a drink and something to eat so we will get on. However, the fundamental point he makes and wants me to answer is on the energy-intensive industries. We cannot just ignore them. As he rightly says, we have to work in co-operation with them and show them the pathway to improving their business. However, in the mean time, we must not destroy them because we are looking at very substantial employers who, for many years, have been the backbone of the country. We need to work with them. We must also recognise the role of the consumer and that everything we do is for the consumer’s benefit. With that, my Lords, I commend these orders to the House.
Lord Moynihan
Before the Minister sits down, I wish to pursue the point made by the noble Lord, Lord Prescott, in recognition of the Climate Change Act. In the Explanatory Memorandum, it states that Government must, in making decisions on carbon budgets, take into account the estimated reportable emissions from international aviation and shipping emissions. It further states that international aviation and shipping are not currently included in the scope of carbon budgets but they may be included in the future. I wonder whether my noble friend the Minister could give the House his wisdom and say when the Government intend that to happen, if at all.
Lord Marland
I have just been told by my noble friend that if I pan this answer out for another two minutes, we will not have to adjourn during pleasure for another two minutes. I will try my best but the noble Lord has asked such a very straightforward question. The straight answer is 2012. I am sorry but I cannot carry this answer forward.
Lord Turnbull
Perhaps I may help out the noble Lord by responding to a comment from the noble Lord, Lord Prescott, my Secretary of State for a year in 1998. It was a wonderful experience working for him. He asked “What has changed?”. I think it was Keynes who said, “When the facts change, I change my mind. What do you do?” The temperature in 1998 was probably the peak. Since then, contrary to what the noble Lord, Lord Teverson, said, there has been no rise in the temperature. If you go into the HadCRUT 3 series and go into that little bit called global, you will get the deviation from the baseline month by month, and the yearly average. In fact, 2011 was probably, in the 13 years since 1998, the second or third coldest and the first four months have been just as cold. That is the principal evidence that has caused me to change my mind.
Lord Marland
It is wonderful to hear such harmony and I am very grateful for this scientific question. I think we are now down to half a minute. What was the question that the noble Lord, Lord Moynihan, asked?
Lord Moynihan
My noble friend the Minister gave an extraordinarily perceptive and astute answer to my question. In the context of that answer, it is important that it enables the Minister to state clearly whether that decision will enable us to be consistent with a pathway to the 2050 target set out in the Act.
Lord Marland
The short answer is that we will be reviewing this in 2012. I want to thank noble Lords for this very entertaining and engaging debate. It has been a real pleasure and privilege being present tonight. Shall we go to the other place?